Aschkenasy v. Teichman

Order entered on November 13, 1959 unanimously reversed, on the law, the first defense and the second defense and counterclaim are stricken, and the denials contained in paragraphs 1, 2 and 5 of the answer are stricken as sham in accordance with the relief sought in the notice of motion, with $20 costs and disbursements to plaintiffs-appellants. Aside from the fact that the arbitration agreement among the stockholders does not appear to embrace the issues presented in this derivative stockholder’s action, it may not be pleaded in the first defense, since defendants’ exclusive remedy was to apply for a stay of the action pursuant to section 1451 of the Civil Practice Act (American Reserve Ins. Co. v. China Ins. Co., 297 N. Y. 322; Marvin v. Thomas J. Hoffman, Inc., 280 App. Div. 616). A reading of the prayer for relief indicates that the individual plaintiff is suing solely in the right of the corporation and not for his individual benefit. Under the circumstances a counterclaim may not be asserted against him as an individual (Binon v. Boel, 297 N. Y. 528; Select Theatres Corp. v. Harms, Inc., 273 App. Div. 505). Settle order on notice. Concur — Botein, P. J., Breitel, Rabin, McNally and Eager, JJ.