Rogers v. Decker

• Decision Date: 22 March 1892
• Citation: 30 N.E. 571,131 N.Y. 490
• Parties: ROGERS v. DECKER.
• Court: New York Court of Appeals Court of Appeals

131 N.Y. 490

30 N.E. 571

ROGERS

v.DECKER.

Court of Appeals of New York.

March 22, 1892.

Appeal from supreme court, general term, first department.

Action by Thomas Rogers against Alonzo T. Decker. From an order of the general term reversing an order of the special term compelling the plaintiff to accept an unverified answer, defendant appeals. Affirmed.

Dill, Chandler & Seymour, for appellant.

James C. Murray, for respondent.

FINCH, J.

This action was brought to enforce the liability of the defendant as trustee of a club incorporated under the law of 1865, c. 368. Section 7 of that act provides that such trustees shall be liable ‘for all debts due from said company or corporation contracted while they are trustees, provided said debts are payable within one year from the time they shall have been contracted, and provided a suit for the collection of the same shall be brought within one year after the debt shall become due and payable.’ The complaint contained appropriate allegations to establish the defendant's liability under that statute, and was duly verified. The defendant served an unverified answer which his adversary refused to accept. The defendant thereupon moved for an order requiring the plaintiff to accept the answer, and the special term granted the motion upon the ground that the action was penal in its character, and upon the authority of Hall v. Siegel, 7 Lans. 206, affirmed in this court without an opinion, 53 N. Y. 607. If that is the true nature of the action, the unverified answer was sufficient, and should have been accepted. Code Civil Proc. §§ 523, 837.¹ On appeal to the general term, the order was reversed, that court holding that the action was not penal in its nature, and refusing to follow in that respect the case cited. The opinion of the general term shows very clearly the analogy between such a cause of action as was here pleaded and that arising under the usual corporate acts which make the stockholders liable for debts of the company until the capital has been fully paid in. It shows that in such case the liability is not so much created by the statute as retained and preserved under the corporate form; that but for the latter the stockholders would have been liable as partners; and the statute continued that primary and original liability until the requisites of a corporate exemption were fully supplied. Corning v. McCullough, 1 N. Y. 47. The opinion further distinguishes, as was done in Wiles v. Suydam, 64 N. Y. 173, between such a cause of action and one founded upon a statutory provision, which makes officers liable for failure to file a report or for its falsity, in which case we have held that the liability is a penalty imposed by the statute for disobedience to its commands. Gadsen v. Woodward, 103 N. Y. 244, 8 N. E. Rep. 653. In one case the original and primary liability of the members of the association which would have existed but for the incorporation is, as to some of them, retained and perpetuated, notwithstanding the incorporation; in the other, that primary liability has been lost and destroyed by force of the completed incorporation, but is created anew by the statute in the form of a penalty for specific acts of disobedience. Under the statute of 1865, no new liability is created; a primary and original obligation is continued and retained. Nothing is required or forbidden to be done as the basis of a penalty for disobedience, but the corporate form...