Bernstein v. Sherman

37 A.2d 680, 135 N.J. Eq. 85, 1944 N.J. Ch. LEXIS 69, 34 Backes 85

• Court: New Jersey Court of Chancery
• Decided: May 9, 1944
• Docket: Docket 149/670
• Status: Published

Opinion

Before me is the return of an order to show cause issued on the petition of complainant for an order to compel the defendant Lee J. Sherman to answer interrogatories numbered 4 to 38 inclusive.

The bill of complaint in this cause is brought by complainant alleging himself to be a stockholder and is brought on behalf of himself and other stockholders who may come in and contribute to the expense of the suit. The prayer of the bill is for an accounting.

The defendants in their answer except to the interrogatories which are annexed to the complainant's bill and move to strike the same upon the ground that the complainant is not entitled to the accounting sought and the information asked for until it is established that the complainant is a stockholder of the defendant corporation.

The answer of the defendants, among other things, sets up that until March of 1943 the complainant was the owner and holder of twenty shares of stock in the corporation, on which date in consideration of $13,000 complainant sold and delivered said shares of stock to the defendant Sherman, and that he is not now and was not at the time of the filing of the bill of complaint a stockholder.

It is elementary that if complainant is not a stockholder, he is not entitled to the relief he prays, nor to the information which he seeks from the defendants through the medium of the interrogatories. The pleadings put his stock ownership directly in issue.

Until it is determined at the final hearing that complainant was a stockholder at the time of filing his bill of complaint the defendants will not be required to answer the interrogatories.

Petitioner's application for the order aforesaid and the motion to strike the interrogatories will be laid over until the final hearing.