103 N.Y.S. 50 | N.Y. App. Div. | 1907
The complaint in this action alleges, in substance, that the defendant corporation, was organized for the purpose of buying
The corporation demurred to the complaint upon the ground that the facts stated therein did not constitute a cause of action; that there was a misjoinder of causes of action, and also a defect of parties defendant in that the' plaintiff had not made the directors of the corporation parties. The demurrer was' sustained upon the grounds first named, and judgment entered upon the decision to a this effect dismissing the complaint upon the merits, from which the plaintiff appeals.
I am of the opinion that the demurrer was properly sustained, not only upon the grounds named, but also could have been sustained upon the third ground. There is no allegation anywhere to be found in the complaint that the defendants are or were, at the time complaint is made of the action of the corporation, its directors. The statute makes the directors of a corporation the managers of its business and affairs, and it is of no importance what a stockholder does unless he be a director, because the statute does not commit to him any voice in the management of the business of the corporation, nor is he in any way made responsible for it. i Nor is there
Causes of action have been improperly united, one being bj a shareholder to compel an accounting by the directors of the corporation of their official acts and a restitution to the corporation of property wrongfully received by them; and the other by a shareholder to recover damages which he personally has sustained by reason of the wrongful acts of the defendants, two separate and distinct causes of action, which cannot be united in the same complaint. (Groh v, Flammer, 100 App. Div. 305.)
While I am of opinion that the demurrer was properly sustained, I am also of the opinion that the court erred in dismissing the complaint upon the merits, and for that reason the judgment appealed from, to this extent, is erroneous. The court should not have dismissed the complaint upon the merits. The merits of the allegation set out in the complaint could only be determined after a trial, not of law but of the facts involved, unless such facts co.uld not by any possibility be changed by an amendment -of the pleading or there would be no legal liability on the facts. The most cursory examination of this complaint shows that it is possible to allege a different state of facts, for which reason it was improper to dismiss the complaint upon the merits, and for the same reason the plaintiff should have been afforded an opportunity to amend.
The judgment appealed from, therefore, should be modified by striking out the words which appear therein “ on the merits,” with- ' out costs to either party, and inserting a provision permitting the plaintiff to serve an amended complaint within twenty days after the entry of the order of modification and service of notice thereof on defendant’s attorney, and on payment of the costs in the court below.
Patterson, P. J., Ingraham, Clarke and Scott, JJ., concurred.
Judgment modified as directed in opinion, without costs to either party. Settle order on notice.