39 S.C. 44 | S.C. | 1893
The opinion of the court was delivered by
The plaintiffs, as stockhold
We propose to consider whether the complaint is fatally defective in the several particulars mentioned in the grounds of appeal, which may be stated substantially as follows: 1st. That there is no allegation that the directors or managing board of the corporation, in which plaintiffs claim to be stockholders, “have been guilty of some act of oppression, illegality, ultra vires or fraud.” 2d. That there is no allegation that the said board of directors, upon demand, have refused to apply for the relief demanded by plaintiffs. 3d. That there are no facts stated in the complaint, “showing an earnest effort on the part of the plaintiffs to obtain within the corporation itself the relief desired.”
It is necessary, therefore, to consider whether any of these allegations are wanting in the complaint, and if so, whether they are necessary to give the plaintiffs a good cause of action. For this reason, the complaint in extenso, without the exhibits, should be embraced in the report of the case, as it is too long for insertion here. We may say, however, that according to the allegations contained in the complaint, some time in the year 1883, the Charlotte, Columbia and Augusta Railroad Company leased the Chester and Lenoir Railroad, and immediately took possession thereof, and proceeded to use and operate the same; that thereafter, to wit: some time in the year 1886, the Charlotte, Columbia and Augusta Railroad Company undertook to sub-let the Chester and Lenoir Road to the Richmond and Danville Railroad Company, who soon thereafter took possession of the said road and assumed control thereof; that there was no authority conferred by statute or
And he adds, what seems to us to be of especial importance: “But in addition to the existence of grievances which call for this kind of relief, it is equally important that, before the shareholder is permitted, in his own name, to institute and conduct a litigation which usually belongs to the corporation, he should show to the satisfaction of the court that he has exhausted all the means within his reach to obtain, within the corporation itself, the redress of his grievances, or action in conformity to his wishes. He must make an earnest, not a
This dootorine, thus abundantly supported by authority, is also well founded in reason. For while it may be very true that a court of equity will and ought to permit a stockholder to bring an action for the redress or prevention of a wrong done or threatened to the corporate property, in order to prevent a failure of justice, in certain well defined exceptional cases, yet it is manifest that, to allow a single stockholder, or one or more of them, to force a corporation or its managing agents into a litigation, which the majority of the body or its officers may think unwise or unnecessary, would place it in the power of a single stockholder who may be dissatisfied with the management of the business of the corporation to involve the corporation in expensive litigation, which might be destructive to the interests of such corporation, and would permit a single diseon