Schwarz v. General Aniline & Film Corp.

New York Supreme Court

Schwarz v. General Aniline & Film Corp.

198 Misc. 1046, 102 N.Y.S.2d 325, 1951 N.Y. Misc. LEXIS 1504

CourtNew York Supreme Court

DecidedJanuary 29, 1951

StatusPublished

Cited by1 cases

This text of 198 Misc. 1046 (Schwarz v. General Aniline & Film Corp.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Schwarz v. General Aniline & Film Corp., 198 Misc. 1046, 102 N.Y.S.2d 325, 1951 N.Y. Misc. LEXIS 1504 (N.Y. Super. Ct. 1951).

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Opinion

Botein, J.

Section 64 of the General Corporation Law "expressly denies to a corporate director the right to indemnity for expenses incurred in the defense of an action, suit or proceeding “ in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such officer, director or employee is liable for negligence or misconduct in the performance of his duties.”

The petitioner pleaded nolo contendere in the criminal prosecution instituted by the Government of the United States against the petitioner, his corporation and others. He was fined the sum of $500. In the court’s opinion the effect of the petitioner’s conviction upon his plea of nolo contendere was an adjudication that petitioner was liable for “ misconduct in the performance of Ms duties ” witMn the meaning of section 64 (supra). As stated in People v. Daiboch (265 N. Y. 125, 128-129) the plea of nolo contendere “ simply means that the defendant will not contend against the charge but will submit to such punishment as the court inflicts, usually less than would have been imposed after a plea of guilty. The court, however, on such a plea may sentence the prisoner to the same punishment as if convicted after a trial or on a plea of guilty. Aside from the ameliorating effect the plea * * s has the same consequences in a criminal court as a plea of guilty; at least it is a conviction of the crime to which the plea is taken.” (Italics supplied.)

Although under the provisions of section 5 of the Clayton Act (U. S. Code, tit. 15, § 16) a final judgment or decree entered upon a plea of nolo contendere is not to be treated as an admission of the operative facts in another action, the fine of the petitioner, based upon a plea of nolo contendere, was nonetheless a conviction of the crime charged against him, as pointed out in People v. Daiboch (supra). The petitioner has, therefore, witMn. the meaning of section 64 (supra) been adjudged liable for misconduct in the performance of his duties in the action or proceeding in connection with which he now seeks reimbursement for expenses incurred.

The motion to dismiss the petition is accordingly granted.

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Botein, J.

Section 64 of the General Corporation Law "expressly denies to a corporate director the right to indemnity for expenses incurred in the defense of an action, suit or proceeding “ in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such officer, director or employee is liable for negligence or misconduct in the performance of his duties.”

The petitioner pleaded nolo contendere in the criminal prosecution instituted by the Government of the United States against the petitioner, his corporation and others. He was fined the sum of $500. In the court’s opinion the effect of the petitioner’s conviction upon his plea of nolo contendere was an adjudication that petitioner was liable for “ misconduct in the performance of Ms duties ” witMn the meaning of section 64 (supra). As stated in People v. Daiboch (265 N. Y. 125, 128-129) the plea of nolo contendere “ simply means that the defendant will not contend against the charge but will submit to such punishment as the court inflicts, usually less than would have been imposed after a plea of guilty. The court, however, on such a plea may sentence the prisoner to the same punishment as if convicted after a trial or on a plea of guilty. Aside from the ameliorating effect the plea * * s has the same consequences in a criminal court as a plea of guilty; at least it is a conviction of the crime to which the plea is taken.” (Italics supplied.)

Although under the provisions of section 5 of the Clayton Act (U. S. Code, tit. 15, § 16) a final judgment or decree entered upon a plea of nolo contendere is not to be treated as an admission of the operative facts in another action, the fine of the petitioner, based upon a plea of nolo contendere, was nonetheless a conviction of the crime charged against him, as pointed out in People v. Daiboch (supra). The petitioner has, therefore, witMn. the meaning of section 64 (supra) been adjudged liable for misconduct in the performance of his duties in the action or proceeding in connection with which he now seeks reimbursement for expenses incurred.

The motion to dismiss the petition is accordingly granted.

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Bluebook (online)

198 Misc. 1046, 102 N.Y.S.2d 325, 1951 N.Y. Misc. LEXIS 1504, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schwarz-v-general-aniline-film-corp-nysupct-1951.

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