Case ID: misc_130/html/0290-01.html
Source: Caselaw Access Project
Author: {"author": "Frankenthaler, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Lloyd Garrison, as Trustee in Bankruptcy of C. H. Pope & Co., Inc., Plaintiff, v. Charles H. Pope and Others, Defendants.
    Supreme Court, New York County,
    August 16, 1927.
    Corporations — officers and directors — action by trustee in bankruptcy under General Corporation Law, §§ 90, 91 and 91-a — complaint is insufficient.
    The complaint in this action by a trustee in bankruptcy, which is brought under sections 90, 91 and 91-a of the General Corporation Law to compel former officers and directors of the bankrupt to account for funds misappropriated, is insufficient in failing to allege that there were any creditors in existence at the time of the alleged misconduct or that the misappropriation was for the purpose of defrauding creditors then existing and for whom the plaintiff is now acting, or in furtherance of a scheme to defraud subsequent creditors.
    Motion for judgment on the pleadings.
    
      Martin C. Ansorge, for the plaintiff.
    
      McManus, Ernst & Ernst [Terence J. McManus of counsel], for the defendants.
   Frankenthaler, J.

This action, brought under sections 90, 91 and 91-a of the General Corporation Law, by plaintiff as trustee in bankruptcy, seeks an accounting from former officers and directors of the bankrupt corporation of sums alleged to have been wrongfully withdrawn from its funds and misappropriated during years antedating the bankruptcy. The complaint, even though most-liberally construed, does not set forth that there were any creditors in existence at the time of said alleged wrongful withdrawals, nor that the said withdrawals were for the purpose of defrauding creditors then existing and for whom the plaintiff is now acting, nor that the transactions were in furtherance of a scheme to defraud subsequent creditors. On the authority of Lummis v. Crosby (176 App. Div. 315) and Lummis v. Crosby (181 id. 884; affd., 224 N. Y. 611) this motion for judgment on the pleadings dismissing the complaint is granted, with leave, however, to serve amended complaint upon payment of costs.