Court Opinion

ID: 5544714
Source: CourtListenerOpinion
Date Created: 2022-01-10 18:56:32.253429+00
Date Added: 2024-06-11T08:34:53.679040
License: Public Domain

McAdam, J.
The facts disclosed are sufficiént to call upon th.e attorney general of the state to compel the defendant Stanley to account for his official conduct, (Code, §§ 1781, 1782,) and sufficient to enable any stockholder, independently of the statute provision, to maintain an action to obtaih the same end. Cook, Corp. § 645; Atwool v. Merryweather, L. R. 5 Eq. 464, note; Dodge v. Woolsey, 18 How. 331; Hawes v. Oakland, 104 U. S. 450; Robinson v. Smith, 3 Paige, 222; Butts v. Wood, 37 N. Y. 317; Brinckerhoff v. Bostwick, 88 N. Y. 59; Stromeyer v. Combes, 2 N. Y. Supp. 232; Brinckerhoff v. Bostwick, 99 N. Y. 185, 193,194,1 N. E. Rep. 663. In order to invoke this extraordinary remedy, however, the plaintiff’s status as a stockholder should clearly appear; for he is invoking a remedy which neither the corporation, said to have been ignored, nor the state, which has supervisory conlrol over corporations, has deemed necessary or proper to initiate. The defendant Stanley'denies that-the plaintiff is a stockholder, while the latter claims he owns 50 shares of the capital stock of the corporation. The defendant Stanley produces the transfer book, and proves by it that the 50 shares were regularly transferred tohim on the books of the corporation, by virtue of assignments in due form executed by the plaintiff. The plaintiff admits signing the transfers, but claims that they were delivered without consideration, and upon conditions which have not been performed. The facts qualifying the transfers are denied. Presumptively, they were made in the ordinary manner, and for value, and the onus of proving the contrary is on the plaintiff. This issue must be disposed of upon a trial, and not determined upon affidavits on mere motion. Until the plaintiff obtains an adjudication setting aside tlie transfers and establishing his title to the stock, the defendant Stanley must be regarded as the legal owner of it. The accounting sought by the plaintiff may follow the establishment of his legal title, but cannot precede it. The plaintiff cannot compel Stanley to submit to an inquisitorial examination in the nature of an accounting in aid of a right the plaintiff may never succeed in having judicially established. Upon this ground, and without considering the numerous other objections urged against the examination sought for, the order will be vacated, and the application denied, with $10 costs.