Court Opinion

ID: 5782598
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:53:08.198945+00
Date Added: 2024-06-11T08:42:01.049015
License: Public Domain

Judgment, Supreme Court, New York County entered October 1, 1971, granting petition by annulling the corporate merger of Stuyvesant Construction Corp. and Merhack Realty Corp., and restoring the afore-mentioned corporations to the status they held on May 25, 1971, is reversed, on the law, the judgment vacated, and the respondent-appellant’s motion for a change of venue to Albany County, Third Judicial District, is granted, without costs and without disbursements. Petitioner seeks to vacate a corporate merger which was effected by filing a certificate of merger with the Division of Corporations and State Records, in Albany. It is alleged that the merger was made through a mistake of fact and through petitioners’ neglect and inadvertence, and that if the corporate merger is not annulled, severe adverse tax consequences will result. While petitioners label the proceeding as one invoking the court’s general equity jurisdiction, it is nevertheless apparent that the proceeding seeks to compel the Secretary of State to perform a specific act. Such is acknowledged in the petition which requests a direction that the “ Secretary of the State of New York * * * vacate and remove the certificate of merger filed on the 26th day of May, 1971 and to restore the constituent corporations Stuyvesant and Merhack ”, Indeed, this prayer for relief was necessary, for without such action by the Secretary of State the Division of Corporations and State Records will continue to have on file the certificate of merger, which is “prima facie evidence”, of the facts contained therein. (Business Corporation Law, § 106.) Clearly, therefore, the Secretary of State is a necessary party to the proceeding. Whether the proceeding is pursuant to CPLR (art. 4, special proceeding), or CPLR (art. 78, proceeding against body or officer), venue properly lies in Albany County, where the Secretary of State maintains his principal office. (CPLR 506, subd. [b]; 7804, subd. [b].) Therefore, Special Term should have granted the motion to change of venue. Neither of the dissenters disagrees with the conclusion that venue properly lies in Albany County. One of the dissenters, however, upon consideration of the merits, would dismiss the proceeding thereby depriving petitioner of any possibility of correcting what might be a manifest and unintended error. The other dissenter, also upon consideration of the merits, would leave standing the unauthorized act of Special Term in granting relief, thus casting upon respondent-appellant the burden of challenging that act. However, since venue should be changed to a county outside of this Department, this court should not, in the interest of “ Orderly procedure and a proper regard for comity ”, consider the underlying merits of the application. (Rosenblatt v. Sait, 34 A D 2d 238, 239.) Concur—Markewich, Murphy and Tilzer, JJ.; Kupferman, J., concurs in part and dissents in part in a memorandum and McGivern, J. P., dissents in a memorandum as follows: