Cary v. Schmeltz

• Decision Date: 07 February 1910
• Parties: CARY et al. v. SCHMELTZ et al.
• Court: Missouri Court of Appeals

125 S.W. 532

141 Mo. App. 570

CARY et al. v. SCHMELTZ et al.

Kansas City Court of Appeals. Missouri.

February 7, 1910.

Rehearing Denied February 21, 1910.

1. COURTS (§ 8)—JURISDICTION—ACTION UNDER LAWS OF OTHER STATE—PENAL STATUTES.

A cause of action arising from a violation of a penal statute is not enforceable out of the state enacting it.

2. CORPORATIONS (§ 355)—OFFICERS—LIABILITY FOR CORPORATE DEBTS—"PENAL STATUTES" —LAWS OF OTHER STATE.

A statute requiring corporations to file with a state officer a report of certain facts, and making the corporate officers and directors personally liable for corporate debts on failure to file such reports, is penal in character, and cannot be enforced by the courts of another state.

Appeal from Circuit Court, Jackson County; Henry L. McCune, Judge.

Action by J. W. Cary and others against J. F. Schmeltz and others. Defendants had judgment, and plaintiffs appeal. Affirmed.

See, also, 221 Mo. 132, 119 S. W. 946.

Lathrop, Morrow, Fox & Moore, for appellants. O. A. Lucas, for respondent McKnight. Ringolsky & White, for respondents Schmeltz and Thacher.

BROADDUS, P. J.

The plaintiffs' suit is in three counts: The first, for goods sold by them in May, 1905, to the Golden Islet Mining Company, of the state of Colorado; the second, for labor performed for the corporation; the third, for goods sold to it. The two latter are claims alleged to have been assigned to plaintiffs. The defendants are sued as directors of said corporation. The petition sets out a certain statute of the state of Colorado, upon which plaintiffs base their right of recovery against the defendants as directors of the corporation. This statute required all corporations of the kind mentioned to file an annual report in the office of the Secretary of State of said state within 60 days after the 1st day of January, 1905. There is no allegation as to the nature of the report required, but perhaps we will be justified in supposing it to be a recitation of the resources and the general financial condition of the corporations. The section copied in the petition reads as follows: "And if such corporation * * * shall fail, refuse or omit to file the annual report aforesaid and to pay the fee prescribed therefor within the time above prescribed, all the officers and directors of said corporation shall be jointly, severally and individually liable for all the debts of said corporation * * * that shall be contracted during the year next preceding the time when said report should by this section have been made and filed." Mills' Ann. St. § 491. The petition alleges that the required report was not filed as the statute provided, and that therefore the defendants as directors of the corporation became liable for the debts of the corporation in suit. The defendants filed a demurrer to the petition, which the court sustained, and rendered judgment against plaintiffs, from which they appealed.

The question raised by the demurrer is whether the statute quoted is penal or remedial? If the former, it is not enforceable in this state; it being a statute of a foreign state. If remedial, it is as a matter of comity enforceable in Missouri. In the state of Colorado, where enacted, the statute is held to be penal. Hazelton v. Porter, 17 Colo. App. 1, 67 Pac. 170; Cannon v. Breckenridge Mercantile Co., 18 Colo. App. 38, 69 Pac. 269. While the interpretation put upon the statute by the highest court of the state where enacted is not binding upon the courts of a sister state, yet it is entitled to much credit, because as a rule the courts of the country of the birthplace of the law would naturally have some advantage in dealing with the question, by reason of their familiarity with local conditions and the purposes of legislation suitable to such conditions.

Independent of the decisions of Colorado, there are many authorities to the effect that the statutory liability of corporate officers for failure to file reports is penal, and will not be enforced by the courts of other states. Cook on Corporations, vol. 1, § 223, p. 421; 10 Cyc. 854; Thompson, Commentaries on Corp. vol. 3, § 3050; Derrickson v. Smith, 27 N. J. Law, 166; Mo. River Telegraph Co. v. National Bank, 74 Ill. 217. It is held that "a suit upon a bond subjecting the obligors to...