Opinion
December 21, 1970
In an action inter alia to declare certain corporate meetings void and that plaintiffs are officers and directors of the subject corporation, Briarcliff Racquet Club, Inc., and for injunctive relief, plaintiffs appeal from so much of an order of the Supreme Court, Westchester County, entered August 7, 1970, as, after granting plaintiffs' motion for a preliminary injunction, directed: (1) that a special meeting of the shareholders be held; (2) that the agenda at such meeting shall include the matter of the removal of plaintiffs as directors and the election of new directors to fill existing vacancies; and (3) that five certain named parties, including plaintiffs and two of the individual defendants, shall be deemed the owners of and entitled to vote shares of stock in the corporation, the amount of their shares being set forth. Order reversed insofar as appealed from, without costs. The motion for a preliminary injunction, brought on by plaintiffs, president and secretary of Briarcliff Racquet Club, Inc., respectively, and members of its board of directors, sought, inter alia, to restrain defendants Helen Bertini, Priscilla Janis and Lucille Melian from acting as directors of the corporation, to restrain all of the individual defendants from conducting the corporation's business to the exclusion of plaintiffs and to restrain defendants Joseph Melian and Helen Bertini from acting as president and secretary, respectively, of the corporation. The affidavit in support of the motion, as well as the complaint annexed thereto, alleged in substance that a special meeting of shareholders was requested by defendants Joseph Melian, David Janis and Helen Bertini on April 8, 1970, for the purpose of removing plaintiffs as directors; that plaintiffs were thereafter removed as directors at said meeting on April 18, 1970, by a vote of these three defendants, who purported to represent the ownership of a majority of the outstanding shares, and were removed as officers by a newly elected board of directors; and that the meeting was illegal, since it was neither approved by plaintiffs as president and secretary of the corporation nor called by shareholders holding a majority of the outstanding stock as allegedly required under the corporate by-laws. The by-laws, however, were not annexed to the motion papers. The individual defendants cross-moved for injunctive relief barring plaintiffs from conducting business in the name of the corporation or interfering with the conduct of the corporation's business and for a declaration that the five individual defendants were the directors, and four of them the officers, of the corporation. They further alleged that they did in fact own a majority of the entire outstanding stock of the corporation, since they were entitled to additional shares pursuant to contracts which they had executed with the corporation. In reply, plaintiffs alleged that these defendants had not satisfactorily performed their obligations under the contract and were not entitled to any additional stock as of April 8, 1970, the date that the notice of the special meeting was sent out to all the shareholders. The Special Term granted plaintiffs the injunctive relief they sought. In view of the conflicting affidavits and the incomplete state of the record, plaintiffs at the very least raised triable issues which could only be resolved in the main action. They were therefore properly granted a preliminary injunction pending a final determination of the intracorporate struggle (CPLR 6301; Brevetti v. Tzougros, 42 Misc.2d 171; Ming v. Simpkins, 59 Misc.2d 853). However, the Special Term went further and determined the ultimate factual issues in dispute in the individual defendants' favor. This was erroneous, in our opinion, and the provisions in the order making that determination should be deleted. Munder, Acting P.J., Martuscello, Kleinfeld, Brennan and Benjamin, JJ., concur.