Koral v. Savory, Inc.

168 Misc. 615 | N.Y. Sup. Ct. | 1938

Furman, J.

Plaintiff, as a stockholder of Elkay Reflector Corporation, incorporates in his complaint against the defendants two causes of action, the first of which alleges the malicious prosecution of bankruptcy proceedings against Elkay Reflector Corporation by defendants and the second of which alleges a general conspiracy by defendants to ruin the business and credit of said corporation. Plaintiff, in the first cause of action, sets forth the filing of the petition in bankruptcy against the corporation by defendants, the adjudication of the corporation a bankrupt by the United States District Court for the Eastern District of New York, and the subsequent reversal of such adjudication by the Circuit Court of Appeals. (Elkay Reflector Corp. v. Savory, Inc., 57 F. [2d] 161.) Plaintiff, in his second cause of action, incorporates as a part of the general conspiracy by defendants the filing of the petition, etc. Defendants, on the motion, seek to dismiss the first cause of action, asserting that the adjudication of the corporation a bankrupt by the District Court in the first instance, regardless of the subsequent reversal of such adjudication by the Circuit Court of Appeals, established a prima facie case against the corporation and is sufficient to defeat plaintiff’s first cause of action; as a relief further defendants seek to have stricken from plaintiff’s second cause of action such allegations as aver the malicious prosecution of said bankruptcy action. It is the opinion of this court that defendants’ contentions in regard to the first cause of action are well founded and that the adjudication of the corporation a bankrupt by the District Court is a bar to plaintiff’s cause of action, for such adjudication establishes a prima facie case of existence of probable cause and constitutes a bar to an action for malicious prosecution in the absence of facts to overcome the existence of probable cause established by such adjudication. The complaint fails to state facts sufficient to overcome the existence of probable cause and, therefore, must be dismissed. As to the second cause of action, defendants’ motion must be denied. Therein it is alleged that the prosecution of the bankruptcy action is a part of the general conspiracy, and that, although such allegations in and of themselves do not constitute a good cause of action, taken together with other allegations setting forth a general scheme or conspiracy are not defective when so alleged. Submit order in accordance with the foregoing.