Abraham Shulman, Respondent, v. The Star Suburban Realty Company and Others, Appellants, Impleaded with Others

Abraham Shulman, Respondent, v. The Star Suburban Realty Company and Others, Appellants, Impleaded with Others. Second Department, June 8, 1906. Equity — injunction refused when papers do not disclose merits of action —when complaint in action to restrain corporation from removing directors and paying out money fails to state cause'of action. When the papers presented on an application for an injunction are so indefinite and incomplete that it is difficult to arrive at the real merits of the controversy, a court of equity will deny that extraordinary remedy. When a complaint merely alleges that through a conspiracy certain of the defendants threaten to remove the directors of a corporation, including plaintiff, from office and have called a meeting of stockholders for that purpose, and that the corporation has collected moneys from the shareholders and is paying it out without the order and direction of the hoard of directors and has called a meeting at which an assessment is to he levied so that §500 can he . paid out for a purpose unknown to plaintiff as a director, etc., it fails to state a cause of action. Appeal by the defendants, The Star Suburban Realty -Company and others, from an order of the .Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Queens on the 1st day of February, 1906, continuing pendente lite an order restraining the Star Suburban Realty Company, its officers, directors and stockholders, from removing the plaintiff from the board of directors of said company and from interfering with plaintiff in the performance of his duties as such director, and also -from collecting or paying any money without the authority of said board. Benjamin Patterson, for the appellants. Maurice M. Greenstein, for the respondent. [MAJORITY — Woodward, J.:] Woodward, J.: The learned court granting the motion from which this appeal is taken declares in a memorandum that “ the papers presented on both sides are so indefinite and incomplete that it is difficult to arrive at the real merits-of the controversy,” and this, it seems to us, is a sufficient reason why a court of equity should refuse to grant the extraordinary remedy of injunction. As we-read the complaint and the affidavits submitted, it is difficult to see where the plaintiff is _ threatened with any such irreparable injury as to warrant interfer-' ence. The complaint alleges as a grievance that certain of the defendants have “ through and by virtue of a conspiracy formed by ” them, “ threatened to and are' about to remove the board ¡of directors of the 'said- corporation from office, amongst whom is this plaintiff; that'said board of directors were elected at a meeting held on October 6th, 1905, to serve for the term .of one year; expiring on .the 6tli day of -October, 1906, and have actually called' a, meeting for the 19th day of January, 1906, whereby they request á meeting of all the shareholders for the ¿lection of a new board of directors^ stud they" are about to carry their threat into execution, and remove this plaintiff, and liis co-directors" from office, withbut any' charges. The said plaintiff and his co-partners being still in office, not having, resigned therefrom.” There is no allegation that the.stockholders have• not the legal right to remove the plaintiff and other-directors, and to elect their successors without preferring charges against them, nor is there any suggestion that the meeting called for that purpose is. not legally called, nor is there- anything in the complaint' " to indicate that the plaintiff or any. of tile codirectors will suffer from the action- of the shareholders in the choice off a new hoard of directors-; the presumption must be to the contrary, for the equitable owners. of the property of the . corporation can hardly be expected to make a choice of directors who will be inimical to the welfare of the corporation or of its stockholders. The only other allegation of a,grievance is that “the said defendant corporation has: collected moneys from the shareholders of the said corporation, which said moneys they are paying out without the order and direction of the hoard of directors, for a purpose unknown to the board of directors, and have' called a meeting on January 19th, 1906, on which an assessment of $6.00 is to -be paid, so that $500 can be paid therefrom, for the purpose of which plaintiff' does- not know, and" which as a director he is not, in formed of: Arid hej therefore-,-alleges " that" the said'payment is not made for a lawful purpose; buffer an unlawful one, to the injury of the plaintiff- and his fellow shareholders," and for no-, benefit or interest; to the said corporation.” The plaintiff does not tell the court how it happens that he is not informed of the ■ purposes of any payment's ; so far as appears from'the complaint lie may never have attended a meeting of the hoard of directors or made any attempt to attend such meeting. In fact, the more the 4th paragraph of the complaint, from which the above is excerpted, is read, the more difficult it appears to be to understand what the pleader has attempted to' allege. We are told that some one or somebody has “ called a meeting on January 19th, 1906, on which an assessment of $6.00 is to be paid, so that $500 can’be paid therefrom, for the purpose of which plaintiff does not know.” What does this mean? An assessment of six dollars on the meeting would not' enable, the defendants to pay $500 therefrom “ for the purpose of which plaintiff does not know,” or for any other purpose, and there is nothing in the complaint to throw any light upon this subject. There is not an allegation that the defendants are attempting to do anything unlawful with any of the property of the corporation, so far as we are able to gather from the complaint, the only suggestion being that in reference to some alleged assessment, the purpose of which is unknown to the plaintiff, he “alleges that the said payment is not made for a lawful purpose, but for an unlawful one, to the injury of the plaintiff and his fellow shareholders, and for no benefit-or interest to the said corporation.” It is not alleged that this money has been collected from the shareholders for the purposes of the corporation; it may have been collected from them for purposes entirely outside of the corporate objects, so far as we are informed from the pleadings, and -the whole case is barren of that concise and clear statement of facts which is essential to good pleading, and which should exist before a court of equity assumes to interpose the strong arm of equity. If the board of directors or other officers of a corporation misapply funds, there is a remedy under the provisions of section 1781 of the Code of Civil Procedure, but the facts' attempted to be alleged in the case now before us do not bring the case within the provisions of this section, and we are of opinion that there is a failure to allege facts sufficient to constitute a cause of action. The" order appealed from should be reversed, with costs. Jenks and Rich, JJ., concurred ; Gaynor, J., concurred in result. Order reversed, with ten dollars costs and disbursements.