Case ID: misc_111/html/0294-01.html
Source: Caselaw Access Project
Author: {"author": "Rodenbeck, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Matter of the Application of Bown Brothers, Inc., for a Voluntary Dissolution.
    (Supreme Court, Monroe Special Term,
    March, 1920.)
    Corporations — when application for dissolution granted — General Corporation Law, § 172.
    Where an increase of the capital stock of a corporation is necessary in order to avoid the borrowing of money upon the personal indorsement of the two equal owners of all the stock, one of whom is desirous of selling the unissued stock, but the other refuses to join, an application under section 172 of the General Corporation Law for the dissolution of the corporation will be granted.
    Application for a voluntary dissolution of a corporation.
    
      Warren, Shuster & Case, for motion.
    Morrison H. McMath, opposed.
   Rodenbeck, J.

The application for dissolution should be granted. The application is properly made since the stock is equally divided into not more than two independent ownerships or interests. Gen. Corp. Law, § 172. These ownerships are deadlocked, one desiring to sell the stock unissued and the other refusing to join. The record owners are not the actual owners of the stock, but this fact would not prevent the actual owner of one-half of the stock from blocking any attempt to sell the stock against his wishes. The facts show the necessity for an increase of the capital stock to avoid the borrowing of money upon the personal indorsement of the owners of the stock. The stockholders are, therefore, at variance upon a vital program of business management. It is for the interest of Mrs. Bown, the owner of one-half of the stock, that the corporation should be dissolved now rather than be continued, if there is to be a substantial disagreement with the owner of the other half of the stock, with the possibility of a refusal to indorse corporate paper and actively manage the business. It is unreasonable to require the business to be continued in its present form without the acquiescence of the owner of either half of the stock. Section 172 of the General Corporation Law presents a ground for the application independent of section 170. Matter of McLoughlin, 176 App. Div. 653.

The application to dissolve the corporation is entertained and a suitable order may be prepared as provided by statute.

Ordered accordingly.