Case Name: Almirall & Company, Inc., Appellant, v. John H. McClement, Trading as J. H. McClement & Company, et al., Respondents, Impleaded with Others
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1925-02-03
Citations: 239 N.Y. 630
Docket Number: 
Parties: Almirall & Company, Inc., Appellant, v. John H. McClement, Trading as J. H. McClement & Company, et al., Respondents, Impleaded with Others.
Judges: 
Reporter: New York Reports
Volume: 239
Pages: 630–630

Head Matter:
Almirall & Company, Inc., Appellant, v. John H. McClement, Trading as J. H. McClement & Company, et al., Respondents, Impleaded with Others.
Stocks and stockholders — corporations — when stockholders may not be held individually liable for debt of corporation.
Almirall & Co., Inc., v. McClement, 207 App. Div. 320, affirmed.
(Argued January 19, 1925;
decided February 3, 1925.)
Appeal from a judgment of the Appellate Division, entered January 11, 1924, upon an order of the Supreme Court in the first judicial department, which reversed an order of Special Term' denying motions by defendants, respondents, for a dismissal of the complaint as to them and granted said motions. The complaint alleged that defendants, respondents, joined with other defendants, under a promoter’s agreement in organizing a corporation to carry out a public contract; that the corporation executed a mortgage upon its .entire assets to secure two bond issues and a voting trust agreement was entered into between the stockholders to secure payment of money advanced; that thereafter plaintiff- contracted with the corporation to furnish and install certain piping in the plant and pursuant to the contract furnished labor and material for which it has not been paid; that the corporation became insolvent, the mortgage securing the bonds was foreclosed and the corporation left without assets. Relief was demanded that the stockholders of the corporation be held individually liable for the debt of the corporation, claiming that the corporate entity was fraudulently used as a shield for the fraudulent operation of the individuals, and that the property was in fact theirs and that the acts and obligations of the corporation were those of the individuals.
Charles A. Brodek and Borris M. Komar for appellant.
Alfred T. Davison and James K. Foster for respondents.

Opinion:
Judgment affirmed, with costs; no opinion.
Concur: Hiscock, Ch. J., Cardozo, Pound, McLaughlin, Crane and Andrews, JJ. Not sitting: Lehman, J.