92 N.Y.S. 233 | N.Y. Sup. Ct. | 1904
This action is brought by the plaintiff as a stockholder in behalf of the defendant corporation to recover losses sustained by it because of the negligence of the individual defendants while acting as its directors. The defendants Wetmore and Brooker demur to the complaint oh the ground that it does not state facts sufficient to constitute a cause of action. The demurrer goes to the entire complaint, but the only question discussed by defendants in their brief, and argued at the bar of this court, was whether the allegation of refusal on the part of the corporation to bring the action is sufficient, and I shall limit my decision to that particular.
The complaint, after setting forth a demand upon the corporation to bring the action, alleges: “ But said Trust Company has wholly omitted and failed to bring said action and the plaintiff therefore brings the same.” The demurring defendants contend that this is not a sufficient allegation of refusal on the part of the company.
There are numerous expressions in published decisions of this court and of the Court of Appéals from which it may be inferred that a plaintiff in a case like this may «allege a refusal or an unreasonable neglect by the corporation as
Tested by this rule, the complaint herein is deficient. It alleges omission and neglect, but not refusal. The essential difference is one of intention. A refusal involves an intentional denial of the stockholder’s request; an omission or neglect does not necessarily contain any such element, but may be of such a character that an intention may be inferred therefrom. To plead neglect is not equivalent to pleading refusal.
I should regard the point raised by this demurrer as hypercritical were it not for the serious consideration given to it in the case of Leslie v. Lorillard, 31 Hun, 305, where the question was quite similar to the one now under consideration. The allegation in that case was, I think, even stronger than the one here. The complaint there alleged: “ That said defendant has neglected to bring such action and threatens to continue to make the monthly payments provided for in such contract.”. This involved a neglect as to the past with a threat of continued negligence in the future, and might reasonably be construed as involving an intentional refusal on the part of the corporation to bring the action;
I think the demurrer must be sustained, the plaintiff to plead over upon the usual terms if he so elects.
Demurrer sustained, plaintiff to plead over upon usual terms, if he so elects.