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Wilson v. Brentwood Hotel Co.

73 N.Y. St. Rep. 274 Court N.Y. App. Term Decision date 1896-02-26 English

Delivered by DALY, P. J.

Contents

Majority

p. 274
William M. Wilson, Resp’t, v. Brentwood Hotel Company, App’lt.
(Supreme Court, Appellate Term, First Department,
Filed Febr'y 26, 1896.)

Headnote

COBPOEATIONS—DlBBCTOB—RESIGNATION—SEBVTCE OP SUMMONS.
The service of a summons upon a director, who has sent his resignation to the president, is not a service of the corporation, though such resignar tion has not been accepted and, if accepted, will reduce the number of directors below the minimum allowed by law.
Appeal from judgments in favor of plaintiff entered by default, on proof of service of summons on Frederick A. Hart, described
p. 275
as one of the directors of defendant, on affidavit showing that Hart had resigned as a director before service of summons.
Blair & Rudd, for app’l'c; Welch & Daviels, for resp'i,

It is not questioned that Hart sent his" resignaas director to president of the company, before the summons was served upon him, although it had not been formally accepted. Acceptance was not necessary to make the resignation effective. Chandler v. Hoag, 2 Hun, 613 ; affirmed, 63 N. Y. 624 ; Smith v. Danzig, 64 How. Prac. 320; Mor. Priv. Corp. § 563. The fact that the withdrawal of Hart from the company would reduce the number of its directors to less than three, the minimum allowed by law (Business Corporation Law 1892, c. 691, § 2, subd. 7) does not require us to hold the resignation ineffectual as regards the plaintiff or other creditors. There remained the president upon whom service of process could be The same consideration renders it unnecessary to discuss the charge that the resignation of Clark, and another director, Keliam, was intended to defeat the employes of the company in their efforts to recover against it If all the directors had resigned with that intention, a question of great interest would be presented, which it is not necessary now to consider. Carnaghan v. Exporters & P. Oil Co., 32 St. Rep. 1117 ; Smith v. Danzig, above.

At the time of the service of summons in these actions upon him, Clark notified the person making the service that he had sent in his resignation, and, that he doubted whether he was the proper person to be served. This prompt notification is satisfactory evidence that he had no intention of prejudicing the rights of creditors by his resignation.

The judgments must be reversed.

All concur.