Case ID: misc_5/html/0205-01.html
Source: Caselaw Access Project
Author: {"author": "Gildersleeve, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wilson Manufacturing Company v. Schwind.
    (New York Superior Court—Special Term,
    October, 1893.)
    The complaint in an action by a foreign corporation authorized to do business in this state, alleged that defendants were, at all the times mentioned in the complaint, directors of a corporation organized under Laws of 1875, chapter 611, as amended; that between September 9, 1892, and December 30, 1892, plaintiff had sold and delivered to said defendant corporation, at its request, at New York city, certain merchandise, and that part of the purchase price was due ; that plaintiff and said company were duly authorized to make said contract, and that said defendant corporation did not, during January, 1893, nor did the defendants or any of the directors of said corporation, make and file the annual report, as required by law. Held, that the complaint was not demurrable on the ground that the court had no jurisdiction of the subject-matter of the action, because the complaint having alleged a sale and delivery at New York city on request, the cause of action was brought within subdivision 2 of section 263 of the Code. As under the statute (Laws 1892, chap. 688) all the directors were jointly and severally liable for a failure to make and file the report, a demurrer on the ground of misjoinder or defect of parties defendant could not be sustained.
    
      The complaint did not state whether or not the defendant company made and filed its report before May 1, 1893, or whether it did or did not do business without the United States. Held, that as the statute provides “that every stock corporation except *.* * shall annually, during the month of January, or, if doing business without the United States, before the first day of May, make a report,” etc., the complaint was demurrable on the ground that it did not state facts sufficient to constitute a cause of action.
    In pleading upon statutes where there is an exception in the enacting clause, the complaint should show that defendant is not within the .exception.
    Demurrer to complaint.
    
      A. W. Fraser, for plaintiff.
    
      Foster & Ackley (Roger Foster, of counsel), for defendants.
   Gildersleeve, J.

The complaint alleges that the plaintiff is a corporation, organized under the laws of Minnesota, but duly authorized to carry on business in the state of Uew York; that the defendants were, at all the times mentioned in the complaint, directors of a certain corporation, organized under the Laws of 1875, chapter 611, and the acts amending the same, called the United States Supply Company (Limited); ” that between the 9tli day of September, 1892, and the 30th day of December, 1892, at the request of said company, the plaintiff sold and delivered to said company, at the city of Uew York, certain merchandise, for which the said company agreed to pay $1,321.54, of which sum it has paid $1,028.93, leaving a balance of $292.61, which is due and owing; that the respective parties were duly authorized to make the said contract; that the said corporation (the said United States Supply Company, Limited), “ did not, during the month of January, 1893, nor did the defendants, or any of the directors of said company, make a report, as required by law in such cases to be made and provided, verified by the oath of the president or secretary or other officer thereof, and file the same in the office of the clerk of the county where it is required by law to be filed, nor has said company, or the defendants, or any of the directors of said company, made, published, signed or caused to be verified and filed, any such report as required by law, but wholly failed to do so,” and the complaint demands judgment against the defendants for the said sum of $292.61, with interest and costs. The defendants demur to the complaint on the grounds: (1) That the court has no jurisdiction of the subject of the action; (2) that there is a mis joiner of the parties defendant; (3) that there is a defect of parties defendant, as it appears by the complaint that there were more directors of the United States Supply Company, Limited, who have not been made defendants; and (1) that the complaint does not state facts sufficient to constitute a cause of action. The statute under which the action is brought (Laws 1892, chap. 688, § 30), provides “that every stock corporation, except monied and railroad corporations, shall annually, during the month of January, or, if doing business without the United States, before the first day of May, make a report,” etc., and if the report is not made and filed as directed, “ all the directors of the corporation shall jointly and severally be personally liable for all the debts of the corporation then existing, and for all contracted before such report shall be made,” etc. It may be noted here that the complaint alleges that the United States Supply Company, Limited, was organized under the Laws of 1875, chapter 611, which excludes moneyed and railroad corporations, so that the United States Supply Company could be neither of these, and does not come under the exception accorded to these corporations under the statute above referred to. I will consider the different grounds of the demurrer in their order. The first ground of the demurrer is not well taken. The complaint alleges that the merchandise, on account of which the indebtedness of the United States Supply Company to the plaintiff arose, “ were sold and delivered to it (the United States Supply Company), at its request, at the city of New York,” etc. This brings the cause of action within subdivision 2 of section 263 of the Code (Gemp v. Pratt, 7 Daly, 197), and gives the court jurisdiction. Nor can the second or third grounds of the demurrer be sustained. The complaint alleges that the United States Supply Company was organized under chapter 611 of the Laws of 1875, and that it failed, and each and all of its directors failed, to make and file the report required by law. The statute above quoted (Laws of 1892) provides that if the report is not made and filed all the directors become jointly and severally personally liable,” etc. The plaintiff was at liberty to sue all the directors, or one or more, as it saw fit to do. Halstead v. Dodge, 1 How. Pr. (N. S.) 170; Botsford v. Dodge, 65 How. 145. In a joint and several liability two may be joined, although there are more than two holding the same relation. Quigley v. Walter, 32 N. Y. Super. Ct. 175; Field v. Van Cott, 15 Abb. (N. S.) 349; Botsford v. Dodge, 65 How. 145; see, also, Code, §§ 454-456. It seems to me, however, .that the demurrer must be sustained upon the fourth ground, i. e., that the complaint does not state facts sufficient to constitute a cause of action. The statute, as we have seen, provides “ that every stock corporation, except monied and railroad corporations, shall annually, during the month of January, or, if doing business without the United States, before the first day of May, make a report,” etc. The complaint only alleges that the United States Supply Company did not make and file its report during the month of January, 1893. It does not state whether or not the company made and filed its report before the 1st day of May, 1893. hi or does the complaint state whether the company did or did not do business without the United States. Under the statute, if the company did do business without the United States, it was not required to make and file its report during the month of January, 1893, but could do it at any time before the 1st day of May, 1893. This action is penal in its nature, and the plaintiff’s pleading should be strictly construed, and ought to contain all the allegations necessary to bind the defendants. In pleading upon statutes, where there is an exception in the enacting clause, the complaint should show that defendant is not within the exception. ■ This the complaint herein has failed to do. The demurrer must be sustained, with costs.

Demurrer sustained.