Andrews v. Murray — 9 Abb. Pr. 8

Majority

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ANDREWS a. MURRAY.

New York Common Pleas;

Special Term, January, 1859.

Headnote

Pleading.—Liability of Trustee for Debt of Corporation.

The complaint in an action to enforce the personal liability of a trustee for a debt of the corporation, in alleging the incorporation showed that the number of trustees was fixed at three, and that the plaintiff was one of the trustees for the first year; and then alleged that in the following year three other persons were elected as trustees.

Held, that it was sufficiently implied that the plaintiff ceased to be a trustee. The action was to recover from the trustee the amount of a judgment recovered against the corporation in 1855, and the complaint alleged that the annual report required by law was not made within twenty days from the first of January, 1855, nor at any time since.

Held, a sufficient allegation of neglect to report in 1858.

Whether the action could be maintained on showing only a neglect before recovery of the judgment against the corporation,—Query?

A judgment for costs against the corporation is a “debt” within the provisions of the statute relative to the formation of manufacturing, &c.; corporations (Laws of 1848, 54, §12), rendering the trustees personally liable, in certain cases, for debts of the corporation.^[1]

Form of a complaint in such an action.^[2]

Demurrer to complaint.

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This action was brought to enforce payment of a debt due from the Rahway Steam Brickworks Company, against the defendant as trustee of the company, on the ground of default on the part of the trustees in filing an annual report, as required by law.

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The allegations of the complaint were as follows:

That at said city of New York, on or about the 25th day of April, in the year 1853, the said defendant, together with one Pierre O. Kane and the plaintiff, being desirous of forming a company for the purpose of carrying on the manufacturing and mechanical business hereinafter specified, in pursuance of the act entitled, “An act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes,” passed-February 17th, in the year 1848, did, in accordance with said act, make, sign, and acknowledge, in due form of law, be

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fore one Lewis Hurst, who was then and there a commissioner of deeds, in and for the city and county of New York, duly qualified and competent to take the acknowledgment of deeds, a certificate in writing, which, with the said commissioner’s certificate, was in substance as follows :

[Here followed a certificate of incorporation, signed by the plaintiff, the defendant, and a third party. The certificate fixed the number of trustees at three, and named the three corporators who signed it as the trustees for the first year.]

And the said plaintiff further says, that afterwards, to wit, on said 25th day of April, in the year 1853, the subscribers to said certificate filed the same, so acknowledged, in the office of the clerk of the city and county of New York, and that on the 26th day of April, in the year 1853, they filed a duplicate thereof in the office of the secretary of state of this State; and thereupon the subscribers to said certificate, and their successors, became, and ever since have been, a body politic and corporate, in fact and in law, by the name of the “ Kahway Steam Brick-works,” under and in pursuance of the act aforesaid.

And the said plaintiff further says, that' immediately thereafter, to wit, on or about the said 25th day of April, in the year 1853,- the said subscribers to said certificate, being then and ever since citizens of this State, accepted said office of trustees, and entered upon and qontinued to discharge the duties thereof until the 4th day of April, 1854; and that afterwards, on said 4th day of April, 1854, trustees were duly elected to manage the business of said company for the year ensuing, and that Clarence Livingston, Chauncy Barnard, and said Pierre C. Kane were elected such trustees. That on or about the 13th day of October, in the year 1854, said Pierre C. Kane resigned his said office, and the defendant was duly elected a trustee of said company in the place of said Kane, and that the defendant has ever since continued to he a trustee as aforesaid, and as such has continued to conduct and manage the stock, property, concerns, and business of said company.

And the said plaintiff further says, that the said company did not, within 20 days from the first day of January, 1855, make, and have not at any time since made a report stating the amount of its capital, and of the proportion of the same actually paid in, and the amount of the existing debts of the said com

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pany at the period last aforesaid, or at any period subsequent thereto; nor did said company cause any such report to be signed by its president and a majority of its trustees, nor to be verified by the oath of its president, nor by the oath of its secretary, nor to be filed in the office of the clerk of the city and county of New York; nor to be published in any newspaper printed and published in the city and county aforesaid; and the said defendant, and also said company, wholly neglected and refused during said period, and have ever since neglected and refused, to cause any such report to be made, signed, verified, filed, printed, and published, in conformity with the provisions of the 12th section of said act; and they, the said company and the said defendant, as such trustee, have at all times neglected and refused, and still do neglect and refuse, to comply with the provisions thereof.

And the said plaintiff further says, that at the city of New York, on or about the 13th' day of October, 1854, the said company, by a resolution of its trustees, of whom the defendant was one, instituted an action in the Supreme Court of this State against the plaintiff, by summons and complaint; and thereupon such proceedings were had that the said Supreme Court, on the 16th day of March, in the year 1857, dismissed said complaint, with costs; and that said costs were afterwards, on the 6th day of April, in the year 1857, duly adjusted and taxed, in the sum of $1212.97, on which 6th day of April aforesaid the judgment-roll in said action was duly filed in the office of the clerk of the city and county of New York.

And said plaintiff further says, that the said judgment, so recovered by the plaintiff against said company, still remains in full force and effect, and that the same has not, nor has any part thereof, been in anywise paid or satisfied.

And the plaintiff says, that the defendant, by means of the premises, became, and is, liable to pay to the plaintiff the said sum of $1212.97, together with the lawful interest thereon from the said 6th day of April, 1857.

Wherefore, &c.

The defendant demurred, on the ground that the complaint did not state facts sufficient to constitute a cause of action.

H. & C. Andrews, for the plaintiff.

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Fullerton & Dunning, for the defendant.

The complaint, upon examination, will be found to contain enough to constitute a cause of action. The certificate which was filed on the 25th of April, 1853, provided that the trustees of the company should consist of three persons, and named them as the persons who should manage the concerns of the company for the first year. The plaintiff was one of the persons so named. It is alleged in the complaint that he accepted the office of trustee, and entered upon and continued to discharge the duties thereof until the 4th of April, 1854, when three persons, who are also named, were elected trustees to manage the-business of the company for the ensuing year. This is not stating the fact directly that the plaintiff had ceased to act as a trustee, but it is a statement of facts which admits of no other conclusion, and is clearly sufficient. The plaintiff’s term expired by limitation (act of 1848, §§ 1,2,3), and upon the election alleged he ceased to be a trustee. This view disposes of the first objection, urged on the demurrer.

The complaint also alleges that the report—which is required by section 12 of the act, supra, to be annually made, and within twenty days from the first day of January in each year—was not made within twenty days from the first day of January, 1855, or at any time since, showing the amount of capital paid in at that period, or at any period subsequent thereto; and this, though it is an indefinite way of stating the fact, is substantially an allegation that no such report was made within twenty days from the first of January, 1858. I am led to comment on this feature of the complaint, because I think that if the action were predicated on the omission to file the report required within the twenty days from the first of January, 1855, this action could not be maintained, inasmuch as the judgment was not recovered, and the debt did not exist until April 6,1851. If the complaint was demurrable because indefinite, I might feel it to be my duty to give judgment for the defendant; but, such not being the law, it is necessary to determine whether, assuming all the facts alleged to be true, the plaintiff is entitled to recover.

Applying this rule, then, and it appearing that no report was filed within twenty days from the 1st of January, 1858, the only question remaining to be disposed of is, whether a judgment for

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costs is a debt within the meaning of section 12 of the act of 1848 mentioned. The legal acceptation of debt is a sum of money due by certain and express agreement. (Jacobs' Law Dic.; 3 Blackst. Com., 154; Denny a. Manufacturing Company, 2 Hill, 233 .) It is also said by Jacobs, under “debt,” that “whatever the laws order any one to pay, that becomes instantly a debt, which he hath beforehand contracted to discharge ;” and I doubt not that a judgment against the Rahway Steam Brickworks Company for costs is a debt existing against them within the meaning of the section referred to. The statute embraces debts existing, and all that shall be made. (See Garrison a. Howe, 3 E. P. Smith's (17 N. Y.) R., 458.)

I am of opinion, therefore, that judgment must be given for the plaintiffs on the demurrer, with liberty, however, to the defendants to answer in twenty days, on payment of the costs of the issue of law.

Order accordingly.