State Bank of Rock Valley v. Andrews — 44 N.Y. St. Rep. 788

Majority

p. 788

The State Bank of Rock Valley, Resp’t, v. Wallace C. Andrews, App’lt.

(City Court of New York, General Term,

Filed March 10, 1892.)

Headnote

MarufacturingsCOmpahies—Liability of directors.

The liability of the directors of a manufacturing company for its debts, is an origin£d,one, and is joint and several. Efforts to collect from the company ismot a condition precedent, and a single director , or the entire board may be sued.

Appeal from judgment directed in faavor of plaintiff on demurrer.

James W. Hawes, for app’lt; M. P. Stafford, for resp’t.

The facts alleged are admitted by the demurrer, and under the liability there charged “ every director-shall be personally liable for all debts incurred by the corporation, etc., to an amount not exceeding $5,000.”

Under this provision the director becomes an original debtor under a contract liability. Corning v. McCullough, 1 N. Y., 47 , 61; Harger v. Same, 2 Denio, 119 ; Moss v. Same, 7 Barb., 279 , 295; Wiles v. Suydam, 64 N. Y., 173 ; Merchants' Bank v. Bliss, 35 id., 414.

Efforts to collect from the company is not a condition precedent. Miller y. White, 50 N. Y., 141 ; Rorke v. Thomas, 56 id., 565; Esmond v. Bullard, 16 Hun, 65 ; McHarg v. Eastman, 7 Rob., 137 .

The liability is joint and several, and a single director or the entire board may be sued, Bank of Poughkeepsie v. Ibbotson, 24 Wend., 473 ; Weeks v. Love, 50 N. Y., 570 ; Bartlett v. Drew, 57 id., 587 ; Roach v. Duckworth, 95 id., 399, and the remedy maybe invoked by a single creditor. Wiles v. Suydam, 10 Hun, 578 ;

p. 789

Weeks v. Love, 50 N. Y., 568 ; Bartlett v. Drew, 57 id., 587 ; Roach v. Duckworth, supra.

These principles applied to similar acts are alike applicable here.

The creditor was not obliged to go into equity.

The common law remedy is sufficient for his purpose.

The defendant might, perhaps, invoke equitable relief if he needed it, or might plead in defense that he had discharged other liabilities up to the statutory limit of $5,000.

Upon the pleadings, the judgment was properly directed in favor of the plaintiff and must be affirmed, with costs.

Van Wyck and Fitzsimons, JJ., concur.