Case ID: ad2d_15/html/0477-01.html
Source: Caselaw Access Project
Author: {"author": "Eager, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ethel C. Gearing et al., Individually and as Stockholders of Radium Chemical Company, Inc., Respondents, v. Joseph A. Kelly et al., Appellants.
   In a stockholder’s derivative action a plaintiff must show both special circumstances and factual evidence to support his allegations (Brush v. Brittain, 10 A D 2d 574). No special circumstances are shown. While the physical condition of Kelly, Sr., might warrant perpetuation of his testimony, it also prevents him from being examined. Thus it cannot constitute a special circumstance. In all but one of the items allowed the allegations are unsupported by any factual evidence. Concur—Rabin, J. P., McNally, Stevens and Steuer, J J.;

Eager, J.,

dissents in the following memorandum: I would affirm. In my opinion, there is a sufficient showing of merit to support the limited examination directed by Special Term, and, bearing in mind that plaintiffs are 50% stockholders of the defendant corporation, there are “ special circumstances ” justifying the examination. (See Steinberg v. Altschuler, 12 A D 2d 479.) The order of Special Term was fully in keeping with the liberal policy of courts in allowing examinations before trial to simplify the issues for the trial and to expedite justice.