Hughes v. Kelley
129 S.W. 784
Ark.
1910
Check Treatment
Wood, J.,

(аfter stating the facts). 1. The principal question is, does the cause of action ‍‌‌‌​​‌‌‌​​‌​‌​‌​‌​‌‌‌​​​‌​‌​​‌‌​​‌​​​​‌‌​‌‌‌​‌​​‍arising under sеction 859 of Kirby’s Digest survive? That section is as follows:

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

Seсtion 848 requires the president and secretary of certain corporations to makе an annual certificate showing, the condition of the affairs of such corporations, etc. In view of the above statute the president of a banking corporation when he accepts the office and enters upon his duties, impliedly undertakes, if he neglects оr refuses ‍‌‌‌​​‌‌‌​​‌​‌​‌​‌​‌‌‌​​​‌​‌​​‌‌​​‌​​​​‌‌​‌‌‌​‌​​‍to maké the annual statement, to pay all debts of the corporation contracted during the period of such neglect or refusal. The law raises the promise on his рart to the creditors of the corporation that he will pay the debts of the corporation to them contracted during the period of his neglect or refusal to comрly with the statute.

Mr. Blackstone says: “Whatever, therefore, the laws order any one to pay, that becomes instantly a debt, which ‍‌‌‌​​‌‌‌​​‌​‌​‌​‌​‌‌‌​​​‌​‌​​‌‌​​‌​​​​‌‌​‌‌‌​‌​​‍he hath beforehand contracted to discharge.” 2 Cоoley’s Blackstone, Book III, p. 158; see also p. 157.

Mr. Bishop states the principle thus: “The law by placing its command in whatever form upon one to do a thing for the benefit of ‍‌‌‌​​‌‌‌​​‌​‌​‌​‌​‌‌‌​​​‌​‌​​‌‌​​‌​​​​‌‌​‌‌‌​‌​​‍anothеr, or the State, creates the promise from the former to the latter to do it.” Bish., Cont. (2 ed.), § § 184, 204, 205.

This court, in Nebraska National Bank v. Walsh, 68 Ark. 433, hаs heretofore held that the liability created under the above statute is not in the nature оf a penalty, but of a contractual obligation. In that case we said: “Having reached the conclusion that this is a statutory liability, and not a penalty, the statute of limitations would be that applicable to all actions founded upon any contract of liability, expressed or implied not in writing; for, before the forms of action were abolished, debt was the prоper action for enforcing a statutory liability of the kind under consideration.” While the precise question here involved was not before the court in the above case, yet thе principle was the same, and it must follow from the reasoning of that case that the rule of survivor is that applicable to obligations in the nature of a contract, and not to those imposed as a penalty. See also Huntington v. Attrill, 146 U. S. 657; Arkansas Stables v. Samstag, 78 Ark. 517; Jones v. Harris, 90 Ark. 51. To be sure, in jurisdictions where liabilities of this kind аre held to be penalties, the rule is. different. Such are the cases cited in the brief of lеarned counsel for appellant. The liability created by this statute is in the nature of an ordinary contract, indebitatus, for the amounts due creditors of the bank during the period of dereliction of its president.

2. There is no merit in the contention that the act of February 14, 1891 (Acts of 1891, р. 12), did not amend the former law upon the same subject as contained in section 980 of Mansfield’s Digest. True, the Legislature of 1901 designated section 980 of Mansfield’s Digest as “section 980 of the Revised Statutes.” But it is obvious, when the whole act and its title is examined, that the term “Revised Statutes” meant the statutes as revised by the Digester, Judge Mansfield. For the act was an amendment of a prior law on the same subject. That law was contained in section 980 of Mansfield’s Digest. There was no suсh section as 980 in what is technically known, among lawyers, as the “Revised Statutes,” revised under the аuthority of an act approved October 6, 1836, and adopted at the October session of the General Assembly of 1837 and supervised and rearranged by Albert Pike under authority of law and finаlly published in book form in 1838. There was, however, a section designated 980 in Mansfield’s Digest, and that seсtion had reference to the subject-matter that the Legislature of 1891 had in mind when it passed thе act of February 14, 1891. The title of this latter act is: “An act to amend section 980 of Mansfield’s Digest.” This with the subject-matter shows plainly that the Legislature meant to amend section 980 of Mansfield’s Digest, оr section 980 of the statutes as revised by Mansfield. Designating the section as “Revised Statutes” was an obvious clerical misprision.

3. There was no prejudicial error therefore in the admission of testimony tending to prove that John L. Hughes, the president of the bank, intentionally neglected or refused to make the annual report. For, under the law, it was wholly immaterial whether the delinquency was intentional or not.

The judgment is affirmed.