Opinion
Argued December 3, 1926
Decided December 31, 1926
Appeal from the Supreme Court, Appellate Division, First Department.
W.N. Seligsberg for appellant.
John Thomas Smith and Anthony J. Russo for respondent.
Distribution of unused portion of the reserves set up was to be made on January 20th, 1922, only in case these reserves "proved too high." Proof that the United States government claimed that the defendant was liable for an additional tax in the sum of $17,581.79 showed at least prima facie that the reserve for Federal taxes might prove insufficient. The trial judge correctly held that the defendant might retain moneys to meet that claim. If thereafter the defendant was not compelled to pay the additional tax the plaintiff might bring a new action for distribution of the amount withheld. Apparently by inadvertence the judgment of the Appellate Division includes in the amount of the net surplus which should be distributed among the stock-holders items aggregating $3,513.08 which the plaintiff concedes should be deducted before distribution.
In other respects we agree with the conclusions arrived at by the Appellate Division.
Judgment of the Appellate Division should be modified to the extent of providing that the plaintiff is entitled to her proportionate share in a net surplus of $15,002.02 instead of a net surplus of $36,096.86, and as so modified affirmed, without costs.
HISCOCK, Ch. J., CARDOZO, POUND, McLAUGHLIN, CRANE, ANDREWS and LEHMAN, JJ., concur.
Judgment accordingly.