43 Misc. 2d 208 | N.Y. Sur. Ct. | 1964
Two of the three executors have brought a proceeding against the third fiduciary whereby the court is asked to disallow a stock option and void a stock interest claimed to be held by the respondent. Certain other incidental relief is also requested. In answer to the petition, respondent has moved for an order dismissing the application, claiming the court does not possess jurisdiction to determine the issues.
For the purpose of deciding the motion the following facts are assumed to be true. Decedent owned all the stock of Artex Enterprises, Inc., hereinafter referred to as Artex, which in turn owned all the capital stock of Garten Table Pad Company, hereinafter referred to as Garten. Respondent has presented a claim to the estate in the form of a written option signed by the decedent as president of Artex dated July 19, 1962, by the terms of which the respondent was given permission to purchase 40 shares of stock of Garten. The respondent has tendered the money to buy the said stock. Respondent also claims to own 30 shares of Garten stock purchased from decedent which is also disputed. Respondent is the operating manager of Artex. He is accused of acts designed to interfere with the continued operation of Garten. Petitioners raise a question of the genuineness of the signatures to the option and stock certificate.
Respondent advances the argument that section 211-b of the Surrogate’s Court Act is inapplicable. The ultimate question for determination is whether the court can assume jurisdiction upon the facts which have been presented. Respondent further argues that inasmuch as Artex and Garten have not been made parties to the proceeding, it is defective as all the necessary parties are not before the court.
The crux of this matter is the fact that the decedent was the sole owner of Artex which in turn solely owned Garten. For all practical purposes, decedent controlled the activities of both corporations. Therefore, any claim against either corporation is in essence a claim against the estate, for the estate is ultimately affected. Should the stock option be valid, it would adversely affect the estate. If the respondent does in fact own 30 shares of stock it would cause the interest of the estate to be diminished.
In view of the authorities, the court is of the opinion that the proceeding brought by the petitioners is one over which it should exercise its equitable powers (Surrogate’s Ct. Act, § 40). Accordingly the motion to dismiss the petition is denied.