Opinion
277 A.D. 880 97 N.Y.S.2d 799 NICK COST, Appellant, v. NICHOLAS BENETOS et al., Respondents. Supreme Court of New York, Second Department. June 12, 1950
In an action by a stockholder for an accounting, etc., of corporation affairs, order denying appellant's motion to compel execution of a proposed agreement and directing all parties to execute a proposed agreement, reversed on the law and the facts, without costs, appellant's motion granted and respondents' motion denied. The intention of the stipulation is that defendants receive back all that they paid to the seller for the stock, namely, $3,000 cash, a $4,000 mortgage, and some $2,600 in notes; that defendants warrant payment of all indebtednesses of the corporation incurred during their operation of the business, other than the corporate indebtednesses to the Master Diners, Inc., and to the bank; and that adjustment of other items, such as taxes, insurance, interest, etc., be made in the same manner as they were made in connection with the sale of September 7, 1949. There is no evidence that the individual defendants paid any corporate obligations with their personal funds, as distinguished from the funds of the corporation. (If the individual defendants made any such payments, they are entitled to credit for one half the amount thereof.) The agreement proposed by appellant fairly represents the terms of the stipulation. It shows reduced amounts of the Master Diners, Inc., and the bank indebtednesses, and the amount payable to defendants on account of the stock purchase is enhanced accordingly. The stipulation does not contemplate that defendants receive $3,000 cash, a $4,000 mortgage and some $2,600 in notes, undiminished by the amount of corporate obligations (other than the chattel mortgage and the bank indebtednesses) incurred during their control of the affairs of the corporation but, on the contrary, contemplates guarantee of payment of such obligations.
Nolan, P. J., Carswell, Adel, Sneed and Wenzel, JJ., concur. [ See post, pp. 900, 1047.]