§ 2715. Multifariousness and misjoinder of causes of action. Whether a bill in equity is multifarious depends upon the rules of equity procedure, where not regulated by statute; and it is held that in equity. "there is no rule on the subject of universal application and much is left to the discretion of the court to be determined by the facts of each particular case."'8 In most, if not all, of the code states, however, the statutory rules as to joinder of causes of action apply equally well to both actions at law and suits in equity. Statutes other than the general statutes relating to joinder of causes of action are sometimes construed as authorizing a joinder not otherwise permissible.10 Under some statutes, an equitable cause of action cannot be joined with a cause of action at law against the same officers.11 Causes of action against the corporation and against officers cannot be joined where the officers are not proper parties to the cause of action against the corporation, and the two causes of action rest upon wholly different principles and must be sustained by quite different facts.12 It has been held that a cause of action to enforce a stockholder's individual liability cannot be joined with a cause of action to enforce his liability for mismanagement as an officer.13 It has been held that it is not misjoinder, in

8 Emerson v. Gaither, 103 Md. 564, 8 L. R. A. (N. S.) 738, 7 Ann. Cas. 1114, 64 Atl. 26, approved in Jesson v. Noyes, 245 Fed. 46, 49.

9 People v. Equitable Life Assur. Soc. of United States, 124 N. Y. App. Div. 714, 728, 109 N. Y. Supp. 453. See also Cummings v. American Gear & Spring Co., 87 Hun (N. Y.) 598, 34 N. Y. Supp. 541.

Under New York statute, cause of action to set aside contract made by directors may be joined with cause of action to compel directors to account for damages from conspiracy, since both are founded upon claims against trustees arising by operation of law. Bosworth v. Allen, 168 N. Y. 157, 55 L. R. A. 751, 85 Am. St. Rep. 667, 61 N. E. 163, rev'g 57 N. Y. App. Div. 633, 67 N. Y. Supp. 1133.

Cause of action to recover damages from wrongful investments cannot be joined with cause of action on bond of officer. French v. Salter, 17 Hun (N. Y.) 546.

Causes of action for failure to file a report and for making a false report may be joined. Bonnell v. Wheeler, 1 Hun (N. Y.) 332.

10 See Bagley & Sewall Co. v. Lennig, 61 N. Y. App. Div. 26, 70 N. Y. Supp. 242.

11 People v. Equitable Life Assur. Soc. of United States, 124 N. Y. App. Div. 714, 734, 109 N. Y. Supp. 453. See also Searles v. Gebbie, 115 N. Y. App. Div. 778, 101 N. Y. Supp. 199.

A cause of action in equity for an accounting cannot be joined with one or more causes of action at law for damages from wrongful or negligent acts of corporate officers. People v. Equitable Life Assur. Soc. of United States, 124 N. Y. App. Div. 714, 109 N. Y. Supp. 453.

12 Cass v. Realty Securities Co., 148 N. Y. App. Div. 96, 132 N. Y. Supp. 1074.

13 Sturtevant-Larrabee Co. v. Mast, Buford & Burwell Co., 66 Minn. 437, 69 N. W. 324; Wiles v. Suydam, 64

an action by depositors in a bank, to join a cause of action to hold an officer of the bank personally liable for negligence, with a cause of action to hold him liable for false representations inducing the deposit.14 In South Carolina, the liability of directors to creditors, as created by statute, is held to be contractual so that a cause of action against the corporation may be joined with one against the officers under such statute.15

There is no misjoinder because some of the directors are sought to be held liable for acts of commission while others are charged merely with acts of omission, where all relate to the same matter.16 But official acts, whether of malfeasance or nonfeasance, where separate and disconnected, do not arise out of the "same transaction" or "transactions connected with the same subject of action," as those terms are used in the statutes permitting joinder of causes of action.17

A stockholder cannot unite in one action a cause of action to compel an accounting by directors and a restitution to the corporation of property wrongfully received by them, with a cause of action to recover damages which he personally has sustained by reason of the wrongful acts of defendants.18 So a right of a stockholder to sue corporate officers for fraud and deceit practiced upon him when he purchased his stock, is a personal one which cannot be joined with a cause of action for the benefit of all the stockholders to set aside alleged illegal transfers of property.19

Generally it is provided by statute that the causes joined must "affect all the parties to the action"; and this has been held to preclude a joinder of directors belonging to the board of directors at different times, part of the directors being officers at different times and some of them being liable only as to part of the causes of action.20 Whether a bill is multifarious, independently of statute,

N, Y. 173, rev'g 3 Hun (N. Y.) 604; Butt v. Cameron, 53 Barb. (N. Y.) 642; Seaman v. Goodnow, 20 Wis. 27. 14 Foster v. Bank of Abingdon, 88 Fed. 604; Solomon v. Bates, 118 N. C. 311, 24 S. E. 478.

15 Sullivan v. Sullivan Mfg. Co., 14 S. C. 494.

16 Murphy v. Penniman, 105 Md. 452, 121 Am. St. Rep. 583, 66 Atl. 282.

17 People v. Equitable Life Assur. Soc. of United States, 124 N. Y. App. Div. 714, 728, 109 N. Y. Supp. 453.

IV Priv. Corp.-38

18 Brown v. Utopia Land Co., 118 N. Y. App. Div. 364, 103 N. Y. Supp. 50.

19 Price v. Union Land Co., 187 Fed. 886.

20 Under this statute, causes of action to recover damages for misconduct cannot be joined where some of the defendants were not interested in nor liable on some of the causes of action set forth-no conspiracy being alleged. People v. Equitable Life Assur. Soc. of United States, 124 N.

where persons joined as defendants were directors in different directorates, and served for different periods and at different times, is largely determinable according to the discretion of the court.21 Where the suit was to recover against directors individually because of loans negligently made, it was held improper to join in one suit in equity directors who had served a less number of terms than other directors, with the directors who had served all of the terms during which the alleged wrongful acts had continued.22 A bill by depositors to recover from directors for their mismanagement is not multifarious because it fails to state precisely when the directors assumed the duties of their office or when the complainants became depositors.23

A bill by depositors in a bank has been held not multifarious because of joinder of all the depositors where their contracts with the bank are identical, they are entitled to participate equally in its assets, and they are very numerous.24

§ 2716. Pleading. The bill or complaint must clearly and concisely state the facts to show the existence of a cause of action.25

Y. App. Div. 714, 728, 109 N. Y. Supp. 453.

21 Jesson v. Noyes, 245 Fed. 46; Emerson v. Gaither, 103 Md. 564, 8 L. R. A. (N. S.) 738, 7 Ann. Cas. 1114, 64 Atl. 26.

22 Green v. Officers & Directors of Knoxville Banking & Trust Co., 133 Tenn. 609, 182 S. W. 244.

23 The claim was that the bill joined matters which occurred when some of the defendants were not directors with matters which occurred when they were. Saunders v. Bank of Mecklenburg, 112 Va. 443, Ann. Cas. 1913 B 982, 71 S. E. 714.

"That some of the defendants have been directors longer than others is no ground of demurrer, because the court can discriminate between them, and hold those elected recently only liable for losses incurred during their term of office." Ackerman v. Halsey, 37 N. J.-Eq. 356, aff'd 38 N. J. Eq.

501.

24 Saunders v. Bank of Mecklenburg, 112 Va. 443, Ann. Cas. 1913 B 982, 71 S. E. 714.

25 Georgia. McRee v. Mexican Gulf Oil & Mineral Co., 127 Ga. 383, 56 S. E. 451; Fricker v. Americus Manufacturing & Improvement Co., 124 Ga. 165, 52 S. E. 65.

Illinois. Wallach v. Billings, 195 Ill. App. 605, aff'd 277 Ill. 218, 115 N. E. 382.

Maryland. Citizens' Trust & Deposit Co. v. Tompkins, 97 Md. 182, 54 Atl. 617.

Montana. McConnell v. Combination Mining & Milling Co., 30 Mont. 239, 104 Am. St. Rep. 703, 76 Pac. 194, aff'd 31 Mont. 563, 79 Pac. 248.

New York. Kavanaugh v. Commonwealth Trust Co., 181 N. Y. 121, 73 N. E. 562; Shulman v. Star Suburban Realty Co., 113 App. Div. 759, 99 N. Y. Supp. 419; Michel v. Betz, 108 App. Div. 241, 95 N. Y. Supp. 844; Young v. Equitable Life Assur. Soc. of United States, 49 Misc. 347, 99 N. Y. Supp. 446, aff'd 116 App. Div. 911, 101 N. Y. Supp. 1150.

It should show that the defendants complained of are officers 26 and that they were such at the time of the wrongdoing.27 It must state facts and not mere conclusions, and must be definite and specific.28 If negligence is relied upon, it is not sufficient to merely allege fraud.29 Defenses need not be anticipated.30 If loss to the creditor is the basis of the action, then of course the facts showing the amount of the loss must be alleged.31 If illegal loans by directors are relied on, it is not necessary to allege a formal vote by them authorizing or approving such loans.32

If the action is based on a statute, the bill or complaint must set forth facts sufficient to show a cause of action embraced within some statute; 33 and it has been said that "the law is well settled

Gold Mining & Milling Co., 19 S. D. 559, 104 N. W. 261.

Tennessee. Green v. Officers & Di rectors of Knoxville Banking & Trust Co., 133 Tenn. 609, 182 S. W. 244.

Complaint for negligence in loaning the funds of the corporation, see Fish. er v. Parr, 92 Md. 245, 48 Atl. 621.

26 A complaint against directors for conspiracy in mismanagement of the corporate affairs should allege that they are directors, since directors only have power to control corporate affairs. Brown v. Utopia Land Co., 118 N. Y. App. Div. 364, 103 N. Y. Supp.

50.

27 Where property of a bank is alleged to have been lost through the negligence and fraudulent management of its officers, in an action against such officers therefor each defendant officer should be alleged to have been such at the time of the wrongdoing. Gores v. Elliott, 108 Wis. 465, 84 N. W. 865.

28 Boston & A. R. Co. v. Parr, 104 Fed. 695.

An allegation that directors were guilty of negligence in retaining in office certain officers is not sufficiently specific. Williams v. Brady, 221 Fed. 118.

But if the corporation sues an officer for an accounting, on the theory that he has made secret profits in act

ing for the corporation in a purchase of land, the complaint need not minutely state all the circumstances. Malden & Melrose Gas Light Co. v. Chandler, 209 Mass. 354, 95 N. E. 791.

29 Fox v. Hale & Norcross Silver Min. Co., 108 Cal. 369, 424, 41 Pac. 308.

30 In an action by the corporation, the complaint need not allege that the stockholders had no notice of the alleged misconduct or did not acquiesce therein. Horn Silver Min. Co. v. Ryan, 42 Minn. 196, 44 N. W. 56.

31 Agnelli v. Shatzin, 68 N. Y. Misc. 329, 123 N. Y. Supp. 797.

32 Allen v. Luke, 163 Fed. 1018. 33 United States. Continental Nat. Bank of Memphis, Tennessee v. Buford, 107 Fed. 188; Swancoat v. Remsen, 78 Fed. 592.

California. Winchester v. Howard, 136 Cal. 432, 89 Am. St. Rep. 153, 69 Pac. 77, 64 Pac. 692, holding complaint insufficient as to misappropriations by

treasurer.

Colorado. Bradford v. Gulley, 10 Colo. App. 146, 50 Pac. 314.

Indiana. Clow v. Brown, 150 Ind. 185, 49 N. E. 1057, 48 N. E. 1034; Niles v. Dodge, 70 Ind. 147.

Maryland. Fisher v. Parr, 92 Md. 245, 48 Atl. 621.

Massachusetts. Pope v. Leonard, 115 Mass. 286.

34

that a party who seeks to enforce the liability of corporate officers under a statute must allege and prove affirmatively every fact, default, or contingency upon which his right to recover depends, so as to bring himself clearly, within the statute.' The complaint must show that the corporation is one embraced within the terms of the statute creating the liability,35 and must show that a debt actually exists by stating the facts in regard thereto.36 Where it is sought to hold one liable under a statute as a director, it must be alleged and proved that he was in fact a director and within the provisions of the statute, and it is not sufficient to allege that he was held out by the corporation with his permission as being its director.37 Where the default relied upon is failure to make and file an annual report, the complaint must set forth all necessary allegations to bring the case within the statute,38 including a state

New York. Cæsar v. Bernard, 156 App. Div. 724, 141 N. Y. Supp. 659; Bagley & Sewall Co. v. Lennig, 61 App. Div. 26, 70 N. Y. Supp. 242.

Tennessee. Minton v. Stahlman, 96 Tenn. 98, 34 S. W. 222.

Complaint based on false report, see American Credit-Indemnity Co. V. Ellis, 156 Ind. 212, 59 N. E. 679.

Complaint under statute making directors making a loan to stockholders liable therefor, see Fisher v. Parr, 92 Md. 245, 48 Atl. 621.

False certificate as to payment of capital stock, see Anthony & Scovill Co. v. Metropolitan Art Co., 190 Mass. 35, 76 N. E. 289.

34 J. L. Mott Iron Works v. Arnold, 35 R. I. 456, 87 Atl. 17.

35 Pierce & Galloway v. Yeaton, McDonald & Loring, - N. H. —, 97 Atl. 876; Acker, Merrall & Condit v. Richards, 63 N. Y. App. Div. 305, 71 N. Y. Supp. 929, action against directors of base ball club.

Rule applied to membership corporation. Acker, Merrall & Condit v. Richards, 63 N. Y. App. Div. 305, 71 N. Y. Supp. 929.

In New York, complaint must show that corporation is a stock corporation. Marshall v. Barr, 27 N. Y. App. Div. 97, 50 N. Y. Supp. 116. Allega

tion that corporation is a business corporation is a sufficient allegation that it is not a railroad or a moneyed corporation. Union Bank of Buffalo v. Keim, 52 N. Y. App. Div. 135, 64 N. Y. Supp. 1070, aff'd without opinion 169 N. Y. 587, 62 N. E. 1101. But it is not sufficient to merely allege corporation is a domestic one, in New York. Church v. Butterfield, 19 N. Y. Misc. 265, 44 N. Y. Supp. 381.

Complaint need not expressly allege corporation is a stock corporation, where necessarily implied from other allegations. Ginsburg v. Von Seggern, 59 N. Y. App. Div. 595, 69 N. Y. Supp. 758, aff'd without opinion 172 N. Y. 662, 65 N. E. 1116.

Alleging that corporation was organized for profit is sufficient to show that corporation has capital stock, so as to be within the statute. Daily v. Marshall, 47 Mont. 377, 133 Pac. 681. 36 Boston & A. R. Co. v. Parr, 104 Fed. 695; Davis v. Wilson, 150 N. Y. App. Div. 704, 135 N. Y. Supp. 825.

37 Edward Davis, Inc. v. Adler, 172 N. Y. App. Div. 414, 158 N. Y. Supp. 623, rev'g 92 N. Y. Misc. 458, 156 N. Y. Supp. 157.

38 Bovee v. Boyle, 25 Colo. App. 165, 136 Pac. 467; Bradford v. Gulley, 10 Colo. App. 146, 50 Pac. 314; Staf