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Carpenter v. Roberts

56 How. Pr. 216 Court SUPREME COURT. English

Delivered by Van Vorst, J.

Contents

Majority

p. 216
SUPREME COURT.
Franklin Carpenter agt. Randel W. Roberts and Roberts’ Manufacturing Company.

Headnote

Sloclcholder’s action against a trustee for property of a corporation converted by him, to his own use — Parties.
A stockholder of a corporation may maintain an action in his own name, and in the behalf of all others similarly situated, to recover of a trustee property of the corporation which the trustee has converted to his own use, the corporation being made a party defendant. ■
Special Term,
October, 1878.
Demubbeb to complaint.
Royal S. Cram,ey for demurrer.
H. F. Averill, opposed.

Greavs agt. Gouge ( 69 N. Y., 154 ) justifies this action in the form in which it is brought (S. C., 49 How. P. R., 79 ).

The plaintiff sues not only for himself but also in behalf of all other stockholders.

The corporation, of which the defendant Boberts is a trustee, and the money and property of which he has converted to his own use, declines, upon application of the plaintiff a stockholder, to bring an action for its recovery, and it is made a defendant.

Under such circumstances, the plaintiff, a stockholder, is

p. 217
justified in bringing an action, for himself, and all others similarly situated, to obtain appropriate redress, in the form in which this actioh is brought.

It would be a reproach to the administration of justice and equity, if there was no remedy for wrongs of this nature.

Fortunately there is (Russel agt. Wakefield, L. R., 20 Equity, 474; Allen agt. The New Jersey So. R. R. Co., 49 How. Pr. R., 14 and cases cited ).

The decree, if this cause goes to final judgment, will adequately protect all interests.

The defendants argue that the complaint discloses no special damage to the plaintiff. The damage to the plaintiff, and the other stockholders, appears in the fact alleged, that the assets of the corporation have been taken by the defendant Eoberts and converted to his own individual use, illegally, wrongfully and fraudulently. This is a direct irijury to all the stockholders, and they can only be made good through a recovery to them, or to the corporation, of the amount of the property so illegally converted.

There should be judgment for the plaintiff on the demurrer, with liberty to the defendant to answer on payment of costs.