Gerben v. Gerben-Hecht Rim Wheel Corp. — 252 A.D. 482

Majority

p. 482

Charles Gerben, as Director of the Gerben-Hecht Rim Wheel Corp., Respondent, v. Gerben-Hecht Rim Wheel Corp., Defendant, Impleaded with Alloys and Products, Inc., Transcontinental Metal Corp., Cosmo Metal Alloys Corp., Joel Edelstein, Henry Hecht, Kate Hecht and Michael Hecht, Appellants.

First Department,

November 19, 1937.

p. 483

Jerome C. Strumpf of counsel [Frederick C. Scheel, Irwin Grinsberg and Charles K. Bermack with him on the brief; Goldwater & Flynn, attorneys for Alloys and Products, Inc., and Transcontinental Metal Corp.; Frederick C. Scheel, attorney for Henry Hecht, Michael Hecht and Rate Hecht; Irwin Grinsberg, attorney for Cosmo Metal Alloys Corp.; and Charles K. Bermack, attorney for Joel Edelstein], for the appellants.

Henry H. Silverman of counsel [Joseph Tenner, attorney], for the respondent.

The complaint, which is addressed to the equity side of the court, fails to state a cause of action and, consequently, Charles Gerben, suing as a director of the defendant Gerben-Hecht Rim Wheel Corp., is not entitled to any relief on behalf of the corporation.

The only theory upon which a recovery could be had must be based upon the so-called fraud which the defendant Henry Hecht is alleged to have perpetrated upon the Whitehead Metal Products Co, of New York, Inc., when it was induced to enter into a contract to sell niqkel to Alloys and Products, Inc, Whitehead Metal Products Co. of New York, Inc., is not a party and for aught we know has no grievance.

If fraud were practiced on the Whitehead Metal Products Co. of New York, Inc., the plaintiff, even though innocent of the original wrongdoing, if successful, would receive the fruits of the fraud from its director and thereby put its stamp of approval upon Ms alleged misconduct.

The four orders entered at Special Term should be reversed, with twenty dollars costs and disbursements, and the complaint dismissed as to all defendants.

Present — Martin, P. J., O’Malley, Townley, Qlennon and Untermyer, JJ.

Orders unanimously reversed, with twenty dollars costs and disbursements, and motions granted.