Case ID: ny-st-rep_6/html/0393-01.html
Source: Caselaw Access Project
Author: {"author": "Learned, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Horace J. Allen v. George C. Clarke.
    
      (Supreme Court, General Term, Third Department,
    
    
      Filed February, 1887.)
    
    1. Corporations—Liability of trustees—Laws 1848, chap. 40, § 13 as AMENDED, BY LAWS, 1875, CHAP. 510.
    A judgment for costs against a corporation in an action for trespass commenced by it is not such a debt of the corporation as a trustee is liable for, on the ground of failure to make a report as required by Laws 1848, chap. 40, section 13, as amended by Laws 1875, chap. 510.
    3. Same—Does not extend to judgment for costs against corporation.
    The liability of a trustee is limited to such debts as are “ contracted *' by the company, and a judgment for costs can in no accurate sense be said to be a debt contracted by the company.
    
      E. H. Neary, for app’lt; L. Hasbrouck, for resp’t.
   Learned, P. J.

The single question presented by this appeal is whether a judgment for costs against a corporation, in an action for trespass commenced by it is such a debt of the corporation that the defendant, a trustee, is liable therefor, on the ground of the failure to make the report required by the twelfth section, chapter 40, Laws 1848, as amended by chapter 510, Laws of 1875.

The judgment was recovered September 21, 1885. The failure to make the report was in January, 1884, 1885 and 1886. The last is evidently the only one material.

The judgment was in January, 1886, an existing debt, and if a report had been made should have been included therein as such. But the liability expressed is “for the debts of the company then existing, and for all that sha.1T be contracted before such report shall be made.” These words, “shall be contracted,” explain the words “existing debt,” and limit them to such debts as the corporation has contracted. In no accurate sense can the corporation be said to have contracted this judgment for costs, although a judgment is sometimes spoken of as a contract.

The case of Miller v. White (50 N. Y., 137) seems decisive of this case. In that case it was held that the judgment against the corporation was not even prima facie evidence of the debt against a trustee in an action like the present. It was held to be necessary, therefore, to prove the debt by evidence other than the judgment. To do that would be impossible in this case. There was no debt prior to the entry of the judgment. Ho proof could be given (other than the judgment) of any debt of the corporation, because no such debt existed prior to the judgment. And if the judgment is not even prima facie evidence, then no evidence can be given. And for a very good reason, viz., that the corporation owed no debt until the entry of the judgment made it a debtor.

The spirit of the statute does not embrace this case.

The interlocutory judgment is affirmed, with costs.

Mayham, J., concurs; Landon, J., concurs on first ground.