Opinion
April 4, 1949.
Derivative stockholder's action to recover in behalf of the corporate defendant for wrongs alleged to have been committed against that corporation by its president, the appellant. Order denying appellant's motion to dismiss the complaint, under rule 106 of the Rules of Civil Practice, for failure to state a cause of action, insofar as appealed from, reversed on the law, with $10 costs and disbursements, the motion granted, and the complaint dismissed. without costs, and with leave to plaintiff, if so advised, to serve a second amended complaint within twenty days after service, with notice of entry, of the order to be entered hereon. The reasons stated in the complaint for failure to serve a demand upon the corporate defendant to commence an action for the redress sought are insufficient. Allegations that the majority of the board of directors are subservient to the alleged wrongdoer, or under obligations to him, in the absence of allegations of wrongdoing on their part, do not show that an application to the board to institute such an action, made upon a suitable presentation of the facts, would prove futile. Such allegations do not establish even by fair inference that upon a proper demand the directors would violate their duty to the corporation. ( O'Connor v. Virginia Passenger Power Co., 184 N.Y. 46, 53; Marco v. Sachs, 269 App. Div. 845, affd. 295 N.Y. 642.) Carswell, Acting P.J. Johnston, Adel, Sneed and MacCrate, JJ., concur. [ 193 Misc. 435. ]