Opinion
November 13, 1967
Order of the Supreme Court, Queens County, dated October 26, 1966, which granted a motion by defendants Gordon to dismiss the complaint, pursuant to CPLR 3211 (subd. [a]), and judgment of said court entered in pursuance of said order on November 2, 1966 reversed, on the law, with $30 costs and disbursements against defendants Gordon, and said motion denied, without costs. The time for defendants Gordon to answer the complaint is extended until 20 days after entry of the order hereon. The action is for a declaratory judgment that plaintiff is the owner of 50% of the capital stock of defendant Main Tavern, Inc., and for related relief. The complaint was dismissed on the ground that judgments in a prior proceeding pursuant to CPLR article 78 and in a prior action for a declaratory judgment barred the instant action under the doctrines of res judicata and collateral estoppel. We do not agree with that conclusion. The article 78 proceeding was instituted by plaintiff and her mother, since deceased, alleging that they were stockholders of Main Tavern, Inc., and seeking an inspection of the corporation's books and records and other relief. The respondents in the proceeding were the corporation, the present defendant George Gordon and a third party. Gordon's answer put in issue the petitioners' ownership of the stock; and a trial of that issue was directed. However, no trial was had and no evidence was adduced, the proceedings before the Special Term designated to hold the trial consisting merely of arguments of counsel, principally on a motion by Gordon to dismiss the petition on the ground that the court lacked jurisdiction of the matter. The Special Term granted the motion, stating in its decision "that in the absence of adequate and convincing evidence that petitioners are shareholders of Main Tavern, Inc., the court is without jurisdiction to entertain their application". We are of the opinion, however, that the court's statement was inaccurate. The court had jurisdiction over the parties and the subject matter; and the dismissal of the proceeding was not for lack of jurisdiction but for failure to show a right to the relief sought (cf. Matter of Kahn [ Nat. City Bank], 258 App. Div. 632, app. dsmd. 284 N.Y. 515). Authorities such as Weissmann v. Euker ( 1 A.D.2d 30), holding that a dismissal for lack of jurisdiction is not a judgment on the merits which will bar a subsequent action are, therefore, inapplicable. However, it is our opinion that the dismissal of the article 78 proceeding, on motion and without the taking of any proof, was equivalent to the dismissal of the petition for failure to state a cause of action and was not, therefore, an adjudication barring a subsequent action on a sufficient complaint (cf. Allston v. Incorporated Vil. of Rockville Centre, 25 A.D.2d 545). Moreover, if it be assumed that the dismissal was for failure of proof, such dismissal would be in the nature of a nonsuit and, similarly, would not bar a subsequent action (cf. Watkins v. Pacific Fin. Corp., 259 App. Div. 685, 687; Kaplan v. Friedman Constr. Co., 148 App. Div. 14, 18). The prior action for a declaratory judgment was instituted by Max and George Gordon, defendants here, against Main Tavern, Inc., and resulted in a judgment declaring that they were the owners of the stock which plaintiff claims in the instant action. However, plaintiff, who was not a party to that action, was not bound by the judgment therein, even though she was advised of its pendency. She was not offered control of the defense of the litigation and so was not vouched in ( Cole v. Long Is. Lighting Co., 14 A.D.2d 922); and in our view plaintiff was not precluded from bringing an independent action by her failure to intervene in the prior declaratory judgment action. Christ, Acting P.J., Brennan, Hopkins and Munder, JJ., concur; Benjamin, J. concurs in the result.