Carr v. Risher — 19 N.Y. St. Rep. 718

Majority

p. 718

John F. Carr, Resp’t, v. John C. Risher, App’lt.

(Supreme Court, General Term, First Department,

Filed November 24, 1888.

Headnote

I. MANUPACTURIN& CORPORATIONS—FAILURE OP TRUSTEES TO PILE REport—Liable por' what debts—Laws 1848, chap. 40, § 12.

This action was brought to recover the amount owing on bonds issued

p. 719

by a company incorporated under Laws 1848, chapter 40, in September, 1865. The bonds were issued on September 28, 1865, and made payable on October 1, 1868, with interest. The defendant was a' trustee of the company in January, 1867. No report was made or filed within twenty days from the first day of that month, as was then required to be done by. Laws 1848, chapter 40, section 12. Upon this ground, the defendant having been in the meantime a non-resident of this state, this action was brought to establish his liability for the amount unpaid on the bonds. IP seems that the debt for which it is sought to make a trustee liable undei;, Laws 1848, chapter 40, section 12, must be in existence at the time of default made in filing a report, pursuant to that provision, but need not be due.

2. Same—Laws 1848, chap. 40, § 12—To What exten" repealed bt Laws 1875, chap. 510, amendatory thereof.

It was provided by Laws 1848, chapter 40, section 12, mat every company incorporated under that act should annually, within twenty days; from the first day of January, make a report of the nature therein provided. Laws 1875, chapter 510, amendatory of that provision; requires all such companies to make the report within twenty days from the first day of January, if a year from the time of the filing of the certificate of incorporation shall then have expired, and if so long a time shall not have expired, then within twenty days from the first of January in each year after the expiration of tho year, from the filingo! such report. Held, that this change repealed only so much of Laws 1848, chapter 40, section 12, as it omitted to include.

3. Same—Obligation of trustees to file report—Laws 1848, chap., § 12, as amended by Laws 1875, chap. 510.

Held, that so much of Laws 1848, chapter 40, section 12, as was continued in force by Laws 1875, chapter 510, directed no more than that every company incorporated under the act should make the report within twenty days from the first of January of the year following the January, of the year in which the company was incorporated.

4. Same—Laws 1848, chap. 40, § 12, as amended by Laws 1875, chap; 510—What constitutes compliance with.

Held, that the omission of the word 1 ‘ annually ” in the amendatory act so far changed the law in its application to this case as to dispense with annual reports. That as there was neither averment nor proof that the report was not made in 1866, it might be inferred that it was made, filed and published, as that was the duty of the trustees, and that it was conceded to have been so máde, filed and published in years subsequently to 1867, and that no liability was left upon the defendant for the omission to make, publish and file the report in January, 1867.

Appeal from a judgment recovered on the verdict of a jury and from an order denying a motion for a new trial..

Thomas G. Shearman, for app’lt; John V. Arnold and Gilbert D. Lamb, for resp’t.

The verdict and judgment were recovered against the defendant for the amount owing on eleven-bonds of $1,000 each, issued by the Pittsburg and Martinez Silver Mining Company, on the 28th of September, 1865. The bonds were made payable on the 1st of October, 1868, with interest semi-annually, on the 1st of April and Octoher, in each year. The company was incorporated under the manufacturing laws of the state of New York-in-September, 1865, and the evidence tended to establish the

p. 720

fact to. oe that the defendant was a trustee of the company in. January,, 1867, and that no report was made or filed within twenty days from the first day of that month, as that was then required to be done by section 12 of chapter 40 of the Laws of 1848. And it was on this ground, the defendant having been, in the meantime, a non-resident of this state, that he was held liable for the amount unpaid on these bonds. A great variety of objections have been presented to the right of the plaintiff to maintain the action on the proof produced at the trial, but neither of .these obr jections appear to stand upon any substantial foundation, except the objections that the debt was not due at the time of the alleged default, and that so much of the statute as created the liability was afterwards repealed by chapter 510! of the laws of 1875, which was before this suit was commenced. In support of the first of these two objections, the case of Nimmons v. Hennion (2 Sweeney, 663) has been cited as controlling, but it is certainly extremely doubtful whether this case contains a correct exposition of the-law. For all that the statute has required in this respect is that the debt shall, be existing at the time of the failure to- male©' and file the report. And these debts did so exist, although they were not due, and that was considered the true construction of the statute in Haight v. Naylor ( 5 Daly, 219 ), and what was incidentally said upon the same subject in Garrison v. Howe ( 17 N. Y., 458 ), Leggett v. Bank of Sing Sing ( 24 N. Y., 283 ), and Jones v. Barlow ( 62 N. Y., 203 ) is in the same direction.

But to dispose of the action, this point is not required to be actually decided, for-the second objection which has been mentioned seems to be fatal to the right of the plaintiff to maintain it. As the law was originally enacted in 1848, every company incorporated under it was required, annually, within twenty days, from the first of January, to make a report, which should be verified, published and filed, stating the amount of capital of the company, the proportion actually paid in, and the amount of its existing debts. And for a failure to make, publish and file such report, all the trustees of the company were declared to be jointly and severally liable for all its existing debts, and such as should be-contracted before the report should be made.

By the act of 1875, this section underwent an important- and material change. It was then amended, so as to require the company to make- the report within twenty days from the first of January, if a year from the time of the filing of the certificate of incorporation, shall then have expired, and if so long a time shall not have expired, then within twenty days from the first of January in each year after the expiration of the year, from the time of filing such certificate. This change, it is true>. only repeals so. much of

p. 721

section 12 of chapter 40 of the Laws- of 1848, as it omitted to-include. Moore v. Mausert, 49 N. Y., 332 .

But the omission which was then made had an important- effect upon the; liability of the defendant, for it left only so •much of the act of 1848 applicable- to the default,, or omission, relied upon in support of this, action, as required the-company to make the report within twenty days from the-first day of January, without indicating what January was-intended. By omitting in the amendment of the section the-word “ annually,” the law was-left as-to preceding cases, in such language as to require uo more than that the report-should be made within twenty days from any first day of January, without directing that to be done annually, or specifying any first day of January from which the time was to be calculated. And so much of section 12 of the. acfc of 1848, as was continued in force by the aet of 1875, directed- no more than that: every company formed under the-act should make the report within twenty days from the first of January of the year- following the January of the year in which the company was incorporated.

To maintain the liability of the defendant, in this case the word ‘‘annually ” as it was employed in the act of 1848, was essential. That, is to be inferred, from the use of that*» word in the act of 1848. Without it the- obligation, or duty, intended then to be created, was not complete. If it had been, the word would not have been used at all. And its omission in 1875 consequently, so far changed the law in its application to this case, as to dispense with annual reports.

As it was- left by the amendment in 1875,, the law has-been, observed, for as there is neither averment nor proof, that the report was not made in 1866, it may be inferred that it was then made, filed and published, as that was thq duty of the trustees. And that it was made, tiled and published after 1867 is conceded by the complaint. By omitting or repealing this word, as that was the effect of the act of 1875, the penalty which had been incurred by the failure to make the report within the first twenty days of the month of January, 1867, was superseded and extinguished.

This general subject was considered in Victoria Webb, etc., Co. v. Beecher ( 26 Hun, 48 ), and the change in the statute was held to-relieve the defendant then before the court from liability. And this view was further sustained by its affirmance in the court of appeals, 97 N. Y., 651 .

No other failure to make, publish or file the report, has-been. alleged as a ground of this action, but it was conceded that the report was made as it should have been after the year 1867. By omitting the use of the word “annu

p. 722

ally” from this section of the act of 1848, no liability was left upon the defendant for the omission to make, publish and file the report in January, 1867. And the consequence is that the plaintiff was not entitled to maintain the action, and the judgment and order should be reversed, and a new trial directed,' with' costs to the defendant to abide the event.

Van Brunt, Ch. J., and Brady, J., concur.