Bank of the Metropolis v. Faber

• Decision Date: 06 October 1896
• Citation: 44 N.E. 779,150 N.Y. 200
• Parties: BANK OF THE METROPOLIS v. FABER.
• Court: New York Court of Appeals Court of Appeals

150 N.Y. 200

44 N.E. 779

BANK OF THE METROPOLIS

v.FABER.

Court of Appeals of New York.

Oct. 6, 1896.

Appeal from supreme court, appellate division, First department.

Action by the Bank of the Metropolis against Eberhard Faber. There was a judgment of the appellate division (37 N. Y. Supp. 423) affirming an interlocutory judgment overruling a demurrer to the complaint, and defendant appeals. Affirmed.

B. F. Tracy, for appellant.

D. M. Porter, for respondent.

O'BRIEN, J.

This appeal presents the question as to the sufficiency of the complaint in an action against the trustee or director of a business corporation to hold him for the debt of the corporation, when there was neglect or omission to file the annual report of the condition of the corporation. There was a demurrer to the complaint, which has been overruled by the courts below, and the question of law has been certified to this court by the appellate division. In a broader sense, the case involves the inquiry whether there was any law in force under which the defendant could be held liable for the debt of the corporation of which he was a trustee. The action is upon a note made by the corporation for $1,129.61, dated December 31, 1892, payable four months after date, which was discounted by the plaintiff. This debt therefore matured about May 1, 1893, and was not paid. During the year 1892 the defendant was one of the directors of the corporation, and it is conceded that it filed no report for that year. The learned counsel for the defendant admits, for the purposes of all the questions in this case, at least, that his client violated the law by neglecting to file the report, or procure it to be filed, in the month of January, 1892; but he contends that the law which was thus disregarded, and the only law in force at the time the duty should have been performed, was repealed before the debt was contracted, and hence his client cannot be held. If the premises upon which this argument has been constructed are correct, the legal conclusionwould necessarily follow. Nash v. Bank, 105 N. Y. 243, 11 N. E. 946;Manufacturing Co. v. Beecher, 97 N. Y. 651. It is entirely clear that section 30 of chapter 564 of the Laws of 1890, which went into effect on May 1, 1891, required the corporation to file the report, and, in case of failure, made the directors liable for all the debts of the corporation then existing, and for all contracted before filing the same. This statute was a part of the general revision of the statutes known as the ‘Stock Corporation Law,’ and was intended, when passed, to be a permanent provision of law on this subject. It cannot be denied that it imposed liability upon the defendant for the payment of the debt described in the complaint, unless the report was filed within 20 days from January 1, 1892, as it was not. So far the case is clear. But this statute was amended by chapter 2 of the Laws of 1892, which went into effect January 14, 1892, ‘so as to read as follows.’ The amendment then gives the whole month of January within which to file the report, changes the form of the report, and the officers by whom it could be verified, drops out words contained in the original law, and adds or substitutes new ones. This enabled the corporation to file the report on any day during the month of January, 1892, but it did not. This amendment was itself repealed, in express terms, by chapter 687, § 34, Laws 1892, which went into effect May 18, 1892, and by chapter 688, § 30, Laws 1892, which went into effect on the same day. The original section 30 of the stock corporation law, providing for filing the report and for liability of directors in case of neglect, was amended, and enacted in the form in which it now appears in the revision of the statutes.

From all this confused and complicated legislation the learned counsel for the defendant has constructed an able and ingenious argument, the whole point and purpose of which are to show that the original law was repealed by the amendment of January 14, 1892, and that in turn was expressly repealed by the act of May 18, 1892, and that repeal carried with it the original law, and thus that all laws which imposed a liability or penalty upon the defendant for failure of the corporation of which he was a director to file a report in the month of January, 1892, were completely swept away before the debt in suit was created, and of course before the commencement of this action. This argument has been answered in the very able opinion of the court below (1 App. Div. 341,37 N. Y. Supp. 423), and we might very well rest our decision of this appeal upon that opinion, but for some criticism upon it which appears in the brief of the learned counsel for the defendant in this court. The argument assumes, as a fundamental postulate, that section 30 of the stock corporation law of 1890 was repealed by the amendment of January 14, 1892, and that from the passage of that amendment the original law ceased to exist, and was annihilated and annulled. These expressions are found in the opinion of the learned judge who wrote in the case of People v. Wilmerding, 136 N. Y. 363, 32 N. E. 1099. The question there was whether a certain statute, which all agreed had been repealed, was revived by a repeal of the repealing act. White v. Inebriates' Home, 141 N. Y. 127, 35 N. E. 1092. That case stood upon peculiar facts, not present here, and, moreover, recognized the authority of the Prime Case, 136 N. Y. 347, 32 N. E. 1091, and In re Rochester Water Com'rs, 66 N. Y. 415. In the Prime Case the law is thus stated: When a statute amends a former statute ‘so as to read as follows,’ it operates as a repeal by implication of inconsistent provisions in the former law, and of provisions therein omitted in the latter. When the amendatory act reenacts provisions of the former law, either ipsissimis verbis or by the use of equivalent though different words, the law will be regarded as having been continuous; and the new enactment, as to such parts, will not operate as a repeal, so as to effect a duty accrued under a prior law, although, as to all new...