Cytron v. B. & C. Insulation Products, Inc.

In a stockholder’s derivative action, order denying motion to dismiss the complaint reversed on the law, with $10 costs and disbursements, and the motion granted, with $10 costs. There are no factual allegations of wrongdoing contained in the first cause of action. (Gerdes v. Reynolds, 281 M. T. 180; Kalmanash v. Smith, 291 M. T. 142.) The second cause of action, considered in its aspect most favorable to plaintiff, namely, to recover individually for breach of a contract with defendant Louis Sperling, is not timely brought. (Civ. Prae. Act, § 48, subd. 1.) There are no appropriate allegations to bring that cause of action within the province of subdivision 5 of section 48 of the Civil Practice Act as one founded on actual fraud, and to the end that breach of the alleged contract was not and could not reasonably’ have been discovered until a period of time had elapsed which was less than six years prior to the commencement of this action. (Pitcher V. Sutton, 238 App. Div. 291; Gob el, Inc., v. Ham [779] merslough, 263 App. Div. 1, affd. 288 N. Y. 653; Hearn 45 St. Gorp. v. Jano. 258 App. Div. 923.) Carswell, Acting P. J., Johnston, Adel, Wenzel and MaeCrate, JJ., concur.