Dubro v. Kerner

Order, Supreme Court, Bronx County (Anita Florio, J.), entered October 27, 1989, which denied plaintiffs’ motion for summary judgment, is unanimously affirmed, without costs. Defendant members of the board of directors of Farband Housing Corporation were not required to sign a recognition [448] agreement, which would have facilitated a mortgage loan to the prospective purchasers of plaintiffs’ shares in the cooperative corporation. The corporation’s bylaws revealed a policy of discouraging speculation in share transactions for a profit motive. The board acted in good faith in rejecting an agreement which would have authorized the intrusion of an institutional creditor upon the tranquility of the cooperative housing arrangement. This had never been done before in the corporation’s 50-year history, and the board’s decision to publicize that policy in response to plaintiffs’ prospective purchaser’s application was insufficient proof of belated adoption of such a policy (see, Dubro v Kerner, 140 AD2d 234 [wherein plaintiffs’ motion for a preliminary injunction in this action was denied on the ground that the record was insufficient to show that it was the corporation’s policy to accept such recognition agreements]). The board acted within its authority in a matter involving the transfer of shares (see, Rossi v Simms, 119 AD2d 137), especially where there was nothing in the bylaws or other corporate documents prohibiting the exercise of such legitimate authority on behalf of the best interests of the shareholders (see, Mogulescu v 255 W. 98th St. Owners Corp., 135 AD2d 32). Concur—Kupferman, J. P., Ross, Ellerin, Wallach and Smith, JJ.