Court Opinion

ID: 5218469
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:28:22.505667+00
Date Added: 2024-06-11T08:27:28.803451
License: Public Domain

Scott, J. (dissenting):
I dissent. I recognize, of course, the general rule that an action in behalf of a corporation to redress a wrong which affects all of *420-the stockholders equally, should be prosecuted by the corporation itself, or by a stockholder suing in right of the- corporation,, and in behalf of all the stockholders. Plaintiffs, however, are not seeking to maintain a representative action, but seek merely to get back their individual stock freed from the impairment of its value resulting from the wrongful acts of the individual defendants.. Their complaint is that defendants having unlawfully acquired plaintiffs’ stock, comprising a large majority of the stock of the corporation, thus gained control of the-corporation itself, and then transferred to if certain worthless properties, doubling the capital stock and taking all of the newly-issued stock themselves. As a result, if the plaintiffs should now recover back their stock, they would receive, it greatly- depreciated in value, because it would constitute a minority instead of a large majority of stock of the com pany, and represent a correspondingly reduced interest in the property of the company. This is an action tiy the plaintiffs as individuals to redress a wrong done to their individual property by the individual defendants acting through their unlawfully obtained control of the corporation. I think that such an' action will lie notwithstanding the fact that upon some of the same facts a representative action in the right of the corporation and in behalf of all the stockholders woiild also lie. There are- allegations in the complaint which, would be appropriate to a representative action, and are not appropriate to an individual -action.. These may be rejected as surplusage. The plaintiffs also ask for relief which could be afforded only in a representative action, such as an- accounting -by' defendants to the corporation. But a complaint is -not to be condemned merely because’tlie complainant asks for more relief than he is entitled to. -I think that plaintiffs, if they can establish their allegations, are entitled not only to get their property back, but to' get it back unimpáired in value by any unlawful act of ■ the defendants, and I further think that they are entitled to full relief in a, single action, bringing in, as they have apparently done, all interested parties as defendants.
Judgment reversed-, with 'costs, demurrer sustained, with costs, with leave- to plaintiffs to serve amended complaint on payment of said costs. .