Deininger v. Ward

218 A.D. 235, 218 N.Y.S. 337, 1926 N.Y. App. Div. LEXIS 5902

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 12, 1926
• Docket: Appeal No. 1
• Status: Published

Opinion

Kelly, P. J.

I think the complaint states but one cause of action, viz., for misappropriation of corporate funds of the General Baking Corporation by the individual defendants, who are said to have used the money of the baking corporation for the benefit of defendant Ward and the securities corporation without authority and in violation of law. It is true that plaintiffs, unnecessarily in my opinion, go on to allege what the defendants did with the money so unlawfully obtained. But I do not see how the defendants are prejudiced by this additional information. It is apparent from the argument and points of the defendants that they assert that the money taken by them was used to purchase stock of the baking corporation. The plaintiffs, apparently anticipating this defense, see fit to deny that the funds so improperly taken were used for the purpose indicated, and they charge that any such use would be contrary to law. The learned counsel for defendants says in his points that the action is brought “ to have adjudged invalid a certain transaction by which the directors of ” the baking corporation “ purchased certain stock of that corporation from the defendant, the Ward Securities Corporation, which latter corporation was owned and controlled by the defendant Ward.” But, as I read the complaint, that is not the cause of action pleaded. I can see no reason for compelling a separate statement of causes of, action, or for making the complaint more definite and certain. But, as plaintiffs have seen fit to anticipate the defense and to allege that certain of defendants’ actions were contrary to the laws of the State of Maryland in which the baking corporation was organized, I think the defendants are entitled to know what particular statutes of that State are referred to. It is unnecessary to serve an amended complaint to give them this information. In one other particular the complaint appears indefinite, viz., where it alleges that defendants have profited “ by the aforesaid and other similar stock transactions.” I think the reference to “ other similar stock transactions ” should be eliminated. This action should be confined to the transaction which is the basis of this particular action.

For the reasons stated, I think the order denying defendants’ ■motion to compel service of an amended complaint, etc., should be modified by providing that within twenty days after service of the order of this court, the plaintiffs shall serve upon the attorneys for the several defendants, appellants, a statement of the various statutes of the State of Maryland referred to in paragraphs 19, 20 and 21 of the complaint, giving the title of the acts referred to, date of passage, and such other information as may be necessary to identify the statute, and if the alleged violation of the law depends upon the provisions of some particular section or part of the statute, the plaintiffs shall so state, indicating the particular portion of the act referred to. Also by directing that the words in paragraph 23 of the complaint, “ and other similar stock transactions,’ should be stricken out as irrelevant and immaterial, and as so modified the order appealed from should be affirmed, without costs.

Jaycox, Manning, Young and Lazansky, JJ., concur.

Order denying defendants’ motion to compel service of an amended complaint, etc., modified in accordance with opinion and as so modified affirmed, without costs. Defendants’ time to answer extended for twenty days after service of the statement required. Settle order on notice.