Court Opinion

ID: 6133529
Source: CourtListenerOpinion
Date Created: 2022-02-04 21:29:44.92851+00
Date Added: 2024-06-11T08:54:24.045306
License: Public Domain

Pratt, J.:
In form the contract mentioned in the complaint binds the Old Dominion Steamship Company, Delaware, to pay the Lorillard ■Steamship Company $12,000 as a lump sum, together with $750 per month. The monthly sum is the agreed price to be paid to induce the Lorillard company to cease to exercise its franchises, ■and that company agrees to cease to exercise its franchises in consideration of that sum. The $12,000 is an aggregate made up of various sums which, in form, accrued for like considerations under a former contract made with like intent and imposing like obligations.
I think the contracts were illegal and ultra vires. These companies were organized under laws which contemplate a public benefit to be derived from the exercise of their powers in a public service, and this contract is in plain violation of the object of their incorporation as well as against public policy. It would, therefore, seem plain that the Delaware company has contracted to pay, and has paid, large sums of money for illegal purposes, and threatens to continue the wrong. The complaint, therefore, makes a plain case of accomplished waste and threatened waste. The plaintiff, being a stockholder of the company whose funds have been thus wasted and which are threatened with like wrongs, is injured and deprived of his just rights. It was the duty of his company to cease this wrong. It has refused to do its duty. Plaintiff has requested it to sue to cancel the contract. It has been sued by the Lorillard company upon these illegal claims and refused to interpose any defense, although plaintiff has requested it to make such defense. This gives plaintiff the right to intervene for the protection of his own rights and those of persons in like situation. Indeed, within the recent case of Currier v. New York, West Shore and Buffalo Railroad Company, recently decided in this department (35 Hun, 355), I fail to see why any demand was even necessary. The allega tions show that it would have been an idle ceremony. So far, therefore, as the demurrer raises the questions of a cause of action and *396plaintiff’s standing I think it sbonld be overruled. I fail to find any merit in tbe other grounds of demurrer.
Judgment should be affirmed, with costs.
BaRNAed, P. J., concurred-; DteMAN, J., not sitting.
Order overruling defendant’s demurrer and judgment thereon affirmed, with costs.