Lummis v. Crosby

Headnote

Lummis v. Crosby, 181 App. Div. 884 , affirmed.

Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the second judicial department, entered November 2, 1917, which affirmed an order of Special Term granting a motion by defendant, respondent, for judgment on the pleadings. This action was brought under sections 90, 91 and 91-a of the General Corporation Law, to compel the defendants (other than the defendant corporation) to account for their official conduct in the management and disposition of the funds of the corporation of J. Spencer Crosby & Company, and compelling them to pay to the corporation or its creditors any money', and value of any property which they had illegally acquired to themselves or transferred to others through any neglect of or failure to perform or of any other violation of their duties. The complaint alleged that the respondent Stier some six months before the defendant Crosby & Co. was adjudicated bankrupt was an officer and stockholder thereof, and that the president of said corporation purchased her stock paying her therefor out of the funds of the corporation. The complaint was held insufficient on the ground that it failed to allege that any of the creditors were such at the time of the diversion of the corporate property. The following questions were certified: “ 1. Does the complaint in this action set forth a cause of action? 2. Is the order of the court below sustaining judgment in favor of the respondent on the pleadings correct? ”