Schmidt v. A. M. Schwartz Building & Construction Co.

232 A.D. 549, 250 N.Y.S. 732, 1931 N.Y. App. Div. LEXIS 13881

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: June 12, 1931
• Status: Published

Opinions

McAvoy, J.

We think that these defendants, respondents, may not be made parties to defend the foreclosure action, and that their answer should be struck out. If the defendant corporation is permitting a judgment to be taken without cause, the stockholders may, by such equitable or statutory remedy as may be granted, restrain the prosecution of the cause on a showing of conspiracy to defraud them on the part of plaintiff and the corporate defendant.

The order granting motion of respondents to be made parties defendant and to interpose a defense should be reversed, with ten dollars costs and disbursements to the appellant, and the motion denied. The order striking out the answer of the defendant corporation, so far as appealed from, should be reversed.

Merrell and Sherman, JJ., concur; Finch, P. J., and Martin, J., dissent.