Court Opinion

ID: 5746441
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:50:11.083172+00
Date Added: 2024-06-11T08:41:10.086646
License: Public Domain

Orders entered on November 2, 1962, insofar as appealed from, unanimously modified to the extent of granting appellants’ motions for judgment dismissing the Complaint as to plaintiff, Tel-A-Sign, Inc., pursuant to subdivision 2 of rule 106 and subdivision 2 of rule 107 of the Rules of Civil Practice, and otherwise affirmed, with $20 costs and disbursements to appellants. In this derivative stockholders’ action, the complaint alleges that plaintiff Tel-A-Sign, Inc., acquired its stock interest in the corporation in July and August, 1962. Neither the complaint, nor the affidavits, alleges any wrongdoing during or after the acquisition of the stock by Tel-A-Sign, Inc. The unambiguous languagjj of section 61 of the General Corporation Law requires that a plaintiff in this type of action be a stockholder “ at the time of the transaction of which he complains ”. The clear effect of section 61 cannot be avoided by the eontentiop. that under section 61-b Tel-A-Sign, Inc., would have the right to intervene in ,the action for the purpose of determining whether security must be posted. It has, however, been held that proposed intervenors must meet the requirements of section 61 before permission to intervene will be granted. (Richman v. Felmus, 8 A D 2d 985; see 73 Harv. L. Rev. 1222-1225.) The question of intervention is, however, irrelevant at this juncture of the case and we therefore do not specifically pass on it. But unquestionably any claim of a,f privilege to intervene cannot affect the unqualified requirement of section 61 that to maintain this action Tel-A-Sign, Inc., must have been a stockholder at the time of the transactions about which complaint is made. Since it appears that it was not such a stockholder, the complaint must be dismissed againstj it. We agree, however, that the allegations as to the individual plaintiffs meet the requirements of section 61. The specific dates of acquisition of their stock — if that becomes material — can be obtained by a bill of particulars. On the face of the complaint, there is a sufficient allegation of the ownership! of stock at the time of the transactions of which the stockholders complain. 'Settle order on notice. Concur — Breitel, J, P,, Rabin, Valente, McNally and Stevens, JJ.