Opinion
Argued November 30, 1943
Decided March 10, 1944
Appeal from the Supreme Court, Appellate Division, Second Department, F.E. JOHNSON, J.
Benjamin Reass, Julien W. Newman and Irving Moldauer for appellant. Brison Howie, Aristotle Souval and Samuel Kaufman for Nicholas Katsoris and another, respondents. Louis Schack, James Madison Blackwell and Louis S. Lewis for Lekas Drivas, Inc., respondent.
Louis Schack, Louis S. Lewis and Edwin A. Lewis for James M. Blackwell and others, respondents.
Where the record contains substantial evidence supporting findings made at Special Term and which are unreversed by the Appellate Division, those findings are conclusive in this court. ( Harrington v. Harrington, 290 N.Y. 126, 130.) In the record before us are unreversed findings, supported by substantial evidence, that the plaintiff's employment contract dated March 1, 1937, has not been terminated by the defendant Lekas Drivas, Inc.; that at a meeting of the corporation's board of directors held on May 20, 1938, formal action was taken, which has not been rescinded, with respect to the plaintiff's employment contract dated March 1, 1937, which action directed the plaintiff to remain in the United States. We conclude that the plaintiff's employment contract of March 1, 1937, remains effective and that plaintiff is entitled to his salary to the date of final judgment in the present consolidated action, after which date his services under his employment contract shall continue to be subject to direction by the board of directors or by a duly authorized representative of the corporation.
There are also unreversed findings, supported by substantial evidence, that without authority of the board of directors the individual defendants Lekas and Katsoris arranged for payment to themselves, from corporate funds, of increased salaries for the years 1935 and 1936, and of payment to Michael Katsoris of an amount in excess of the salary to which he was entitled for the year 1935. These salary increases, which aggregated $5,650, were an unauthorized diversion of corporate funds which should be returned by the defendants Lekas and Katsoris to the corporation.
We think the Appellate Division erred in striking from the resettled judgment of Special Term paragraphs 4 and 5 (a) which awarded to the plaintiff against the defendant Lekas the sum of $600. The weight of evidence favors the finding by Special Term that a counsel fee in that amount was reasonable and that the plaintiff was justified in expending that amount in the successful prosecution against the corporation of a mandamus proceeding which would not have been prosecuted except for false statements made by Lekas to the directors of the corporation.
The judgment entered upon the order of the Appellate Division should be modified in the following particulars and otherwise affirmed, without costs:
(1) Decretal paragraph "2 (c)" should be reversed and the case remitted to Special Term to determine the amount due the plaintiff, from the defendant Lekas Drivas, Inc., under his employment contract dated March 1, 1937;
(2) Judgment should be directed against the individual defendants Lekas and Katsoris in favor of the plaintiff in behalf of the defendant Lekas Drivas, Inc., in the amount of $5,650, with interest;
(3) Insofar as it fails to include therein paragraphs 4 and 5 (a) of the resettled judgment of Special Term, the judgment entered upon the order of the Appellate Division should be reversed and paragraphs 4 and 5 (a) of the resettled judgment at Special Term should be affirmed.
The judgment of the Appellate Division should be modified in accordance with this opinion, and as so modified affirmed, without costs. (See 292 N.Y. 718.)
LEHMAN, Ch. J., LOUGHRAN, RIPPEY, LEWIS, CONWAY, DESMOND and THACHER, JJ., concur.
Judgment accordingly.