Meltzer v. Wattles

¶1Order, entered on April 29, 1963, unanimously modified on the law, to the extent of granting the leave requested by plaintiff upon oral argument to serve an amended complaint wherein the title will recite that plaintiff sues as custodian for her two minor children and the body of the complaint will allege that she holds certain shares of stock in defendant Mergenthaler Linotype Company as such custodian pursuant to the provisions of article 8-A of the Personal Property Law (Uniform Gifts to Minors); and upon service of such amended complaint, otherwise affirming, without costs. In the event plaintiff does not serve such an amended complaint within 10 days after filing of the order to be settled herein, the order appealed from is unanimously reversed, on the law, with $20 costs and disbursements to appellants, and the complaint dismissed. Generally speaking, a person holding stock in a representative or fiduciary capacity has the right to institute a stockholders’ derivative action, such as the complaint asserts herein, notwithstanding his lack of a beneficial interest. Section 266 of the Personal Property Law grants the custodian broad powers and duties in the disposition and investment of the custodial property. These powers clearly qualify such a custodian to bring this derivative stockholders’ action on behalf of and to protect the interests of the minors who own the beneficial interest in the stock. Settle order on notice. Concur — Botein, P. J., Breitel, Rabin, Stevens and Eager, JJ.