Court Opinion

ID: 5192256
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:38:04.827981+00
Date Added: 2024-06-11T08:26:56.726397
License: Public Domain

Lattghlin, J.:
The plaintiffs are creditors of the Harlem Casino Company, and as such bring this action in behalf of themselves and all other creditors against the directors of the corporation to enforce the liability created by section 24 of the Stock Corporation Law (Laws of 1890, chap. 564, as amd. by Laws of 1892, chap. 688) prior to its repeal by chapter 354 of the Laws of 1901. The summons and complaint were served on the defendant Luchow on the 14th day of October, 1901. His time to answer was extended by stipulation from time to time until after the making of this motion.Hone of the other defendants have been served. The motion was made upon the ground that the plaintiffs had unreasonably neglected to serve the other defendants.
The motion was opposed by the plaintiffs upon three grounds: *583(1) That the defendant was not in a position to make the motion upon which the order was granted, he not having answered or demurred, but having obtained an extension of time which had not éxpired when the motion was made ; (2) that inasmuch as no notice of intention to hold them personally liable was served on the other directors upon whom service of the summons has not been made as required by subdivision 2 of section 34 of the Stock Corporation Law, added by chapter 354 of the Laws of 1899, such directors are not liable and service upon them will be of no avail; and (3) that due diligence has been used in endeavoring to make such service.
The plaintiffs have made the other directors defendants, and they have not used due diligence in serving the summons upon them. The acceptance of stipulations extending his time to answer did not bar the defendant from complaining of the plaintiffs’ gross laches in failing to bring in the other defendants. The appeal does not present the question as to whether the action can be maintained against the defendant Lucliow alone, or whether the defendants who have not been served would have a good defense.
The appellants also contend that the order requires them to serve all of the defendants, which is impossible on account of the non-residence of one of them. As we read the order, it only requires them to serve the resident defendants.
The award, however, of fifty dollars costs to the defendant Lucliow, in addition to the costs of the motion, cannot be sustained. The only foundation laid for the imposition of these costs was the claim that, as the action could not be successfully maintained, he should be indemnified against the expense of having the records of the corporation examined to prepare his answer. We fail to discover any logic in this claim. If the other parties had been served and notified timely, said defendant would have been obliged to prepare his answer, and then might have been held liable.
The order should, therefore, be modified, by striking out the requirement that the plaintiffs pay fifty dollars to the respondent, and as modified affirmed, without costs.
Van Beunt, P. J., O’Bbien and McLaughlin, JJ., concurred.
Order modified as directed in opinion, and as modified affirmed, without costs.