Halsey v. Ackerman

The opinion of the court was delivered by

Beasley, C. J.

The complainant, who is the respondent in this court, is & creditor and stockholder of the Mechanics National Bank of Newark, and the defendants were its directors at the time of its • failure. The receiver of the bank is likewise a defendant. The bill purports to be exhibited for the benefit of the complainant and such others of the stockholders and creditors as may choose to join in the litigation. The sufficiency of the case stated in the bill has been put in question by demurrers.

The main point insisted on in favor of the demurrant, is that the allegations of this bill are too vague and uncertain to warrant a decree. But this exception does not rest on any basis of fact.. The substance of the complaint will be found in the opinion of the chancellor, and from that statement it will be manifested that' the allegations of the misconduct of the officers of this institution are as circumstantial and definite as the rules of pleading, require. Most of the charges are of a nature that, for their full, development, would necessitate great prolixity of narration, and in such instances, according to the well-known rule, particularity of statement is dispensed with. T.he charges in question are clearly of this character. Besides, a requirement that the creditor or stockholder must show in detail the various neglects and misfeasances of the officers of one of these corporations, when the books and papers appertaining to such affairs are beyond his control, would be, for the most part, to leave him remediless. The objection has no foundation in principle.

With respect to the other exception, that the court of chancery cannot assess damages for negligence, the difficulty which it sug~ *510gests exists, if at all, only in the terms employed to state the proposition. The bill does not, in substance, call for allowance of damages, but to hold the defendants for definite sums of money which are alleged to have been lost by their criminal negligence. The case is entirely parallel with proceedings to call a trustee to account for moneys that of right should be in his hands. This plea for the defence tacitly asserts that if the complainants’ grievance exist in point of fact, in law they have no remedy. Such a position is manifestly unsustainable.

Touching the objection to the bill urged by one of the defendants, that it appears from its statements that the bank was insolvent before he became a director, the answer is that a creditor or stockholder has a right to hold officers to account for losses that occurred by reason of their culpable neglects as well after insolvency as before. The mere statement of such losses is an averment, on the part of the creditor or stockholder, of a damage done to him.

The decree should be affirmed. If the allegations of the bill are wholly true there would seem to be no doubt as to the responsibility of these defendants, for the negligence and neglects of official duty thus set forth are of the grossest character, and with respect to the doctrine of official liability founded on negligence, this is the only principle that this court is at present called upon to propound.

Decree unanimously affirmed.