Case ID: misc_24/html/0508-01.html
Source: Caselaw Access Project
Author: {"author": "Hirschberg, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William B. Pope et al., Plaintiffs, v. William Kelly, The Brooklyn Alcatraz Asphalt Co. et al., Defendants.
    (Supreme Court, Kings Special Term,
    September, 1898.)
    Contract — Parties — Corporations — Reformation.
    Where the owners of a corporation in financial straits made an agreement with third parties to turn the company ,oyer to th.em on their promise to finance and operate the. company, in accordance with the terms of the agreement and the third parties have failed to do so and have violated and disregarded the agreement, an action may be brought to reform the contract and enforce it, and the corporation. and the parties with whom the agreement was made are proper parties defendant.
    Demurrers to complaint.
    Wingate & Cullen, for plaintiffs.
    Harriman & Fessenden, for defendants.
   Hirschberg, J.

The complaint asserts but a single cause of action, viz., the reformation and enforcement of the agreement. On the 23d of April, 1896, the plaintiffs were, in effect, the owners of the defendant corporation. The corporation was in financial straits. An agreement was then executed between the plaintiffs and the defendant William Kelly, by which the plaintiffs agreed to turn the company over to Kelly and the two other individual defendants, on the promise of Kelly to finance and operate the company in accordance with the terms of the agreement. The plaintiffs allege that they have carried ,out the agreement but that Kelly has failed to do so, but that on the contrary he in collusion with his associates and representatives has willfully violated and disregarded the obligation of the agreement to the pecuniary damage of the plaintiffs, the extent of which can only be ascertained by an investigation of the company’s business since the date named. The right to reform the contract and the right to enforce it may be united in one action. Lattin v. McCarty, 41 N. Y. 107, and cases cited. The action would not be effective against William Kelly alone. The corporation for whose benefit the contract was made and which was the chief subject-matter of the contract, as well as the representatives named by him in the contract and now directors of the company actively engaged in the violation of its terms, are all proper parties. Flor is the relief demanded beyond the scope of equity jurisdiction and practice in a single action. See Daland v. Good, 25 N. Y. St. Repr. 496; Corcoran v. Mannering, 10 App. Div. 516; Gray v. Fuller, 17 id. 29; Woodworth v. Brooklyn El. R. Co., 29 App. Div. 1.

The demurrers should be overruled, with costs, but with leave to the defendants to answer on payment within twenty days.

Ordered accordingly.'