Court Opinion

ID: 3549702
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:02:54.32482+00
Date Added: 2024-06-11T14:06:35.026658
License: Public Domain

1. The plaintiffs should allege that the bill is brought in behalf of themselves, and all others interested who may come in and join in the suit. March v. Eastern R. R., 40 N.H. 548. The objection however may be obviated by amendment.
2. The plaintiffs allege that they are stockholders in the Hooksett Manufacturing Company, and specify the number of shares owned by each, but do not allege that they were stockholders at the time the dividend was paid the defendants. But that is not necessary, and it is immaterial whether they were or not. The transfer of the stock conveyed to them not only the ownership of the shares and the right to the future dividends thereon, but also placed them on an equal footing with the other stockholders in respect to the right to call the officers and agents of the corporation to an account for their fraudulent conduct.
3. The bill is not multifarious in that it joins the seven stockholders as defendants to whom the dividend is alleged to have been wrongfully paid. The plaintiffs are not seeking to recover the amount of the dividends so wrongfully paid, for their own use, but for the use of the Hooksett Manufacturing Company. The plaintiffs cannot maintain a suit at law or in equity to recover back said dividends for their own use. It is alleged (and the demurrer admits the fact) that a majority of the directors refuse to allow the same to be recovered in a suit in the name of the company. The plaintiffs then have no remedy for the protection of their interests except by bill in equity, and the defendants are properly joined for this purpose. Their defence must be a common one, and a multiplicity of suits is thus avoided.
4. But the bill is open to the objection of being multifarious in other respects. Four of the defendants have no interest in the purpose of the bill, which seeks an injunction against the treasurer and his removal from office. The plaintiffs seek to recover from six of the eight defendants the money alleged to have been paid to them illegally as dividends, and ask for the removal of the treasurer, and an injunction against him, and the appointment of a receiver. They also charge the treasurer with fraud and embezzlement. These matters are clearly distinct and independent. Several matters, distinct and unconnected, cannot be joined in a bill against one defendant, nor with still stronger reason against several defendants when the various matters do not apply to some of them. Story's Eq. Pl., sec. 275. The bill can however be amended in the circuit court upon leave obtained.
5. If the bill alleges that which if confessed by answer would subject the defendant to a criminal prosecution or to a penalty, the defendant may, if required to answer under oath, demur, and protect himself from discovery; and this in so, not only if his answer would, but if it may, subject him to such prosecution. 1 Daniell's Ch. Prac. 626*, 627*. The bill charges several offences punishable by fine or imprisonment, such as violation of the law regulating voting in corporations; *Page 223 
embezzlement of the funds of a corporation by an officer; perhaps forgery in making false entries in the books of the corporation with intent to defraud the corporation; and conspiracy to cheat and defraud the plaintiffs; and if the defendants were called upon to answer under oath, the defendants might demur, and protect themselves from discovery. But under our practice, the defendants not being called upon to answer under oath, their answer will be considered as a mere pleading, and accordingly, without admitting the truth of the allegations, may be so drawn as to require the plaintiffs to go to proofs.
Demurrer sustained.