Sullivan v. Venner — 45 N.Y. St. Rep. 688

Majority

p. 688

Dennis Sullivan, Resp’t, v. Clarence H. Venner et al., App'lts.

(Supreme Court, General Term, First Department,

Filed March 31, 1892.)

Headnote

Cobpoeatiors—Injunction.

An injunction should not be granted at the suit of a director and officer of a corporation to prevent the holding of a meeting of the board without a quorum, where the only serious and irreparable injury to plaintiff by the action of the meeting would be the discontinuance of a suit brought by the company against some of its directors without authority of the board.

Appeal from order denying injunction pendente lite.

S. B. Clarke, for app’lts ; D. McClure, for resp’t.

This action is brought by the plaintiff, a stockholder and director and one of the vice presidents of the American Water Works Co. of Hew Jersey, and it is claimed that the defendants propose to hold an irregular meeting of the board of directors in that they intend to transact business without a quorum. The articles of incorporation of the association state what shall constitute a quorum, and for the purposes of this appeal it does not seem to be necessary for the court to enter upon a discussion as to whether the plaintiff or the defendants are right in their contention .as to what will constitute a quorum, for the reason that ail the acts of the board of directors if a quorum is not present are necessarily void, and are therefore not binding upon the plaintiff.

It seems to be well settled that under such circumstances the1 court will not interfere, and that the plaintiff must show in his complaint the manner in which he will be prejudiced, and unless that appears in some distinct form it will not interfere. As was stated by Andrews, J., in McHenry v. Jewett, 90 N. Y., 62 : “ It is not sufficient to authorize the remedy by injunction that a violation of a naked legal right of property is threatened. There must be some special ground of jurisdiction, and where an injunction is the final relief sought, facts which entitle the plaintiff to this remedy must be averred in the complaint and established on the hearing.”

The case of Thomas v. The Musical Mut. Prot. Union, 121 N.Y., 45 ; 30 St. Rep., 563 , is an example of this principle. /In that case the plaintiff moved to have certain by-laws of the corporation declared void, and to restrain its directors from enforcing the same against him. The court held that the invalidity of the bylaws was not a ground of equitable jurisdiction in itself, and that the plaintiff would have other adequate means of redress in case the directors, notwithstanding the invalidity of the by-laws, proceeded to enforce them against the plaintiff.

p. 689

The court say in its opinion that courts do not sit for the purpose of determining speculative and abstract questions of law or laying down rules for the future conduct of individuals in their business and social relations, but are confined in their judicial action to real controversies wherein the legal rights of parties are necessarily involved and can be conclusively determined. It is obviously not fit that the power of the court should be invoked in this form for every theoretical or speculative violation of one’s rights, and that it is a cardinal rule of equity that it will not entertain jurisdiction of a case where there is an adequate remedy at law, or grant relief unless for the purpose of preventing serious or irreparable injury.

Nothing of this kind is shown in the complaint at bar. In fact it would appear that the only serious and irreparable injury which could be done to the plaintiff by the action of a meeting of an incomplete board of directors would be the discontinuance of a suit brought apparently by the American Water Works Co. against .some of its directors, which discontinuance if ordered would have far greater authority than the suit had for its institution, the same having been brought without there ever having been even a pretended meeting of the board of directors.

We think that the plaintiff wholly fails to show any ground for the interposition of a court of equity, as the evils which he .anticipates are imaginary, indefinite and undetermined.

The order should be reversed, with ten dollars costs and disbursements, and the injunction vacated, with ten dollars costs.

O’Brien, J., concurs.