Court Opinion

ID: 5740912
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:41:31.288988+00
Date Added: 2024-06-11T08:41:04.180648
License: Public Domain

Eager, J. (dissenting).
We dissent, and would reverse the order appealed from and deny the motion requiring the plaintiffs to furnish security pursuant to the provisions of section 61-b of the General Corporation Law. The right to require security for the costs of an action is regarded as wholly statutory. “ [A]uthority therefor must be found in the statute, or it does not exist.” (Republic of Honduras v. Soto, 112 N. Y. 310, 313. *575Also Turmelle v. Jefferson, 166 Misc. 70.) “ [T]here is no discretionary power in the court to act beyond the provisions of the statute but rather it is the duty of the court to confine itself strictly to the provisions thereof (Bowles v. Glenzer, 186 Misc. 362, 363.)
The statute here declares that the corporation in whose right the stockholders’ action is brought is entitled “ at any stage of the proceedings before final judgment ” to require plaintiffs to give security for costs. (General Corporation Law, § 61-b.) We agree with the majority that these words of the statute refer to the time of entry of final judgment in the Supreme Court (Matter of Bailey [Bush Term. Co.], 265 App. Div. 758, affd. 291 N. Y. 534). Such “ final judgment ” having been rendered in this action, we would hold that there is no authority in the court at this time to require the giving of security by the plaintiffs.
Here, the prior motion for security, made before judgment, was finally disposed of by the vacatur of the order granting such motion and by a determination that the plaintiffs were not required to give security. And, as we understand it, it is conceded that, to the time of the rendition of final judgment, the plaintiffs continued to own shares of the corporate defendant having a market value in excess of $50,000. So, therefore, prior to such judgment, the corporation had no right to security. Nevertheless, the majority has concluded that the application now made may, in order to give the court jurisdiction, be treated as one to further amend the order which disposed of the original application, 1 ‘ and there is no restriction on when this may be done ’ ’. But, clearly, here the order now granted after final judgment was not merely an amending order. (See 1 CarmodyWait, New York Practice, §§ 127-132, pp. 717-721.) It is a new order on a de novo independent application and, in fact, is dependent upon facts occurring subsequent to final judgment. Thus, it is beyond the authority of the statute, which as we read it, is written to allow applications for security prior to final judgment based upon conditions then existing.
The effect of the determination of the majority is to enlarge the statute to cover a situation not considered and provided for by the Legislature, namely, the right to require security after “ final judgment ” and pending appeal. If there is a defect’ in the statute in this connection, it must be corrected by legislation.
Botein, P. J., and Breitel, J., concur with Steuer, J.; Eager, J., dissents in opinion in which Valerte, J., concurs.
Order, entered on September 20,1962, affirmed, with $20 costs and disbursements to respondent.