Court Opinion

ID: 5201677
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:53:40.921576+00
Date Added: 2024-06-11T08:27:12.546370
License: Public Domain

Ingraham, J. (dissenting):
It seems to me that the allegations of this complaint are too indefinite and general to justify a court of. equity tó require an accounting by the defendants at this time. . After alleging the appointment of the individual defendants as the reorganization committee under an agreement which is annexed to the complaint and by which this committee is made the attorneys, agents and trustees for each of the depositors of the securities of the company which was to be reorganized and which expressly provided that *264“ neither the Committee nor the Depositary assume any' personal responsibility for the execution of such Plan and this .Agreement or any part thereof,” and that “no member of the Committee, nor the Depositary, shall be personally liable- for any act or omission of any agent or employee selected in good faith, nor for ány error of judgment or mistake of law, nor in any case except for his,, its or their own individual willful malfeasance or neglect,, and no member of the Committee shall in any case be- personally liable for the act or omission of any other member of the Depositary, nor shall the Depositary be liable for the acts or defaults of the Committee.”
The complaint alleges on information and -belief that by the use. of the said certificates and corporate securities the said individual defendants in their individual capacity have received and. -realized large sums of money and property' of large value besides that of the American Cotton Company which should have been held and administered by them'for this plaintiff and other depositors under said reorganization agreement; but said individual defendants have wasted and squandered a large amount of the said property and money and have , used for unauthorized and unlawful purposes a large-portion of the balance of the same. Coupled with this allegar tion the plaintiff alleges that he is wholly ignorant of the amount of. money and other property so received and realized by said defendants and of . the amount of money and of the other property so received and realized by said defendants and of that which they so wasted and squandered and of that so used by them for - unauthorized and unlawful- purposes and is ignorant of the purposes-for which said defendants have used said moneys and other -property and of the manner in-which' the same was wasted an,d squandered.
-Thus, we have a contract signed by the plaintiff under which he appoints the committee his agents and trustees, but expressly agrees 'that neither member of the committee shall be responsible for any act Or omission in any case except for his own individual willful malfeasance or neglect, and that no member of the committee shall in any case be personally liable for the act or omission of any -other member of the depositary. ■'
He alleges that the reorganization committee as a whole have. Wasted and squandered a large amount of property and money, and used for unauthorized and unlawful purposes a large portion of the *265balance of the same, coupled with an allegation that he does not know what property they have received, or what property they have used', or the purpose for which they have used it. To justify, the court in calling this committee' to account before the reorganization is completed, or the plans of reorganization adopted, it seems to me that there must be a distinct allegation of wrongdoing against an individual for which, under the agreement, he is responsible. There is no allegation that all of the members of the committee joined in such alleged misappropriation of the property and money, and where .there are several members of a committee, each of whom is not liable for the acts of the other members of the c.oinmittee, it seems to me that there must be at least a distinct charge that each individual member of the' committee who is made a defendant has been guilty of an act which imposes a liability before a cause of action is' alleged. This allegation is that the individuals as a whole have wasted and squandered the property and money, and used a sum for unauthorized and unlawful purposes, coupled with an allegation that the plaintiff does not know what property they • received, or what property they wasted and squandered, or the particular methods by which these defendants have used said moneys and other property, and the manner in which the same was wasted and squandered, and is not sufficient to entitle the plaintiff to an accounting from members of the committee who were-liable for their individual acts of misfeasance or malfeasance only.
The next allegation is also upon information and belief and is that the individual defendants and some and each of them have also pledged certain of the said certificates of the shares of stock and other corporate securities deposited with them with certain banks, trust companies and other persons, natural and corporate, to the plaintiff unknown, and have thus obtained loans of large sums of money by the use of which, in speculation in stocks, bonds, cotton and otherwise, the said borrowers have realized large profits which, in equity, belong to this plaintiff and to other depositors under said agreement, coupled with the further allegation that further particulars of the matter are to the plaintiff unknown.
It is hot alleged here that these defendants have not applied any profits realized from these transactions to the benefit of the depositors or parties to the agreement; or that they claim to have any per*266sonal interest therein ; that the speculations were not such as were authorized by the agreement and not, carried out for the benefit of the parties to the agreement; nor is it alleged that in consequence of - these speculations any money or property was lost; on the contrary, it is alleged that profits, were realized, which, so far as appeal’s, were applied for the benefit of the parties to the agreement.
, There'is then the allegation that the defendants claim to-have spent large sums of money for counsel fees and otherwise under color of said, reorganization agreement, which are alleged to have been unnecessary. But the particular defendants who have made such expenditures are not stated and no facts are alleged to show that such expenditures were unnecessary, being a mere general allegation of a conclusion of. the plaintiff’s, although he expressly disclaims knowledge of the particulars in relation to the'expenditures.
There is. also an allegation that the defendants have in' a manner to the plaintiff' unknown, by negligence and misfeasance, wasted and misapplied the.assets of the property which they have thus acquired and have depreciated the value of the certificates of stock and other securities deposited with them to the great.loss of the.plaintiff and-others. This allegation certainly can sustain ho cause of action against anybody. ,
The allegation that the American Cotton Company became insolvent and a receiver wa$ appointed by a vice-chancellor of the State of Mow Jersey gives no cause of action.
It is then alleged that the defendants have issued their plan of reorganization provided for by the agreement but that the plaintiff has not accepted that plan.
It thus .appears, that the object for which this committee was appointed has not yet been accomplished but is at present in process of accomplishment. Assuming that after the completion of the plan any party to the agreement would have the right to call the trustees to account, it was clearly contemplated that the committee should proceed with their work and pending the final completion of the work to entitle a party to the agreement to call on the trustees or agents to account there must be some specific allegation of wrongdoing as against some specific member of the committee, for which, under the. agreement, he is liable. Such general allegations on information "and belief as are here contained, coupled with an express *267statement that the particulars necessary to entitle a party to such an agreement to- any relief are unknown, seem to me entirely insufficient upon which to base an application to a court of equity for judgment.
I am, therefore, of the opinion that this complaint fails to state a cause of action, and that the judgment should be reversed and the demurrer sustained.
Judgment affirmed, with costs. „