Court Opinion

ID: 6516724
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:27:20.45997+00
Date Added: 2024-06-11T15:55:02.663240
License: Public Domain

BRICKELL, O. J.
The original bill, filed by the appellant, has for its objects, the injunction of the execution of a decree of the court of chancery, foreclosing a mortgage on lands, executed by the Van Kirk Land & Construction Company, a corporation orginized and existing under the laws of this State, and the reopening of a staked account, the origin and basis of the mortgage debt, because of supposed false or over charges. The chancellor, in term time, sustained a motion to dismiss the bill for want of equity, offering the complainant leave to amend, which was declined, the bill was dismissed, and from the decree of dismissal the appeal is taken.
There is no theory or phase of the bill, in which it can be deemed to contain equity. The counsel for the appellant, proceed on the theory, that the bill makes a case in which a court of equity is accustomed to reopen an account stated, permitting it to be surcharged and falsified. If it could be admitted that the bill was maintainable on this theory, so far from showing, it negatives a proper title in the complainant to sue for the redress of the injury. The wrong, the injury, if any was committed, was committed, not against the complainant, but against the Van Kirk Land & Construction Company, the mortgagor, with whom the account was stated, becoming the origin and basis of the mortgage debt. The power to sue and be sued is inseparably incident to every corporation, and to enforce its rights, it must sue in its proper corporate name, as natural persons sue under'similar circumstances. The right resides in the corporation, and it has full capacity to enforce it. — 2 Cook on Stocks & Stockholders, § 751; 1 Morawetz Corp., § 238. There are exceptional cases in which the stockholder is permitted to maintain a suit for the *113protection of his equitable rights in the corporation, under particular circumstances or conditions, which are not now shown, if in any aspect, this case could be assumed to fall within the exception. The complainant may be the larger shareholder of the corporation, but the fact gives him no greater right to sue in his own name to enforce corporate rights, than the holder of a single share of stock would have The corporation represented all the shareholders, has full capacity, has the right or title involved, and can alone institute suit to enforce the one or the other.
If the plaintiff could be regarded as the guarantor of or surety for the mortgage debt, he can make no defense to its payment which the principal waives, or repudiates, or by his conduct precludes himself from making, for the reason, as was said by Judge Ormond, in Evans v. Keeland, 9 Ala. 42: “If the principal could abide by the contract, and the surety repudiate it, the strange result would be produced, that the principal would retain the fruits of the contract, whilst the surety would avoid the performance of his obligation, on the ground of its invalidity, in direct opposition to the acts of the principal, admitting that the contract was valid.” The bill shows clearly that mortgagor and mortgagee deliberately stated the account; that the mortgagor had full opportunity to ascertain the correctness of the items of the account; that for the payment of the aggregate balance promissory notes were given, and a mortgage given to secure their payment. Subsequently, the stockholders and directors of the corporation reaffirmed the correctness of the account, consenting to a decree of foreclosure of the mortgage. It may bo, that the mortgagor could maintain a bill to reopen the decree and account, but it could be maintained only on clear and precise allegations, supported by proof, of fraud, undue advantage, accident or mistake. There are no such allegations found in the present- bill — the case made by it, is that the mortgagor abided by the settlement'and decree, waiving all objection to the one or the other. It is not for the complainant to disturb the settlement or decree, so long as the mortgagor, without fraud or collusion with the mortgagees,.for the purpose of prejudicing the complainant, acquiesces in it.
The decree of the chancellor must be affirmed.