109 Wis. 355 | Wis. | 1901
The sole question for determination is whether we can spell out from the allegations of this complaint a cause of action in favor of the plaintiff and against Alexander Syme. An attempt has been made to allege, facts sufficient to show that he was guilty of a breach of duty towards the corporation, which rendered him liable thereto, and for which the defendants, as his heirs, are answerable. As a premise it is to be said that during the pendency of all the transactions set forth in the complaint the plaintiff was a going corporation, in debt, and embarrassed for want of ready money with which to meet current demands. Alexander Syme was its president and a director, and was familiar with its business affairs. At the time of the transaction with Humphrey the company was unable to
The remaining question involves the right of an officer and director of a corporation to purchase outstanding liabilities of the corporation at a discount and enforce them in full. The relative duties and obligations of managers and officers of a corporation to it and its stockholders have been likened to those of trustees and cest/uis que trustent, and have been considered and enforced with varying degrees of strictness by the courts of this country. They are, however, of one accord on the proposition that a director of a stock corporation occupies one of those fiduciary relations where his ■dealings with the subject matter of his trust or agency, and with the beneficiary or party whose interest is confided to his care, are regarded with jealousy by the courts. He must deal with the interests confided to his care with conscientious fairness, and will not be permitted to secure advantages by virtue of his position prejudicial to the interests he represents. Twin-Licit, O. Co. v. Marbury, 91 U. S. 587. This court has asserted that rule in numerous cases, a few of which are here noted: Cook v. Berlin W. M. Co. 43 Wis. 433; Haywood v. Lincoln L. Co. 64 Wis. 639; Pittsburg M. Co. v. Spooner, 74 Wis. 307; Hins v. Van Dusen, 95 Wis. 503. The strictness of the earlier cases is somewhat
But we need not prolong the discussion. As we construe the complaint, it fails to show any breach of duty on the part of Mr. Syme for which he could be held liable in this action. But, should it be deemed otherwise, still we cannot see how this action can be maintained, if, as we have seen, plaintiff is not entitled to the collaterals mentioned. The notes given to Syme in renewal of the ones purchased are yet held by his heirs. In an action to enforce them, plaint
Another objection of some importance is urged. It is. nowhere alleged when the corporation discovered the alleged shortcomings of Syme. Considerable time has elapsed since the alleged transactions took place, and since Syme’s. death. If they were voidable at the election of the corporation, the rule is that prompt action must be taken upon sufficient knowledge of the facts. Seymour v. Spring Forest C. Asso. 144 N. Y. 333. Delay must be excused when there is an appeal to equity.
What has been said renders it unnecessary to consider the-question whether plaintiff’s claim would be barred by failure to present a claim against the estate of Syme in the county court.
By the Court.— The order of the circuit court sustaining-the demurrer is affirmed.