International Bank of St. Louis v. Faber

• Decision Date: 03 March 1898
• Docket Number: 66.
• Citation: 86 F. 443
• Parties: INTERNATIONAL BANK OF ST. LOUIS v. FABER.
• Court: U.S. Court of Appeals — Second Circuit

86 F. 443

INTERNATIONAL BANK OF ST. LOUIS v. FABER.

No. 66.

United States Court of Appeals, Second Circuit.

March 3, 1898

This is a writ of error from a judgment of the circuit court for the Eastern district of New York. The action was tried and the facts were specially found by the court, a jury having been waived by written stipulation signed by the attorneys for the respective parties. The F. J. Kaldenberg Company, a corporation organized under the laws of the state of New York, and located in the county of Westchester, made five notes in December, 1892, and in January, 1893, amounting in all to $9,400, and each one of which matured in four months from its date. These notes were discounted for the benefit of the maker by the plaintiff, the International Bank of St Louis, a banking corporation located at St. Louis, in the state of Missouri, and nothing has been paid thereon except a part of the first note. The Kaldenberg Company was dissolved by decree of the proper state court on September 21, 1893. At its incorporation it had 11 directors, but in the year 1890 the number was reduced to 7 by a change in the by-laws. It did not appear whether a certificate of this change was filed either in the office of the clerk of Westchester or in the office of the secretary of state. During the years 1892 and 1893 the defendant, Eberhard Faber, was a director of the company. In April 1891, he was chosen by the board of directors secretary and treasurer, and in October, 1891, both orally and by a written resignation delivered to the president of the company, he resigned both offices, and thereafter ceased to act in either capacity. After his resignation no meetings of the board or of the executive committee were held until February 29, 1892, during which time the duties of secretary and treasurer, so far as they were performed, were carried on by F. J. Kaldenberg, the president of the company. His resignation was formally accepted by the company at the meeting of the board of directors held on the 29th day of February, 1892, at which meeting a quorum was present, and a new treasurer was appointed. Four directors constituted a quorum, and by the by-laws it was provided that the acts of the executive committee, of which two constituted a quorum, should have the same power and effect as the proceedings of the board of directors, when it was not in session. Three of the directors and of the executive committee were habitually present in the factory during business hours, and the defendant was habitually at his office in the city of New York. On January 29, 1892, the company duly made and filed in the offices of the secretary of state of New York and the clerk of the county of Westchester annual reports, as required by law, which said reports complied with the statutes in all respects as to the contents thereof, and contained all the information required to be contained therein. These reports were signed by F. J. Kaldenberg, as president of the company and by five of its directors, and were duly verified by the oath of the said Kaldenberg, president. The verification of the report filed in the office of the secretary of state was not signed by said Kaldenberg. No other reports were made or filed by the company during the month of January, 1892, or during the year 1892, or until the 31st day of January, 1893 when reports were filed by it complying in all respects with the law. The reports filed in January 29, 1892, were made and filed by the company in good faith, and in an honest endeavor to comply with the law as it understood it, and in verifying said reports Kaldenberg believed that the law only required a verification by the president. The resignation of the defendant as secretary and treasurer of the company was made in good faith, and was not made with reference to, or in contemplation of, the making and filing of reports or of the creation of the company's indebtedness to this plaintiff. By a statute of the state of New York, amended on January 14, 1892, every stock corporation, except moneyed and railroad corporations, is required to make a report annually in January, or, if doing business without the United States, before the 1st day of May, which shall state the facts designated by the statute. 'Such report shall be signed by a majority of its directors, and verified by the oath of the president or the vice president and treasurer of secretary, and filed in the office of the secretary of state, and in the office of the county clerk of the county where its principal business office may be located. If such report is not so made and filed, all the directors of the corporation shall jointly and severally be personally liable for all the debts of the corporation then existing, and for all contracted before such report shall be made. ' The suit was brought to compel Faber to pay the amount due upon the notes, upon the ground that the report required by the statute in 1892 had not been made and filed. The circuit court entered judgment for the defendant.

Robert D. Murray, for plaintiff in error.

Benjamin F. tracy, Francis Forbes, and Charles T. Haviland, for defendant in error.

Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges.

SHIPMAN Circuit Judge (after stating the facts).

The plaintiff bases the allegation that the company did not make the report required by the statute upon three alleged defects:

1. Because the verification of the paper was not signed by the president. It is not denied that he took the oath, and that the magistrate certified to that fact, but it is said that he should have signed an oath. This criticism is frivolous. Millius v. Shafer, 3 Denio, 60; Jackson v. Virgil, 3 Johns. 540; Bonnell v. Griswold, 80 N.Y. 128.

2. Because the report was not signed by six directors. The company originally had 11 directors, but in 1890 reduced the number to 7 by a change in the by-laws, and thereafter chose only that number. Whether a certificate of the change was filed in the appropriate offices in Westchester county and at Albany is not known, but the actual number of directors who constituted the board was 7. The technical objection to the validity of a corporation's report, which was filed under a similar statute, was treated by...