Diamond v. Davis

While we find the fifth cause of action sufficient on its face, we think that the sixth cause of action is insufficient for two reasons: (1) It fails to allege facts to show violation of the statute (U. S. Code, tit. 15, §§ 13-13a) in that there are no allegations showing that the discriminatory allowances complained of had *69a prejudicial effect on competitors, or tended to lead to a monopoly (Great Atlantic & Pacific Tea Co. v. Federal Trade Commission, 106 F. [2d] 667; certiorari denied, 308 U. S. 625), pleading the consent decree would not establish a statutory violation for the purpose of this case (U. S. Code, tit. 15, § 16; Baush Machine Tool Co. v. Aluminum Co. of America, 79 F. [2d] 217, 226); and (2) the acts complained of in said sixth cause of action are not such that injury to the corporation would ordinarily be inferred therefrom as the natural and probable result thereof. Facts establishing damage, rather than a conclusory allegation of waste, should be pleaded.

The order should be modified by granting the motion to strike out the sixth cause of action, and, as so modified, affirmed, without costs, with leave to the plaintiff to serve an amended complaint within twenty days after service of. order.

Present — Martin, P. J., Glennon, Cohn and Callahan, JJ.

Order unanimously modified by granting the motion to strike out the sixth cause of action, and, as so modified, affirmed, without costs, with leave to the plaintiff to serve an amended complaint within twenty days after service of a copy of order with notice of entry thereof.