Hyperlawhypertext legal database Camp Manufacturing Co. v. Reamer 43 N.Y.S. 1027

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Camp Manufacturing Co. v. Reamer

43 N.Y.S. 1027 Court N.Y. App. Div. Decision date 1897-02-19 English

Delivered by PATTERSON, J.

Contents

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p. 1027
CAMP MANUF’G CO. v. REAMER et al.
(Supreme Oourt, Appellate Division, First Department.
February 19, 1897.)

Headnote

■Corporations—Liability of Directors—Failure to File Annual Reports.
A creditor of a corporation may sue the directors at law upon his debt, where they have failed to make annual reports, as required by Laws 1892, c. 688 (Stock Corporation Law) § 30, without prior recovery of judgment against the corporation, and return of execution unsatisfied. 43 N. Y. Supp. 673 , reversed.
Appeal from special term, New York county.
Action by the Camp Manufacturing Company against Job M. Beamer, impleaded with James Harriman. From an interlocutory judgment sustaining a demurrer to the complaint ( 43 N. Y. Supp. 673 ), plaintiff appeals. Reversed.
Argued before VAN BRUNT, P. J., and BARRETT, RUMSEY, WILLIAMS, and PATTERSON, JJ.
p. 1028
D. M. Porter, for appellant.
Charles D. Ridgway, for respondents.

This action was brought to recover from the defendants, directors of a domestic corporation, the amount of an indebtedness of that corporation to the plaintiff, the alleged ground of liability of the defendants being that the directors'of the corporation had failed to make and file a report as required by section 30 of the stock corporation law (chapter 688 of the Laws of 1892). There .is-no allegation in the complaint of the recovery of a judgment against the principal debtor, and the return of an execution unsatisfied, and a demurrer was interposed to the complaint on the ground that it did not contain facts sufficient to constitute a cause of action, for the want of such an allegation. The learned judge below sustained the demurrer, and held that the obligation of the directors, as imposed by section 30 of the act referred to, ’was a secondary liability, and was in analogy with that imposed upon directors by the twenty-fourth section of the same law, and that within the decision of the court of appeals in the case of the .National Bank of Auburn v. Dillingham, 147 N. Y. 603 , 42 N. E. 338 , it was necessary for the plaintiff" to exhaust its remedy at law against the principal debtor before resort could be had to the directors individually.

The precise question involved in this appeal, which is from the judgment sustaining the demurrer, was disposed of by the appellate-division of the supreme court in the case of Bose v. Ohadwick, 9 App;. Div. 311, 41 N. Y. Supp. 190 . It was there held that it was not necessary, in an action under the thirtieth section of the stock corporation law, for the plaintiff to proceed against the principal debtor-before resorting to Ms remedy against the directors. It was also1 declared that the case of the National Bank of Auburn v. Dillingham, supra, was not in point in the consideration of tMs question. The-case of Bose v. Chadwick is conclusive of the question, and the authorities cited in the opinion of the court in that case abundantly establish the correctness of the decision.

The interlocutory judgment sustaining the demurrer must be reversed, and judgment directed overruling the demurrer, with costs, with liberty to the defendants to withdraw the demurrer, and answer-over within 20 days, upon the payment of the costs below and in this-court. All concur.

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