103 A.D. 1 | N.Y. App. Div. | 1905
This action was brought by the plaintiff as a director of the defendant The Coughlin-Sanford Switch Company, under section 1781 of the Code of Civil Procedure, to compel the defendant Coughlin to account for his official conduct as a director and president of the corporation in the management and disposition of. the funds and property committed to his charge, and to compel him to pay to the corporation the money and the value of the property which he has acquired to hitpself, or lost or wasted by a violation of his duty. This action can be maintained in the courts of this State by a director of a foreign corporation. (Miller v. Quincy, 179 N. Y. 294.) The defendant is a corporation organized under the laws of the State of West Virginia. Section 1787 of the Code of Civil Procedure provides for granting an injunction restraining a corporation and its trustees, directors, managers and other officers from collecting or receiving any'debt or demand, and from paying out, or in. any way transferring or delivering to any person, any money, property or effects of the corporation during the pendency of the action, except by express permission of the court.
It is evident that there is a distinction between the power of the Supreme Court of the State of New York to interfere with the
Thus, while the courts of this State, at the suit of an officer, director, stockholder or creditor of a foreign corporation, have jurisdiction to compel the officers or directors of the corporation, over whom jurisdiction has been acquired by the service of process, to
The order appealed from assumed to appoint a receiver of the property of the defendant The Coughlin-Sanford Switch Company during the pendency of the action, with power to collect and receive the debts, demands, accounts, assets and property of the defendant The Coughlin-Sanford Switch Company ; to preserve the property and the proceeds of the debts and demands collected ; to employ counsel and maintain any action or special proceeding for any of the said purposes, and generally to possess and exercise the usual powers and duties of temporary receivers in such cases. The order also provides that the defendant The Coughlin-Sanford Switch Company, and its president, directors, officers, agents and servants are strictly enjoined from collecting or receiving any debt, demand or property of the said defendant, and from paying out or in any way transferring or delivering to any person except the receiver thereby appointed any money, property, papers, accounts or effects of the said company, or otherwise disposing thereof or
It is claimed that the facts presented do not justify either the injunction or the receiver. The plaintiff in his affidavit alleges that he is and has been since Hay 10, 1899, a director and treasurer of the defendant corporation and the owner of 1,500 shares of the capital stock of the corporation; that the corporation was organized under the laws of the State of West'Virginia on November 16, 1895, with a capital stock of $100,000, subsequently increased to $1,000,000, to manufacture, vend, sell, lease and license to railway companies and other persons the Coughlin improved railroad switch, whose principal place of business has been since August, 1898, in the city of New York; that the defendant Edward W. Coughlin has been, since the 21th day of December, 1895, one of the directors and the president of the said company; that since the year 1903 the plaintiff, though the treasurer of the company, has never received any of the corporate funds of the defendant company, or maintained any account in the name or for the benefit of the said company, or deposited any moneys of the company in any bank or banks, nor signed any checks on the funds of the company ; that all the funds and money received for the sale of the stock or manufactures of said company, or loaned to said company, have been received by the defendant Coughlin and by him deposited to his individual account in various trust companies in the city of New York ; that no meeting of the board of directors of the said company has been held since April 1, 1902, and no meeting of the stockholders thereof since Hay 8, 1899 ; that since the month of July, 1903, the defendant Coughlin has received from the sale of stock the sum of $13,000, by way of loan the sum of $5,000, from the sale of switches manufactured for it the sum of $5,931.50, and by way of loan from J. Hurray Hitchell the ■ sum of $7,500,
The defendant Coughlin, in answer to this application, submitted an affidavit in which he alleges that the stock sold by him was his own stock, and not the stock of the corporation; that the moneys advanced by John Murray Mitchell were advanced under a specific agreement made with Mitchell as to the use thereof; that it is not true that the company is insolvent and unable to pay its debts. He does not deny, however, that he has received funds of the corporation, alleged in the moving affidavits to be upwards of $15,000, for which he has rendered no account.
Upon these papers, we agree with the court below that a case
I think, therefore, that the injunction granted should be modified to the extent above indicated, and the motion for the appointment of a receiver denied, and that the order appealed from as modified should be affirmed, without costs.
Van Brunt, P. J., McLaughlin, Hatch and Laughlin, JJ., concurred.
Order modified as directed in opinion, and as modified affirmed, without costs.