Whitaker v. Masterton
| Decision Date | 28 June 1887 |
| Citation | 12 N.E. 604,106 N.Y. 277 |
| Parties | WHITAKER v. MASTERTON and others. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from general term supreme court, First department.
The Imperial Skirt Manufacturing Company was a corporation organized under the general manufacturing of 1848, and the acts amendatory thereof. At various periods during the year 1877 it made its four promissory notes, amounting in the aggregate to the sum of $13,000, and delivered them to the plaintiff for value. At their maturity the several notes were dishonored, and the plaintiff then commenced an action upon them against the corporation, and recovered judgment against it. A portion of the judgment was collected, and the balance of $11,610.47 was left unpaid, and the present action was commenced against these defendants as trustees of the corporation to recover that sum, with interest. In his complaint the plaintiff alleges three causes of action: (1) That the defendants were trustees of the corporation, and that it did not, within 20 days from the first day of January, 1878, make, file, and publish the annual report required by the statute, but that the defendants did, as matter of fact, on or about the eighteenth day of January, 1878, file and publish what purported to be a report which, though it did state that the capital of the company had been paid in in cash, patent-rights, merchandise, machinery, etc., did not state the proportion in which it had been so paid in, nor how much stock was issued for money, and how much for property, and that they thus wholly failed to comply with the provisions of the statute; (2) that the defendants, being such trustees and officers, did, on or about the lastmentioned day, publish what purported to be a report, but that the same was false in a material representation; and (3) that the defendants, in organizing the corporation, conspired to deceive and defraud the plaintiff. The case was tried at a circuit before a judge without a jury, and judgment was given in favor of the defendants, from which judgment plaintiff appealed to the general term, and from affirmance there to this court.
Geo. V. N. Baldwin, for appellant.
Flamen B. Candler, for respondents.
The trial judge found that there was no fraud or conspiracy as alleged by the plaintiff in the second and third causes of action, and the findings against the plaintiff in reference to those causes of action being based upon sufficient evidence, and having been affirmed by the general term, conclude us, and we have no power to review or interfere with them. Our sole duty, therefore, is to determine whether the court below erred in reference to the first cause of action.
It is undisputed that the defendants, as trustees of the corporation, made, filed, and published a report on the eighteenth of January, 1878, which is as follows:
‘JOHN M. MASTERTON, President.
‘Majority of the Trustees.’
The contention of the plaintiff is that this report was wholly inadequate and inoperative, because it did not state the proportion of the capital paid in, and what amount thereof was paid in cash, and what amount in property; and therefore it is claimed that the report did not comply with section 12 of chapter 40 of the Laws of 1848, which, as originally enacted, provided that every corporation organized under that act should annually, within 20 days from the first day of January, make, verify, publish, and file a report, stating ‘the amount of capital, and of the proportion actually paid in, and the amount of its existing debts;’ and that, if any corporation should fail so to do, all its trustees should be jointly and severally liable for all its debts then existing, and for all that should be contracted before such report should be made.
As we have repeatedly held, this section is highly penal, and it should be construed like other penal statutes. Its scope should not be enlarged by construction or implication, and the courts should not impose the penalty except in cases where the plain language of the section requires it. Whitney Arms Co. v. Barlow, 63 N. Y. 62;Wiles v. Suydam, 64 N. Y. 173;Bonnell v. Griswold, 80 N. Y. 138;Brackett v. Griswold, 103 N. Y. 425, 9 N. E. Rep. 438. The report made by the defendants was in form a full compliance with the section referred to. It stated the amount of the capital; that it was all actually paid in; and the amount of the existing debts of the company. That was all that was required to be stated, and the penalty was imposed for anomission to...
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