Court Opinion

ID: 5481218
Source: CourtListenerOpinion
Date Created: 2022-01-10 01:56:07.172479+00
Date Added: 2024-06-11T08:33:37.054310
License: Public Domain

Froessel, J.
In this action, which involves primarily the two principal stockholders of the corporate defendant, and wherein plaintiff seeks restoration of his former status and rights in said corporation, based largely upon the oral agreement of August 1, 1941, we are of the opinion that the weight of the evidence supports the findings and determination of Special Term, excepting with respect to the failure to declare dividends (Special Term’s findings 51 and 53; subdivision 6 of first decretal paragraph of its judgment). The Appellate Division properly reversed said findings and ruled that upon this record the refusal of the directors to declare dividends cannot be said to have been arbitrary or in had faith (City Bank Farmers Trust Co. v. Hewitt Realty Co., 257 N. Y. 62). Special Term also erred (subdivision 8 of first decretal paragraph of its judgment) in directing defendant George F. Robie, in this action, to repay to the corporate defendant “ the sum of fourteen hundred dollars ($1400) heretofore paid to him out of corporate funds as a payment on the purchase price of an automobile personally purchased by George F. Robie ”, as this is not a stockholder’s derivative action.
Accordingly, the judgment of the Appellate Division and that of Special Term should be modified in accordance with the opinion herein and, as so modified, affirmed, with costs in this court and in the Appellate Division.
Lewis, Conway and Dye, JJ., concur with Froessel, J.; Loughran, Ch. J., Desmond and Fuld, JJ., dissent on the ground that the findings of the Appellate Division are in accord with the weight of the evidence.
Judgment accordingly. [See 301 N. Y. 731.]