Court Opinion

ID: 5758417
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:10:20.547099+00
Date Added: 2024-06-11T08:41:28.856818
License: Public Domain

Benjamin, J.,
concurs ir. '¡he result with the following memorandum: In my opinion, the proof at the hearing clearly established that in 1962 defendant Manlio 'Severino, on behalf of himself and certain of his eodefendants, including all respondents, agreed to accept service of the summons and complaint by mail in this action; that such service was made pursuant to that agreement; that, in reliance upon that agreement and the service made pursuant thereto, plaintiff made no attempt to effect personal service until 1964, when it became apparent that those defendants intended to repudiate their 1962 agreement to accept service by mail; and that, because of these facts, respondents are now estopped to assert the 'Statute of Limitations as a defense (Erbe v. Lincoln Rochester Trust Co., 13 A D 2d 211; Robinson v. City of New York, 24 A D 2d 260). In view of my conclu*892sion that respondents are barred from asserting the Statute of Limitations as a defense, I have not reached the question whether the 6- or 10-year Statute would have been applicable. And if it were assumed arguendo that such defense was assertable, I believe it should not be decided on this record but should instead be left for determination by the trial court after a full development of the facts. Ughetta, Acting P. J., dissents and votes to affirm the order, with the following memorandum: In my opinion, the 6-year Statute of Limitations is applicable to this action for several reasons: (1) The gravamen of the complaint is for return of excessive payments pocketed by respondents. Therefore, the action is essentially one at law. (2) Stockholders’ derivative actions against a present or former director, officer, or stockholder, if for an accounting or to procure judgment on the ground of fraud, are subject to the 6-year Statute of Limitations (former Civ. Prac. Act, § 48, subd. 8). The individual respondents were the owners of all the stock of the corporate respondents and completely controlled them; plaintiff’s officers, directors and stockholders were “ dummies ” who acted in accordance with respondents’ wishes; the “ dummy ” officers, director and stockholders of plaintiff were agents and nominees of respondents. Under these circumstances, respondents were in fact the directors, officers and stockholders of plaintiff within the meaning of subdivision 8 of section 48 of the former Civil Practice Act. (3) In any event, the 10-year Statute of Limitations would not apply here because an accounting is unnecessary in view of the fact that (a) there is no claim that respondents made profits on the corporate money they pocketed and (b) there is no claim that the gains received by respondents through breach of their fiduciary duties were greater than the correlated losses suffered by plaintiff (Dunlop's Sons v. Spurr, 285 N. Y. 333, 336).