Case ID: ad2d_7/html/0714-03.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

All States Warehousing, Inc., et al., Respondents-Appellants, v. Mammoth Storage Warehouses, Inc., et al., Appellants-Respondents.
   The defendants moved at Special Term to dismiss the second, third, fourth, fifth and gixth causes of action for insufficiency, and they appeal from so much of the order entered thereon as denied their motion to dismiss the second cause of action. The plaintiffs appeal from so much of the same order as granted the defendants’ motion to dismiss the third, fifth and sixth causes of action. As we view the first cause of action, against which no motion was made, it alleges a tortious injury to the corporate plaintiff. The second cause of action seeks recovery by the individual plaintiff as a stockholder, officer and director of the corporate plaintiff for the same tortious conduct charged by the corporation in the first cause of action. As pleaded, his rights are merely derivative. If damage resulted from the misconduct of the defendants, it was suffered by the corporate plaintiff. The individual plaintiff’s loss would be in the diminished value of his stock. His recoupment, in common with that of all others similarly situated, would be the restoration of the value of his stock, through the medium of recovery by the corporation for the tort committed. In this respect, therefore, the second cause of action is insufficient (Niles v. New York Cent. & Hudson Riv. R. R. Co., 176 N. Y. 119, 123; Hedger Transp. Corp. v. Bushey & Sons, 186 Misc. 758, affd. 270 App. Div. 912; 42nd St. Fotoshop v. Weimet Film Co., 286 App. Div. 714). There are no allegations from which injury, other than derivatively received, can be spelled out. The third cause of action, in which the corporate plaintiff attempts to allege a breach of contract, is insufficient for it fails to plead due performance (Utica Trust & Deposit Co. v. Sutton, 231 App. Div. 95, 98; Rules Civ. Prac., rule 92). The order is modified on the law, to provide that the motion to dismiss the second cause of action is granted, with leave to the respective plaintiffs to replead the second and third causes of action within 10 days after the service of a copy of the order, with notice of entry. As so modified, the order is affirmed, without costs. Concur — Rabin, J. P., M. M. Frank, Valente, McNally and Stevens, JJ.