Data-Guide, Inc. v. Dennis , 182 N.Y.S.2d 707 ( 1958 )

Sidney A. Fine, J.

Defendant moves for dismissal of the complaint. The pleading contains three causes, each seeking a declaratory judgment. The individual plaintiff and the defendant are two of several stockholders of the plaintiff corporation. They entered into an' agreement by which each undertook to vote for the other as officer and director, and in the event of desire to sell, each was to make a first offer of the stock for purchase, by the other. It is also alleged that at all times defendant was the attorney for both plaintiffs.

A motion to dismiss a declaratory judgment complaint before answer presents for determination only the question whether a case for a declaratory judgment is made out, not the question of whether the plaintiff is entitled to an adjudication in his favor (Rockland Light & Power Co. v. New York, 289 N. Y. 45, 50-51).

- The first cause seeks a declaration with respect to the validity of the agreement as it affects the administration of the affairs of the corporation. Defendant has asserted his claimed rights at the .1958 annual meeting, while the plaintiffs challenged those rights, with the result that the inspectors of election have not certified the results, to the prejudice of the corporation. Both plaintiffs are proper parties and their rights and relations with respect to the agreement and its impact upon the corporation raise a proper subject for a judicial declaration.

The second cause rests on claimed invalidity of the agreement by reason of the relationship existing between the individual plaintiff and the defendant, as his attorney, and the legal advice given by defendant, who had personal interests to advance in conflict with those of said plaintiff. A good cause of action for a declaratory judgment is made out in favor of the individual plaintiff, but no facts are set forth which make out a cause of action in favor of the corporation.

The third cause of action, which proceeds upon the theory that defendant was guilty of conduct which would excuse the individual plaintiff from voting for defendant is insufficient, because the allegations of wrongful conduct consist of vague conclusions, unsupported by any allegations of ultimate facts.

The motion is granted to the extent of dismissing the second cause of action, as to the corporate plaintiff, and the third cause as to both plaintiffs, with leave to serve an amended complaint within 10 days from the service of a copy of this order with notice of entry.