
    Gustave Weiser, Appellant, v. Marmalax Manufacturing Co., Inc., Respondent.
    (Supreme Court, Appellate Term, First Department,
    June, 1916.)
    Corporations — assignment of account for goods sold and delivered — evidence — Stock Corporation Law, § 66.
    In the absence of proof that a corporation had refused to pay any of its obligations or that it was insolvent or that its insolvency was imminent, an assignment by it of an account for goods sold and delivered to one of its officers and stockholders does not violate section 66 of the Stock Corporation Law.
    Appeal by plaintiff from judgment of the City Court of the city of New York dismissing complaint.
    Max Winder (Meyer Levy, of counsel), " for appellant.
    Reuben Doreman, for respondent.
   Guy, J.:

The complaint alleges the sale and delivery of certain goods by A. Kupferschmid, Inc., to defendant, and that the amount was assigned by the corporation to the plaintiff for a valuable consideration before the beginning of the action.

The answer is a general denial.

The plaintiff’s proof, aided by concessions of defendant, warrants a finding that plaintiff’s assignor had a valid claim against defendant for a balance of account; and plaintiff put in evidence a written assignment of the claim executed under the seal of the corporation by its president, and duly proved before a notary public. Under the contract between plaintiff’s assignor and the defendant the latter had a right to return defective goods, and it seems that some goods were returned; but the account, which is annexed to the assignment, gives defendant credit for “ cash payments and credits, ’ ’ and it does not appear that defendant was not credited with any returns that were made.

The learned trial judge against the objection and exception of plaintiff allowed defendant to introduce testimony for the purpose of showing that the transfer by the corporation to the plaintiff, one of its officers and stockholders, for an antecedent debt, came within section 66 of the Stock Corporation Law, declaring such a transfer under the circumstances stated in that statute to be void; and at the close of plaintiff’s case, apparently on the ground that the transfer was .in violation of the statute, he dismissed the complaint. The dismissal was error requiring a reversal of the judgment.

The provisions of section 66 of the Stock Corporation Law in so far as this controversy is concerned are applicable only to a corporation “which shall have refused to pay any of its notes .or other obligations, when due,” or, considered from the standpoint of a preference to one not an officer or stockholder, to an insolvent corporation or one whose insolvency is imminent; and the record contains no evidence that plaintiff’s assignor had refused to pay any of its obligations, nor does it appear that the corporation was insolvent or its insolvency imminent. It follows that a finding by the court that the statute was violated by the assignment was unwarranted.

The judgment, must be reversed and a new trial ordered, with costs to the appellant to abide the event.

Bijue and Philbin, J. J., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.  