197 Misc. 575 | City of New York Municipal Court | 1950
This is an action by a former stockholder of a corporation against the remaining stockholders, the corporation itself, and an individual not an officer or a stockholder of a corporation, but who is said to have had an interest in the corporation nevertheless.
The action is upon an alleged oral agreement the plaintiff said he had with the individual stockholders and the additional individual defendant which called upon them to purchase from the plaintiff the shares of stock, original issue, that represented his investment in a corporation; the agreement being made it is said, at the time of investment. The complaint does not allege that the corporation agreed to return the plaintiff’s investment at any time, but the case proceeded against the corporation on the theory that the individuals constituted all the stockholders and could bind it. There was a verdict against all defendants. But as I reserved decision on the defendants’ motion to dismiss the complaint at the end of the plaintiff’s ease and again at the end of the entire case, the question of the plaintiff’s right to go to the jury is still before me.
The defense, so far as the individual defendants are concerned was based largely upon the Statute of Frauds and upon that ground those defendants must prevail. So far as they are concerned the case is that of a plaintiff suing on an oral contract for the sale of personal property where the amount involved exceeds $50. In the absence of a writing binding the defendants plaintiff cannot recover. (Personal Property Law, § 85; cf. Leach v. Weil, 129 App. Div. 688 — where the unenforcibility of an oral agreement was conceded.) This is not a case of the defendants selling their own property and agreeing to repurchase, a species of “ sale and return ” wherein the two transactions are really as one with a dual aspect, the purchase being regarded as sufficient to place the entire transaction without the scope of the statute. (Cf. Finlaw v. Wertheim, 161 Misc. 339, affd. 248 App. Div. 572, affd. 272 N. Y. 550, and Johnston v. Trask, 116 N. Y. 136.) The individuals interested in the affairs of the corporation are, being asked to purchase the stock of another individual who has lost his enthusiasm in the venture. Their promise to purchase may have been the occasion for the original investment — the inducing cause, but the promise cannot be enforced.
The verdict is set aside and the. complaint is dismissed as to all defendants.