Reed v. Goldstein

By the Court, Crockett, J.: The plaintiff is a creditor of the Golden Gate Sugar Refinery, an insolvent corporation, and the present is an action on the case for damages which the plaintiff is alleged to have suffered, by reason of the fraudulent misappropriation by the defendants of a large sum of money belonging'to the corporation, whereby it is averred that the corporation became insolvent and unable to pay the debt due the plaintiff.

The plaintiff has mistaken his remedy, and the action for damages cannot be sustained on the facts alleged in the complaint. The proper remedy was an action in the nature of a creditor’s bill against the corporation and the present defendants, (who were also creditors) wherein, with all the parties in interest before it, the Court might have compelled the defendants to account for the money which they had misappropriated, and have proceeded to distribute it according to the rights and equities of the several parties. The appropriate relief might possibly have been administered in the present action on the facts alleged in the complaint, if the corporation had been made a party defendant. But it is not made a party; and one of the grounds of demurrer to the complaint was a defect of parties defendant, and the demurrer was properly sustained on this ground.

Judgment affirmed. Remittitur forthwith.