289 P. 577 | Mont. | 1930
This action was commenced in Toole county. On motion of all defendants, save Abell, who was not served with process, the venue was changed to Flathead county. The appeal is by plaintiff from the order granting the motion for change of venue.
The complaint alleges, in substance, that defendants are directors of the Abell Oil Company, a domestic corporation with its principal place of business in Flathead county; that the defendants failed to file the annual report of the corporation due on March 1, 1927, showing the condition of the company as of December 31, 1926; that on March 21, 1927, the Abell Oil Company purchased from plaintiff, a Delaware corporation with its principal office and place of business in Toole county, Montana, certain merchandise and paid a part of the purchase price in cash and executed promissory notes payable at the office of plaintiff in Shelby, Toole county, for the balance. Some of the notes not having been paid when due, the action was commenced against the directors by virtue of section 6003, Revised Codes 1921.
The affidavit, in support of the motion for change of venue,[1] shows that all moving defendants reside, and were served with summons in Flathead county, save Dewey, who resides and was served in Lake county; that the cause of action, if one exists, arose in Flathead county, the principal place of business of the Abell Oil Company, and the county in which the annual statements are required to be filed, and not in Toole county, where the action was commenced. *557
Section 6003, supra, requires corporations to file reports by March 1 of each year in the office of the county clerk of the county in which the principal place of business is situated, showing the condition of the corporation on December 31 preceding. It then provides: "If the directors or trustees of any corporation shall fail to file such report, the directors of the corporation shall jointly and severally be liable for all debts or judgments of the corporation then existing, or which may thereafter be in anywise incurred until such report shall be made and filed."
By Chapter 5, Laws of 1927, section 6003 was amended so as to require also that a certified copy of the report be filed in the office of the secretary of state, and in which the italicized words above were omitted. Because of section 90, Revised Codes 1921, Chapter 5 did not become effective until July 1, 1927, long after the alleged failure to file the report and after the indebtedness was incurred. But whether section 6003, as it existed before or as it stands after the amendment, applies here is not important, for the result is the same. Before, as well as after amendment, its provisions are the same so far as the liability here sought to be enforced is concerned. The debt was incurred after the failure to file the statement. Section 6003, before as well as after amendment, covered such a liability on the part of the directors.
The liability created by the statute is in the nature of a penalty for failure to file the statement, and is not based upon contract. (Gans v. Switzer,
In most, if not all, of the foregoing cases it appears that the debt sought to be recovered existed at the time of the *558 failure to file the report. Because of that fact, counsel for plaintiff contend that the cases are not authority on the proposition that liability for debts subsequently incurred is in the nature of a penalty. We do not agree with this contention. The statute imposes the liability in the nature of a penalty for failure to file the report. The debts, whether created before or after the failure to file the report, serve but to measure the extent of the penalty.
The liability being in the nature of a penalty, the proper venue of the action depends upon section 9094, Revised Codes 1921, which, in part, provides: "Actions for the following causes must be tried in the county where the cause, or some part thereof, arose, subject to the like power of the court to change the place of trial: 1. For the recovery of a penalty or forfeiture imposed by statute."
In the case of Commonwealth v. Morrell Refrigerator Car[2] Co.,
But it is contended by plaintiff that, since the notes were made payable in Toole county, and since they evidence the debt sought to be collected, at least a part of the cause of action arose in Toole county within the meaning of section 9094. Like contention was made in the case of Veeder v. Baker,
The reasoning of the court in that case applies to this. Here the failure to file the report gave rise to the cause of action. (State Sav. Bank of Butte v. Johnson, supra.) The debts subsequently created constituted but the measure of recovery. (See Graves v. McCollum Lewis, (Tex.Civ.App.)
The court properly ordered the place of trial changed to Flathead county. The order is affirmed.
MR. CHIEF JUSTICE CALLAWAY and ASSOCIATE JUSTICES MATTHEWS, GALEN and FORD concur.