Allen v. Clark — 49 N.Y. St. Rep. 175

Majority

p. 175

Horace J. Allen, Resp’t, v. George C. Clark, App’lt.

(Supreme Court, General Term, Third Department,

Filed November 22, 1892.)

Headnote

1. Manufacturing companies.

Articles of incorporation, filed under the act of 1848, specified the objects of the corporation to he the purchase of a certain town and the property and franchises of a defunct iron company, to sell or lease lands or water power, to manufacture and sell trees, wood, timber and lumber produce, and erect mills : to mine and sell ores of iron, lead, etc.; aud to smelt and manufacture the same and sell the produce, and to erect or purchase blast furnaces, etc., to repair, maintain and operate a railroad, etc. Held, that such specifications were all embraced in the terms of the act, and that the provisions of the act apply to the corporation.

3. Same—Assignment of judgment against corporation carries remedy

AGAINST TRUSTEES.

An assignment of a judgment against a corporation organized under the act of 1848 carries with it the claim upon which it was founded, and .all rights and remedies for the recovery of such claim, including the remedy given by the act against trustees.

3. Same—Report.

The amendment of 1875 was not intended to relieve corporations organized before that date from making an annual report.

Appeal from judgment entered upon the report of a referee.

Action brought against defendant as a trustee of the “Clifton Mining Co.” to recover the amount of a judgment recovered against the company, it being claimed that he is liable therefor by reason of a failure to file an annual report of the company.

The articles of incorporation of said company show its objects to be, to purchase the town of Clifton in said county or so much thereof as may be found practicable, together with all the property and franchises late of the “ Clifton Iron Company ” under the several acts extending the powers of the same, and including the road bed and right of way thereof, extending through the said town of Clifton and the towns of Russell, Hermon, and Dekalb in said county, to sell or lease lands and water powers and interests in lands and water powers in said town of Clifton.

To manufacture and sell trees, wood, timber and lumber, produce of said land, and erect and maintain mills for the manufacture thereof.

_ To mine, raise, transport, ship and sell ores of iron, lead, copper, zinc, tin and silver, and to smelt and manufacture the same or any of them and transport and sell the product thereof.

To erect, construct or purchase such and so many blast furnaces, cupola furnaces, forges, puddling furnaces, or other structures or works for the manufacture of iron and steel, pig iron, mer

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chant iron, rails or other manufactures of iron and steel as may be found advisable.

To purchase land or docks, or to construct docks on lands so purchased on the river St. Lawrence at or near the city of Ogdensburgh, and to erect furnaces, forges, or other iron works thereon for the reduction of its iron ore, or other manufacture of its products and to operate the same and deal in the said products.

And to repair, rebuild or reconstruct, maintain, use and operate the railroad lately owned by the said “ The Clifton Iron Company," and to operate the same with the same engines, cars, rolling stock, fixtures, tools, implements and machinery late of said “The Clifton Iron Company,” or to purchase and use new and other rolling stock, implements and machinery thereon, and to alter the route and construction, and to sell and convey the same if advisable.

Louis Hasbrouck, for app’lt; E. H. Neary, for resp’t.

This action was prosecuted by the plaintiff' as the assignee of a judgment rendered against “The Clifton Mining Company ” of which the defendant was one of the trustees. The case discloses that the judgment was for costs in an action unsuccessfully prosecuted by “ The Clifton Mining Company," a corporation duly incorporated under the laws of this state, for alleged trespasses, alleged to have been committed by the plaintiff’s assignors in whose favor judgment was rendered- in the action, and the plaintiff in this action seeks to charge the defendant, under the provisions of § 12 of chapter 40 of the Laws-of 1848, as amended by chapter 510 of the Laws of 1875, on the ground that the trustees of said corporation, of whom he was one, had failed to make and file the report required by that section in the proper county clerk’s office within tvrent-y days after the 1st-day of January, 1886, or within twenty dajrs after the 1st of January in either of the years from 1880 to 1886, both inclusive.

That section provides that every such company “ shall within twenty days after the 1st day of January in each year, * * *" make a report * * * which shall state the amount of capital and the proportion actually paid in, the amount of its existing-debts, * * * and if any of said companies shall fail to do-so all the trustees of the company shall be jointly and severally liable for all debts of'the company then existing, and for all that shall be contracted before such report is made."

That this judgment is a debt coming within the terms of that-section is no longer an open question, as the same has been expressly so declared in Allen v. Clark, 108 N. Y., 272 -273; 13 St. Rep., 609 . It is objected that the plaintiff in this action did not show title to the judgment in him, and that he was not, therefore, a creditor of the corporation, so as to enable him to maintain this action against' the defendant, as one of the trustees.

We cannot agree with that contention. The complaint of the-corporation in the action in which this judgment was recovered charged the defendants therein as co-partners; and the defendant,, who is a trustee of the corporation, is estopped of record from now

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denying the existence of that relation, and the judgment, at least as to the plaintiff and defendant in that record, became a judgment in favor of the firm, and we think an assignment by the firm in the firm name by one of its members passed a good title to the same to the plaintiff. He, therefore, became the creditor of the corporation, and in a proper case could proceed against'a trustee for the payment of his debt

The assignment of the judgment against this corporation, organized under the acts above referred to, carries with it the claim or debt upon which it was founded, and all the rights and remedies for the recovery and collection of the same, including the remedy given by the act against the trustees. Bolen v. Crosby et al., 49 N. Y., 183 .

It is also urged that the amendment of the act of 1848 by the act of 1875 dispensed with the making of an annual report where the certificate was filed before the passage of that amendment, and in this case was fully complied "with by making a report within twenty days after the 1st of January, 1876.

We do not think the statute capable of that construction in this case. There is no apparent reason for any distinction between corporations organized before the amendment of 1875 and those incorporated after that time, so far as the policy and object of the law requiring this report is concerned; and while the word “ annually ” is omitted from § 12 “ as amended ” in 1875, the words “each year” were, we think, intended to take its place.

The apparent object of the amendment of 1875 was to relieve corporations organized, and the certificates of which were filed but a short time before the 1st of January in any year, from making this report until one full year from its organization had expired, and not to relieve corporations organized before the amendment from making an annual report.

We are aware that the general term of this court in Carr v. Risher, 50 Hun, 146 ; 19 St. Rep., 718 , a case somewhat like this, but different from it in some essential particulars, reached a different conclusion, which we would be inclined, out of respect due to that court, to follow but for the decision of the court of appeals in Allen v. Clark, supra. In that case, Earl, J., in pronouning the opinion of the court, in construing § 12, as amended by chapter 510 of Laws of 1875, uses this language: “The section provides that every such company shall, within twenty days from the 1st day of January in each year, make a report, etc.” Following with the substance of the section. It is true that the judge in this opinion does not quote the literal words of the section, but it is quite apparent that he gives the construction that court places upon the language and effect of the amendment, and reflects the reasonable interpretation of the intention of the legislature and does no violence to the well-settled rule of interpretation expressed by the court, Verona Cheese Co. v. Murtaugh, 50 N. Y, 314 -317, that “ A. penal statute will not be extended by implication or construction to cases within the mischief, if they are not at the same time within the terms of the act fairly and reasonably interpreted.”

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Mor do we think that the contention oí the learned counsel for the appellant, that at the time of contracting the debt sought to be recovered in this action “ The Clifton Mining Company ” had ceased to be a corporation, can be sustained.” The referee finds, as we think, upon sufficient evidence: “ That ‘ the Clifton Mining Company,’ was duly organized under the general manufacturing act of 1848, as amended and supplemented by other legislation of the state, and continued its corporate existence from the time o i its organization until after the commencement of this action."

It is apparent that the business of the corporation for some years prior to the commencement of this action was not prosperous, and much of its property was suffered to go to waste and decay, but it continued to maintain agencies and carry on the sale of bark and timber and lumber, which was a part of the business specified in the articles of incorporation, and did other acts in reference to its corporate property down to about the time of the commencement of this action.

It is also objected by the appellant, as the action brought against him is in the nature of a penalty, it was not assignable and that no right of action passed by the assignment against this defendant.

But the assignment in this case was of the judgment against the corporation, which was a money claim against it, established by a judgment which imported upon its face absolute verity, and its assignment to the plaintiff carried with it all the incidents attached by law to and benefits connected with it. One of its incidents was the method of enforcing collection against a trustee, and that, we think, passed by the assignment to the assignee.

This was held in Bolen v. Crosby, 49 N. Y., 183 , supra. To the same effect is Bonnell v. Wheeler, 1 Hun, 332 , wherein Miller, J., writes an elaborate opinion on which the court of appeals affirmed the judgment in 68 N. Y., 294 . See also Hoag v. Lamont, 60 N. Y, 96 ; also, 80 id., 128: 89 id., 122 ; 103 id., 429 ; 4 St. Rep., 221 ; 112 N. Y., 458 ; 21 St. Rep., 791 .

We think the numerous cases cited by the learned counsel for the appellant all distinguishable from the one at bar upon this branch of the case. The remaining question raised by the appellant’s counsel on this appeal is as to whether or not the “Clifton Mining Company ” was properly incorporated under the act of 1848 as amended, so as to subject its trustees to the provisions of § 12 of that act, and its amendments.

While the specifications in their articles of incorporation are more in detail than -those specified in the acts, yet we think that they are all embraced in the general and comprehensive terms of the “ act to authorize the formation of corporations for manufacturing, mining, mechanical or -chemical purposes, and that the provisions of that act with its amendments apply to this corporation and its trustees and officers.

On the whole case we see no error for which the judgment should be reversed.

Judgment affirmed, with costs.

Putnam and Herrick, JJ., concur.