Case Name: In re ATTORNEY GENERAL. In re CENTRAL STAMPING CO.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1894-11-16
Citations: 30 N.Y.S. 1093
Docket Number: 
Parties: In re ATTORNEY GENERAL. In re CENTRAL STAMPING CO.
Judges: 
Reporter: West's New York Supplement
Volume: 30
Pages: 1093–1095

Head Matter:
In re ATTORNEY GENERAL. In re CENTRAL STAMPING CO.
(Supreme Court, General Term, First Department.
November 16, 1894.)
1. Corporations—Dissolution—Application por Leave to Sue.
An application by the attorney general for leave to sue to annul a charter on the grounds that it has abused its powers, and has attempted to exercise privileges not authorized by its charter (Code Civ. Proc. § 1798), must point out the particular acts done.
2. Same—Order.
An order granting leave to sue to annul a charter should specify the grounds on which the action is to be brought.
Appeal from special term, New York county. .
Application by the attorney general for .leave to sue to annul the charter of the Central Stamping Company. There was an order granting the application, and said company appeals. Reversed.
Argued before VAN BRUNT, P. J., and O’BRIEN and FOLLETT, JJ.
Howard Mansfield, for appellant.
Louis Marshall, for respondent.

Opinion:
FOLLETT, J.
Section 1798 of the Code of Civil Procedure provides that, upon leave being granted by the court, the attorney general may bring an action to vacate the charter or annul the existence of a corporation, upon the ground that it has either—
"(1) Offended against any provision of an act, by or under which it was created, altered, or removed, or an act amending the same, and applicable to the corporation; or (2) violated any provision of law, whereby it has forfeited its charter, or become liable to be dissolved, by the abuse of its powers; or (3> forfeited its privileges or franchises, by a failure to exercise its powers; or (4) done or omitted any act, which amounts to a surrender of its corporate rights, privileges, and franchises; or (5) exercised a privilege or franchise not conferred upon it by law."
When "this matter was first before this court, it was.held that leave should not be granted to bring an action to annul the charter of a corporation without the written application of the attorney general to the court, stating that, in his opinion, the action could and ought to be maintained for reasons given. 79 Hun, 369, 29 N. Y. Supp. 449, The matter now comes before the court on a petition of the attorney general, which states:
"After a full and careful consideration of the affidavits, contracts, and other exhibits so presented before your petitioner, hereinbefore referred to, of which, copies are hereto annexed, your petitioner has arrived at the determination - that the public interests require that an action should be brought by him, in the name of the people of the state of New York to annul the charter of the Central Stamping Company, for the reason that the said Central Stamping Company has exceeded and abused its powers, to the detriment of the public; has attempted to exercise powers and privileges not authorized by its charter; and has violated various provisions of the law under which it was organized, and the laws of the state binding upon it; and the public interests require that such an action should be commenced, and I believe such action can be-maintained."
This, we think, is too indefinite to justify the court in authorizing an action to be brought. It is asserted that the corporation "has exceeded and abused its powers, to the detriment of the public"; but what powers it has exceeded and abused, or what it has done that it ought not to have done, is not stated in the petition. It is also asserted that it "has attempted to exercise powers and privileges not authorized by its charter, and has violated various provisions of the law under which it was organized, and the laws of the state binding upon it." It does not state what powers and privileges the corporation has attempted to exercise, not authorized by its-charter, nor what statutes it has violated. Before authority should be given to bring an action to vacate the charter or to annul the existence of a corporation, the attorney general should point out in his application to the court the particular act or acts done or omitted which, in his judgment, áre sufficient to justify the bringing of such an action, and should allege in his petition wherein the corporation' has violated the laws of the state,—what it has done or omitted,— which allegations should be supported by sufficient evidence to render it probable that a cause of action exists. The fact that such an action has been begun is usually destructive of the credit and business of the corporation assailed, and authority to commence-such an action should not be lightly given. Authority will not be-granted, as a matter of course, on the application of the attorney general.
It may be said that, if the court will look into the affidavits annexed1 to this petition, sufficient grounds for an action will be found. We have looked into the record and find several grounds stated and shadowed forth, some of which the court may deem sufficient, and others quite insufficient; but upon which ground or grounds the- attorney general proposes to found Ms action is nowhere disclosed, and, under the general order granted, an action may be brought upon any one or all of the grounds stated or shadowed forth, or upon grounds not disclosed in the affidavits. By such an order the court abandons all control over the action, and' it becomes possible to bring one based on grounds not disclosed in the moving papers, and which the court would not have held to be sufficient. The order , in such a case should specify the grounds on which the action is I to be brought. The order should be reversed, with $10 costs and disbursements, and the motion denied, with $10 costs and disburse- i ments, but without prejudice to the right of the attorney general, on payment of costs, to apply again for leave to bring an action. All concur.