45 Misc. 2d 235 | N.Y. Sup. Ct. | 1964
Defendant Merchants’ National Properties, Inc., moves for dismissal of each cause of action stated in the amended complaint on the ground that plaintiff lacks legal capacity to sue, and the causes of action are legally insufficient. The amended complaint supersedes the original complaint and is alone before the court. This is a derivative
In a first cause in libel, it is alleged that the moving defendant and its president, the defendant Leonard Marx, mailed a proxy statement on .September 11, 1963, to the MeCrory stockholders. It stated, in part: “ Without Lerner, your company would have lost approximately $3,000,000 last year. There is no reason why MeCrory should sacrifice its best asset to solve one stockholder’s problem. The proposal will help protect our assets from being dissipated.” It also stated: “ TO THE STOCKHOLDERS OF McORORY CORPORATION. We urge you to vote AGAINST the sale of Lerner Stores Corporation. In management’s proxy material was the following statement: ‘ The sale of 97 % of the stock of Lerner Stores Corporation was arranged by Rapid-American which controls 51% of MeCrory in order to solve its own financial pressures after it unsuccessfully attempted to do so by sale of its holdings of MeCrory stock. ’ ” It appears from the pleading, however, and Exhibit A attached thereto, that the last-quoted portion of the defendants ’ proxy statement is not a statement of McCrory’s management but, rather, it is a statement of the defendants which had been repeated in management’s proxy material. It is further alleged that the statements relating to the continuing need of the Lerner stock as a part of the MeCrory assets, the self-interest of Rapid-American, and the adverse interest of MeCrory, were false and defamatory. The proposed sale was not approved and was abandoned, to McCrory’s damage. A second cause in libel is based on a letter mailed on September 21, 1963, containing similar alleged defamatory matter.
The current pleading speaks as of the time of its service and the factual allegations thereof pertaining to plaintiff’s capacity to sue must be accepted as true. From aught that appears in the first two causes, the moving defendant is a stranger to the corporation despite the fact that it objected as a MeCrory stockholder which, in the circumstances here, affords it no position other than a stranger not charged with any wrong committed in connection with the corporate affairs and their management by a person in possession and control thereof. The right of the
Next it is urged that there is no libel of the corporation but, at best, of its stockholder Rapid-American and its president. It is clear, however, that the corporation is charged with seeking the consummation of a transaction which would damage it and it is done in circumstances which go to the heart of the corporation’s integrity, business methods, and credit, regardless whether the transaction is concluded. Nor is it perceived that the pleading relies on recital of extrinsic facts to render the statements libelous. Rather such facts are recited as identifying the corporation rather than its stockholder and officer as the party libeled. There is no need for the assertion of special damage. The first and second causes are sufficient.
In the third cause it is alleged that defendant Merchants ’ is the owner of property leased to McCrory for the operation of
Defendant moves alternatively for corrective relief pursuant to CPLR 3024 (subd. [b]). In the light of the foregoing considerations affecting the nature of the causes and their elements, none of the objections raised is tenable. Motion is denied in all respects.
(On reargument, April 30, 1964.)
The letters of April 17,1964 and April 20,1964, are considered on the informal application of the defendant Merchants ’ National Properties, Inc., for reargument of its motion for dismissal of each cause of action and the letters are placed on file. Defendant urges with respect to the first two causes in libel, the plaintiff is not the proper party since it is alleged that the authors and publishers of the defamatory matter meant and intended to charge the officers and directors of the defendant McCrory Corporation with misfeasance. This action is brought on behalf of McCrory Corporation. However, it is clear from the entire complaint that the charge may be read to mean as alleged, that the corporation acted so as to help a stockholder against its own interest, while in doing so such action was persuaded by its officers. It is further charged in the complaint that the alleged defamatory matter was directed to the corporation’s financial condition and operational results, was known to
With respect to the third cause of action, the justification on which defendant relies is a matter of defense, assuming that justification may be pleaded. In this instance, the third cause of action does not rely on the doing of lawful acts but rather charges unlawful acts producing the claimed injury. While defense and proof of mixed motive may justify and exonerate, they will not serve the same function when plaintiff alleges injury resulting from wrongful acts. The application for reargument is denied.