Lally v. Wilson

259 A.D. 985, 20 N.Y.S.2d 519, 1940 N.Y. App. Div. LEXIS 7546

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: May 29, 1940
• Status: Published

Opinion

Order affirmed, with ten dollars costs and disbursements. Memorandum: In this action plaintiff seeks to obtain certain shares of corporate stock of which it is claimed plaintiff’s testator was defrauded by the defendants. Plaintiff also seeks an accounting for the profits of the stock earned during the period it has been wrongfully withheld by defendants. The order appealed from is attacked because it directs examination of certain of the defendants as to their knowledge of the profits made on the stock, and the objection is that, until plaintiff establishes a right to the stock, there should be no inquiry into the financial affairs of the corporation. (Moffat v. Phœnix Brewery Corp., 247 App. Div. 552.) It is true that great injustice could be done to a business by permitting an inquiry into all its financial affairs by one who might turn out to be not properly interested in the corporation, and perhaps interested only in a rival company wishing to know its secrets. As we interpret the order, however, it permits only an inquiry into the general knowledge which the defendants have of the corporate business and profits, without going into the details of such business and profits. All concur. (The order denies motions of certain defendants for an order vacating plaintiff’s notice of examination before trial or to limit such examination in a stockholder’s action.) Present — Crosby, P. J., Cunningham, Taylor, Dowling and MeCurn, JJ.