Rafe v. Hindin
New York Supreme Court, Appellate Division
29 A.D.2d 481, 288 N.Y.S.2d 662 (1968)
- Written by Kelly Simon, JD
Facts
In 1963, William Rafe (plaintiff) and Seymour Hindin (defendant) organized a corporation (defendant). Rafe and Hindin each owned one certificate representing 50 percent of the outstanding stock. Both share certificates included restricting language, signed by both parties that (1) made the stock transferable to only the other shareholder and (2) required written permission from the other shareholder before shares could be transferred to a third party. There was no provision in the legend prohibiting the unreasonable withholding of permission to sell. In 1967, Rafe identified a third party to purchase his stock. Rafe offered to sell his shares to Hindin for the same price as the third-party buyer agreed. Hindin refused to buy Rafe’s stock and also refused to agree to the sale to the third-party purchaser. Rafe filed suit, seeking a judgment that the certificate’s legend was void and that the stock was transferable to his third-party buyer. The trial court denied Rafe’s request for summary judgment, and Rafe appealed.
Rule of Law
Issue
Holding and Reasoning (Beldock, J.)
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