Court Opinion

ID: 5198045
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:46:35.742484+00
Date Added: 2024-06-11T08:27:09.053215
License: Public Domain

Spring, J.:
The respondent has commenced this action as a stockholder of the corporation of Edward Wallerstein & Co., charging that its assets haye been fraudulently diverted, and seeks to have them restored to the corporation.
This court has held the complaint states the cause of action mentioned (Weber v. Wallerstein, No. 1, 111 App. Div. 693). The allegations of the complaint are all set forth on information and belief. A motion was made by the plaintiff upon the complaint and the demurrers' thereto for the appointment of a temporary receiver of the corporation. The defendants appeared and by affidavits positively denied the charges of fraud and the dissipation of the corporate assets. In addition the entire transactions which are set out in the complaint on information and belief are explained in these affidavits, and if the facts are correctly stated therein, the defendants are exculpated of the misconduct imputed to them.
In this situation there should be no receiver appointed pending the action, or at least until there is some' urgent necessity for that drastic remedy. The statement of a cause of action alone does not warrant the granting of this relief. The receiver is authorized to take possession and control of all the corporate assets, and his incumbency will necessarily oust the corporation of the management of its affairs. Something beyond the mere unsupported statement of the plaintiff made on information and belief in the general allegations of a complaint should appear to warrant the appointment where the allegations are explicitly denied, (Kieley v. Bar*702ron & Cooke H. & P. Co., 87 App. Div. 317; Platt v. Elias, 101 id. 518.)
The order should be reversed, with ten dollars.costs and disbursements of this appeal, and the motion denied, with ten dollars costs.
All concurred.
Order reversed, with ten dollars costs and disbursements, and 'me.tion''denied, with ten dollars costs.