Caldwell v. Bates

• Decision Date: 07 April 1896
• Court: North Carolina Supreme Court
• Parties: CALDWELL. v. BATES et al.

24 S.E. 481

118 N.C. 323

CALDWELL.

v.BATES et al.

Supreme Court of North Carolina.

April 7, 1896.

Appeal from superior court, Robeson county; Norwood, Judge.

Action by L. H. Caldwell, executor, against Isaac Bates and others. There was a judgment for plaintiff and defendants appeal. Affirmed.

D. L. Russell, H. G. Connor, Ricaud & Weill, and P. D. Walker, for appellants.

F. H. Bus-bee and McNeill & McLean, for appellee.

CLARK, J. This case presents substantially the same points as Solomon v. Bates (at this term) 24 S. E. 478; the plaintiff in this case, as in that, being a depositor who had lost by the insolvency of the bank, and the defendants being the same in both cases. Corporate interests are increasing steadily in importance, and have become intimately connected with every phase of life. It is necessary to define accurately the duties, rights, and obligations of corporations, and the responsibilities of their managers to the public and to their own stockholders. Without reiterating the reasoning and authorities in the case of Solomon v. Bates, it is sufficient to sum up the conclusions at which the court arrived in that case:

1. It is not a misjoinder of causes of action to join in the same action, brought against the directors individually, a cause of action for gross negligence in the discharge of their duties, whereby the plaintiff was injured, with causes of action for the fraud and deceit of the directors in making false statements and misrepresentations of the condition of the bank, whereby the plaintiff was induced to deposit his money in the care of the bank.

2. That the directors are jointly and severally liable for their torts, and the corporation itself can be joined or not, at the election of the plaintiff.

3. That, where it is admitted by demurrer or otherwise that the corporation is insolvent, it is not necessary to exhaust remedies against it before suing the directors for wrongs caused by their negligence, fraud, or deceit.

4. That an action can be brought by a depositor or other creditor, and even by a stockholder, for such torts against the president and directors, without having first applied to the corporation or its receiver to bring such action, and being refused.

5. That it is not necessary to allege that, "when the plaintiff deposited his money, the directors knew or believed he would not get it back, or intended by deceit to get it from him, or cause him to lose it"; but that it is sufficient toallege that, the bank being...