Opinion
May 25, 1956
Appeal from the Onondaga Special Term.
Present — McCurn, P.J., Kimball, Wheeler, Williams and Bastow, JJ.
Order entered April 19, 1956, reversed on the law, without costs of these appeals to any party, and plaintiffs' motion for an injunction pendente lite granted upon condition that the plaintiffs file a bond with proper sureties, to be approved by a Justice of the Supreme Court, in the amount of $20,000. Portion of stay granted by order of this court entered May 2, 1956, (see ante, p. 647) continued in the exercise of the discretion of this court, for a period of fifteen days from the date of service of a copy of the order entered herein by the attorneys for the defendant A.R. Braun upon the attorney for the plaintiffs. Memorandum: These actions, in the nature of stockholders' and directors' derivative actions, are merely for moneys claimed to be due the Prosperity Company by virtue of the defendants' alleged mismanagement and fraud with regard to company funds. Neither the Prosperity Company stock owned by the appellant A.R. Braun, the proceeds for the sale thereof for which receivership is sought, nor any other identifiable or specific securities or funds, with one possible distinguishable exception, are the subject of these actions. (Civ. Prac. Act, § 974; Brody v. Mills, 278 App. Div. 771; O'Mahoney v. Belmont, 62 N.Y. 133; Mack v. Stanley, 74 App. Div. 145; Central Union Trust Co. v. Northern Ins. Co., 217 App. Div. 482, 487.) Under the pleadings before the court there is no ground for the appointment of a receiver, and the motion therefor should have been denied. We think, however, that the cross appeal of the plaintiffs is not without merit, and that under the facts and circumstances disclosed by this record the injunction pendente lite should have been granted. The provisional relief provided for by subdivision 2 of section 878 of the Civil Practice Act, at the discretion of the court should be put in motion where, as here, the facts as well as the history of the litigation point affirmatively, if not conclusively, to the studied efforts of a defendant to ostensibly dispose of assets for the obvious purpose of avoiding the consequences of a possible judgment in an action pending against him. The plaintiff in such an instance must be protected only by a restraining order, upon the posting of a proper bond. Order entered January 26, 1956, insofar as appealed from, modified by permitting appellant A.R. Braun to draw a check on the Irving Trust Company of New York City payable to Hancock, Dorr, Ryan Shove, Attorneys, in the additional sum of $7,977.83, and as modified affirmed, without costs of this appeal to any party. Memorandum: In the exercise of discretion we conclude that appellant was entitled to be permitted to withdraw this additional sum. Order entered April 12, 1956, affirmed, without costs of this appeal to any party. Memorandum: In view of the vague provisions of the order of October 31, 1955, based upon a stipulation absent from the record and the continuing ambiguities, the order is affirmed. All concur.