Court Opinion

ID: 8185873
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:08:19.562801+00
Date Added: 2024-06-11T16:40:24.799603
License: Public Domain

Maeshall, J.
The above statement, without adopting the language of the complaint, sufficiently shows the nature of the action and the facts alleged in support of it. In the briefs of counsel the complaint is treated in so many aspects that it is difficult to determine therefrom what the pleader intended. It is said that the action is in equity for an accounting of corporate assets negligently lost; that it is an action for losses to the creditors by mismanagement; that it is an action for damages; that it is an action to enforce a personal liability to plaintiff and the other creditors; that it is an action to enforce a statutory liability of the directors *279under secs. 3223, 3224, 3227, R. S. 1878; and that it is an action for misfeasance of officers in the management of the affairs of the defendant bank, and to compel them to return what they fraudulently and criminally misappropriated. There is much inconsistency in the numerous claims, but looking at the pleading itself, it is quite clearly an effort to invoke the jurisdiction of the court under secs. 3237, 3239, R. S. 1878, which provide that the circuit court shall have jurisdiction over directors, managers, trustees, and other officers of corporations, to compel them to account for their official conduct in the management and disposition of the funds and property committed to their charge, to order and compel payment by them to the corporation whom they represent, and to its creditors, of all sums of money, and of the value of all property which they may have acquired to themselves or transferred to others, or may have lost or wasted by any violation of their duties as such directors, managers, trustees, or other officers; and to set aside all alienations of property made by the directors, trustees, or other officers of any corporation, contrary to the provisions of law or for purposes foreign to the lawful business and objects of such corporation, in cases where the person receiving such alienation knew the purposes for which it was made; and that such jurisdiction may be exercised in an action prosecuted by any creditor.
The complaint sets forth the creditor capacity of the plaintiff, the official character of defendants as directors of the corporation, and facts showing that the assets of the corporation were largely wasted and lost through the culpable negligence and fraud of such directors, and asks that they be compelled to account for their misconduct by restoring such lost assets, or the equivalent thereof in money, ■sufficient to satisfy the claims of the participating creditors. The liability of the directors of the corporation to account, under such circumstances, is not statutory, so the complaint *280does not come under sec. 3223, R. S. 1878, authorizing a creditor to bring an action to enforce such liability. Directors are liable to be charged as trustees of property fraudulently misapplied or wasted by them, independent of anjr statute on the subject, but the duty of enforcing such liability is in the managing officers of the corporation, though-it may be performed by stockholders, or creditors, or possibly the assignee, or successor of the corporation, when the-circumstances are such as to make that necessary, independent of any statute on the subject. Sec. 3237, R. S. 1878,. does not materially add to the jurisdiction of the court; that, existed under its general equity powers. But sec. 3239 goes-further and provides that the jurisdiction shall be exercised, in an action prosecuted by any creditor.
It follows from what has preceded that the complaint does, not state a cause of action to enforce a statutory liability,, nor an action for damages for the fraud alleged, but does-state facts sufficient to constitute a cause of action to compel the defendants to account for assets of the bank lost through their wrongdoing,— not account to the plaintiff,, or plaintiff and his associates, for their benefit solely, but,, under the circumstances stated in the complaint, to the representative of the corporation, that is, its' assignee for the-benefit of creditors. Plaintiff and those participating with hhn in this action have no right to have the assets recovered, administered for their benefit, as appears to be the-scheme of the pleader, but the restoration must be to the assignee, either directly or by payment into court, to be administered by him, in lieu of to the corporation, for the-benefit of all the creditors.
The fact, however, that the relief prayed for is not the-proper relief on the facts alleged, does not militate against the sufficiency of the complaint, since the facts pleaded constitute an equitable cause of action, and the prayer invokes the same jurisdiction. The right to maintain the action om *281the facts is fully covered by the decision of this court in South Bend Chilled Plow Co. v. George C. Cribb Co. 97 Wis. 230.
By the Gourt.— The order appealed from is reversed, and the cause remanded with directions to overrule the demurrer, and for further proceedings according to law.