Case Name: Cochran et al. v. Weichers et al.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-07-09
Citations: 6 N.Y.S. 304
Docket Number: 
Parties: Cochran et al. v. Weichers et al.
Judges: 
Reporter: West's New York Supplement
Volume: 6
Pages: 304–305

Head Matter:
Cochran et al. v. Weichers et al.
(Supreme Court, General Term, First Department.
July 9, 1889.)
Abatement and Revivab—Corpoeations—Stookhobdees.
An action against a stockholder in a corporation organized under an act which provides that all the stockholders shall be individually liable to the creditors oí the company to an amount equal to the stock held by them, respectively, for all debts and contracts made by such company, until the whole amount of capital stock fixed by such company has been paid in, and a certificate thereof made and recorded, to enforce defendant’s liability for the corporation’s debts, the certificate not having been recorded, is not an action to recover a penalty, but arises on contract, and survives against defendant’s personal representatives.
Appeal from special term, Hew York county. Plaintiffs appeal from an order'denying their motion to revive the action as against the executors of Weichers, a deceased defendant.
Argued before Van Brunt, P. J., and Brady and Barrett, JJ.
H. D. Hotehhiss, for appellants. Hy. Schmitt, for respondents.

Opinion:
Van Brunt, P. J.
This motion to revive was denied, upon the ground that the cause of action set out in the complaint was to recover a penalty, and therefore did not survive. In this we think the learned judge fell into an error, as the action was not brought to recover a penalty, but to recover a sum which the deceased (under the act under which the corporation was formed of which he was a member) became liable to pay under certain contingencies. The provisions of the act in question are that in limited liability companies all the stockholders shall be individually liable to the creditors of the company in which they are stockholders to an amount equal to the stock held by them, respectively, for all debts and contracts made by such company, until the whole amount of capital stock fixed by such company has been paid in, and a certificate thereof has been made and recorded as therein provided. Although the deceased has-paid in full for his stock, yet still the subsequent conditions in regard to the filing of the certificate, as to the payment of the stock, have not been complied with; and the defendant became liable, under the provisions of this section, to the creditors of the corporation for all debts and contracts made by such corporation, to the amount of the stock held by him. The discussion of this question seems to be entirely unnecessary, in view of the decision of the supreme court of the United States in the case of Flash v. Conn, 109 U. S. 371, 8 Sup. Ct. Rep. 263. That action was brought to enforce a liability under section 10 of the act of the legislature of the state of Hew York, passed February 17,1848, commonly known as the "Manufacturing Act. " The language of section 10 is identical, with but two insignificant exceptions, witli the language which has been quoted from section 37 of the act under which the deceased's corporation was organized, and that action was brought to enforce identically the same liability which is sought to be enforced by this action; and it was there held that the action was not brought to enforce a liability in the nature of a penalty, following the decisions upon this point which had previously been made in the state of Hew York, but a liability arising upon contract. The order must be reversed, with $10 costs and disbursements, and an order entered reviving the action as against the personal representatives of the deceased defendant. All concur.