Winchester v. Mabury

Citations

• 122 Cal. 522
• 55 P. 393
• 1898 Cal. LEXIS 624

Syllabus

<p>Corporations—Misappropriation by Directors—Construction of Constitution—Action at Law—Bill in Equity.—Under section 3 of Article Nil of the constitution, which provides that “the directors or trustees of corporations and joint stock associations shall be jointly and severally liable to the creditors and stockholders for all moneys embezzled or misappropriated by the officers of such corporation or joint stock association during the term of office of such director or trustee,” conceding it be self-executing, an action at law on behalf of one or more of the creditors of the corporation cannot be sustained, but the only proper remedy, on behalf of the creditors, is a bill in equity where all the creditors are parties, or are represented, and in which there can be an accounting and adjustment of equities, after ascertainment of all the facts.</p>