Court Opinion

ID: 5775856
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:40:54.003933+00
Date Added: 2024-06-11T08:41:53.115203
License: Public Domain

McNally, J. (concurring).
I concur on the grounds set forth in the memorandum of the court and with respect to the denial of compensation to counsel on the additional ground that the principal action was discontinued without costs. An award of counsel fees in a stockholders’ derivative action is in the nature of costs and where, as in this case, the principal action has been settled and discontinued without costs, an application for counsel fees appears precluded. (Margarten v. Horowitz, 112 N. Y. S. 2d 24.) Former section 61-a of the General Corporation Law provided for the assessment upon the corporation of attorneys’ fees of any party plaintiff. However, since former section 61-a was a codification of the common law, the principles applicable to such allowances survive its repeal. (See annotation to section 64, McKinney’s Cons. Laws of N. Y. Book 22, General Corporation Law, cumulative annual pocket part 1969-1970, p. 202.) Moreover, the limited consent of the plaintiff does not affect the rights of the defendant corporation under the stipulation of discontinuance. She cannot bind Bates Manufacturing Company, the only defendant east in judgment, and as far as Bates Manufacturing Company is concerned, the case was ended with the stipulation of discontinuance with regard to counsel fees. While this stipulation stands there can be no application for counsel fees. This aspect of the ease is precluded.