Morris Jacobson, Appellants v. Brooklyn Lumber Company, Respondents

Summary

The New York Court of Appeals reversed the Appellate Division’s dismissal of a minority shareholders’ derivative suit, holding that the court may consider pleadings to determine admitted facts, that a demand on the corporation is unnecessary when the accused officers constitute a majority of the board, that board actions where the majority is personally interested are voidable regardless of corporate solvency, and that the plaintiffs are entitled to relief to set aside the salary resolutions and recover the amounts received. The court ordered a new trial on the merits.