Case ID: misc_16/html/0048-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Daly, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William M. Wilson, Respondent, v. The Brentwood Hotel Co., Appellant. (Two cases.)
    (Supreme Court, Appellate Term,
    February, 1896.).
    Corporations — Service.
    Service of process upon a director who has sent in his resignation is not binding upon' the corporation, although.such resignation has not been formally accepted, and • its acceptance would reduce the number of directors to less than the minimum allowed by law.
    Appeals by defendant from judgment's in. plaintiff’s favor, entered by default in the Eighth District Court upon proof of service of the summons upon ■ Frederick A; Hart, described as one of the directors of the defendant.
    > - The appeal is taken under section 3057 of the Code, upon affidavits showing that Hart hid' resigned as a director of the company before the service of the summons. Opposing affidavits are presented -by the respondent. '
    Blair & Rudd, for appellant.
    .Welch & Daniels, for respondent.
   Daly, P. J.

It is not questioned that Hart sent his resignation as director to the president of the company before the summons was served upon him, although it had not been formally accepted. Acceptance was not necessary to make the resignation effective. Chandler v. Hoag, 2 Hun, 613; 63 N. Y. 624; Smith v. Danzig, 64 Hun, 320; Morawetz on Corp., § 563. The fact that the withdrawal of Hart from the company would, reduce the number of its directors to less than three, the minimum allowed by law (Business Corporation Law, § 2, sub. 7; Laws of 1892, chap. 691), does not require ns to hold the resignation ineffectual as regards the plaintiff or other creditors. There remained the president, upon whom service of process could be made. The' same consideration renders it unnecessary to discuss the charge that the ■ resignation of Clark and another director, Eellam, was. intended to defeat the employees of the company in their efforts, to,recover against.it. If all the directors had resigned with' that intention, a question of great interest would be presented, which, it is not necessary now to consider. Carnaghan v. Exporters & Producers’ Oil Co., 11 N. Y. Supp. 172; Smith v. Danzig, supra.

At the time of the service of summons in these actions upon him, Clark notified the person making the service that he had sent in his resignation, and that he doubted whether he was the proper person to he served. This prompt notification is satisfactory evidence that he had no intention of prejudicing the xighteof creditors by his resignation.

The‘judgments must he reversed.

MoAdam and Bischoff, JJ., concur.

Judgments reversed, with costs.