Court Opinion

ID: 5462347
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:40:20.458052+00
Date Added: 2024-06-11T08:32:56.732036
License: Public Domain

Ingraham, P. J.
The plaintiff, as a stockholder, sues the defendant, claiming a dissolution of the company, on the ground that- the business of the company had been *17suspended more than a year. There is no difficulty as to all the points raised, except that which relates to the right of the plaintiff, being a mere stockholder, to maintain such an action. At special term a receiver was appointed, and from that order the defendant appeals.
The provisions of the Revised Statutes which allow of proceedings against corporations for not continuing business for a year, evidently contemplate proceedings by the Attorney General, for a forfeiture of the charter; and a reference to the original act, in Session Laws of 1825, will show that no provision was made for any proceeding in such cases to be taken by stockholders. It has been repeatedly held that this court has no jurisdiction over these corporations, except such as is conferred by statute; and unless authority therefor can be found therein, it cannot be exercised. There are various cases in which this question has been examined, and in which it has been expressly held that no such action can be maintained by a stockholder, before judgment. The Code (§ 430) provides for actions to annul the charter of a corporation, by the Attorney General, among other causes, for forfeiture by failure to exercise its powers; but that can only be done upon leave of the court. In Howe v. Deuel, (43 Barb. 504,) it was held by the general term of this district, that in no case could a stockholder, except of a moneyed corporation, have a receiver appointed to take possession of the property of a corporation, and thereby cause a forfeiture of the charter. And it was also held in that case that the court, as a court of equity, could not exercise such a power not given by the statute. In Belmont v. The Erie Bailway Oo., (52 Barb. 637,) the same principle was recognized as applicable to a case charging the directors with misconduct in office. In Oalwey v. The U. S. Steam Sugar Befining Co.', (36 Barb. 256,), it was held that even a creditor at large could not maintain such an action; and Mullir, J., *18held that the Attorney General, only, could proceed for a forfeiture for not using its powers for the year. There has been, no case cited in which such an action has been sustained, by a stockholder. In Bradt v.' Benedict, (17 N. Y. 99,) it was also held, that to constitute a forfeiture, the surrender müat be accepted by the government, or judicially declared. And in The People v. The Northern B. B. (Jo., (53 Barb. 98,) and in the same case, 42 N. Y. 217, it was held that the receiver could be appointed on rendering judgment.
[First Department, General Term, at New York,
November 7, 1871.
My opinion is, that an action cannot be maintained to effect a forfeiture of the charter for non-user within a year; and that in any. case, even when the action is brought by the Attorney General, the receiver cannot be appointed until judgment in the action.
The order appointing the receiver should, for this reason, be reversed.
Order reversed.
Ingraham, P. J., and Gardozo and Geo. G. Barnard, Justices.]