Buist v. Melchers
Buist v. Melchers
Opinion of the Court
The opinion of the court was delivered by
This is an action brought by George Lamb Buist, as receiver of the Assistance Building and Loan Association, against the above named defendants, to recover judgment for the sum of $58,000, damages alleged to have been sustained by said association, on account of negligence on the part of said defendants in the discharge of their duties as president and directors of said association. The case was placed for trial on Calendar 1, but, on motion of defendant’s attorneys, was ordered by the presiding judge to be transferred to Calender 2, on the ground that the case was one in equity, and not at law.' When the case was called for trial on Calendar 2, the defendants demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was overruled. The defendants have appealed to this court on exceptions assigning error on the part of the Circuit Judge in overruling the demurrer; and the plaintiff has appealed because his honor, the presiding judge, ruled that this is an equity case, and ordered it transferred from Calendar 1 to Calendar 2. For a proper understanding of the questions in this case, it will be necessary to incorporate in the report of it, the complaint, the answer, the order transferring the case from Calendar 1 to Calendar 2, the order overruling the demurrer, the exceptions of the plaintiff, and the exceptions of the defendants.
Therefore, taking the period of service by years, it stands thus: 1888, Alexander Melchers, president. Board of directors — -Daniel Eavenel, Jacob Kruse, Patrick Darcy, A. F. C. Cramer, W. H. Welch, and J. Alwyn Ball. 1881h the same. 1885, the same, until September. 1886, Alexander Melchers, president. Board of directors — Daniel Eavenel, Patrick Darcy, Jacob Kruse, A. F. C. Cramer, W. H. Welch. 1887, the same. 1888, the same. 1889, the same. 1890, up to September, the same, except that B. Feldman became a member of the board in September, 1889. 1891, Alexander Melchers, president. Board of directors — Patrick Darcy, Jacob Kruse, A. F. C. Cramer, W. H. Welch, Eobert Martin, F. W. Cappelmann. 1892, Alexander Melchers, president. Board of directors — Lee Loeb, Eobert Martin, F. W. Cappelmann, B. Feldman, Patrick Darcy, Jacob Kruse, A. F. C. Cramer, and W. H. Welch.
The ninth paragraph of the complaint sets forth the particular acts of negligence alleged to have been committed by the defendants, and are as follows: That the defendants failed to meet monthly, as required by the by-laws of the association, in order to dispose of funds; failed to'hold the stated meeting to pass on loans; to inspect the books and accounts of the association; to have annual statements properly audited; to see that drafts on the treasury were properly signed; to require a proper bond from the treasurer; allowed the funds to accumulate in the hands of the treasurer instead of lending them out; put forth yearly incorrect and untrue statements, and misrepresented the condition of the association; did not verify by vouchers the faulty and incorrect statement of the treasurer; certified and misrepresented that $67,272 had been spent in buying and retiring shares of the association, when this was false; failed to verify the alleged purchases of stock, and calling for the production of ttye scrip so alleged to have been bought, and having them cancelled; and did not enforce the penalties
The defendants are, therefore, only liable for their proportionate parts of the damages alleged to have been sustained by t.heir negligent acts committed at different times, and in order to ascertain the proportionate amount for which each was liable, it was necessary to resort to a court of equity. The proportions in which the defendants are liable can only be determined by an accounting of their acts and doings as officers of the association, and to make such an accounting is peculiarly the province of a court of equity. Having reached the conclusion that the defendants are only liable for their proportionate parts of the loss sustained by reason of their alleged acts of negligence, and that the proportions in which they are liable can only be determined by an accounting as to their official acts, it would seem'to be unnecessary to cite authorities to show that a court of equity is the proper forum for such accounting and adjustment of proportions iniwhieh they are liable. The distinction in eases-where the liability of the directors is for a fixed and definite^amount, and where they are only liable for & proportionate part, which can be determined only by an accounting, is pointed out in a number of cases, amongst which we may mention: Hornor v. Henning, 93 U. S., 228; Pollard v. Bailey, 20 Wall., 520; Terry v. Tubman, 92 U. S., 156; Stone v. Chisolm, 113 Id., 302—all cited with approval in Hall & Co. v. Klinck, 25 S. C., 348. In support of our view, that this is a case in
Section 181 of the Code provides that “when the allegations of a pleading are so indefinite or uncertain that the precise nature of the charge or defence is not apparent, the court may require the pleading to be made more definite and certain by amendment.” The remedy in such cases is not by demurrer, but by motion to make more definite. Mobley v. Cureton, 6 S. C., 49; Childers v. Verner, 12 Id., 6; Hellams v. Switzer, 24 Id., 39; Dowie v. Joyner, 25 Id., 153; Holland v. Kemp, 27 Id., 623; Chapman v. City, 28 Id., 373; McCown v. McSween, 29 Id., 130; Westlake v. Farrow, 34 Id., 270; Cartin v. South Bound R. R. Co., 43 Id., 221. The first exception is overruled.
It is the judgment of this court, that the orders appealed from be affirmed.
Reference
- Full Case Name
- BUIST v. MELCHERS
- Cited By
- 4 cases
- Status
- Published
- Syllabus
- 1. Action Against Directors — Negligence—Equity.—Where an action is brought by the receiver of a corporation to recover from its several boards of directors during successive terms of office, unliquidated damages for negligent omissions of duty of which they were alleged to have been severally guilty during these successive terms, the proportionate liability of each one could be ascertained and fixed only by a Court of Equity, and, therefore, the cause was properly docketed on Calendar 2. 2. Allegations Not Specific — 'Remedy-—Where a complaint fails to specify the time of the omissions of duty charged against the board of directors of a corporation, and which of the defendants were members of the board at such times, the remedy is not demurrer, but motion to require the allegations of the complaint to be more definite and certain. 3. Liability oe Directors — Demurrer.—Nor will a demurrer be sustained on the ground that the liability of the defendants, if any, is secondary, as such a defence raises only an equity to be asserted by answer. 4. Contributory Negligence — Estoppel—Demurrer.—Whether contributory negligence or estoppel are to be inferred from facts stated in the complaint, cannot be determined on demurrer. The distinction pointed out between facts admitted and facts alleged, from which an admission is sought to be inferred.