Sandler v. Superior Industrial Gas Corp.

In a stockholder’s derivative and representative action based on alleged acts of waste by the individual appellants, directors of the appellant corporation, a counterclaim was interposed to compel respondent, formerly the president and a director of the appellant corporation, to account and for other relief, based on allegations that he breached his fiduciary duties as such and that he is engaged in a competing business. The appeal is from so much of an order as denied appellants’ motion to vacate respondent’s notice to examine them before trial. Order modified by adding thereto provisions (1) that as to all items the examination shall be limited to transactions had, and records made, within six years of the commencement of the action and (2) that respondent shall not be permitted to examine records showing the customers of the appellant corporation, nor records of purchases and sales by said corporation, except in respect to transactions with the two customers referred to in the complaint, namely, the City of New York and the Joint Purchasing Corporation. As so modified, order insofar as appealed from affirmed, without costs. Inasmuch as extensive records are to be produced, the examination might more properly be held at the place of business of the appellant corporation. The individual appellants should be examined singly and not together. If the parties cannot agree on these two matters, application for such relief should be granted at Special Term. Under all of the facts and circumstances shown, it would be unduly oppressive to carry the examination back to a time earlier than the commencement of the six-year period of limitations pleaded in the answer. Nolan, P. J., Murphy, Ughetta, Hallinan and Kleinfeld, JJ., concur.