People v. Ballard

• Decision Date: 29 November 1892
• Parties: PEOPLE v. BALLARD et al.
• Court: New York Court of Appeals Court of Appeals

136 N.Y. 639

32 N.E. 611

PEOPLE

v.BALLARD et al.

Court of Appeals of New York.

Nov. 29, 1892.

On rehearing. For former report, see 32 N. E. Rep. 54. Refused.

PER CURIAM.

Upon the first argument of this appeal, one member of the court was disqualified from sitting, and the remaining judges were equally divided upon the question whether an action of this character can be maintained by the attorney general in the name of the people. The case was thereupon transferred to the second division, where it was again argued, and a decision handed down on October 1, 1892, contemporaneously with the dissolution of that branch of the court. It was there held by a divided court that the action in its present form was maintainable, and the judgment of the general term affirming the judgment of the special term, which dismissed the plaintiff's complaint, was reversed, and a new trial ordered, upon the ground that the trustees of a mining company, incorporated under the act of 1848, cannot, even with the consent of a majority of its stockholders, transfer all of its property and assets to another corporation, avowedly incorporated for the purpose of acquiring the same and carrying on its business, and receive in payment therefor the stock of the latter corporation. It appears that the purchasing company is a foreign corporation, but we do not understand that it is claimed the case would be different if it were a domestic one. Upon the transfer the purchasing corporation assumed all the debts of the defendant corporation, and it is conceded that the defendant corporation has virtually abdicated its franchises, and placed itself in a position where it is and will be unable to carry on the business for which it was incorporated. The defendants now move for a reargument, and their counsel, with commendable candor, concede that under the rules which prevail in this court, and which control the determination of such motions, all discussion is foreclosed of the question of the maintainability of this action by the people, and also of the question that the directors of a domestic corporation, which is engaged in a profitable business, cannot, without the assent of all the stockholders, close out its business, transfer its entire property to another corporation, pay its debts, distribute its remaining assets among its stockholders, and surrender its franchises to the state. But it is contended that the rule is otherwise with respect to a nonpaying...