Court Opinion

ID: 5509765
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:32:43.353717+00
Date Added: 2024-06-11T08:34:08.038097
License: Public Domain

FOLLETT, J. (dissenting).
This case has been once before this court, and, for a statement of the facts and the relief sought, reference is made to 87 Hun, 152, 33 N. Y. Supp. 1024. Since that decision the case has been again submitted to the special term, and a decision signed and an interlocutory judgment entered, from which this appeal is taken. In the decision filed the court found as follows:
“The court states the grounds of its decision to be that the plaintiff William E. D. Stokes is a stockholder of the said corporation, as alleged in the complaint; that the relations of said Edward S. Stokes to said corporation were such that an application by the plaintiff to the board of directors of said corporation to bring an action against said corporation were futile and unnecessary; that said corporation being under the control of said Edward S. Stokes, as a.n officer and director thereof, he received to his own *355use funds of said corporation, as appears by three accounts on the books of account of said corporation, entitled, respectively, ‘The E. S. Stokes Account,’ ‘The E. S. Stokes Yacht Account,’ and ‘The Fenwick Hall Account.’ ”
These facts and those admitted in the pleadings are sufficient to entitle the plaintiff to maintain this action, and are quite sufficient to sustain the interlocutory judgment, which simply directs the defendant to account for such moneys as he has received, belonging to the corporation, of which he is an officer. Brinckerhoff v. Bostwick, 88 N. Y. 52. The learned counsel for the appellant urges that, because the conduct of his client in receiving to his own use the funds of the corporation is not characterized by the trial court as fraudulent, the interlocutory judgment cannot be sustained. This position is not tenable, for if the defendant has money in his hands belonging to the corporation, which he received as an officer, and which he is unwilling to pay over, as he seems to be, he is liable to account therefor, and it is quite immaterial whether or not he acquired it fraudulently.
On the trial the defendant showed by oral evidence that receivers for the Hoffman House had been appointed by the court of chancery of the state of New Jersey, and offered in evidence the order of that court appointing the receivers, which was rejected on the ground that the defect of parties had not been pleaded. Not having pleaded that there was a defect of parties, the defendant has waived the objection. Code Civ. Proc. § 499. The sums recovered in this action will be paid into the treasury of the corporation, and will eventually reach the hands of the receivers, unless they have been or shall be discharged. Should the receivers desire to be admitted as parties to the action, they undoubtedly would be, upon their own application; but the defendant, by neglecting to raise the objection by answer, has lost his right now to do so.
No question relating to the reception or rejection of evidence is argued, excepting the one considered; and, believing that the judgr ment is right, it should be affirmed, with costs.