Pope v. Kelly

Hirschberg, J.

The complaint asserts but a single cause of action, viz., the reformation and enforcement of the agreement. On the 23d of April, 1896, the plaintiffs were, in effect, the owners of the defendant corporation. The corporation was in financial straits. An agreement was then executed between the plaintiffs and the defendant William Kelly, by which the plaintiffs agreed to turn the company over to Kelly and the two other individual defendants, on the promise of Kelly to finance and operate the company in accordance with the terms of the agreement. The plaintiffs allege that they have carried ,out the agreement but that Kelly has failed to do so, but that on the contrary he in collusion with his associates and representatives has willfully violated and disregarded the obligation of the agreement to the pecuniary damage of the plaintiffs, the extent of which can only be ascertained by an investigation of the company’s business since the date named. The right to reform the contract and the right to enforce it may be united in one action. Lattin v. McCarty, 41 N. Y. 107 , and cases cited. The action would not be effective against William Kelly alone. The corporation for whose benefit the contract was made and which was the chief subject-matter of the contract, as well as the representatives named by him in the contract and now directors of the company actively engaged in the violation of its terms, are all proper parties. Flor is the relief demanded beyond the scope of equity jurisdiction and practice in a single action. See Daland v. Good, 25 N. Y. St. Repr. 496; Corcoran v. Mannering, 10 App. Div. 516 ; Gray v. Fuller, 17 id. 29; Woodworth v. Brooklyn El. R. Co., 29 App. Div. 1 .

The demurrers should be overruled, with costs, but with leave to the defendants to answer on payment within twenty days.

Ordered accordingly.'