Strickland v. Jolly

Beck, J. (After stating the facts.) 1. The court below did not err in refusing to sustain a general demurrer to the plaintiff’s petition. While the directors of the corporation, at the time of acting upon the proposition of selling and closing out the business in which they were engaged at a time when it appeared that the differences and internal troubles of the corporation were such as to render the further carrying on of the business unprofitable, were not assembled in a regular meeting or in a special meeting formally called, still all the directors and the stockholders were conferring together, and the action taken was by the consent of every one of the stockholders and directors. And having, under these circumstances, agreed and consented to wind up and close out the business of the corporation, where subsequently, in pursuance of this action of the directors, a sale of all the stock of goods, except such as was damaged and on which a price could not be agreed between the parties, was made to a party who became the purchaser thereof, the corporation could not, over the objection of the plaintiff, he being a stockholder and director in the corporation, continue the business with the remnant of the stock of goods not included in the sale because of the damaged and unsalable character of the remnant, and should not be permitted to do so, or to make other purchases, thereby adding to the remnant so reserved; but in good faith the agreement made among the entire body of directors and stockholders should be carried out to its final completion by the entire disposal of the remnant of the stock of goods reserved fox the reasons stated above, when the business was practically closed by the sale of the bulk of the goods. This is in the main what the plaintiff seeks by his petition, and these main principles of the suit can be accomplished without any order dissolving the incorporation; and the petition, by the overruling of the general demurrer, was properly retained. See, in this connection, 3 Clark & Marshall on Private Corporations, § 644; 21 Am. & Eng. Ene. L. 865-6. 2. While we have held that the grounds of demurrer which are general in their character were properly overruled, we are of the opinion that the court should have sustained the special demurrer to so much of the petition and the prayers thereof as sought to prevent the corporation from holding a meeting for the purpose of electing a secretary and treasurer; as it appears that the plaintiff [888] was holding over beyond his term as the incumbent oí that office, and no reason appears why he should continue in the office beyond the expiration of his regular term. Direction is given that such special demurrer be sustained, and so much of the petition as seeks to prevent a meeting of the directors for the purpose just stated be stricken. The other special demurrers were without merit, and the court did not err in overruling them. The extent of the interlocutory injunction granted is not brought under review by this bill of exceptions. Neither does this case involve any question of the rights of creditors- No creditor is proceeding, and a proper decree can be entered, as to corporate debts. The question raised is between the plaintiff, the corporation, and the other individuals constituting •all the stockholders and directors thereof. Judgment affirmed, with direction. All the Justices concur.