Court Opinion

ID: 7990775
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:30:48.235245+00
Date Added: 2024-06-11T16:35:21.424398
License: Public Domain

Anderson, J.,
after stating the facts as above, delivered the opinion of the court.
The appellants fail to state a case in their bill. Stockholders of an insolvent corporation, in order to maintain a bill against the directors for their ultra vires and fraudulent acts, must allege and prove a state of facts which will entitle them to a decree. They must sho'w an interest in the result. In 3 Cook on Corporations (5th Ed.), p. 1883, the principle involved here is stated in this language; “Another principle of law in *272this connection, is that, where the corporation is insolvent, a stockholder cannot maintain a suit to hold the directors liable for fraud, unless he alleges that the relief asked for will be of some benefit to him; in other words, that there will be a surplus for the stockholders after the creditors are paid.” The assets of a corporation go first to the creditors, and the remainder, if any, to the stockholders. The bill fails to state facts which, if proven, would entitle appellants to a decree — facts which show there would be anything left after paying creditors. Affirmed.