Hill v. Knickerbocker Electric Light & Power Co. — 45 N.Y. St. Rep. 761

Majority

p. 761

Frederick M. Hill, Resp’t, v. The Knickerbocker Electric Light & Power Co., App'lt.

(Supreme Court, General Term, First Department,

Filed March 31, 1892.)

Headnote

1. Corporations—Directors—Disabilities.

The statutes of this state relating to disabilities of directors of corpora tians have no application to a director of a foreign corporation against which he is proceeding to collect his debt.

2. Same.

Such disabilities simply apply to the giving of preferences by the corporation, and not to the ordinary procedure at law taken by a creditor of the corporation, although he may be an officer, for the purpose of securing his debt.

Appeal from order denying motion to vacate attachment. Action to recover for services rendered to defendant, a foreign corporation, of which plaintiff was a director. The following opinion was delivered at special term:

The case of Coats v. Donnell, 94 N. Y. 178 , is conclusive authority (if any were needed) that the provisions of the Bevised Statutes as to insolvent corporations do not apply to foreign corporations. I know of no provision of law that prevents a director of a corporation from recovering a judgment against the corporation for money due to him, and from using the ordinary remedies to recover the debt.

Motion to vacate • attachment denied, with $10 costs and disbursements.

A. B. Page, for appl’t; J. A. Amundson, for resp’fc

It had been held by repeated adjudications that the statutes of this state have no extra territorial jurisdiction long before the case of Coats v. Donnell, 94 N. Y., 168 , which merely reiterated that rule. Consequently the provisions respecting corporations, contained in the-Revised Statutes, have no application to the plaintiff in this case, he being a director of a foreign corporation against which he is proceeding to collect his debt.

Neither do the principles adverted to by the counsel for the appellant in respect to the disabilities of directors and trustees of corporations. These disabilities simply apply to the giving of preferences by the corporation, and not to the ordinary procedure at law taken by a creditor of the corporation, although he may be an officer, for the purpose of securing his debt. That such was the rule at common law, seems to be recognized by the court of ap?eals in the case of Throop v. The Hatch Lith. Company, 125 N. Y., 530 ; 35 St. Rep., 816 , the disability of the director in that case being expressly based upon the provisions of the statute.

We think therefore that there was no ground presented for the vacation of the attachment and that the order appealed from was correct.

It has been urged upon the court that the appellant should be relieved from some of the hardships he has suffered arising from the action of the special term in directing a reference upon the motion to vacate the judgment. We are unfortunately unable to relieve the appellant from the burdens which were thus imposed upon him, but because of them the order iri question should be affirmed, without costs.

Van Brunt, P. J., and O’Brien, J., concur.