Case ID: ny-st-rep_50/html/0644-01.html
Source: Caselaw Access Project
Author: {"author": "O’Brien, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James A. Whitney, Resp't, v. Charles L. Cammann et al., App'lts.
    
    
      (Court of Appeals,
    
    
      Filed February 28, 1893.)
    
    3. Manufacturing companies—Trustees—Report.
    The statute requires the annual report not only to be made, but also to be published and filed, and for a neglect to either file or publish the trustees become liable.
    3. Same.
    The fact that the secretary of the company to whom the report -was> de livered neglected to file it will not relieve the trustees from their liability. It is their duty to see that it is filed.
    
      Appeal from judgment of the New York superior court, general term, denying motion for new trial and ordering judgment for plaintiff upon verdict.
    
      Louis Marshall, for app’lts;
    
      Roscoe H. G banning, for resp’t
    
      
       Affirming 45 St. Rep., 570.
    
   O’Brien, J.

The defendants are the trustees of a manufacturing corporation, organized in October, 1884, under the act of 1848 as amended by chap. 510 of the Laws of 1875, and carrying on its business in the city of New York. The plaintiff obtained the judgment appealed from for professional services performed for the corporation and contracted for in November, 1886, and rendered between the 17th of February, 1888, and the 1st of January, 1889, on the ground of the failure to file the annual report prescribed by § 12 of the act of 1848, as amended by chap. 510 of the Laws of 1875. The report was made out and signed on the 20th of January, 1888. The next day it was published in a newspaper, but it was never filed. It has been often held that this statute was highly penal and to be construed according to the rules of construction applicable to such statutes, not to be extended by construction or made to embrace cases not within the language used. Bruce v. Platt, 80 N. Y., 381; Whitaker v. Masterton, 106 id., 280; 8 St. Rep., 888; Bonnell v. Griswold, 80 N. Y., 135; Wallace v. Walsh, 125 id., 26; 34 St. Rep., 426.

A party seeking to make trustees of a corporation liable under this statute, for failure to comply with it, must allege and prove affirmatively every fact and circumstance upon which his right to recover depends, and nothing will be presumed in his favor. Whitney Arms Co. v. Barlow. 63 N. Y., 62; Van Dyck v. McQuade, 86 id., 56.

Reasoning from these premises the learned counsel for the defendants attempts to show that the penalty is imposed only for default in making the report and not for default in filing or publishing. Such a construction would of course defeat every useful purpose which the law was intended to serve. The law was intended for the information and protection of creditors and persons dealing with the corporation and a report properly made out, signed and verified, but left in the office of the corporation, would not accomplish this purpose. The statute requires the report not only to be made, but also to be published and filed, and for a neglect to either file or publish the trustees become liable. If the trustees make and verify the report within the time prescribed by the statute it may be filed or published as soon as practicable thereafter without incurring the penalty of the statute. Cameron v. Seaman, 69 N. Y., 396; Butler v. Smalley, 101 id., 71.

When the trustees have made the report within twenty days from the first of January in each year, the filing and publishing may be done the next day or as soon thereafter as may be consistent with reasonable diligence and good faith. But as in this case the report made or any other report during the year never having been filed the defendants failed to comply with the statute in one of its substantial requirements, and, therefore, they became liable to the class of persons specified, of which the plaintiff was one. If it be true, as claimed, that the secretary of the company to whom the report was delivered neglected to tile it, that would not relieve the defendants. The obligation of filing was imposed by the statute upon them and they could not relieve themselves from responsibility by intrusting this duty to another who failed to perform it. The judgment should, therefore, be affirmed.

Judgment affirmed, with costs.

All concur.