In re Meighan

Citations

• 106 A.D. 599
• 94 N.Y.S. 1153
• 1905 N.Y. App. Div. LEXIS 2639

Syllabus

<p>Action by a stochholder on behalf of himself and others to compel directors to repay to a corporation dividends illegally declared and paid — where the amount thereof is repaid by the directors pending the' action, the attorneys are not entitled, on, motion, to have their-compensation declared a lien thereon.</p> <p>Attorneys at law, acting under retainer from one Watkins, a stockholder of a corporation, brought several separate actions on behalf of Watkins and of all other stockholders similarly situated, making in each one of the respective actions one of the directors of the corporation a party defendant with the corporation, to recover certain dividends alleged to have been illegally paid by the directors out of the capital of the corporation. After the commencement of the actions, but before the trial thereof, the full amount of the dividends claimed ' to have been illegally paid, together with interest thereon, was repaid by some of the defendant directors to the corporation.</p> <p>Previous to the commencement of the actions, the corporation had been requested to commence the actions, but had neglected to do so, and it appeared that the-restitution of the illegally paid dividends resulted from the commencement of the actions.</p> <p>The attorneys, claiming a lien under section 66 of the Code of Civil Procedure upon the fund thus paid, petitioned the court to determine the amount of their compensation and to declare the same a lien on the fund.</p> <p>Held, that an order denying the aiiplication of the attorneys should be affirmed.</p> <p>McLaughlin and Hatch, JJ., dissented.</p>