Sage v. Culver

• Decision Date: 15 October 1895
• Citation: 41 N.E. 513,147 N.Y. 241
• Parties: SAGE et al. v. CULVER et al.
• Court: New York Court of Appeals Court of Appeals

147 N.Y. 241

41 N.E. 513

SAGE et al.

v.CULVER et al.

Court of Appeals of New York.

Oct. 15, 1895.

Appeal from supreme court, general term, Second department.

Action by Henry W. Sage and others against Andrew R. Culver and another for discovery and accounting. From an order of the general term (24 N. Y. Supp. 514) reversing an order sustaining a demurrer to the complaint, defendants appeal. Affirmed.

George W. Wingate, for appellants.

Wm. C. De Witt, for respondents.

O'BRIEN, J.

While the complaint in this action is open to criticism as lacking in that clearness and fullness of statement essential to good pleading, yet we think that the decision of the general term overruling the defendants' demurrer was correct. When a complaint is met by a demurrer on the ground of insufficiency, the question always is whether, assuming every fact alleged to be true, enough has been well stated to constitute any cause of action whatever. The complaint will be deemed to be sufficient whenever the requisite allegations can be fairly gathered from all the averments, though the statement of them may be argumentative, and the pleading deficient in logical order and in technical language. The pleading will be held to state all facts that can be implied from the allegations by reasonable and fair intendment, and facts so impliedly averred are traversable in the same manner as though directly stated. Zabriskie v. Smith, 13 N. Y. 330;Marie v. Garrison, 83 N. Y. 14, 23;Sanders v. Soutter, 126 N. Y. 193, 27 N. E. 263. The complaint in this case was not, we think, so deficient in the statement of facts as to warrant the defendants in assailing it by demurrer.

The defendants own a very large majority of the stock of the railroad which is joined with them as defendant, and they are its trustees, and practically, by reason of their ownership of nearly all the stock, the sole directors and managers. The plaintiffs own a small amount of the stock and some of the bonds of the road, and, to the extent of their holdings, are interested in the management of the property. They bring this action, as such stockholders, against the defendants, as directors, and ask the court to adjudge that the defendants account to them or to the corporation concerning certain transactions in regard to the management of the affairs of the corporation which are stated in the complaint. It is the sufficiency of these allegations as the basis of an action that is challenged by the demurrer. The complaint contains proper allegations to warrant the plaintiffs, as stockholders, in bringing the action, instead of the corporation itself; and there is no difficulty on that ground, if the allegations are otherwise sufficient. Where the corporation is exclusively under the control of the trustees and officers whose acts and management are questioned, a demand that the corporation bring the action would be idle and fruitless, and in such cases equity permits the stockholder to bring the action in his own name. Brinckerhoff v. Bostwick. 88 N. Y. 52;Hawes v. Oakland, 104 U. S. 450;Leslie v. Lorillard, 110 N. Y. 519, 18 N. E. 363.

There are, we think, at least two facts stated in the complaint, or which are fairly to be gathered or implied from the allegations, which are sufficient to require the defendants to answer: (1) It is alleged, in substance, that the defendants, as officers and trustees of the defendant railroad, took from themselves, as trustees and officers of another railroad, a lease of the latter, which they practically owned and managed, to the defendant corporation, at an exorbitant rent, which arrangement has the effect to unlawfully deplete the funds and earnings of the defendant corporation, and to injury the plaintiffs, as stockholders therein. (2) It...