Jordan v. Hartness

*719 BaeNhill, J. The plaintiff does not allege a loss peculiar to himself. Bane v. Powell, 192 N.C. 387, 135 S.E. 118. The alleged wrong caused loss to stockholders and creditors generally. Douglass v. Dawson, 190 N.C. 458. Thus he has failed to allege a cause of action resting in him which he may enforce of his own right. Bane v. Powell, supra. A cause of action for the conversion or dissipation of corporate assets rests in the corporation and must be enforced by the corporation. Ordinarily, in the absence of demand upon the corporation to prosecute the action and its wrongful refusal so to do, the action may not be maintained by an individual stockholder. Winstead v. Hearne, 173 N.C. 606, 92 S.E. 613; Douglass v. Dawson, supra; Corporation Commission v. Bank, 193 N.C. 113, 136 S.E. 362; Sain v. Love, 207 N.C. 588, 178 S.E. 98; Taylor v. Holmes, 14 F. 298, affirmed, 127 U.S. 489, 32 L. Ed. 179. He must first seek relief through the corporation, Winstead v. Hearne, supra, and in the absence of allegation that action by the corporation has been demanded and refused, a demurrer must be sustained. Douglass v. Dawson, supra; Merrimon v. Asheville, 201 N.C. 181, 159 S.E. 413; Roscower v. Bizzell, 199 N.C. 656, 155 S.E. 558. This is true even though the injury to the corporation causes a depreciation in the value of his shares of stock therein. Anno. 59 A.L.R. 1099. That is to say, the right of a stockholder to bring suit against other stockholders for dissipation of the assets of the corporation rests (1) in the existence of a complete cause of action against the defendants in favor of the corporation and (2) upon the neglect and refusal of the corporate body to act for itself. 13 A. J. 506. Even then the recovery is for and in behalf of the corporation, and so it is a necessary party to the action. While there are exceptions to the rule that a stockholder must first demand action by the corporation, Murphy v. Greensboro, 190 N.C. 268, 129 S.E. 614; Hawes v. Oakland, 104 U.S. 450, 26 L. Ed. 827, the allegations in the complaint fail to bring this case within the exceptions. For the reasons stated the judgment below is Affirmed.