Arenwald v. Douglas Machinery Co.

Frankenthaler, J. Liability is sought to be enforced in this action under section 71 of the Stock Corporation Law against a stockholder who resists same on the grounds that the suit is prematurely brought and that section 71 is not applicable to a foreign corporation, notwithstanding that it is licensed to transact business in this State. Section 73 expressly provides that the action shall not be brought until judgment has been' rendered against the corporatism and execution thereon returned unsatisfied. Card v. Groesbeck (204 N. Y. 301) does not hold, as urged by the plaintiff, that the court has discretion to entertain a suit based upon section 71 prior to judgment against the corporation and return of execution unsatisfied. Liability under section 71 does not attach to a stockholder of a foreign corporation. (Armstrong v. Dyer, 268 N. Y. 671.) Motion to dismiss complaint against the individual stockholder is accordingly granted. In view of the foregoing disposition of this motion, it is not necessary to pass on whether, in any event, the liability of a stockholder under section 71 can be extended to include the additional amounts and attorneys’ fees recoverable under the Fair Labor Standards Act of 1938. (U. S. Code, tit. 29, § 201 et seq.)