Brinckerhoff v. Bostwick

82 Citing cases

  1. Brinckerhoff v. Bostwick

    12 N.E. 58 (N.Y. 1887)   Cited 21 times
    In Brinckerhoff v. Bostwick (reported in the Court of Appeals, 88 N.Y. 52; 99 id. 185 and 105 id. 567) it was held that an action in equity could be maintained to call the directors of a corporation to account for their negligent wrongful acts, whereby the corporation and its stockholders suffered damage.

    The expression "common law liability" was obviously used in contradistinction to that of a liability imposed by statute, and had no reference whatever to a liability enforceable at common law in distinction from one cognizable in equity. Since the first decision of this case, by this court ( 88 N.Y. 52), other stockholders, upon their petition, have been added as plaintiffs, and the judgment demanded against the defendants is that they may be adjudged to pay the damages sustained by the plaintiffs, and that the receiver may recover, collect and receive the same for the benefit of the creditors and stockholders of the bank, or else that plaintiffs may recover, etc. Under the allegations of the complaint and upon the very numerous bases of liability respecting the several defendants, it is hard to see exactly what kind of a verdict could be directed as to form, in case the action were to be regarded as a common law one, and the jury were to give a verdict for the plaintiff, which should cover the whole case and upon which judgment should be entered.

  2. Bischoff v. Boar's Head Provisions Co., Inc.

    436 F. Supp. 2d 626 (S.D.N.Y. 2006)   Cited 30 times
    Holding "as long as [plaintiff] may bring derivative claims on behalf of [defendant LLC], then [defendant LLC] is a true defendant that destroys complete diversity in this case."

    Such equitable suits have been recognized without statutory authorization since the 1800s. See id.;see also Brinckerhoff v. Bostwick, 88 N.Y. 52, 53 (1882) (relying on Robinson to find that stockholders had standing to sue corporation in their own names); Carter G. Bishop Daniel S. Kleinberger, Limited Liability Companies: Tax and Business Law ¶ 10.07[2] (2006) (citing Hichens v. Congreve, 38 Eng. Rep. 917 (Ch. 1828)). This common law right to sue derivatively is rooted in the law of trusts, pursuant to which a beneficiary (also called a cestui que trust) has the equitable right, independent of statute, to bring a cause of action that belongs to the trust but upon which the trust refuses to act.

  3. Tzolis v. Wolff

    10 N.Y.3d 100 (N.Y. 2008)   Cited 142 times   10 Legal Analyses
    Concluding that derivative suits should be recognized even though no statute provides for them

    This case arising in equity, the Supreme Court's jurisdiction is granted by the New York State Constitution; the Legislature cannot abridge that power. ( Brinckerhoff v Bostwick, 88 NY 52; Ross v Bernhard, 396 US 531; Ettlinger v Persian Rug Carpet Co., 142 NY 189; Klebanow v New York Produce Exch., 344 F2d 294; Riviera Congress Assoc., v Yassky, 18 NY2d 540; Strain v Seven Hills Assoc., 75 AD2d 360; Salm v Feldstein, 20 AD3d 469; Lio v Mingyi Zhong, 10 Misc 3d 1068[A], 2006 NY Slip Op 50016[U]; Waters Co. v Gerard, 189 NY 302; Batas v Prudential Ins. Co. of Am., 281 AD2d 260.) II. Soterios Tzolis has a direct claim.

  4. Small v. Sullivan

    218 App. Div. 612 (N.Y. App. Div. 1926)   Cited 2 times

    It is contended by plaintiff that the agreement cannot be given effect "to absolve the directors from legal responsibility for violation of the statutory provision." As will be indicated below, if plaintiff had merely charged such a violation, instead of bringing this action in equity for fraud ( Brinckerhoff v. Bostwick, 88 N.Y. 52, 58), the six-year Statute of Limitations would be properly pleaded by the defendants. To put it another way, if this first defense, based on the agreement and on assertion of good faith, is sufficient because plaintiff's alleged case comes down to a violation of a statutory prohibition which is "absolute," in the sense and with the result referred to above, then the pleas of limitation mentioned below would be sufficient.

  5. Clayton v. Farish

    191 Misc. 136 (N.Y. Sup. Ct. 1947)   Cited 9 times

    "If the averments of fact, above quoted, are proven on the trial, they may be held to have amounted to actionable breaches of the duties owed by defendants to the corporation, as its trustees and agents. Depending on circumstances, they may fall into one or more of the categories of acts for which directors are liable in damages, among which are lack of due care ( O'Brien v. Fitzgerald, 143 N.Y. 377; General Rubber Co. v. Benedict, 215 N.Y. 18; Bosworth v. Allen, 168 N.Y. 157; Kavanaugh v. Commonwealth Trust Co., 223 N.Y. 103); waste or squandering of the corporate assets ( Bowers v. Male, 186 N.Y. 28; Hazard v. Wight, 201 N.Y. 399); willful conversion or misapplication of the company's goods ( Brinckerhoff v. Bostwick, 88 N.Y. 52, 62; Quintal v. Kellner, 264 N.Y. 32; Pollitz v. Wabash R.R. Co., 207 N.Y. 113; see Hornstein v. Paramount Pictures, 292 N.Y. 468, 471); and using the corporation's property for the doing of an unlawful or immoral act ( Bath Gas Light Co. v. Claffy, 151 N.Y. 24, 31; Continental Securities Co. v. Belmont, 206 N.Y. 7; Berkey v. Third Avenue Railway Co., 244 N.Y. 84)."

  6. Porter v. Sabin

    149 U.S. 473 (1893)   Cited 157 times
    Recognizing that the claim at issue arose prior to the appointment of the receiver

    Their position rests on a misunderstanding of the nature of the office and duties of a receiver appointed by a court exercising chancery powers, and of the extent of the jurisdiction and authority of the court itself. In Brinckerhoff v. Bostwick, 88 N.Y. 52, and Ackerman v. Halsey, 10 Stewart, (37 N.J. Eq.) 356, cited for the plaintiffs, in which stockholders of a national bank were permitted to bring such a suit when a receiver had refused to bring it, the receiver was not appointed by a judicial tribunal, but by the comptroller of the currency, an executive officer. When a court exercising jurisdiction in equity appoints a receiver of all the property of a corporation, the court assumes the administration of the estate; the possession of the receiver is the possession of the court; and the court itself holds and administers the estate, through the receiver as its officer, for the benefit of those whom the court shall ultimately adjudge to be entitled to it.

  7. Capital Sav. Loan Ass'n v. Olympia Nat. Bank

    80 F.2d 561 (9th Cir. 1935)   Cited 3 times

    In such a suit, it is "manifestly futile and unnecessary" to allege that a demand has been made upon the receiver to institute proceedings against himself. Brinckerhoff v. Bostwick, 88 N.Y. 52, 59, 60; Dawkins v. Mitchell, 149 La. 1038, 90 So. 396, 398. Under the allegations of the bill, therefore, we think that the appellants had the capacity to institute and maintain the present suit.

  8. O'Connor v. Rhodes

    79 F.2d 146 (D.C. Cir. 1935)   Cited 37 times

    To say that in every case the rule of exclusive power in the receiver is positive and admits of no exception, would be to sacrifice substantial rights to matters of form. That is not a purpose for which courts are constituted. See Brinckerhoff v. Bostwick, 88 N.Y. 52-59. In this view, we think it may be affirmed that while, as a rule, a stockholder's or creditor's suit cannot be maintained until demand has been made upon the receiver, the Comptroller, or the bank, the rule does not apply where the receiver or Comptroller refuses to bring the suit (Ex parte Chetwood, 165 U.S. 443, 17 S. Ct. 385, 41 L. Ed. 782), or where it would be a vain thing to make demand upon them, and it is shown there is necessity for a suit for the protection of the interests of creditors.

  9. Jesson v. Noyes

    245 F. 46 (9th Cir. 1917)   Cited 3 times
    In Jesson v. Noyes, 245 F. 46, 157 C.C.A. 342, this court held that the Washington-Alaska Bank was bound by the provisions of the general incorporation laws of Nevada prescribing the powers of directors of corporations.

    It alleged that the dividend was wrongfully and unlawfully and fraudulently declared and paid, with the knowledge, consent, and approval of the defendants, and set forth facts to sustain the allegation, and also alleged facts to show that the money paid out for the surrender of stock certificates was fraudulently and illegally paid out of the capital of the corporation. Those allegations were sufficient to constitute a cause of action at common law. 7 C.J. 562, Sec. 168; Brinckerhoff v. Bostwick, 88 N.Y. 52. Again, it is our opinion that the court below was authorized to take judicial cognizance of the law of Nevada. In Mills v. Green, 159 U.S. 651, 657, 16 Sup.Ct. 132, 134 (40 L.Ed. 293), the rule is thus stated:

  10. Camrex (Holdings) Ltd. v. Camrex Reliance Paint Co., Inc.

    90 F.R.D. 313 (E.D.N.Y. 1981)   Cited 19 times
    Holding a "plaintiff's election to sue on an admiralty or maritime claim as the basis for federal jurisdiction binds the parties in the lawsuit to the inevitable procedural consequence of a court trial . . . even where a `legal' counterclaim has been interposed."

    Traditionally, equity has retained jurisdiction of suits for breach of directors' and officers' fiduciary duty to make the directors account for and make good the property and money entrusted to them but misapplied and lost, and to make restitution of any gain they thereby received. See, e. g., Bosworth v. Allen, 168 N.Y. 157, 61 N.E. 163 (1901); Brinckerhoff v. Bostwick, 88 N.Y. 52 (1882). Jurisdiction in equity has remained the rule under New York Business Corporation Law, s 720, which expressly sanctions such suits.