Friday, November 22, 2013

711 Kings Highway Corp. v. F.I.M.’s Marine Repair Serv., Inc. case brief

711 Kings Highway Corp. v. F.I.M.’s Marine Repair Serv., Inc. case brief summary
273 N.Y.S.2d 299 (1966)


CASE SYNOPSIS
Plaintiff landlord brought an action against defendant tenant and sought a declaration that the lease agreement was invalid or for recission of the lease. The tenant filed a motion to dismiss the action on the ground of legal insufficiency pursuant to N.Y. C.P.L.R. 3211(a).

CASE FACTS
The tenant's lease provided that the premises were to be used as a movie theater. The tenant's certificate of incorporation stated that it was formed to carry on marine activities. The landlord brought an action and asserted that the lease was invalid because the operation of the motion picture theater was outside of the authority conferred by the tenant's corporate charter. The tenant filed a motion to dismiss.

DISCUSSION

  • The court granted the motion. 
  • The court stated that the complaint had to be dismissed for failure to state a cause of action because under N.Y. Bus. Corp. Law § 203, a valid transfer of property could not be made invalid just because the tenant's corporation was without capacity to operate a movie theater. 
  • The court stated that the landlord did not fall within one of the exceptions listed in § 203 and that by virtue of § 203 the ultra vires doctrine could not be invoked.

CONCLUSION
The court granted the tenant's motion to dismiss the landlord's action for a declaration that the lease was invalid.

Recommended Supplements for Corporations and Business Associations Law

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