Court Opinion

ID: 6897911
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:51:49.231583+00
Date Added: 2024-06-11T16:06:04.009149
License: Public Domain

BRATTON, Circuit Judge
(dissenting).
Rule of Civil Procedure 8(a), 28 U.S.C.A.. following 723c, requires among other things-*350that a complaint shall contain a short and plain statement of the claim showing that plaintiff is entitled to relief and a demand for the relief to which he deems himself entitled. The purpose .of the rule is to bring about brevity, simplicity, and clarity in pleading. And a motion to dismiss an action for failure of the complaint to state a claim upon which relief can be granted admits every material fact well pleaded in the complaint, construed in the light most favorable to plaintiff. Porter v. Karavas, 10 Cir., 157 F.2d 984.
Stripped of prolixity, the second amended ■complaint charged in effect that Blankenship and Trapp took title in their own names to certain properties purchased with funds of Farmers Mutual Royalty Syndicate; that they wrongfully appropriated the properties to their own use and benefit; .and that they have never accounted for the properties or their proceeds. It further ■charged that in connection with the resignation of Blankenship and Trapp as directors •of the company it was agreed that they should assign to the corporation certain shares of corporate stock and should receive in exchange therefor other stock; and that ■such exchange of stock resulted in substantial profit to Blankenship and Trapp and heavy loss to the corporation. And it further charged in general language that Blankenship and Trapp transferred to themselves properties and assets of the corporation which they still retain and appropriate to their own use and benefit. The prayer was for an accounting. Trapp filed a motion to dismiss the complaint for the reason that it failed to state facts sufficient to constitute a cause of action against him. The court sustained the motion and dismissed the action as to the defendant Trapp.
In respect to, certain transactions, the essence of the complaint was that Blankenship and Trapp obtained title to certain properties which were purchased with funds belonging to the corporation; and that they have never accounted for them. If so, they took and held the properties in trust for the benefit of the corporation, even though Trapp was not one of its officers or directors; and Trapp should be held liable accordingly. In respect to another transaction, the gravamen of the complaint was that Blankenship and Trapp were parties to an arrangement in connection with their resignation as directors, in which they reaped a large profit and the corporation suffered a heavy loss. If so, on principles of equity, Trapp should be held liable. I think the complaint stated a cause of action as to Trapp.