Hertz v. Quinn & Kerns, Inc.

21 Misc. 2d 227, 195 N.Y.S.2d 907, 1959 N.Y. Misc. LEXIS 2404

Opinion

Jacob Markowitz, J.

This is a motion to declare the purported notice of appearance and answer attempted to be served by Dent, Goldblum & Witschieben, Esqs., on behalf of defendant Quinn & Kerns, Inc., a nullity, and for judgment against such corporate defendant and to sever as against the remaining defendants. This action is brought to recover the sum of $10,000, with interest, upon a promissory note made by the corporate defendant and indorsed by the individual defendants. It appears that upon the service of the summons and complaint on the corporate defendant a resolution was duly adopted by a majority of the three sole stockholders and directors at a formal meeting of the stockholders and directors, stating that there was no defense in fact and that no answer should be interposed by the corporate defendant. The dissenting director, however, in spite of the resolution, retained counsel to appear for the corporate defendant. A dissenting director cannot circumvent the action of the board of directors duly made by the majority, as the business of the corporation, including the interposition of an answer to a lawsuit, is exclusively within their province. A dissenting director may not defend an action on behalf of the corporation after permission to do so has been refused by the affirmative vote of the majority of the board of directors (Sterling Inds. v. Ball Bearing Pen Corp., 298 N. Y. 483, 489).

Accordingly, the motion is in all respects granted. Settle order.