Price v. Groves

Full title: GEORGE E. PRICE, on Behalf of Himself and All Other Stockholders of…

Court: Appellate Division of the Supreme Court of New York, First Department

Date published: Nov 17, 1939

258 App. Div. 35 (N.Y. App. Div. 1939)

15 N.Y.S.2d 532

Opinion

November 17, 1939.

Appeal from Supreme Court of New York County, BERNSTEIN, J.

Samuel Blumberg of counsel [ Maurice Gellar with him on the brief; Charles Rosenbaum, attorney], for the plaintiff.

William D. Whitney of counsel [ Cravath, deGersdorff, Swaine Wood, attorneys], for the defendants.

Present — MARTIN, P.J., TOWNLEY, UNTERMYER, COHN and CALLAHAN, JJ.

PER CURIAM.

Plaintiff brings a representative stockholder's action, containing many broad allegations of improper conduct by the defendants as directors. These allegations are mere general statements of alleged wrongdoing unsupported by facts. Standing alone they would not support a complaint. ( Gerdes v. Reynolds, 281 N.Y. 180.) Plaintiff admits that he knows of no facts to support these general charges and gives such lack of knowledge as the reason why a broad discovery and inspection and an examination before trial should be granted him herein. Such practice involves resort to the so-called "fishing expedition" to get evidence. We deem it proper to refuse an examination in such a case, except as to the allegations of specific acts of wrongdoing set forth in the complaint.

The order accordingly should be modified by permitting examination only as to items 5 to 11, inclusive; and 17 to 27, inclusive, and 33; and by limiting the examination to defendant Mack, with leave to renew as to the others on these items after that examination is completed, on a showing of necessity.

The motion for a general discovery and inspection prior to the examination before trial was properly denied.

As so modified the order appealed from should be affirmed, without costs.

PER CURIAM.

Order unanimously modified by permitting examination only as to items 5 to 11, inclusive; and 17 to 27, inclusive, and 33; and by limiting the examination to defendant Mack, with leave to renew as to the others on these items after that examination is completed, on a showing of necessity. The motion for a general discovery and inspection prior to the examination before trial was properly denied. As so modified order appealed from affirmed, without costs. The date for the examination to proceed to be fixed in the order. Settle order on notice.