Court Opinion

ID: 4893372
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:53:31.187487+00
Date Added: 2024-06-11T08:09:49.388688
License: Public Domain

Gould, Associate Justice.
By mismanagement and gross neglect of duty on the part of defendants, as directors of the Texas Banking and Insurance Company, it is alleged that the company suffered heavy losses, and in consequence thereof plaintiff was injured in the depreciated value of his stock. The object of the suit" is to recover of the directors damages for this depreciation in the value of his stock.
On principle and authority, it is clear that the liability of 'directors for" a breach of duty that injures the corporate property as a whole, is primarily to the corporation whose agents they are. (Peabody v. Flint, 6 Allen, 53; Smith v. Hurd, 12 Metc., 384; Allen v. Curtis, 26 Conn., 456; Attorney-General v. Wilson, 1 Craig & Phill., (18 Eng. Ch.,) 1; 1 Angell & Ames on Corp., sec. 312, and other authorities cited for appellees.)
A recovery by the corporation for such an injury would inure to the benefit of its stockholders, and in that way they would be compensated for the indirect injury received. If the corporation refuses to sue, or is still under the control of the directors sought to be held responsible, a stockholder may maintain an equitable proceeding “ to protect the interest of the corporation as the trustee for all its stockholders and creditors.” (Craig v. Gregg, 83 Penn. St., 21; Angell & Ames, supra.)
A fatal defect in the plaintiff’s petition, both original and *61amended, is, that it seeks no recovery in behalf of the corporation, but seeks a direct recovery of damages for the plaintiff individually, the case stated not entitling him to such a recovery.
Directors of moneyed corporations, such as banks, have often had enlarged liabilities imposed upon them by statute, and a case is referred to, by counsel for appellant, where, in the absence of statutory provisions, they have been held directly accountable to special depositors. (Conant v. Reed & Bank, 1 Ohio St., 298; United Society of Shakers v. Underwood, 9 Bush, 610.)
The great current of authority, we think, denies to a stockholder the relief sought in this case.
Affirmed.
[Opinion delivered March 12, 1880.]