Cavanaugh v. Patterson
| Decision Date | 07 October 1907 |
| Parties | CAVANAUGH v. PATTERSON et al. |
| Court | Colorado Supreme Court |
Appeal from District Court, City and County of Denver; Frank W Owens, Judge.
Action by Edward J. Cavanaugh against Frank G. Patterson and other. From a judgment for defendants, plaintiff appeals. Reversed and remanded.
The question presented by this appeal is the liability of directors of a corporation for indebtedness incurred thereby after the lapse of the period when, in accordance with the provisions of section 491, 1 Mills' Ann. St., such corporation should have filed its annual report. This section, as it existed at the time when such indebtedness was created, provided, in substance, that every such corporation shall annually, within 60 days from the 1st day of January make and file with the recorder of deeds of the county where its business is carried on a report, stating the amount of its capital and the proportion thereof actually paid in together with a statement of its existing indebtedness. The section further provides that the failure to file such report within the time specified renders the directors of the defaulting corporation jointly and severally liable for the debts of such corporation created during the year next preceding when such report should have been filed, and until it is filed, unless the capital stock of the corporation has been fully paid in, and a certificate to that effect filed as provided in section 487, Id. In 1894, the Fish Creek Gold Mining & Land Company was incorporated under the laws of this state, and on the 8th day of March, 1901, its certificate of incorporation was amended by changing the name to the Freeland Mercantile & Mining Company. No certificate of full paid-up stock was filed, as provided by section 487 nor was the annual report, required by section 491, made and filed. On March 13, 1901, the corporation created an indebtedness of $1,000. Suit was brought thereon by appellant against the appellees. The court found as a fact, in addition to those above recited, that appellees were directors of the corporation at the time the indebtedness sued upon was created, and, specifically, that Mr. Taggart had been such director from February 5, 1901, and Mr. Patterson from March 8, 1901, but determined as a conclusion of law that the defendants were not liable. The plaintiff appeals.saving statute of 1891, and, therefore, does not preclude an enforcement of liabilities incurred under the repealed section.
Skelton & Morrow, for appellant.
John R. Smith, for appellees.
GABBERT, J. (after stating the facts as above).
The report for 1901 was due 60 days from the 1st day of January of that year. Directors of a domestic corporation during the period it is in default, in failing to file the annual report required by the statute, become personally liable for the indebtedness incurred by such corporation during that period. The statute in question has been so construed in numerous decisions of the Court of Appeals and this court, among which we cite Colo. Fuel & Iron Co. v. Lenhart, 6 Colo.App. 511, 14 P. 834, and Austin v. Berlin, 13 Colo. 198, 22 P. 433. New York has a similar statute, and the courts of that state have given it a similar construction. Boughton v. Otis, 21 N.Y. 261; Shaler & Hall Quarry Co. v. Bliss, 27 N.Y. 297.
From our conclusion under the facts we are considering, both defendant were liable, and the district court erred in holding to the contrary. No certificate of paid-up stock was filed. The annual report required by the statute had not been filed when the indebtedness sued upon was created, and both defendants were directors of the debtor corporation at this time. The fact that Mr. Patterson was not a director until after the expiration of the period when the annual report for 1901 should have been filed did not relieve him from and liability imposed by the statute, for indebtedness incurred thereafter under his administration while the corporation was in default. The duty devolved upon him, when he became a director, to see that the law with respect to the filing of the annual report was obeyed, and, having neglected this duty, he became liable for the penalties imposed by the statute for this neglect.
April 6, 1901, the General Assembly passed an act providing for a different kind of report than...
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Cont'l Supply Co. v. Abell
...general rule, rule (d) above, the Supreme Court of Colorado has declared that their statute abrogates that rule. Cavanaugh v. Patterson, 41 Colo. 158, 91 P. 1117. Section 6013, above, read in connection with section 93, clearly abrogates the rules announced heretofore by this court; these s......
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State v. Railroad and Warehouse Commission
...& O. Ry. Co., D.C., 151 F. 84, affirmed 8 Cir., 162 F. 835, certiorari denied 212 U.S. 579, 29 S.Ct. 689, 53 L.Ed. 659; Cavanaugh v. Patterson, 41 Colo. 158, 91 P. 1117; Neilson v. Perkins, 86 Conn. 425, 85 A. 686. Where the legislature has left unsaid its intention with respect to pending ......
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Continental Supply Co. v. Abell
... ... rule (d) above, the Supreme Court of Colorado has declared ... that their statute abrogates that rule. Cavanaugh v ... Patterson, 41 Colo. 158, 91 P. 1117 ... Section ... 6013, above, read in connection with section 93, clearly ... ...
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State ex rel. Butters v. R.R. & Warehouse Comm'n
...Ry. Co., D.C., 151 F. 84, affirmed 8 Cir., 162 F. 835, certiorari denied 212 U.S. 579, 29 S.Ct. 689, 55 L.Ed. 659;Cavanaugh v. Patterson, 41 Colo. 158, 91 P. 1117;Neilson v. Perkins, 86 Conn. 425, 85 A. 686. Where the legislature has left unsaid its intention with respect to pending actions......