Court Opinion

ID: 5234403
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:05:25.679049+00
Date Added: 2024-06-11T08:27:42.735371
License: Public Domain

Hotchkiss, J. (dissenting):
I concur with my brother McLaughlin on all points save one. The appellant Oppenheimer and his associates were promoters of the corporation. When the corpqration took over the real estate which it was organized to buy, G-rannis, the broker for the vendor, under a secret arrangement with Oppenheimer and McCreery, another of the promoters, consummated through dummies and with the indirection customary in transactions of that nature, divided his commission of $6,250 into three parts, one of which he paid to Oppenheimer and one to McCreery. It is elementary law that for secret profits promoters are hable to account to the future corporation or to its representative in insolvent proceedings. (10 Cyc. 274 and cases cited.) The fact that the corporation was not itself entitled to any part of the commission; that it belonged to G-rannis, I do not regard as controlling. The profit was made in a transaction of the company and was brought about by or through the payment of its moneys. (Boston Deep Sea Fishing & Ice Co. v. Ansell, L. R. [1888] 39 Ch. Div. 339, 354, 363, 364.) The claim of the corporation against Oppenheimer and his associates was an asset of the corporation in their hands which they were not entitled to retain. (McClure v. Law, 161 N. Y. 78.) It is true that the complaint in this case makes no mention of the G-rannis transaction and specifically demands no relief in that regard, but a recovery on its account is in my opinion germane to the complaint as drawn, and properly covered by the prayer for general relief. Moreover, the facts are found by the court below. To the extent of his proportionate interest in this item, I think the plaintiff may recover.
Judgment reversed and complaint dismissed, with costs. Order to be settled on notice.