176 A.D. 653 | N.Y. App. Div. | 1917
This is a proceeding to dissolve a corporation under article 9 of chapter 28 of the Laws of 1909, known as the General Corporation Law (Consol. Laws, chap. 23).. Pursuant to section 172 of the act, the appellant, upon notice to the Attorney-General, presented to the Special Term of the Supreme Court a petition praying for a final order dissolving McLoughlin & Donovan, Inc., a domestic corporation. The court entertained the application and made an order under section 178 of the act (as amd. by Laws of 1909, chap. 240) requiring all persons interested in the corporation to show cause before a referee named in the order why the corporation should not be dissolved. Thereafter, on motion of the respondent corporation, the court vacated the order appointing a referee as well as all proceedings taken thereunder, and dismissed the petition herein. The appellant has appealed from the latter order.
It appears from the petition that the petitioner is one of the directors of the McLoughlin & Donovan corporation; that the others are Richard J. Donovan and Thomas J. Evers; that the petitioner owns fifty per cent of the stock, and that Donovan
In vacating the order appointing a referee the learned court at Special Term took the view that the petition disclosed merely a deadlock between the stockholders and failed to show any reasons why a dissolution would be beneficial to the stockholders, and, therefore, was insufficient to entitle the petitioner to the order appointing the referee under section 172 of the act. We are of opinion that the petition is sufficient in both respects.' It allege^ the deadlock between the conflicting interests in the corporation and as shown above it also sets forth reasons showing that a dissolution would be beneficial to the stockholders. Section 172 provides that in case of a deadlock such as that existing here a stockholder or stockholders “may present a petition as prescribed in section one hundred and seventy * * that is, where, as in this case, stockholders owning fifty per cent of the stock for any reason “deem it beneficial to the interests of the stockholders that the corporation should be dissolved, they may present a petition to the Supreme Court praying for a final order dissolving the corporation * * *. ”
The contents of the petition are prescribed by section 174 (as amd. by Laws of 1909, chap. 240). Among other things the.
“Contents of petition.—The petition must show that the case is one of those specified in sections one hundred and seventy or one hundred and seventy-two of this chapter * *
Therefore, we are of opinion that the owners of fifty per cent of the stock have the right to present a petition to the court for a dissolution under section 172, as was done in this case, without regard to any action of a majority of the directors under section 170, and that similarly a majority of the directors may file a petition for dissolution irrespective of any of the provisions of section 172. Having reached these conclusions, it is unnecessary to consider the effect of the failure to give the AttorneyQsneral notice of the application, to vacate the original order,
The order-appealed from is, therefore, reversed, with ten dollars costs and disbursements, and the original order reinstated.
Clarke, P. J., Scott, Page and Shears, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and original order reinstated. Order to be settled on notice.