Opinion
April 15, 1921.
Lewis Schuldenfrei, for the appellants.
Albert A. Levin, for the respondent.
The learned justice at Special Term denied the motion upon the authority of Witherbee v. Bowles ( 201 N.Y. 427, 434), where the Court of Appeals said: "It was proper for them [plaintiffs] in one cause of action to attack all the acts and join all the parties who took part in the acts which have impaired their rights and which are barriers between them and the relief which they seek." But in the case at bar the plaintiff is asserting two distinct grievances, the first under a written contract by which the individual defendants agreed to sell him stock in the corporation. He alleges performance on his part, payment for the stock and refusal of delivery by the defendants. Here is a cause of action for specific performance, the plaintiff asserting his rights perforce the contract.
The plaintiff proceeds to allege that the individual defendants as officers, directors and managers of the corporation, have been guilty of wrongdoing: (a) by cheating and defrauding plaintiff of his stock and the dividends accruing thereon; (b) by "padding" the payrolls of the corporation; (c) by fraudulent payments to themselves for fictitious debts and larceny of the corporate property; (d) by failure to keep proper books of account; (e) by filing false reports. These are alleged to have occurred between the date of the agreement and the commencement of the action. Concededly, during a part of that period the plaintiff was not a stockholder of the defendant corporation. Until the stock was fully paid for, his rights depended upon the contract. After the stock was paid for he was entitled to the rights and remedies of a stockholder under the law. These rights and remedies are essentially different from his rights under the contract. It would seem that this distinguishes the plaintiff's case from Witherbee v. Bowles ( supra), and that the causes of action should be separately stated.
The order is, therefore, reversed, with ten dollars costs and disbursements, and defendants' motion granted, with ten dollars costs.
JENKS, P.J., MILLS, PUTNAM, BLACKMAR and KELLY, JJ., concur.
Order reversed, with ten dollars costs and disbursements, and defendants' motion granted, with ten dollars costs.