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Smith v. Stone, 21 Wyo. 62, 128 P. 612

Facts

John Smith, a stockholder in the Bear River Land & Stock Company, filed a petition alleging that the defendants, including Charles Stone and others, wrongfully attempted to sell the company's assets to the Crawford Land Company for $76,500, despite the assets being worth at least $125,000. The petition claimed that the sale was made without proper authority and was intended to defraud minority stockholders. Smith sought to have the sale declared void and to require the defendants to account for the proceeds from the sale.

The petition alleges that at all the times mentioned therein each of the companies above named was a corporation existing and doing business under the laws of the state of Wyoming; that the plaintiff is a stockholder in the Bear River Land & Stock Company, owning 98 shares of its capital stock; that said capital stock consists of $150,000 divided into 1,500 shares of the par value of $100 each, of which 765 shares have been issued and were outstanding on the 2d day of October, 1906.

Issue

Whether the petition states a cause of action against the defendants regarding the alleged wrongful sale of the Bear River Land & Stock Company's assets.

The general question to be determined is whether or not the petition states a cause of action against the defendants or either of them.

Rule

A petition must allege with certainty and definiteness tangible facts to support claims of fraud or misconduct; vague allegations are insufficient to sustain a cause of action.

A defect of that kind is ordinarily to be corrected by motion to render the pleading more definite and certain by amendment, and is not ground for demurrer.

Analysis

The court found that the petition was indefinite and uncertain, failing to clearly allege that a sale of the assets actually occurred or that the defendants acted fraudulently. The objections raised by Smith were primarily about the price of the assets rather than the authority of the stockholders to sell them. The court noted that the allegations did not demonstrate a lack of authority for the sale or provide sufficient evidence of fraud.

The indefinite character of many of the averments will be referred to as we discuss the propositions involved.

Conclusion

The court affirmed the dismissal of the petition, concluding that it did not state a cause of action against the defendants.

The court may require the money in the hands of said defendants to be paid to the clerk of the court to be distributed pro rata to the stockholders of the said company.

Who won?

Defendants prevailed as the court found the petition insufficient to state a cause of action.

The petition is indefinite and uncertain in several important particulars.

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