the electors are entitled to fill it at the next general election. We are not now concerned with the question as to which of the petitioners' term of office has expired, or whether it will be possible to decide that question after the election of a successor to one of them. Indeed, the question may never arise, for one of them may be elected to the vacancy. It follows that the order should be reversed, and motion denied. Order reversed, with $10 costs and disbursements, and motion denied, with $10 costs. DOWLING and HOTCHKISS, JJ., concur. INGRAHAM, P. J. (dissenting). Upon no theory of the facts presented in this case is there a vacancy in the office of justice of the City Court to be filled at the general election in 1914. The order appealed from should therefore be affirmed, with $10 costs and disbursements. MCLAUGHLIN, J., concurs. (86 Misc. Rep. 86) DAILEY et al. v. CITY OF NEW YORK et al. (Supreme Court, Special Term, New York County. June, 1914.) INJUNCTION (§ 59*)-CONTRACTS RESTRAINING ABROGATION. Where a contract with the city of New York for the final disposition of ashes, street sweepings, and rubbish did not prohibit the contractor from using dumping scows, and where the commissioner of street cleaning attempted to abrogate the contract because the pickers used dumping scows under an incidental contract, instead of the more efficient deck scows, the contractor was entitled to equitable relief restraining the commissioner from taking such action. [Ed. Note. For other cases, see Injunction, Cent. Dig. §§ 114-116, 128; Dec. Dig. § 59.*] Action by John D. Dailey and another against the City of New York and another to restrain abrogation of contract. Judgment for plaintiffs. Alexander N. Ash, of New York City, for plaintiffs. Frank L. Polk, Corp. Counsel, of New York City (John F. Collins, of New York City, of counsel), for defendants. FORD, J. Plaintiffs' contract with the city for final disposal of ashes, street sweepings, and rubbish is the main contract; that of Clarke, advertised and let simultaneously by the city, for "loading and trimming deck scows, dumpers, and other vessels" used by the plaintiffs, is incidental merely. Both contracts are to be read together because of the allusion in that of plaintiffs' to the other (paragraph 12 of specifications). Nowhere in the final disposal contract is there a prohibition against the use of dumping scows by the plaintiffs. On the contrary, the terms used descriptive of the conveyances which might For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes be used are broad enough to include them, and the specific provision for loading and trimming "dumpers" in the Clarke contract makes clear, in my opinion, the right of the plaintiffs to use them. That being so, paragraphs "F," "N" and "33" of their contract cannot be construed so as to give the commissioner of street cleaning power to abrogate this right. The authority given to that official may be exercised as to details of the work and in case of ambiguities or obscurities in the language of the contract but not to the extent of destroying its identity or mutuality. The dumping at sea, as carried on by the plaintiffs, is in accord with the laws, ruies, and regulations of the state, city, and federal governments; and, indeed, the defendant through the commissioner of street cleaning does not object to the dumping at sea, but merely to the use of dumping scows, upon the sole ground that in loading them the pickers under the Clarke contract cannot so thoroughly do their work as in the case of deck scows. That may be so, but there is no claim that full freedom of action is not given to them to pick as much as the nature of those conveyances will permit, and that is, in my opinion, the only duty owing either to the city or to the other contractor by these plaintiffs under their contract. The damage done to the contractor by a prohibition of the use of dumpers would be of such a nature as, in my opinion, to call for equitable relief. Judgment for the plaintiffs. Settle findings on notice not later than June 12th. Judgment for plaintiffs. WEINGREEN v. MICHELBACHER et al. (Supreme Court, Special Term, New York County. January 21, 1914.) CORPORATIONS (§ 182*)-INSOLVENCY-SALE OF ASSETS-AUTHORITY OF DIRECTORS-MINORITY STOCKHOLDer. Where a corporation was practically insolvent and without available capital or assets to continue its business, its directors, in the absence of fraud or bad faith, were authorized, under a resolution voted by a majority of the stock, to sell its assets and business to protect the shareholders from further loss, without being liable to a minority dissenting stockholder, he not being entitled, under such circumstances, to compel a valuation and purchase of his stock, as provided by Stock Corporation Law (Consol. Laws, c. 59) §§ 16, 17, which apply only to solvent corporations selling their assets as going concerns. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 686-690; Dec. Dig. § 182.*] Action by one Weingreen against one Michelbacher and others. Complaint dismissed. See, also, 148 N. Y. Supp. 1150. Waldo & Ball, of New York City, for plaintiff. Herman Goldman, of New York City, for defendants. GREENBAUM, J. The plaintiff, a stockholder of the defendant, the "E. Weingreen Company," brings this action against its directors *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date. & Rep'r Indexes for an accounting and damages, alleging that the individual defendants had conspired to deplete the business of the corporation for their own benefit and advantage and for the purpose of defrauding the plaintiff. The evidence before the court conclusively established that the defendants had neither conspired together nor perpetrated any fraud, and that their acts in disposing of the assets of the corporation were performed in good faith. The corporation was practically insolvent when the defendants were elected as directors. A considerable portion of the merchandise consisted of manufactured fur garments of old styles, many of them carried over from year to year, the original cost of their production being far beyond their actual value when sold. The corporation manufactured its wares, and at the time complained of it had no cash or available capital or assets with which to continue its manufacturing business. Under these circumstances, the defendants, directors of the corporation, undertook to sell the merchandise at private sale, and after disposing of a portion of its stock of goods to various individuals at the best prices obtainable and after unsuccessful efforts, lasting many months, they sold the balance of the merchandise in lots at public sale to the highest bidders. With the proceeds they paid all the debts of the corporation, excepting only a considerable balance due the defendant Solomon Michelbacher, a director, who was the largest creditor of the company. The plaintiff relies upon Matter of Timmis, 200 N. Y. 177, 93 N. E. 522, in which the court had under consideration the effect to be given to sections 16 and 17 of the Stock Corporation Law (Consol. Laws, c. 59). In that case the corporation, which apparently was abundantly solvent, had called a meeting of its stockholders for the purpose of considering a resolution whether the trustees be authorized to sell to another corporation which had been organized for that purpose a department of its business which was a valuable integral part thereof, and more than two-thirds of the stockholders had voted in favor of the resolution. A minority stockholder opposed the contemplated transfer. The court, after stating "We are not now called upon to lay down a rule embracing all the cases covered by the statute, but simply to decide whether the facts of this case bring it within the sections under consideration," held that the facts in the case before it warranted the granting of the application of the minority stockholder for an appraisal of the value of his shares of stock and the payment therefor by the corporation, pursuant to section 17. Judge Vann, in his opinion, shows that these sections of the Stock Corporation Law were enacted as remedial legislation to overcome the injustice that otherwise might flow to minority and majority stockholders by reason of the law as established by Abbot v. American Hard Rubber Co., 33 Barb. 578, and People v. Ballard, 134 N. Y. 269, 32 N. E. 54, 17 L. R. A. 737, and other cases. The learned judge states the law of these cases as follows: "That a corporation cannot sell all its property or even a part thereof so integral as to be essential for the transaction of its ordinary business, because such a sale is wholly or partly an act of self-destruction and a practical dissolution without compliance of law." People v. Ballard and Abbot v. American Hard Rubber Co., supra, cited in the Timmis Case, were cases in which directors of a corporation transferred a valuable going business to another corporation, and in which directors of the former corporation became directors of the latter. It is thus quite evident that the cases just discussed have reference to solvent going concerns where majority stockholders seek to transfer the business of a corporation to another corporation which is to continue the business. The facts in the case at bar come within the principles discussed in Jameson v. Hartford Fire Insurance Co., 14 App. Div. 380, 44 N. Y. Supp. 15, in which the limitations upon the application of the rule in Abbot v. American Hard Rubber Co., supra, are pointed out. In Skinner v. Smith, 134 N. Y. 240, 250, 31 N. E. 911, 914, reported in the same volume as People v. Ballard, supra, it is said: "The right of a manufacturing corporation to discontinue its operations when they have become unprofitable, for the purpose of protecting shareholders from further loss does not admit, we think, of doubt" (citing numerous cases). In the absence of fraud or bad faith the plaintiff has no cause of action. The complaint must be dismissed upon the merits. (Supreme Court, Special Term, New York County. June, 1914.) 1. CORPORATIONS (§ 55*)-BY-LAWS-VALIDITY. A by-law of a private corporation, requiring the unanimous vote of its directorate to a sale of its business or property otherwise than in the usual course of business, is not violative of General Corporation Law (Consol. Laws, c. 23) § 34, providing that "unless otherwise provided" the action of a majority of a board of directors at a lawful meeting shall be the act of the board. [Ed. Note.-For other cases, see Corporations, Cent. Dig. § 152; Dec. Dig. § 55.*] 2. CORPORATIONS (§ 605*) -DISCONTINUANCE OF BUSINESS. Where a private corporation is unable to do business except at a loss, it has the right to cease doing business. [Ed. Note. For other cases, see Corporations, Cent. Dig. § 2389; Dec. Dig. § 605.*] 3. CORPORATIONS (§ 320*)-STOCKHOLDER'S ACTION-EVIDENCE-DISMISSAL. Where, in a stockholder's action against a corporation and two individuals who owned a majority of the stock and were a majority of the directors, for an accounting for corporate assets acquired by the individual defendants and for damages occasioned by their misconduct, the evidence, though showing that such defendants had exceeded their powers, fails to show that plaintiff has been injured thereby, the complaint will be dismissed on the merits. [Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 1426-1431, 1433-1439; Dec. Dig. § 320.*} Action by Annie Levin against Joseph L. B. Mayer and others. Complaint dismissed. *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes Engel Bros., of New York City (Jacob B. Engel, of New York City, of counsel), for plaintiff. Jellenik & Stern, of New York City (Nathan D. Stern, of New York City, of counsel), for defendants. PENDLETON, J. The action is a stockholder's suit against the defendant company and two of its three directors, in which plaintiff seeks a judgment against the individual defendants for an accounting for all property of the company diverted by them, and for injuries sustained by the company by reason of the alleged unlawful acts of said individual defendants. The complaint alleges that the two individual defendants, being a majority of the directors of the company and owners of a large majority of its stock, in violation of the bylaws of the company, and for their own benefit, caused the company to discontinue business and sell out its assets, and that the said defendants so manipulated the affairs of the company that its assets have been acquired by and gone into the possession of said defendants and been appropriated by them, thereby injuring the said company and the plaintiff as a stockholder thereof, and prays as relief that said defendants account for the assets of the company diverted by them and for damages to the company occasioned by their misconduct. It appears by the evidence at the trial that the defendant company was organized by plaintiff and the individual defendants to take over and carry on a certain business theretofore owned by plaintiff, plaintiff receiving certain stock for the assignment of the business and its assets to the company and the individual defendants receiving stock for money paid into the company by them. It was agreed that the directors of the company were to consist of the two individual defendants and one Louis Bobrick, plaintiff's son-in-law, and evidently intended to represent her on the board, and a by-law was adopted providing that the unanimous vote of all three directors should be required to sell out the business as a going concern, or to sell out any of the machinery and stock on hand, in bulk or in any other way than the usual course of business. The company was organized and continued to carry on business in the usual course until about November, 1910, when, it appearing that the company had been losing money and was largely indebted, the individual defendants, without the consent of the third director and without a vote of all the directors, as required by the bylaw in question, stopped the business of the company and sold out part of its machinery and stock on hand, in bulk or not, in the usua' course of business, and finally disposed of all the assets of the com pany, applying the proceeds to the payment of its debts, with the result that all the assets have been disposed of and all debts paid with the exception of about $1,500 due to the father of one of the individual defendants. It does not appear that any of its assets were illegally acquired by, or diverted to, the individual defendants, or that they were sold for less than their fair value at a sale of that character, or that the individual defendants acted in bad faith, or were actuated by any other motive than to do what, in their judgment, was the best course, to realize as much as possible for the creditors and stockholders of 149 N.Y.S.-8 |