Reply Affidavit of Herman Rosenberg.

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principals, had been acting solely on behalf of Leo Willens. The reduction of the contract to writing and the signatures thereto, was merely to have a written record of the agreement. The oral agreement was considered binding by all of the parties and was acted upon in every respect.

Pursuant to the agreement, the respondents Willens and Rafanello each paid his $500.00 immediately. The definite arrangements were

that the petitioners Rosenberg and Katz were 161

to have one year in which to pay their respective sums of $500.00 each. Both Rosenberg and Katz became irrevocably bound to pay such sum of $500.00 by the issuance by each of a promissory note in the sum of $500.00 payable to the corporation on March 6, 1954, exactly one year to the day that the arrangements were made. Furthermore, Willens and Rafanello acceded to the year for the payment to be made as is proved conclusively by the financial statement issued by Deutsch & Spector, auditors for the corporation,

in their reports of April 30, 1953, and May 31, 162 1953; contained in each of said reports under

Exhibit A and listed as current assets, is the following item: “Subscriptions to Capital Stock Receivable $1,000.00”.

To say the least, the respondents' attorney was rather remiss in obtaining the signatures to the various papers that were drawn. An examination of the minute book of the corporation which will be submitted to the Court and offered in evidence, reveals quite clearly that all the papers requiring the signatures of Herman Rosenberg and Charles Katz, the petitioners, were Reply Affidavit of Herman Rosenberg.

163

164

signed by them, but on the contrary, the papers requiring the signatures of the respondents Leo Willens and Fred Rafanello remained unsigned. Not only was the respondents' attorney remiss in this respect, but the Court's attention is also called to the fact that the minute book reflects that the said attorney acted as chairman of the first meeting of the subscribers and incorporators, but failed on page 25, to sign his name as chairman of the meeting. However, so thoroughly understood was the fact that Herman Rosenberg, one of the petitioners, was to be the President of the corporation, that the said respondents’ attorney had your petitioner Herman Rosenberg sign on the line indicated by the word “Chairman”.

Furthermore, the said minutes show definitely that on March 6, 1953, your petitioners subscribed over their written signatures for five shares of the capital stock to be paid by the execution and delivery of their notes in the sum of $500.00 each, one year from date. On the other hand, the written subscription of both the respondents Willens and Rafanello, although pencilled with their respective initials for the placing of their respective signatures remained unsigned.

That the parties definitely had agreed among themselves that your petitioners were to be considered as stockholders immediately is evidenced conclusively by the fact that page 41 of the minute book contains an assignment by Simon Heischuber, one of the incorporators, of his right, title and interest as an incorporator and subscriber to the capital stock of the corporation to Hyman Rosenberg, your petitioner. Page 42 of the minute book shows the assignment by Harry

165

Reply Affidavit of Herman Rosenberg.

166 Alexander, the respondents' attorney, likewise

one of the incorporators, of his incorporator's rights, including the right to one share of the capital stock, unto Charles Katz. The certificates of stock all prepared in the office of the respondents’ attorney Harry Alexander with each certificate of stock bearing the impression of the corporate seal were signed by your petitioner Herman Rosenberg. Each of said certificates has the notation on it placed thereon under the direction of and in the office of the respondents'

attorney reading as follows: 167

“Subject to stockholder's agreement of March 6, 1953."

None of the aforementioned certificates bears any signature other than that of your petitioner Herman Rosenberg as President. The certificates bearing the printed number of issuance are as follows:

It is absurd for the respondents to state that your petitioners were acting as de facto officers. We not only were actual officers and directors of the corporation, but we are actual stockholders of same.

The Court's attention is called specifically to this very strange, but important detail. In view Reply Affidavit of Herman Rosenberg.

169 of the fact that no other certificates than those above mentioned (and which will be offered in evidence on this motion) were ever signed by your deponent as President of the corporation, and since up until July 6, 1953, the date of the alleged meeting of the stockholders, there had been no other president than your deponent, or vice-president other than Charles Katz, it is a virtual impossibility for the respondents Willens and Rafanello to have any certificates of stock properly issued to them. Their sole status as stockholders must depend upon the certificates

170 of stock mentioned and described hereinabove in this affidavit, and the status of your deponent and Charles Katz as stockholders is identical with that of Willens and Rafanello. Your deponent and Charles Katz have been advised that Section 69 of the Stock Corporation Law has not been interpreted as claimed in the respondents' affidavits, but that the provisions of said Section 69 of the Stock Corporation Law are tempered by the provisions of Section 70 of said Law with the result that the petitioners' respective status as stockholders is unassailable. In view of the 171 fact that the status of both of your petitioners as stockholders is definite and concrete, the alleged stockholders' meeting instigated by the respondents Willens and Rafanello without notice to your petitioners is void, illegal and without any effect or standing whatsoever.

It is apparent that the respondents thought that if they mentioned the fact of the bank resolution in their answering affidavits that the weight of such bank resolution as evidence would be less onerous. The Court's attention is called to the fact that the minute book contains a copy

Reply Affidavit of Herman Rosenberg.

172 of said bank resolution signed by Leo Willens

as Secretary and Fred Rafanello as Treasurer to the effect that the petitioners Herman Rosenberg and Charles Katz are President and VicePresident respectively.

Undisputed proof that the petitioners Herman Rosenberg and Charles Katz were considered by the corporation and the respondents Leo Willens and Fred Rafanello to be stockholders of the corporation is contained in Exhibit A

hereto annexed. Exhibit A is a photostat of an 173

affidavit signed by the four principals of National Kiddie Rides Inc. in support of a resolution wherein the corporation had made arrangements to borrow money from Jaris Trading Co.

After an examination of the said photostat, Exhibit A, there can be no dispute that over their sworn signatures the respondents Leo Willens and Fred Rafanello attested to the fact that the petitioners Herman Rosenberg and Charles Katz were stockholders of National Kiddie Rides Inc. The Court will note from the

date of Exhibit A that this sworn statement was 174 made by the respondents as recently as April

15, 1953.

The charitable and altruistic atmosphere which the respondents attempt to portray in their opposing affidavits regarding the petitioners' connection with the corporation is outside the scope of the actual truth. It is admitted in the answering affidavit that Rafanello is a manufacturer of “kiddie rides”. Nowhere in his opposing affidavit does the respondent Leo Willens deny the forthright statement of the original petition that he likewise is connected and deeply

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