Howell Bros. v. Roberts

• Decision Date: 06 May 1890
• Citation: 45 N.W. 923,29 Neb. 483
• Parties: HOWELL BROS. v. ANNA M. ROBERTS ET AL
• Court: Nebraska Supreme Court

45 N.W. 923

29 Neb. 483

HOWELL BROS. v. ANNA M. ROBERTS ET AL

Supreme Court of Nebraska

May 6, 1890

ERROR to the district court for Harlan county. Tried below before GASLIN, J.

REVERSED AND REMANDED.

Morning & Keester, for plaintiff in error:

The liability is intended as a means of redress for creditors not as a penalty. (Goodridge v. Rogers, 22 Pick. [Mass.], 497; Sackett v. Sackett, 8 Id., 320; Adams v. Palmer, 6 Gray [Mass.], 338; Corning v McCullough, 1 N.Y. 47; Morawetz, Private Corp. [2d Ed.] secs. 873, 877.) It is in the nature of a specialty and does not fall within the statute of limitations. (Angell, Lim. [6th Ed.], sec. 80; Bullard v. Bell, 1 Mason [U. S. C. C.], 243.)

C. C. Flansburg, contra, cited on the contention that the statute was penal: First Nat. Bank v. Price, 33 Md. 487; Derrickson v. Smith, 27 N.J.L. 166; Kritzer v. Woodson, 19 Mo. 327; Cable v. McCune, 26 Id., 380; Lawler v. Burt, 7 Ohio St. 340; Diversy v. Smith, 103 Ill. 400, and cases cited; Merchants Bank v. Bliss, 35 N.Y. 412; Wiles v. Suydam, 64 Id., 173; Knox v. Baldwin, 80 Id., 613; Irvine v. McKeon, 23 Cal. 472; Halsey v. McLean, 12 Allen [Mass.], 438; Stebbins v. Edmands, 12 Gray [Mass.], 203-5.

OPINION

MAXWELL, J.

This action is brought upon four drafts, each for $ 1,200, which were drawn upon and accepted by the Nebraska Lumber Company, of Red Cloud. The drafts are dated December 5, 1885, and were payable, respectively, February 10, 1886, February 25, 1886, March 15, 1886, and March 25, 1886. The drafts not being paid, an action was brought on the 28th day of December, 1887, against the defendants, who were the stockholders in the corporation. A demurrer to the petition was sustained in the court below and the action dismissed. The plaintiff in the petition, after stating the incorporation of the lumber company and that the defendants were the stockholders thereof, the acceptance of the drafts etc., alleges:

"That said Nebraska Lumber Company, its officers, agents, directors, stockholders, managers, or servants, did not at any time post in a conspicuous place at the places of doing business of said corporation, subject to public inspection, a copy of the by-laws of said corporation and the names of all officers appended thereto. And said Nebraska Lumber Company neglected to give notice annually in some newspaper printed in the county or counties in which its business was transacted (there being newspapers printed in the said counties), of the amount of all existing debts of the corporation, signed by the president and a majority of the directors, as required by the statutes of the state of Nebraska; that all of said defendants were stockholders in said Nebraska Lumber Company, and were such stockholders at the time of such default in failure to give the notice first above mentioned, and were such stockholders at the time of the failure to post a notice stating the names of officers and the place of doing business, and were stockholders at the time of the failure to give a notice of indebtedness required by law as above stated, and were such stockholders at the time the debt owing to this plaintiff was contracted; that by reason of such neglect and default the said defendants, stockholders as aforesaid, would become liable for the debt now owing from the Nebraska Lumber Company to this plaintiff; that said corporation was at the time the indebtedness herein stated was contracted and now is insolvent."

There are four counts in the petition, one upon each draft. It is sought to make the stockholders personally liable because they failed to publish the annual statement required by law. Sec. 136 of chap. 16, Compiled Statutes, provides that "Every corporation hereafter created shall give notice annually in some newspaper printed in the county or counties in which the business is transacted, and in case there is no newspaper printed therein, then in the nearest paper in the state, of the amount of all the existing debts of the corporation, which notice shall be signed by the president and the majority of the directors; and if any corporation shall fail to do so, * * * all the stockholders of the corporation shall be jointly and severally liable for all the debts of the corporation then existing, and for all that shall be contracted before such notice is given."

It is claimed by the attorneys for the defendants that the provision in question is a penalty, and hence that, under section 13 of the Code, this action is barred in one year from the time the cause of action accrues...