255 A.D. 253 | N.Y. App. Div. | 1938
The plaintiff, a small, closely-held corporation, originally brought this action against the defendant Fagan for moneys claimed to be due it because of excess withdrawals in anticipation of extra salary profits and credits. The said defendant, a minority stockholder, set up in his answer a counterclaim against the corporation and its directors for their mismanagement of the corporate affairs, an accounting, the restitution of moneys improperly received by these directors and the payment to said defendant of his share of the corporate income thus misappropriated by these directors. Such a representative action by a minority stockholder against the corporation and its directors is amply sustained by authority. (Sage v. Culver, 147 N. Y. 241; Jones v. Van Heusen Charles Co., 230 App. Div. 694; Earl v. Brewer, 248 id. 314; affd., 273 N. Y. 669.) This counterclaim was struck out of the answer by the court below as one which might not properly be interposed because the proceeds to be realized as the result thereof belonged to the corporation and not to the defendant stockholder.
The order below should be reversed, in so far as appealed from, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.
Hill, P. J., Rhodes, McNamee and Crapser, JJ., concur.
Order reversed on the law and facts," in so far as appealed from, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.