Butler v. Smalley

Headnote

Manufacturing corporations—liability of trustees for failure to file report and for filing false report—nature of—may be enforced in same action.— Construction of statute.—Intent.

Appeal by defendant from judgment in favor of plaintiff entered on report of referee.

Action to recover $1,705, and interest, the amount of an indebtedness to the plaintiff of the Lathrop Anti-Prictionate Company, a manufacturing corporation formed under the act of 1848, upon the grounds: 1. That the defendants as trustees of said company failed to file the annual report as required by the 12th section of the said act; 2. That the defendants as officers of the said company made and signed a report false in a material representation, to wit, as to the amount of the existing debts of the company.

The case was-referred to Israel Minor, Jr., who wrote as follows:

“ The two causes, one for failing to file an annual report in compliance with § 12 of the act of February 17,1848, and the other for making a false report in violation of § 15 of that act, are not necessarily inconsistent and are properly joined in one complaint (Bonnell v. Wheeler, 1 Hun, 332 ). It is not necessary, in order to render the defendants liable under § 12 of the act, that failure to make and publish should concur with failure to file the annual report. The failure to file is of itself a sufficient violation of the act to subject them to the penalty (Gildersleeve v. Dixon, 6 Daly,

76 ). The construction given to § 12 of the act by the court of appeals in Cameron v. Seaman (69 N. T. 396), is that the twenty days mentioned in the statute, applies only to the act of making, that is, preparing, signing and verifying the report, for which twenty days from the first day of January are allowed, and not to the acts of publishing or filing; that these acts are necessarily subsequent to that of making; that the time for publishing and filing are not expressly fixed, but that in the absence of an express provision on the subject, the law implies that the filing and publishing must be within a reasonable time after the twenty days, and that this requirement, in view of the object of the statute, can only be satisfied by prompt performance and diligent action on the part of the trustees. In the case last cited, the report was prepared, signed and verified January 20, and on the same day mailed to the county clerk, who filed it on the 21st, and the 21st, the first day after the expiration of the twenty days the trustees sent it to a newspaper for publication, which published it on the 24th. This was held a compliance with the statute and the trustees were exonerated from liability.

“In the present case, though the report was made and published within the twenty days, no attempt was made to place it on file until February 13, a lapse of twenty-four days after the expiration of the twenty days allowed by statute for making the report. FTo obstacle to filing intervened, nor is any reasonable excuse offered for the delay. This certainly shows neither the prompt performance nor the diligent action on the part of the trustees required by the statute. There is here no opportunity for making such a construction as to relieve the trustees. If the delay of twenty-four days in filing is excusable, why not an indefinite period ; why not, indeed, an entire failure to file ?

“It is urged by defendants’ counsel that the neglect to file must be shown to be fraudulent; that malafides on the part of the trustees must be shown. In some of the states, the legislatures have made the liability of trustees in such cases, dependent upon their intention. This is not, how-^

ever, an element of our statute, and the trustees cannot be excused by reason of failure to prove an intentional evasion or violation of the statute.”

The referee upon consideration of the testimony held defendants liable under § 15 of the act.

The following memorandum was delivered at general term: