Court Opinion

ID: 6411581
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:53:06.060833+00
Date Added: 2024-06-11T15:51:23.562200
License: Public Domain

Shaw, C. J.
The reduction of the debts within the capital stock by dividends and payments by the assignees was not such a reduction, within the meaning of the statute, as to exempt the defendants from liability.
But we are of opinion that an action at law, under the circumstances of this case, will not lie. The statute says that “ any person to whom they are so liable may have an action on the case against any one or more of the said officers.” Rev. Sts. c. 38, § 29. But taking this section in connection with § 31 of the same chapter, authorizing a bill in equity instead of such action at law; and with c. 81, § 8, giving this court jurisdiction in equity in all “ cases in which there are more than two persons having distinct rights or interests, which cannot be justly and definitely decided and adjusted in one action at the common law;” we are of opinion that the plaintiffs’ remedy is in equity.
Here all the directors are liable. It is like Crease v. Babcock, 10 Met. 533, except that in that case the defendants, stockholders, were liable in various amounts; whereas here the directors are liable for the whole amount for which any are liable. But the cases are alike in this, that there are various parties, having several and unequal claims against a common fund. That fund here consists, by statute, of the excess of the debt over the capital; and the claims of the creditors, by the case stated, greatly exceed that fund. Harris v. First Parish in Dorchester, 23 Pick. 112. Atlas Bank v. Nahant Bank, 23 Pick. 488. Crease v. Babcock, 10 Met. 531. Thayer v. Union Tool Co. 4 Gray, 75.
Demurrers sustained.*

 See Merchants’ Bank v. Stevenson, 5 Allen, 325.