Case ID: ad_156/html/0736-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henry A. Caesar and Edwin A. Richard, Copartners Doing Business under the Firm Name of H. A. Caesar & Co., Appellants, v. Robert W. Bernard, Respondent, Impleaded with William M. Bernard and Others, Defendants.
    First Department,
    May 9, 1913.
    Corporations — action under section 66 Of Stock Corporation Law — party defendant.
    An action under section 66 Of the Stock Corporation Law may be maintained against one who, as a director, voted to authorize the execution of a mortgage in violation of the statute, and as secretary of the corporation executed the necessary papers, and who personally benefited by receiving a preferential payment. '
    Ingraham, F. J., and Dowling, J., dissented.
    Appeal hy thq plaintiffs, Henry A. Caesar and another, copartners, etc., from an order of the Appellate Term of the Supreme Court, entered in the office of the clerk of the county of New York ón the 7th day of February, 1913, affirming an order of the City Court of the city of New York granting the respondent’s motion for judgment on the pleadings.
    
      Henry L. Scheuerman, for the appellants.
    
      John Elton Wayland, for the respondent.
   Laughlin, J.:

The opinion on another appeal herein, wherein the defendant Runyon is respondent (156 App.’ Div. 724), which is to be decided herewith, is decisive in favor of the ajppellants on all points save one. The learned counsel for this respondent pointedly contends that the statement of. a cause of action against an officer or director to enforce this personal liability requires an allegation that he violated the statute, or was concerned in its violation, in his capacity as an officer or director of the corporation-. That point is sufficiently discussed in the opinion on the appeal in which William M. Bernard is the respondent (156 App. Div. 737), and is there .decided adversely to 'this respondent. He was a director, and as such voted to authorize a mortgage,' alleged to have been executed in‘violation of the statute, and as secretary of the corporation he executed the necessary papers, and in his individual capacity he benefited by the transaction by receiving a preferential payment.

It follows that the determination of the Appellate Term and order of the Special Term of the City Court should be reversed, with costs, and motion denied, with costs.

McLaughlin and Hotchkiss, JJ., concurred; Ingraham, P. J., and Dowling, J., dissented.

Determination and order reversed, with costs, and motion denied, with costs.