Case Name: Marie B. Birkmire, Respondent, v. Campus Realty Corporation and Others, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1928-03-30
Citations: 223 A.D. 226
Docket Number: 
Parties: Marie B. Birkmire, Respondent, v. Campus Realty Corporation and Others, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 223
Pages: 226–229

Head Matter:
Marie B. Birkmire, Respondent, v. Campus Realty Corporation and Others, Appellants.
First Department,
March 30, 1928.
Alfred B. Page, for the appellants.
Douglas Mathewson of counsel [Joseph T. Brown with him on the brief], for the respondent.

Opinion:
McAvoy, J.
The action upon which the judgment appealed from is founded is called derivative, that is, it is not plaintiff's wrong that is to be redressed but that of the corporate body. That entity, however, has no complaint that it can assert because the unanimous consent of its stockholders and the continued course of the conduct of its affairs pursuant to the family arrangement negative the idea that these directors were guilty of misappropriating or misapplying the corporate property or funds. The plaintiff's remedy is not a recovery of funds in behalf of the company and a distribution of part thereof to the alleged wrongdoers who will thus receive not alone free rental of the company's apartments but dividends beside on the returned rent but rather a suit against the entire stockholding group for their use of the property to the extent of her proportionate share of the rentals which the others have on her theory illegally retained from the corporation to the detriment of her aliquot share in the funds, if indeed her shares are not perpetually burdened by the consent to and acquiescence in the arrangement of her assignor complained of by her. We find no ground for concluding that the death of the father of the stock-holding children was to terminate the scheme under which all had lived for many years and thereupon to revert to strict corporate accounting so that his second wife might benefit more fully from her shares than he had done. It is obvious that it was the design of all that the arrangement should continue as to the free use of such premises as were occupied thus during the life of the founder of the family fortune.
The court at trial found too that plaintiff offered no evidence tending to prove that the salary paid to William H. Birkmire, the father, of $5,000 was unreasonable compensation for his services during his lifetime, when he transacted the business of the company, and that the plaintiff offered no evidence which tended to show that the salaries fixed by Gladys were not fair and reasonable compensation for the services discharged by her, and her brother and sister. Although the finding was that there was no evidence to show that these salaries were unreasonable and that the officers had rendered services therefor and discharged the duties of their offices properly, the court said that he would take his own judicial knowledge of what the services were worth for the taking care and management of real estate. This ruling was obviously without any "warrant in reason or precedent.
We think the judgment appealed from should be reversed, with costs, and the complaint dismissed, with costs.
Merrell and Finch, JJ., concur; Dowling, P. J., and Proskauer, J., dissent.