105 Wis. 359 | Wis. | 1900
The plaintiff is a stockholder in the Home Building & Loan Association of Milwaukee. He brings this action in behalf of himself and all others similarly situated against the defendants as officers and directors of said association, and alleges that through their carelessness, negligence, and inattention to duty* the funds of the association-have been lost, squandered, and embezzled to the amount of about $100,000, so that it has become entirely insolvent, has ceased to be a going concern, and that its affairs are now in the hands of a receiver appointed by the court to take charge of its property and assets and wind up its business. No question is raised, if the plaintiff is entitled to maintain this action, that the complaint does not otherwise state sufficient facts to constitute a cause of action. .A demurrer was interposed by the defendants, which challenges the right of the plaintiff to maintain this action upon the facts stated, which was overruled, and they have appealed.
The point first raised is that the plaintiff is not a “creditor ” of the corporation, and therefore cannot maintain this action. It is true that he is not a creditor in the sense that word is used in the statutes. He is nothing more or less, than a stockholder entitled to share in the residue of corporate assets after the claims of actual creditors, if it has any, have been paid. Leahy v. Nat. B. & L. Asso. 100 Wis. 555. The right of a stockholder to maintain this action does not depend upon any statutory enactment. In Gores v. Day, 99 Wis. 276, this court said: “The liability of the directors of the corporation to account, under such circumstances, is not statutory, so the complaint does not come under sec. 3223, R. S. 1878, authorizing a creditor to bring an action to enforce such liability. Directors are liable to be charged as trustees of property fraudulently misapplied or wasted by them, independent of any statute on the subject; but the duty of enforcing such liability is in the managing officer» of the corporation, though it may be performed by stock
Another objection to the complaint is that the rights sought to be redressed are the rights of the corporation, and that a stockholder cannot maintain an action to enforce them, except under conditions which are not made to appear in the complaint. There can be no doubt about the proposition that a stockholder has no right to bring an action in his own name against the officers of a corporation for fraudulent or negligent acts, or waste of the corporate property, unless such corporation or its officers, upon being applied to for such purpose by the stockholder, refuses to prosecute, or unless it appears that a request to prosecute would be useless. Doud v. W., P. & S. R. Co. 65 Wis. 108; Land, L. & L. Co. v. McIntyre, 100 Wis. 245, and cases cited. The complaint in this action contains no allegation of a request and refusal of corporate authorities to act. If there was no other objection to the right to maintain this action, we should not hesitate to say that under the facts stated it amply appears that such a request to prosecute would be useless. As we understand it, complaint is made against the entire governing body of the corporation, and, in view of the acts of misfeasance and nonfeasance alleged, it would be an idle ceremony to petition the defendants to prosecute themselves.
But, be that as it may, there are other allegations in the complaint which are deemed fatal to the right of the plaintiff to maintain this action. It appears by the complaint that in July, 1891, an action was begun in the circuit court for Milwaukee county, in which action the insolvency of the association was alleged, and the relief sought was that the officers be restrained from exercising their official func
By the Court.— The order of the circuit court is reversed, and the cause is remanded with directions to sustain the demurrer and for further proceedings according to law.