Case Name: William J. Smith, as Administrator, etc., on Behalf of Himself and Other Stockholders of the Queen Anne Land Grant Company, Similarly Situated, Respondent, v. David Crear and Others, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1917-03
Citations: 177 A.D. 930
Docket Number: 
Parties: William J. Smith, as Administrator, etc., on Behalf of Himself and Other Stockholders of the Queen Anne Land Grant Company, Similarly Situated, Respondent, v. David Crear and Others, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 177
Pages: 930–930

Head Matter:
William J. Smith, as Administrator, etc., on Behalf of Himself and Other Stockholders of the Queen Anne Land Grant Company, Similarly Situated, Respondent, v. David Crear and Others, Appellants.

Opinion:
The majority in control cannot transfer all the corporate assets to a new corporation against objection of the minority stockholders. (Schwab v. Potter Co., 194 N. Y. 409.) Stock ownership was sufficiently alleged to vest plaintiff with the right to bring a representative stockholder's suit. Suspending the exercise of the voting power by means of deposit of the stock certificate in the corporation treasury, increases the fiduciary duty of the directors toward a stockholder, from whom they have taken an ordinary protective remedy within the corporation. The holder of such deposited stock has all the stronger grounds for equitable relief. (7 R. C. L. Corp. § 609.) The order is affirmed, with ten dollars costs and disbursements. Jenks, P. J., Mills, Rich, Putnam and Blackmar, JJ., concurred.