Court Opinion

ID: 5459608
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:30:53.836418+00
Date Added: 2024-06-11T08:32:49.351327
License: Public Domain

By the Court, E. Darwin Smith, J.
The plaintiff’s right of action depends upon the neglect of the trustees of the Rochester Novelty Works, within twenty days from the first of January, 1857, to file and publish the statement or report of its condition, required by the 12th section of the general manufacturing act, (Laws of 1848, p. 54.) The statute provides that “ if any of said companies shall fail to make and publish such statement, all the trustees of the company shall be jointly and severally liable for all the debts of the company then existing, and for all that shall be contracted before such report shall be made.” This is a penalty imposed for neglect of duty. The penalty consists in depriving the trustees guilty of the fault or neglect of duty of the irresponsibility which pertains to the directors, trustees and stockholders of corporations, and subjecting such trustees to a personal liability for the debts of the corporation then existing. It is a penalty imposed, I think, upon those guilty of the neglect of duty, and those only. It would be unjust to extend it further; and I think such was not the intention of the legislature. The directors or trustees of a corporation making default might well be deemed to elect to incur the responsibility imposed by the statute. They may fitly be punished in the manner provided by the act, by being rendered personally liable for the debts of the corporation. Such trustees are liable for all debts then existing, and for all such as may be thereafter contracted until the proper statement shall be made and published. New trustees coming in, I think, are only liable for their own defaults. It is the failure to make and publish the report within the twenty days next after the first of January of some year, that creates the penalty: that subjects the trustees then in office to personal liability for the debts of the corporation then existing and subsequently contracted. Such trustees may exempt themselves from personal liability for future debts by making such statement after the twenty days, but not for those then existing. Eor such debts their liability is fixed by permitting the twenty days to elapse without making and pub*198lishing the statement required by the act. This, I think, is the true construction of this provision; and as the defendant Otis was not in default in making such statement within twenty days after the first day of January of any year, he was not liable in this action, and the demurrer to the complaint was well taken.
[Monroe General Term,
March 7, 1859.
T. R. Strong, Welles and Smith, Justices.]
The judgment of the special term, overruling the demurrer, should be reversed, and judgment be given for the defendant on such demurrer.
Judgment reversed.