Case ID: abbn-cas_15/html/0483-01.html
Source: Caselaw Access Project
Author: {"author": "Hyatt, J.[After stating the facts.]", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ZOLLER v. O’KEEFFE.
    
      N. Y. City Court ; Trial Term,
    
    May, 1885.
    Manufacturing corporations ; trustee’s liability ; time of PUBLISHING AND FILING ANNUAL REPORT.-ABATEMENT AND REVIVAL.—CONTRACTS ; CONSIDERATION FURNISHED BY THIRD PERSON.
    An action to charge trustees of a manufacturing corporation for its debt by reason of alleged default in filing the annual report does not abate by death of the plaintiff, although it would abate by death of the defendants.
    
    
      It seems, that under section 12 of the general manufacturing act (L. 1848, p. 57,,c. 40),—requiring the corporation within twenty days from the first day of January to make, publish and file an annual report,—a report published December 22, and filed on the 28th, becomes effective on the ensuing January 2, as a compliance with that section.
    
    
      Plaintiff, bping a creditor of the corporation, agreed with defendants, who were trustees of the corporation, that if a third person would turn over to a new corporation certain of its assets which he had purchased under execution against it, plaintiff would accept stock of the new company in full satisfaction and payment of his claim against the old company. Held, that the third person having performed the contemplated act, the old company could use this agreement as a defense to the plaintiff’s claim against it, and, consequently, that its trustees, when sued by him on their individual liability for its debts, could likewise do so.
    
    Trial by the court without a jury.
    
      Albert Zoller brought- this action against Michael O’Keeffe, Martin E. Doyle, and Robert H. Leslie, to recover a debt of the New York Brewing Company, a corporation of which the defendants were trustees.
    The action was submitted to the court without a jury upon the following conceded facts:
    That the “New York Brewing Company” isa corporation organized under chapter 40 of the laws of 1848, and that at the time that plaintiff’s debt was incurred and became due, the defendants were trustees of the said corporation. That the debt of the said “New York Brewing Company” on which this suit is brought, accrued between October 1, 1883, and March 18, 1884. That on December 22, 1883, an annual report of the “ New York Brewing Company,” in the form required by law, was published in the World, a newspaper published in the city and county of New York, where the said company transacted its business. That on December 28, 1883, a report, in the form required by law, was filed in the office of the clerk of the city and county of New York. That on April 28, 1884, the plaintiff in this suit made and entered into an agree-me t- in writing with these defendants, that if one Henry Hamilton would turn over to a new corporation, to be called the “New York Brewing Company of the city of New York” the property purchased by him under certain executions against the “New York Brewing Company,” said Albert Zoller would accept of said new company, to the amount of his claim, stock against the “ New York Brewing Company,” of which the defendants were trustees, in full satisfaction and payment of the same.
    After issue was joined, and before trial, the plaintiff Zoller died.
    
      
       See, to same effect, Bonnell v. Griswold, ante, 470.
    
    
      
       The substantial objection to sustaining an anticipatory filing is that if, according to the usage of the recording office, the filing is indexed chronologically, one who examines the index for the proper year only would not discover that the report had been filed previously. In some cases, too, the report could not show the condition of the company at the close of the year, as required by the statute.
      
        As to anticipatory filing, a rule somewhat analogous to that in the text was recently applied in Ohio in King v. Penn, 42 Ohio St. S. C., 13 Weekly L. Bul. 375. The statute limiting the time for filing a petition in error to reverse a judgment, required the petition to be filed within two years after the rendition of the judgment, and the practice required previous leave to file, to be had on motion. The petitioner’s attorney, before the expiration of the limitation, deposited the petition and papers with the clerk in his office, and the,clerk marked all as filed except the petition, which he assured the plaintiff he would formally file and indorse as soon as the motion for leave was granted. Upon the granting of leave, the plaintiff assumed that the -clerk would mark the petition as filed, but the clerk neglected to do so until after the two years had expired.
      The court say : “ While it was not the practice to do so, there would have been no impropriety in indorsing the petition in error as ‘ filed,’ upon the filing of the motion, as a paper presenting the grounds and assignments of error complained of, and to be considered only for the purposes of the motion. Had this been done, we think that, in the language of Scott, Ch. J., in Robinson v. Orr, 1U Ohio St. 286 : ‘ The objection that there should have been a distinct act of refiling after leave granted, is too technical and unsubstantial to require grave consideration.’ But the petition was, in fact, 1 filed.’ When a paper is in good faith delivered to the proper officer to be filed, and by him received, to be kept in its proper place in his office, it is ‘ filed.’ The indoisement upon it by such officer of the fact and date of filing is but evidence of such filing. Haines v. Lindsey, 4 Ohio, 90; Nimmons v. Westfall, 33 Ohio St. 223; Bishop v. Cook, 13 Barb. 329.”
    
    
      
      See, as to the right of one who is a stranger to the consideration to enforce the contract, Matter of Walker, ante, 465, and note, 468.
    
   Hyatt, J.[After stating the facts.]

The defendants contend that the action abated on the death of the plaintiff. While it is true that the action would not survive as against the defendants’ representatives in view of the fact that the same was penal in its character and the defendants tort-feasors, it does not follow that it abated on the death of the plaintiff, for, if the action is assignable, the plaintiff’s administrator can maintain it, and the cause of action survives.

This action was revived in favor of the executor of the deceased plaintiff. The general term of this court (May, 1885) has affirmed the order of revival.

This issue, therefore, as between the parties hereto, is res judicata.

There remains for consideration the question whether or not the report was filed in accordance with the requirements of section 12 of the General Manufacturing Act. Its provisions are too well known to require recital.

It appears to be the tendency of the court of appeals to give such a construction to the section as will do away with its technical requirements, if the substantial object of the section be complied with.— i. e., a report be filed, from and by which creditors who deal with the company may know its financial condition (Cameron v. Seaman, 69 N. Y. 396).

In the case at bar, a report was filed in the office of the clerk of New York county, on December 28, 1883. As far as the language of the act is concerned, the filing was nugatory ; but on January 2, 1884, it became effective as a filing within the provision of the act.

This principle has been frequently enunciated by the courts. In Hathaway v. Howell (54 N. Y. 97), two executions and a chattel mortgage were delivered to the sheriff and the county clerk respectively at the hours of 8 P. M. and 10 P. M. The court decided that such delivery and filing out of office hours was a nullity, but at 9 A. M. on the following day,—the hour legally fixed for the opening of the sheriffs’ and county clerks’ offices,—they were legally and properly filed, and became of full force and effect. A judgment docketed out of office hours has been given effect and made a lien at the next office hours after such docketing (France v. Hamilton, 26 How. Pr. 180).

I am of the opinion that this report, filed December 38, 1883, became operative on January 2, 1884, and that the fact that it was published on December 22, 1883, is immaterial (Cameron v. Seaman, supra).

I do not think that the spirit of section 12 of said act has been violated in this case. There was a report of the condition of the company on file, to which creditors and all persons dealing with the “ New York Brewing Company ” might have access as to its financial condition. This is the end and purpose of this section (Cameron v. Seaman, supra), and this the “New York Brewing Company ” did.

If this view of the law is error, and I have misapprehended its expression by the court of appeals, even then I fail to see how the plaintiff can recover in this action. In my judgment the signing of the aforementioned agreement is a bar to a recovery.

It is a well settled. principle that when A. and B. contract for the benefit of C., the latter has an interest in the contract which will enable him to maintain an action. The plaintiff, in agreeing with the defendants to surrender his claim against the “New York Brewing Company” if Hamilton would turn over the property bought under the executions against said company to the “ New York Brewing Company of the city of New York” (the proposed new organization), and Hamilton having performed his part of the agreement, by turning over such property,—the “New York Brewing Company” (the existing corporation) as the party to be benefited under the contract, the plaintiff’s claim against it being thereby satisfied and paid, has the right to use the said agreement as a defense to the assertion of this claim. And as- the trustees may make any defense the “New York Brewing Company” might have made, they have a right to set it up as a bar (62 N. Y. 202).

It follows therefore that the complaint should be dismissed.

Judgment for the defendants accordingly.