Case ID: ny-st-rep_32/html/0717-01.html
Source: Caselaw Access Project
Author: {"author": "Barnard, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The People, App’lts, v. The Atlantic Avenue Railroad Company, Resp’t.
    
      (Supreme Court, General Term, Second Department
    
    
      Filed July 18, 1890.)
    
    1. Corporations — Forfeiture.
    An action to annul the charter of a corporation on the ground of a suspension of its business cannot be maintained unless such suspension has continued for a year.
    2. Same — Laws 1887, chap. 529.
    A failure to observe chap. 529, Laws 1887, which provides that ten hours shall constitute a day’s work, is not a legal cause of forfeiture.
    Appeal from judgment sustaining a general demurrer to the complaint.
    Action to dissolve the corporation defendant The complaint alleges in substance:
    
      First. That the plaintiff has been duly authorized to begin this action.
    
      Second. That the defendant is a domestic corporation, incorporated under the general railroad law, passed April 2, 1850, to run cars on certain streets in Brooklyn, New York.
    
      Third. That the principal place of business of defendant is in Brooklyn, where it has operated said road for many years.
    
      
      Fourth. That § 36 of chap. 140 of the Laws of 1850 is applicable to said defendant, and that the defendant violated said •section and act and offended against the same, in that for six •successive days, from January 25 to January 31, 1889, it omitted, failed and neglected to run cars on its lines of railroad.
    
      Fifth. That it violated chap. 529 of the Laws of 1887, in that it exacted more than ten hours labor within twelve consecutive hours for a day’s work, and permitted its employes to work more than ten hours per day.
    The defendant demurred to the complaint on the ground that it does not state facts sufficient to constitute a cause of action.
    
      Charles F. Tabor, att’y-gen. {J. T. McDonough, of counsel), for app’lts; W. W. MacFarland, for resp’t
   Barnard, P. J.

By § 1785 of the Code it is provided that an .action may be maintained to dissolve a corporation “where it has .suspended its ordinary and lawful business for at least one year.” This is the only provision of law which authorizes a dissolution for a suspension of the business of the corporation. Section 1798 of the Code is not in conflict with § 1785. Section 1798 permits the attorney-general to bring an action against a corporation created under the laws of this state, and among the causes specified for vacating a charter of a corporation is, when a corporation has forfeited its privileges and franchises by a failure to exercise its powers. This makes no different rule from the one established in § 1785 and it is to that section the attorney-general must look for a declaration as to what constitutes a forfeiture of a franchise by a failure to exercise its power.

It may therefore safely be conceded that an action will lie for an omission of duty amounting to a breach of trust by a corporation but the legislature have plainly given a period of one year during which an omission to transact its business shall not be sufficient to annul the charter. There is, therefore, no cause of action stated in the complaint under that branch of it which avers a discontinuance of business for six days and there is no averment that the company had not the power and wish to continue the business. Bradt v. Benedict, 17 N. Y., 93.

By chap. 529, Laws of 1887, ten hours labor to be performed within twelve hours was the standard day’s work to be exacted by the defendant of its employees, and the act made a violation of same a misdemeanor as to all officers and agents of the corporation who exacted more than ten hours a day. The complaint avers a failure to observe that law as a reason for annulling the charter of the defendant. It is not a legal cause for a forfeiture of the charter. The act does not so provide, but it does provide a criminal punishment for its violation as to its officers and agents who offend against its provision. The act is not in terms an ■amendment to the railroad act, and it is not an amendment by implication. A corporation must act by agents and these agents cannot destroy the corporation by a criminal act, in the absence of the expression of a legislative intent to that effect in the legislative act which creates the crime.

The judgment should therefore be affirmed, with costs.

Pratt, J., concurs.