Case ID: ad_27/html/0097-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Ingraham, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William L. Marshall, Respondent, v. Thomas M. Barr and Henry Rogers, Appellants, Impleaded with Ella H. Barr.
    
      Action against directors of a corporation which has failed to file an annual report — the complaint must state that the corporation is a stock corporation.
    
    In an action brought to enforce the penalty imposed by the Stock Corporation Law (Laws of 1890, chap. 564, § 30, as amended by Laws of 1892, chap. 2} upon directors of a stock corporation, other than a moneyed or railroad corporation, which has failed to file an annual report of its condition, a complaint which does not allege that the corporation in question was a stock corporation does not state a cause of action.
    Appeal by the defendants, Thomas M. Barr and another, from a; judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 11th day of November, 1897, upon an order made at the New York Special Term and entered in said clerk’s office on the 10th day of November, 1897, overruling the answers of the said defendants as frivolous, with notice of an intention to bring up for review upon suche appeal the said order.
    
      L. H. Arnold, for the appellants.
    
      William P. Maloney, for the respondent.
   Ingraham, J.:

The defendants appealed from the judgment, and in the notice of appeal seek to review an order of the court granting judgment to the plaintiff, upon the ground that the answer interposed by the appellants is frivolous. The action is brought to enforce a penalty incurred by the defendants as directors of a corporation, known as the “ Hew York Piano Case Company,” by reason of the failure of the directors of the corporation to file an annual report in the year 1897.' The defendants attack the complaint as being insufficient, as it is not alleged that the corporation of which the defendants are directors is a stock corporation. The statute which imposes this penalty, in force at the time this default took place, was chapter 564 of the Laws of 1890, known as the Stock Corporation Law, as amended by chapter 2 of the Laws of 1892. By section 30 of that act it is provided that' every stock corporation, except moneyed and railroad corporations, shall annually, during the month of January, make a report as of the first day of J anuary. By the express provisions of this statute it is only a- stock corporation that is required to make such a report, and the complaint nowhere alleged that the defendant was a stock corporation. As this is an action to recover upon a penalty, by a familiar rule the complaint must allege that the words of the statute distinctly enact that, under the circumstances, the penalty has been, incurred. Provisions of this character must be strictly construed and cannot be extended by implication. (Van Dyck v. McQuade, 86 N. Y. 56.) “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 v. Cammann, 137 N. Y. 344.) Thus, to entitle the plaintiff to recover he was bound to allege not only that the corporation of which the.defendants were directors was incorporated under the laws of this State, but must also show that it was a stock corporation ; and this is not alleged in the complaint.' It would seem, therefore, that upon the complaint, admitting all of the facts alleged, the plaintiff was not entitled to judgment.

It is not necessary for us to determine whether the answer is so clearly frivolous as to justify the court in granting an order, for judgment upon the answer as frivolous. For the reasons before stated, we do not think upon the facts alleged in the complaint that the plaintiff was entitled to judgment. The order granting the plaintiff judgment, and the judgment entered thereon, must, thérefore, be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.

Van Brunt, P. J., Barrett, Rumsey and McLaughlin, JJ., concurred.

Judgment and order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.