W. A. VARN, PLAINTIFF IN ERROR,
v.
W. A .WHIDDEN, DEFENDANT IN ERROR
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This case concerns whether a stockholder can sue at law to dispute the method of distributing corporate assets after dissolution, or if equity is the proper venue. The court held that equity is the appropriate forum for such disputes.
The court held that the remedy for disputes over the method of distributing corporate assets among stockholders after dissolution is in equity, not at law. A common count for money had and received is insufficient to replace equitable remedies.
“the court gave judgment for the defendant upon the ground that the remedy is in equity and not at law.”
This quote establishes the trial court's basis for its decision.
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Join FLexlaw to unlock all legal intelligenceA stockholder, Varn, sued another party, Whidden, who held the assets of a dissolved corporation for distribution. Varn believed he was entitled to a …
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Whitfield, C. J.
— Varn brought an action at law against Whidden “tor the portion of the funds which the plaintiff thought he was entitled to have,” as a stockholder upon the voluntary dissolution of a corporation, Whidden holding the assets of the dissolved corporation for distribution among the stockholders, the debts having been paid.
The pleadings show a contest as to the method of computing the distributive shares of the funds due to the stockholders of the dissolved corporation after the payment of debts, and the court gave judgment for the defendant upon the ground that the remedy is in equity and not at law. On writ of error the plaintiff contends that under Section 2682 of the General Statutes, the method of distribution may be determined in an action at law. The statute referred to does not provide a rem-, edy for an alleged erroneous and inequitable method of distributing the funds of a dissolved corporation among the stockholders. The remedy is in equity.
The declaration contains a common count for money received by the defendant for the use of the plaintiff. While on a proper common count recovery may be had for money which in good conscience should be paid to the plaintiff, it does not take the place of equitable remedies and cannot be used as such, it being an action at law.
This is not an action to recover an amount due under a contract relation between the corporation or its representative and a third party, but it is to determine the rights of a stockholder with reference to the distribution of the funds of a dissolved corporation after the corporate debts are paid. See Spratt v. Livingston, 32 Fla. 507, 14 South. Rep. 160, 22 L. R. A. 453, cited by plaintiff in error. Being a matter of equitable cognizance the court will not be held in error for rendering judgment for the defendant upon the ground that the plaintiff’s remedy is in equity and not at law.
The judgment is affirmed.
TayloR, Shackleford, Cockrell and Hocker, J. J., concur.