APPEAL from an order of the Supreme Court at Special Term (HAGERTY, J.), entered August 13, 1954, in Erie County, which denied a motion by petitioner for an order under section 21 of the Stock Corporation Law to determine the value of shares of the common stock in respondent corporation owned by petitioner and for the payment by respondent of such value.
Louis N. Blatt for appellant.
Robert Boasberg for respondent.
MCCURN, P. J.
This is an appeal from an order of the Special Term denying the application of the petitioner for an appraisal and payment for his stock pursuant to sections 20 and 21 of the Stock Corporation Law.
The stockholders of the respondent corporation at their annual meeting held on May 13, 1954, adopted by a two-thirds vote a resolution authorizing its officers and directors to sell, mortgage, or lease any and all real estate owned by the corporation and to sell any and all furniture, equipment, dies, moulds, machinery and other personal property which the directors deem advisable to dispose of. The petitioner, a dissenting stockholder, brought this proceeding pursuant to section 21 of the Stock Corporation Law for a determination of the value of his stock and for payment thereof.
It appears that for sometime in the past the corporation has been engaged in a manufacturing business carried on principally
in a plant owned by it in the village of Depew, New York; that the officers and directors being desirous of procuring a larger plant with a view of a more economical and advantageous conduct of its increasing manufacturing business searched for a suitable plant and location in various localities in the State of New York and elsewhere, and finally selected a plant located at Roanoke, Virginia. Thereupon they moved their offices and manufacturing business together with their manufacturing equipment and machinery, with the exception of certain items of personal property to be mentioned later, to the new location at Roanoke, Virginia. They leased the plant formerly occupied in the village of Depew to another manufacturing concern for a ten-year period upon terms which they allege to be favorable. They sold certain items of personal property which items were allegedly obsolete or not needed at the new location for a total sum of $1,590.45.
The Special Term has found, and properly so as we view it, that the lease of the real property and the sale of the above-mentioned items of personal property are not to be regarded as transactions outside of the regular course of business of the corporation and that such lease and sale do not involve all of its property or an integral part thereof essential to the conduct of the business of the corporation (Stock Corporation Law, § 20). Even so, we think it was error to deny petitioner's application under the circumstances present here. While the directors have not acted under the resolution of the stockholders, such resolution has not been rescinded and insofar as it appears from this record the directors may still at any time pursuant to the resolution of the stockholders exercise their discretion to sell any part or all of the real and personal property of the corporation. Such a sale of all the corporate property would obviously put an end to the manufacturing business of the corporation (see
Matter of Timmis, 200 N.Y. 177). If the directors should elect to make such a sale and the present proceeding should be no longer pending, the petitioner will have lost his right to an appraisal and payment of the value of his stock pursuant to section 21.
It appears here that no proposed sale is actually pending. The stockholders have authorized the directors in their discretion to effect a sale, and while such discretion has not as yet been exercised, still the power to do so continues until the resolution of the stockholders is rescinded. In that respect the situation here is not the same as in cases where the stockholders have
authorized a particular sale which has afterward failed or has been abandoned (see Matter of Millard, 221 ...