Affidavit of Fred Rafanello, Read in Opposition to Motion. 25 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK [SAME TITLE] State of New York FRED RAFANELLO, being duly sworn, deposes 26 and says: I am one of the respondents in the above entitled proceeding and make this affidavit in opposition to the application for reargument of the motion decided in the above entitled matter. At the outset deponent states that no new matter has been submitted in the papers to cause the Court to reconsider the decision made in this action. Furthermore, the papers are deficient in that they do not indicate that leave to reargue was secured and also does not indicate what 27 specific attempts were made to secure such leave. The petitioners in their moving papers made no mention of subscribing for stock and that the subscription was secured secured by the promissory notes. In their moving papers they stated that they were the holders and owners of stock which deponent and Leo Willens emphatically denied. Deponent stated in the answering affidavit that no consideration was ever received from the petitioners and wishes to repeat now that the promissory notes which petitioners speak about were never turned over to the corporation or to the Affidavit of Fred Rafanello. 28 deponent. That if the petitioners ever executed any promissory notes, the promissory notes continue to be in their individual possession. Claim is made that under section 70 of the Stock Corporation Law they may be considered to be stockholders. Section 70 was designed to provide additional protection to creditors of a corporation so that creditors could look to subscribers of the capital stock for payment in the event that their obligations could not be paid. That section was not intended to contravene the provisions of Section 69 of the Stock Corpora29 tion Law which required payment for stock before it could be issued. The petitioners are urging an unusual position. They suggest that a person who has not paid for his stock could enjoy all of the rights of a stockholder, such as voting and the right to dividends which might accrue to a stockholder. The law never contemplated such charitable consideration to subscribers who do not pay for their stock. In any event, the facts submitted indicate and the Court so found that the arrangement be30 tween the parties was that the stock would issue when it was paid for and since petitioners had until 1954 to pay, stock could not be issued until that time. For all of the reasons stated, it is respectfully requested that this application of reargument be denied. WHEREFORE, deponent respectfully prays that this application for reargument be denied with costs. FRED RAFANELLO. (Sworn to by Fred Rafanello, Aug. 7, 1953.) The following papers numbered 1 to 15 read on this motion, submitted July 15, 1953. Motion Calendar No. 104. Papers Numbered 32 Order to Show Cause and Petition An nexed, Exhibits and Affidavits of 1-5 Additional Affidavit of Service 6 Answering Affidavits 7-10 Reply Affidavit and Exhibit 12-14 Exhibit (stock certif. to be returned to Herman Brothers, Esq., do not file) 15 Exhibits—Minutes of corporation (to be returned to Harry Alexander, Esq.) 11 33 Upon the foregoing papers this motion is denied and the petition dismissed. It is admitted by the petitioners that the stock they subscribed for was not paid for, and they have until 1954 to pay for same, and, in view of that, was not issued. They are not stockholders within the meaning of section 69 of the Stock Corporation law. Dated, July 31, 1953. E L B J. S. C. Respondent's Brief ✓ Order to Show Cause. 34 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK [SAME TITLE] On reading the annexed Petition of Charles 35 Katz and Herman Rosenberg verified July 9, 1953, whereby it appears to this Court that National Kiddie Rides Inc. is a domestic corporation duly organized, created and existing under and by virtue of the laws of the State of New York, having its principal place of business in the Borough of Manhattan, City, County and State of New York, and having capital stock divided into two hundred shares, all of which are no par value, and of which the petitioners are the owners of fifty percent of the issued stock; that the petitioners are duly constituted and 36 elected directors and officers of the said corpo ration, and that at an alleged meeting of the stockholders and an alleged meeting of the Board of Directors, both held on July 6, 1953, the petitioners were illegally removed as directors of the corporation and as officers thereof, and that there is serious question as to the legality of the removal of the petitioners as directors and officers, and as to the election of the officers and directors allegedly substituted in petitioners' place, and that the petitioners feel aggrieved and complain of both the aforementioned meetings Order to Show Cause. 37 and the elections of their supposed successors thereat; and it further appearing that said petitioners as such stockholders should be permitted to participate in the meeting of the stockholders and in their capacity as directors, in the meetings of the Board of Directors, Now, on motion of Herman Brothers, it is ORDERED, that the said Leo Willens, Fred Rafanello and John De Vivo, National Kiddie Rides Inc. and “John Doe”, the name “John Doe” 38 being fictitious, the party intended being the person who was elected as director and VicePresident at the aforementioned meetings of July 6, 1953, and each and all of them, show cause at a Special Term Part I of the Supreme Court of the State of New York, County of New York, appointed to be held at the Courthouse located at Foley Square, in the Borough of Manhattan, City of New York, on the 15th day of July, 1953, at 10 A.M. in the forenoon of that day, or as soon thereafter as counsel can be heard, why the relief asked for in the said 39 petition should not be granted, and the removal of petitioners as directors and officers, and the election of directors and officers in place and stead of the petitioners of National Kiddie Rides Inc. held on July 6, 1953, be declared irregular, null and void and set aside, and that all persons now assuming to act as such directors and officers cease to act as such, and that your petitioners be declared to be reinstated as officers and directors of the said corporation, as well as employees thereof; that a receiver of the assets of the said |