Case ID: ad_259/html/0719-05.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Harry J. Friedman, a Stockholder of Orange County Theatres, Inc., Suing on Behalf of Said Corporation and of Himself and All Other Persons Similarly Situated, Respondent, Appellant, v. Isaac Miller, Philip Sherry, Eva Sherry, Appellants, and Orange County Theatres, Inc., Appellant, Respondents
   'Action by the plaintiff as a stockholder for alleged acts of waste by the corporate directors and by the plaintiff as an individual for certain personal relief. Appeal by defendants from an order striking out the defenses and counterclaims of the individual defendants and the defense and a portion of the counterclaim of the corporate defendant. Cross-appeal by plaintiff from so much of the order as permits certain matters to remain in the defendant corporation’s answer as a counterclaim. Order modified by striking out the first ordering paragraph and substituting the following in place thereof: “ ORDERED that the matters alleged in paragraphs ‘ Fifteenth ’ to ‘ Fiftieth,’ inclusive, of the respective amended answers of the defendants Isaac Miller, Philip Sherry and Eva Sherry, be permitted to remain as a defense, but not as a counterclaim, and it is further.” As thus modified, the order in so far as appealed from, is affirmed, with one bill of forty dollars costs and disbursements payable to defendants by plaintiff. Plaintiff is allowed ten days from the service of a copy of the order hereon to reply to the matters permitted bo remain as an alleged counterclaim in the amended answer of the defendant corporation. In form this is a minority stockholder’s representative and derivative action, although actually the plaintiff and two of the individual defendants each own one-third of the defendant corporation’s stock. It is obvious that in the complaint the plaintiff has also alleged causes of action in his personal behalf. While the answers of the individual defendants may be unduly verbose (which is also true of the complaint), we believe that the substance of the matters alleged in the answers should be permitted to stand as defenses to the charges alleged in the complaint against the individual defendants. In order that the trial court may make a plenary disposition of the action, the pleadings should not be unduly limited on technical grounds, although the trial court will regulate the quantity of the evidence. Lazansky, P. J., Hagarty, Adel, Taylor and Close, JJ., concur.