Case ID: misc_52/html/0202-01.html
Source: Caselaw Access Project
Author: {"author": "Dowling, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Stephen Farrelly, Suing in His Own Behalf, etc., Plaintiff, v. The New York Life Insurance Co., et al., Defendants.
    (Supreme Court, New York Special Term,
    December, 1906.)
    Injunction — Preliminary injunction — Papers on motion for injunction — Sufficiency of complaint or affidavit.
    Where a policy holder of the New York Life Insurance Company, who, at the election held under the provisions of L. 1906, eh. 326, was a candidate for election as director upon the international committee ticket, brought an action against the company on behalf of himself and all other policy holders to restrain the defendant and all persons acting for or under its existing board of directors by its direction from proceeding with or conducting a campaign for- the election of the administration ticket which, by the provisions of said statute, said board of directors are required to name, a motion for a temporary injunction, based upon allegations of improper conduct upon the part of the company, made upon information and belief and denied by its answer, where there is no satisfactory proof of any act attempted or threatened on the part of the defendant which would entitle plaintiff to the relief asked for, will be denied.
    Motion for an injunction pendente lite. The opinion states the case.
    
      Samuel Untermeyer, for plaintiff.
    James H. McIntosh and William Nelson Cromwell, for defendants, New York Life Insurance Company and Mr. Orr.
   Dowling, J.

Plaintiff seeks an injunction pendente lite restraining the defendants and all persons acting for or under them or by their direction (1) from proceeding with or carrying on the campaign described in the complaint for the election of the administration ticket, at the expense of the defendant corporation; (2) from expending or causing or permitting to he expended any sums of money whatever in distributing the marked ballots referred to in the complaint or procuring the execution thereof; (3) from using or employing the time of any employees of the defendant corporation for any of the purposes aforesaid or otherwise than in the lawful and proper business of the company; (4) from attempting or seeking to procure the execution of, and from circulating by mail or otherwise, any of the aforesaid marked ballots containing policy numbers, and (5) from attempting or seeking by any other means than sending to the policyholders the statement of nominations, proxy and envelope prescribed by statute to obtain the ballots or proxies of any of said policyholders. Plaintiff is a policyholder of the defendant corporation, the Yew York Life Insurance Company, and brings this action in his own behalf and in behalf.of all other policyholders of said company, to obtain permanent relief substantially identical with that asked for pendente lite, together with an accounting for any of the defendant corporation’s funds diverted, wasted or misappropriated in the manner alleged. Pursuant to the provisions of section 30, chapter 326, Laws of 1906, an election for directors of the defendant corporation will be held on December 18, 1906, the ballots have been distributed therefor, and, as provided for by said law, ballots and proxies for said election have been executed and forwarded since October 18, the date set for the commencement of such voting.

At this election plaintiff is a candidate-for election as a director upon the international committee ticket. This ticket is nominated in opposition to that which is known as the administration ticket, and which, by the provisions of said law, the present board of directors of the defendant corporation is required to name. As votes and proxies have been received continually since October 18, and are still being received, and as the date for the declaration of the result of the voting is near at hand, the intervention of the court is sought to prevent a continuance of what are alleged to be unlawful methods of campaigning in behalf of the administration ticket, summarized in the plaintiff’s prayer for relief. The propositions of law governing the granting of the relief sought are well settled. The sole purpose of an injunction pendente lite is to prevent the defendant, during the pendency of the action, from committing, or continuing to commit, an act which would impair or render ineffectual any judgment that the plaintiff might obtain; and, unless the court can see from the papers presented that some injury may result to the plaintiff unless the injunction be granted, the application for it will always be denied. This rule was clearly stated by Allen, J., in People v. Canal Board, 55 N. Y. 390. He said: “To entitle a plaintiff to prohibition by injunction by a court of equity, either provisional or perpetual, he must not only show a clear legal and equitable right to the relief demanded, or to some part of it, and to which the injunction is essential, but also that some act is being done by the defendant, or is threatened and imminent, which will be destructive of such right or cause material injury to him.” In short, to justify the granting of the motion for a temporary injunction, the plaintiff must establish that the defendant, unless restrained, will do some act during the pendency of the action, which will produce injury to the plaintiff, or that he threatens to do some act in violation of the plaintiff’s right incident to or connected with the subject matter of the action. Clark v. Herbert Booth King & Bro. Pub. Co., 40 App. Div. 408. It may be said at the outset that the allegations of the com plaint are all directly and flatly controverted by the answer herein. Taking np seriatim the alleged acts against which a temporary injunction is asked, the first three are that a campaign is being conducted at the expense of the defendant corporation for the election of the administration ticket; that the money of the company is being spent in the distribution of marked ballots, circulars and other literature, and that the time of the employees of the company is being used in behalf of the so-called administration campaign. Plaintiff has been unable to substantiate these charges by proof. The allegations of his complaint are in large part made on information and belief, and entirely so as to the charges of improper conduct on the part of the defendant corporation. Many of the statements in his affidavit and that of his supporting affidavits, while in form statements of fact are in reality only statements of his conclusions, surmises or opinions. In his affidavit, plaintiff says: “ In view of the fact that the defendant corporation has upwards of eight hundred thousand policyholders, a large portion of whom are residents of the United States and Canada, it is impossible to believe that agents of the company are carrying on a campaign at their own expense or otherwise than at the expense of the Company.” Yet no evidence is adduced by him, or on his behalf, that the company has spent any of its funds in this so-called campaign. On the contrary, it affirmatively appears that the defendant corporation has opened in its books a special account for the expenses incurred in complying with the law governing this election, which is the first one held by this company under the law of 1906. A statement in full of the items appearing in said account has been made by the comptroller, with the date and purpose of every payment. ¡Nowhere in said statement is there an item which could properly be termed an expense for campaigning nor for assisting in the success of the administration ticket. Large numbers of circulars have been introduced in evidence as exhibits which were sent out in various States to policyholders by agents of the defendant company, soliciting votes for the administration ticket, and inclosing what is called by plaintiff a “marked ballot;” which means a ballot prepared for voting in favor of the administration ticket. It is affirmatively established that, so far from being sent out at the expense of the company, those circulars are being sent out by agents on their own initiative and at their own expense. Plaintiff charges on information and belief that these circulars were printed at the home office of the defendant company, but this, is disproved by the affidavit of Van Wart, in charge of its printing-office, showing that not one of the circulars complained of was printed therein.

Furthermore; it is established from the affidavits submitted that neither the money of the defendant company nor the time of its employees during business hours has been devoted in any manner, shape or form to the election of the administration ticket, nor to the distribution of so-called “ marked ballots ” in aid thereof, nor to the solicitation of votes or proxies for the said ticket, nor have advances to agents been made to induce their activity therefor This is overwhelmingly demonstrated by the affidavits of six executive officers of the defendant company, of twenty-four heads of departments thereof, of two inspectors of agencies, of five-agency directors, of thirty-two cashiers, and of eighty-six soliciting agents located in some ten different States. Plaintiff does not claim that the defendant company’s employees may not use their efforts for whatever ticket they think best calculated to promote the company’s interests, so long as such activity is had outside of their hours of employment and without expenditure of the company’s moneys. So far as the fourth series of acts complained, of, being the circulation of so-called “ marked ballots ” with the policyholder’s number written in, is concerned, there is no proof whatever connecting the specific cases enumerated with the defendant corporation, and it affirmatively appears that the number upon a policy of insurance is not confidential and reserved to the home office and the policyholder, but is known, and in the nature of the transaction must be known, to the agents through whose hands the application and policy pass. Finally I have examined carefully the complaint and affidavits to see if any ground existed for the fifth class of acts complained of for any relief pendente lite under the general prayer, and I am unable to discover satisfactory proof of any act, attempted or threatened, upon the part of the defendant corporation which would entitle plaintiff to a temporary injunction. The motion is, therefore, denied.

Motion denied.