Nielsen v. Gillespie

THE COURT.

An appeal by the plaintiff from a judgment entered, for defendants and respondents Gillespie, Gray, and Hendry, following his refusal to further amend his fourth amended complaint.

As stated by appellant, the gist of his complaint against respondents is that, being neither directors nor officers of the corporation defendant, which was organized under the laws of the state of California, upon their representations that they would manage and operate its business, three of the five corporate directors were induced to resign, whereupon respondents took control of the corporate business and property; that through the acts of the respondents, which were alleged to have been done for the purpose of destroying the business of the corporation, this result followed, and its property, through proceedings brought by its creditors, was sold for less than its value. It was further alleged that as a consequence of these acts the plaintiff, to whom the corporation is indebted in the sum of $6,500, is unable to collect his claim from the corporation, and he seeks by this action to recover from respondents the amount thereof as damages.

If the business of the corporation was destroyed and its property dissipated as alleged, then a suit to recover the damage caused might be maintained by the corporation, and the chose in action, like any other property, would constitute a part of its assets. The facts alleged, however, created no cause of action in favor of appellant. His remedy was a proceeding to subject the assets of the corporation to the payment of his debt and the debts of other creditors. While such appears to have been his object in the present suit, in- order to do so it was necessary that his claim be first reduced to judgment.

(Roberts

v.

Buckingham,

172 Cal. 458 [156 Pac. 1018];

Delaney Producing & Refining Co.

v.

Crystal etc. Co.,

88 Cal. App. 784 [264 Pac. 523].) This, so far as shown by his complaint, he had not done, and the demurrer thereto was properly sustained.

The judgment is affirmed.

A petition for a rehearing of this cause was denied by the District Court of Appeal on March 30, 1929, and a petition