Mayar v. Poe

Decision Date02 July 1906
Citation95 S.W. 1005,79 Ark. 465
PartiesMAYAR v. POE
CourtArkansas Supreme Court

Appeal from Pulaski Circuit Court; Edward W. Winfield, Judge reversed.

Reversed and remanded.

Morris M. Cohn, for appellant.

1. This is a penal suit, or, at least, a suit ex delicto to enforce a statutory liability. The justice of the peace had no jurisdiction, and the circuit court acquire none on appeal. Kirby's Digest, §§ 848, 859; art. 7, § 40 Const.; 101 U.S. 188; 113 U.S. 452; Thompson, Liability of Directors, 455, 456; Ib. 416; Ib. 425; 146 U.S. 567; 64 Ark 271; 37 Mich. 416; 12 Met. (Mass.), 249; Mechem, Agency, § 539; 68 Ark. 440; 146 U.S. 674; 114 F. 290; 96 N.Y. 323; 113 U.S. 457; 35 Ark. 622; 39 Ark. 463; 52 Ark. 240; 62 Ark. 360; 56 Ark. 592; 48 Ark. 301; 7 Ark. 172; 43 Ark. 375; 197 U.S. 154.

2. The action was premature. The primary liability is on the corporation which ought to be enforced before seeking to impose a secondary liability. 93 U.S. 228; 113 U.S. 302; 3 Bradw. (Ill. App.), 191; Ib. 202; 24 Ga. 273; 41 F. 459; 34 Ark. 323; 71 Ark. 1; 20 Wall. 520, and authorities supra.

3. The intent of the law was fully complied with when a report for the year ending July 1, 1903, was signed, verified and filed by the vice-president of the company. 4 Thomp. Corp., § 4687. No issue is raised as to the correctness of the reports. 3 Thomp. Corp., § 4235; 26 P. 812. See also 58 Hun (N. Y.), 87; 29 Barb. (N. Y.), 196.

E. B. Kinsworthy and Marshall & Coffman, for appellee.

1. The statute is not penal. 68 Ark. 433, and authorities cited; 10 Cyc. 854-5-6. The liability therefore must be contractual. 3 Thomp. Corp., § 4164; 76 F. 695; 61 Minn. 375; 11 Neb. 243; 45 N.W. 923; 118 Mass. 295; 176 U.S. 599; 14 S.C. 494.

2. The statement filed July 1, 1903, did not comply with the law, because it was not signed and sworn to by the president and secretary; because it did not show the condition of the business on that date, and because the affidavit does not show that it is a true and correct statement of the business on that date. 79 N.Y.S. 437; 56 Id. 542; 65 Id. 391; 50 Id. 265; 67 How. Practice, 204; 40 N.Y.S. 1081; 79 F. 919; 86 F. 443; 47 N.Y.S. 302.

OPINION

BATTLE, J.

Franklin Bros. Company was a corporation organized under the laws of Arkansas. Its domicil and place of business was Little Rock, Arkansas. Henry W. Myar was its president; J. P. Franklin, vice-president; Joe A. Franklin, secretary, and Oscar Davis, treasurer.

Sections 848 and 859 of Kirby's Digest are respectively as follows:

"Sec. 848. The president and secretary of every corporation organized under the provisions of this act shall annually make a certificate showing the condition of affairs of such corporation, as nearly as the same can be ascertained, on the first day of January or July next preceding the time of making such certificate, in the following particulars, viz.: The amount of capital actually paid in; the cash value of its real estate; the cash value of its personal property; the cash value of its credits; the amounts of its debts; the name and number of shares of each stockholder, which certificate shall be deposited on or before the 15th of February, or of August, with the county clerk of the county in which said corporation transacts its business, who shall record the same at length in a book to be kept by him for that purpose.

"Sec. 859. If the president or secretary of such corporation shall neglect or refuse to comply with the provisions of section 848 and to perform the duties required of them respectively, the person so neglecting or refusing shall jointly and severally be liable to an action founded on this statute for all debts of such corporation contracted during the period of any such neglect or refusal."

A. B. Poe brought an action against Franklin Bros. Company, H. W. Myar and J. A. Franklin, before a justice of the peace of Pulaski County. He stated in his complaint that "he is a creditor of Franklin Bros. Company, a corporation duly organized and doing business under the laws of Arkansas, with its offices and domicil in Pulaski County. That plaintiff's debt amounts to $ 150, all of which has been incurred during the calendar year 1904. That defendants are and have been for the last two years or more president and secretary respectively of said corporation, and as such officers it became their duty to annually file with the clerk of the Pulaski County Court a verified statement, showing the condition of the affairs of said corporation on the first day of January, or of July, next preceding time of filing same. That they have wholly failed and refused to file such statement, and have been in default thereof for two years last past until July 7, 1904, and that plaintiff's debt was incurred by said corporation during the period of such default. Plaintiff alleges that said defendants are jointly and severally liable to plaintiff for its said debt." And he asked for judgment against the defendants for its debt, interest and costs.

Plaintiff recovered judgment before the justice of the peace, and defendants appealed to the circuit court.

Myar filed an answer in the circuit court, denying the allegations of the complaint.

The court, sitting as a jury and trying the issues in the case found the facts and law as follows: "The court finds that Franklin Bros. Company was a corporation organized under the laws of Arkansas; that H. W. Myar was president; that the annual statements of said corporation were filed February 12, 1902, July 1, 1903, and July 4, 1904; that the statement filed July 1, 1903, was signed and sworn to by J. P. Franklin, vice-president, and J. A. Franklin, secretary; that the indebtedness sued for was contracted between January 1, 1904, and May 1, 1904; that the statement filed July 1, 1903, was not sufficient to relieve H. W. Myar; that he is liable for the amount of ($ 137.60) one hundred and thirty-seven dollars and sixty cents, with...

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