Shapiro v. Peoples Co-operative Society, Inc.

Judgment unanimously reversed on the law, with thirty dollars costs to the appellant, and complaint dismissed, with appropriate costs in the court below.

The conclusion reached by this court in Eureka v. Peerless, Appellate Term, Second Department, Memoranda Decision, No. 609, June, 1922, Term, that a general or judgment creditor cannot take advantage of a failure to comply with the provisions of section 16 of the Stock Corporation Law of 1923, is not controlling here. The corporation, a receiver, or a general assignee for the benefit of creditors may raise the question. (Leffert v. Jackman, 227 N. Y. 310.)

Since a receiver or assignee for the benefit of creditors may raise the question, a trustee in bankruptcy may also raise it. (Matter of Progressive Wall Paper Corp., 230 Fed. 171; Matter of Astell Engineering & Iron Works, 284 id. 967.)

We hold under the authority of Leffert v. Jackman (supra) that plaintiffs’ mortgage is not without the provisions of the statute because they advanced present value for it.

Present: Cropsey, Lazansky and MacCrate, JJ.