Feldmeier v. Webster

Decision Date24 October 1955
Citation208 Misc. 996,145 N.Y.S.2d 365
PartiesRobert H. FELDMEIER as a Stockholder of Sanitary Processing Equipment Corporation, Plaintiff, v. Eric WEBSTER, Sanitary Processing Equipment Corporation and Eastern Dairy Equipment Co., Inc., Defendants.
CourtNew York Supreme Court

Gray, Norem, Van Lengen & Van Lengen, George Van Lengen, Syracuse, for plaintiff.

Harry L. Marcus, Brooklyn, Herbert L. Maltinsky, Brooklyn, of counsel, for defendants.

SULLIVAN, Justice.

This is a motion by the defendants for an order to change the venue of this action from Onondaga County to Queens County.

The suit is a stockholder's derivative action and it is brought pursuant to Section 60 of the General Corporation Law.

It is the contention of the defendants that the real plaintiff is Sanitary Processing Equipment Corporation and not Robert Feldmeier, a stockholder, and therefore, the action belongs to the corporation and not to the stockholders individually or collectively. Carruthers v. Jack Waite Mining Co., 306 N.Y. 136, at page 140, 116 N.E.2d 286, at page 288.

Hence, it is argued that the residence of the corporation, which is Queens County, determines the venue of the action.

However, the cited case holds that the stockholder is a plaintiff, altho only a nominal one, and that an existing corporation is an indispensable party to the action. In the instant case, the corporation is not prosecuting the action. It is a defendant. The stockholder is prosecuting it. He is the plaintiff. Civil Practice Act, § 191.

As such, he is, of course, a party.

'Parties, in the larger legal sense, are all persons having a right to control the proceedings to make defense, to adduce and cross-examine witnesses, and to appeal from the decision, if an appeal lies.' Knickerbocker Trust Co. v. Tarrytown, W. P. & M. R. Co., 139 App.Div. 305, at page 308, 123 N.Y.S. 954, at page 956.

The stockholder in a derivative action comes within this category.

Civil Practice Act, § 182, provides, in part:

'An action in the supreme court * * * must be tried in the county in which one of the parties resided at the commencement thereof.'

The stockholder resides in Onondaga County. Since he is a party, nominal or otherwise, the venue of this action is laid in the proper county. Aside from the foregoing, it may be well to consider the several statutes pertaining to actions against officers of a corporation for misconduct which is the gravamen of the instant one.

Section 60 of the General Corporation Law gives the right of action.

In section 61 of the same law, it is designated 'who may bring the action' and a shareholder is described as one who may. In this section, the terms 'party' and 'plaintiff' are applied to him.

A reading of Section 61-b clearly manifests that a shareholder is a plaintiff.

Therefore, since Section 191, supra, styles as the plaintiff the party who prosecutes the action and since Section 182, supra, provides that an action must be tried in the county where one of the parties resided, the venue of this action is properly laid in Onondaga County.

What is more, Sections 182-a, 182-b, 183, 184 and 184-a of the Civil Practice Act except specified actions from the provisions of Section 182. The nature of the instant action is not among these exceptions. If the Legislature had intended that a stockholder's derivative action was to be excepted from the provisions of Section 182, it undoubtedly would have so legislated.

This Court is inclined toward the reasoning of the Supreme Court of Michigan as stated in Eston v. Argus, Inc., 328 Mich. 554, 44 N.W.2d 154, 155 (cited by plaintiff):

'The gist of this suit is breach of duty by the directors to the corporation. It is an alleged corporate right, based on negligence and mismanagement. * * * The subject matter is transitory. (Citations.) That...

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4 cases
  • Blum v. Gleitsman
    • United States
    • United States State Supreme Court (New York)
    • 9 Junio 1960
    ...... For the purpose of venue the residence of a stockholder in a derivation action is controlling (Feldmeier v. Webster, 208 Misc. 996, 145 N.Y.S.2d 365, affirmed 1 A.D.2d 938, 150 N.Y.S.2d 581). Defendants rely [25 Misc.2d 743] on Tenney v. Rosenthal, 6 ......
  • Tashenberg v. Breslin
    • United States
    • New York Supreme Court Appellate Division
    • 9 Julio 1982
    ...as a stockholder, director and officer, his county of residence is proper for purposes of venue (CPLR 503, subd. Feldmeier v. Webster, 208 Misc. 996, 145 N.Y.S.2d 365, affd. 1 A.D.2d 938, 150 N.Y.S.2d 581; Blum v. Gleitsman, 25 Misc.2d 740, 203 N.Y.S.2d 38). Accordingly, since this matter i......
  • Shami v. F.O.A.N., Inc.
    • United States
    • United States State Supreme Court (New York)
    • 8 Noviembre 2010
    ...see also Casavecchia v. Mizrahi, 2010 N.Y. Slip Op. 32234(U), *6, 2010 WL 3384620 [Sup. Ct., Nassau County 2010], Feldmeier v. Webster, 208 Misc. 996, 996-997, 145 N.Y.S.2d 365 [Sup. Ct., Onondaga 1955] ). Defendants' assertion that the venue must be changed to the county where the Property......
  • Feldmeier v. Webster
    • United States
    • New York Supreme Court Appellate Division
    • 21 Marzo 1956
    ...Gray, Norem, Van Lengen & Van Lengen, Syracuse (George Van Lengen, Syracuse, of counsel), for respondent. Order affirmed, 208 Misc. 996, 145 N.Y.S.2d 365, with ten dollars costs and disbursements. All concur. (Appeal from an order of Onondaga Special Term, Sullivan, J., denying defendants' ......

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