Court Opinion

ID: 5390065
Source: CourtListenerOpinion
Date Created: 2022-01-08 09:45:04.847644+00
Date Added: 2024-06-11T08:30:17.493190
License: Public Domain

Shientag, J.,
(concurring). I concur in the result but wish to point out that the denial of the motion to examine the defendant Remington Rand, Inc. before trial should be without prejudice and with leave to renew upon proper papers which shall set forth facts showing some basis for the claims of waste and mismanagement which are alleged entirely upon information and belief, without disclosing the sources of the information or the grounds for the belief. In a derivative stockholder’s action a corporation, in behalf of whose stockholders the action is brought, is a necessary party defendant. The corporation in such an action occupies an anomalous position. Even if it is a nominal defendant, the plaintiff is entitled to examine that corporate defendant before trial. Such examination is material and necessary for the establishment of the cause of action asserted by the plaintiff. Because of the anomalous position which it occupies, the corporate defendant in a derivative stockholder’s suit may also occupy a position adverse to that of the individual defendants who are sued for wrongs alleged to have been perpetrated against the corporation. In Chaplin v. Selznich (186 Misc. 66) I held that individual defendants might examine the corporate defendant before trial in a derivative stockholder’s suit. That holding, however, in no way militates against the right of the plaintiff, upon a proper showing, to an examination of the corporate, defendant before trial.
Does, J. P., Cohn and Van Vooehis, JJ., concur with Callahan, J.; Shientag, J., concurs, in opinion.
Orders unanimously modified in accordance with the opinion herein and, as so modified, affirmed, with one bill of $20 costs and disbursements to the appellants. The date for the examination to proceed shall be fixed in the order. Settle order on notice. [See post, p. 1006.]