Case ID: ny-super-ct_41/html/0220-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Curtis, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE WHITNEY ARMS COMPANY, Plaintiff and Appellant, v. SAMUEL L. M. BARLOW, Defendant and Respondent.
    Before Curtis, and Sanford, JJ.
    
      Decided, May 1, 1876.
    In an action brought to enforce a liability of a trustee of a manufacturing company formed under the act of February 17, 1848, based upon an alleged neglect to file and publish reports required under the act, the plaintiff must fully establish and prove the default, and that the debt was incurred previous thereto.
    An admission on the part of the defendant, of the neglect of the corporation to file a report as required by the act, in any one year, does not presume a like neglect in after years, nor does such admission make it necessary that the defendant should prove that the required reports subsequent to the default were duly made and tiled.
    .Appeal from a judgment in defendant’s favor, entered upon a verdict directed by the court.
    The plaintiffs sue to enforce a liability against the trustees of the American Seal Lock Company, for failing to file and publish ieports, as required by § 12 of the act for the formation of corporations for manufacturing purposes, &c., passed February 17, 1848.
    The American Seal Lock Company was incorporated on May 17,1870, and on October 6, 1871, entered into a .contract with the plaintiffs, that the latter should manufacture for, and deliver to them twenty thousand circular railroad locks. The American Seal Lock Company filed its first report on January 18, 1872, and the next on January 17, 1878. The plaintiffs claim that one hundred of the locks were delivered prior to the filing of the report in January, 1872, and that the report filed in January, 1873, states the amount of capital to be three hundred thousand dollars, when in truth, it was four hundred thousand dollars, and that consequently, the trustees became severally liable, under § 12 of the act, “ for all the debts of the company then existing, and for all that shall be contracted before such report shall be made.”
    The defendants urge that there is no evidence of any locks being delivered prior to the filing of the first report, January 18, 1872, that all the-locks delivered at any time were paid for by notes which were renewed, and which renewal notes, viz.: one for two thousand four hundred and seventy-nine dollars and thirteen cents, maturing August 2,1872, and the other for three thousand four hundred and forty-three dollars and nineteen cents, maturing September 9, 1872, constitute the claims contained in the complaint. The defendants also answer that the report of January 17, 1873, states truly the amount of capital.
    
      D. M. Porter, for appellant.
    
      W. W. MacFarland, for respondent.
   By the Court.—Curtis, J.

The evidence fails to show that any locks were delivered to the American Seal Lock Co. by the plaintiffs before the filing of the report of January 18, 1872. The witnesses by whom it was attempted to show that one hundred locks had been delivered prior to the filing of the report, appear to have had little or no personal knowledge of such delivery, and the receipts taken by the plaintiff the day of, or the day after, the deliveries, are all dated subsequent to the time of the tiling othe report. The debt for these locks delivered under the contract, subsequent to its execution, can not be said to have been contracted when the agreement was signed (Garrison v. Howe, 17 N. Y. 465).

But if the proofs showed a delivery of any locks during the default of the company prior to such filing of the report, a difficulty might arise as to how far they could be followed, and separated from a series of renewal notes embracing other and subsequent indebtedness, and the penalty of liability thus enforced against the trustees. The liability of the latter being limited not only to an existing debt against the corporation, but to one presently due and sueable, and upon which an action could be commenced against the corporation, it is apparent the plaintiffs’ demand could not be sustained, previous to the maturity of the notes given by the company, and embracing it. These notes matured in 1872, subsequent to the filing of the report of January, 1872.

The plaintiff claims that there is no evidence that the reports of 1872 and 1873 were published as inquired by statute, and that the report of 1873 states the amount of capital three hundred thousand dollars, when it should be four hundred thousand dollars. He insisted that as no report was filed or published in 1871, the presumption of law is, that the default continued until the defendant showed that the report was filed and published, and that it does not appear that any report was ever published as required by § 12 of the Act.

It is the duty of the plaintiff, who sues to enforce a statutory penalty, to make out his case. In his complaint he alleges a violation of the statute by the trustees, in omitting to file and publish these reports, which they by answer controvert. It is true they admit that in the year 1871 they were in default, but such admission carries with it no legal presumption that they were in default in subsequent years. Because a person was guilty of abreach of the statute in January, 1871, the law does not presume him to have been equally culpable in January, 1872, and in January, 1873. The presumption is, that at other times he is innocent, and has complied with the law, until the contrary is established against him. Locus pcsniteniice is not closed upon the first offense, and that it has been availed of the law presumes. If the plaintiff relied to sustain his action upon a default of the trustees in publishing the report, it was his duty to prove such default.

The report of 1873 being similar in form to that of 1872, no question arises in that respect. The objection that it states a less amount of capital than actually existed, is not one that tends to impute bad faith to the trustees, by exaggerating the pecuniary strength of the corporation, nor to call for the most stringent construction in establishing a liability for the penalty.

The act requires the report to “ state the amount of capital, and of the proportion actually paid in.” It appears that on April 9,1872, a stockholders’ meeting was held, at which it was voted to increase the capital of the company, one hundred thousand dollars. A certificate of such action by the stockholders was on the next day filed in the county clerk’s office, and on the same day the trustees met, and voted that the new stock so authorized should not be issued, without the further order of the board. It is in evidence that after this initiatory action to increase the stock, no further steps were taken, and the one hundred thousand dollars new stock was never issued. This appears to dispose of the question, as to whether there was an increase of the capital stock, irrespective of what may have been the power of the trustees, to vote that it should not be issued. In fact, it was never paid into the com pany nor issued, and it would have been an untrue statement, if the trustees in their report in January, 1873, had represented that the amount of the capital was four hundred thousand dollars.

There were no questions of fact at the trial, that should have been submitted to the jury, and none of the exceptions call for a reversal of the judgment.

The judgment appealed from, should be affirmed.

Sanford, J., concurred.