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LILLIAN GRANT ET AL. v. BEATRICE ADLER (06/20/68)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT


June 20, 1968

LILLIAN GRANT ET AL., APPELLANTS,
v.
BEATRICE ADLER, AS ADMINISTRATRIX OF THE ESTATE OF ROBERT L. ADLER, DECEASED, ET AL., RESPONDENTS, AND 369 DEKALB REALTY COMPANY, INC., APPELLANT

Concur -- Stevens, J. P., Steuer, McGivern and Rabin, JJ.; Tilzer, J., concurs in the result.

In the action plaintiffs, brother and sister, sought a judgment declaring them to be each a one-third stockholder of 369 DeKalb Realty Company, Inc., and derivatively on behalf of that corporation for a judgment against the estate of a third brother, deceased, and a corporation wholly owned by his estate. The issues were wholly factual and we find no fault with the learned trial term's decision in favor of plaintiffs. After the entry of judgment defendants applied to Special Term for a stay of an execution previously issued to the Sheriff. Stay was sought pursuant to section 11-4.6 of the Estates, Powers and Trusts Law which requires permission of the Surrogate before execution can be allowed against an estate. The purpose of the statute is to retain control by the Surrogate of estates subject to his administration by preventing any one creditor from obtaining a preference over other creditors (Matter of Mason, 175 Misc. 458). The execution in this instance was not issued against the estate but only against the corporate defendant. It is to be noted that the estate owns only the stock of the corporation, not its assets. A creditor of the corporation could not collect against the estate. Conversely, he is not barred from collecting against the corporation. Merely because an estate owns a part or all of the stock of a corporation, a creditor is not barred from proceeding to collection against the corporation. And the Estates, Powers and Trusts Law is inapplicable.

Disposition

Order entered February 19, 1968, unanimously reversed, on the facts and the law, with $30 costs and disbursements to appellants, and stay vacated.

19680620

© 1998 VersusLaw Inc.



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