Hazelton v. Porter

• Decision Date: 10 June 1901
• Parties: HAZELTON v. PORTER et al. [1]
• Court: Colorado Court of Appeals

67 P. 170

17 Colo.App. 1

HAZELTON v. PORTER et al. ^[1]

Court of Appeals of Colorado

June 10, 1901

Error to district court, Arapahoe county.

Action for a penalty by Milton W. Hazelton against Henry M. Porter and others. Judgment for defendants, and plaintiff brings error. Affirmed.

Benedict & Phelps and Horace Phelps, for plaintiff in error.

Charles H. Toll and William R. Barbour, for defendant in error Henry M. Porter.

W.C. Kingsley, for defendants in error Moritz Barth and Leonard H. Eicholtz.

WILSON P.J.

In 1890 the plaintiff, Hazelton, contracted with the Denver Steam Heating Company, a corporation organized and doing business under the laws of Colorado, to erect and construct for it a boiler for steam heating purposes. In February, 1891, the work was completed, and the boiler, after having been tested in accordance with the agreement, was then accepted by the company, at the same time the price to be paid therefor being agreed upon and fixed by the parties, to be paid in monthly installments of certain sums thereafter; the time of payment extending over a period of several years. The corporation did not within 60 days from January 1, 1891, file nor cause to be filed its annual report, as required by section 491 Mills' Ann.St. (section 252, Gen.St.); nor was any such report filed at any time thereafter prior to the bringing of this suit, nor had there been previous to March 2, 1891; nor was there at any time thereafter filed a certificate of the paid-up capital stock of the corporation. The defendants were during all of the times mentioned directors of the corporation, and this action, commenced January 30, 1897, was brought to recover the amount of the debt from them, on account of their personal liability incurred for failure to make such report. Section 491, referred to, reads as follows "Every such corporation shall, annually, within sixty days from the 1st day of January, make a report, which shall state the amount of its capital and the proportion actually paid in, and the amount of existing debts, which report shall be signed by the president, and shall be verified by the oath of the president or secretary of said company, under its corporate seal, and filed in the office of the recorder of deeds of the county where the business of the company shall be carried on. And if any such corporation shall fail so to do, unless the capital stock of such corporation has been fully paid in, and a certificate made and filed as provided in section twelve (12) of this act, all the directors or trustees of the company shall be jointly and severally liable for all the debts of the company that shall be contracted during the year next preceding the time when such report should, by this section, have been made and filed, and until such report shall be made."

None of the allegations in the complaint with reference to the contracting of the indebtedness are disputed, and it is not denied that there was a failure to make the annual report required by the statute. It is claimed, however, that this action is barred by the statute of limitations, which reads as follows: "All actions and suits for any penalty or forfeiture of any penal statute brought by this state, or any person to whom the penalty or forfeiture is given, in whole or in part, shall be commenced within one year next after the offense is committed, and not after that time." Section 2907, Mills' Ann.St. (section 2170, Gen.St.). The plaintiff concedes, it having been so expressly decided by the appellate courts of this state, that section 491 is a penal statute, and that the limitation statute which applies to actions under it is that which we have just quoted. The sole question to be determined is, when, under the facts of this case, did the limitation statute begin to run? It is claimed by the plaintiff that it did not begin to run until a cause of action accrued to him against the company for the collection of the debt. The defendants insist that the statute began to run at the time when the default of the directors occurred which made them liable for a penalty; it being in this case, under the conceded facts, March 2, 1891. In this contention we believe that the defendants are correct. Counsel for plaintiff have made a very able and forcible argument in support of their theory but in our opinion the question is definitely settled against them, not only by the plain reading of the statutes, but by the express adjudications of both appellate courts in this jurisdiction. It will be observed that the penalty imposed by section 491 is twofold in its character: First, for all debts of the company contracted during the year next preceding the time when such report should have been made; and, second, for all debts which might be thereafter contracted until the report should be made. The statute says nothing about the maturity of the debts. This question was under consideration by this court in a case very recently decided. Thatcher v. Salomon, 16 Colo.App.--, 64 P. 369. We there declared the true doctrine to be that a debt is contracted when, in consideration of value received by the corporation, a payment is to be...