Major v. Walker (1913) · DecisionDepot

Major v. Walker

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Court of Appeal Dec 10, 1913 No. Civ. No. 1398.Published

Before: Richards

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Holding. The court held that the liability of a corporate director for the embezzlement or misappropriation of funds is contractual rather than penal, and therefore the cause of action survives the director's death.

Issues

Does an action to enforce a director's liability for corporate mismanagement survive the director's death?
Is the liability of a corporate director for embezzlement or misappropriation of funds contractual or penal in nature?

Disposition. reversed

Quotations verified verbatim against the opinion

“the liability of a director of a corporation to its stockholders and creditors for the embezzlement and misappropriation of its funds is contractual and not penal in its nature”

“the cause of action attempted to be set up in the plaintiff’s fifth amended complaint did not survive the death of David F. Walker, cannot be upheld.”

Synopsis

APPEAL from orders of the Superior Court of the City and County of San Francisco dismissing action and vacating substitution of administrator as party defendant. J. M. Seawell, Judge.

The facts are stated in the opinion of the court.

RICHARDS, J.

This is an appeal from an order of the superior court in and for the city and county of San Francisco, setting aside its order theretofore made, substituting Walter H. Linforth, administrator of the estate of David F. Walker, deceased, in the place and stead of said David F. Walker, who, prior to his death, had been one of the defendants in the case, and from a further order dismissing the action as to said defendant Walker.

The facts of the case leading up to the entry of the orders appealed from are the following: The plaintiffs Frieda R. Major and Kate O’Connell, the administratrix of the estate of George P. Connell, deceased, each brought a separate ac

[466]

tion against David F. Walker, and a number of other persons, directors of the California Safe Deposit & Trust Company, to enforce the alleged liability of the defendants as such directors, for the alleged mismanagement of the institution. These two actions were consolidated in the court in which they were pending

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and thereafter and during the lifetime of David P. Walker the plaintiffs filed therein their fifth amended complaint, wherein, purporting to act not only for themselves, but also on behalf of all of the depositors and creditors of said corporation, numbering several thousand persons, they seek to enforce the aforesaid liability of the defendants for the mismanagement of the corporate affairs.

Subsequent to the filing of this fifth amended complaint David P. Walker died, and Walter H. Linforth was duly appointed administrator with the will annexed of his estate. Thereafter and on February 9, 1912, upon the suggestion of the attorney for plaintiffs, the court made its

ex parte

order substituting said Walter H. Linforth, administrator, etc., as a party defendant in the place and stead of said Walker. Upon April 20, 1912, upon motion of said Linforth, the court made an order setting aside its previous order of substitution, and further ordered that the action be dismissed as to said David P. Walker, deceased.

It is from these orders that this appeal has been taken.

Major v. Walker

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Synopsis

RICHARDS, J.

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