Silverstein v. Exciting Fashions Inc.

In a purported stockholders’ derivative action, order denying defendants’ motion to dismiss the complaint under subdivisions 2 and 4 of rule 106 of the Rules of Civil Practice, reversed on the law, with $10 costs and disbursements, and motion granted, with $10 costs. The complaint does not allege ultimate facts showing that plaintiff is the legal or equitable owner of stock of the defendant corporation. Such an action may only be prosecuted in the right of the corporation. The naked allegation that plaintiff is the “ beneficial owner” of stock is insufficient without allegations of ultimate fact to sustain such a eonclusory allegation, especially where it is alleged that the stock involved is held in the name of an undisclosed nominee. (Miller V. Miller, 256 App. Div. 846, affid. 280 N. Y. 716, and cases cited therein.) Nolan, P. J., Carswell, Adel, Wenzel and Schmidt, JJ., concur. [See post, p. 898.]