62 N.Y.S. 775 | N.Y. App. Div. | 1900
The plaintiff, alleging that the defendant Fritz was, in the year .1891, a director of the California Vintage Company, a -corporation •of the State of New York, brought this action to enforce the liability created by section 30 of the Stock Corporation Law (Laws of
It is urged on his behalf that there was no competent proof to show that he was a director of the California Vintage Company at the time the indebtedness to the plaintiff accrued. That indebtedness arose on promissory notes, dated and maturing in the year 1897. The plaintiff showed by the only stock book the .company had or used that a certificate of stock had been issued to Fritz. The cer- • tificate itself was not produced, but an entry on the stub of the certificate book showed that one had been issued. The directorship was proven by the record of the company contained in the minute book of the proceedings of its board of directors, and in connection with that evidence the president of the company testified that Fritz was present at meetings of the directors and participated therein, taking an active part in the business transacted at such meetings. From this minute book it was shown that the defendant Fritz was elected a director of the corporation in the year 1892, and by the by-laws of the company read in evidence it appeared that directors were to
But the competency of the evidence by which Mr. Fritz’s rel&tion to the company as a director was established is challenged. In the main, that evidence is from the boobs of the company. • While those books would not have been competent evidence against a stranger ,or as against Mr. Fritz, in an action in which the company itself sought to enforce a liability against him arising out óf some dealing by him with it as an individual, they were competent to establish that the defendant Fritz was a director, and, if-it were necessary, that he was a stockholder. The books of a corporation “ are received in evidence generally to prove corporate acts of a corporation, such as its incorporation, its list of stockholders, its by-laws, the formal proceedings of its board of directors audits financial-condition when its solvency comes in question.” (Rudd v. Robinson. 126 N. Y. 118.) The records of this corporation show that the defendant was a stockholder and also that he was elected a director, and that he acted as a director ; in addition to which there is independent proof that he did act as a director. Having been elected a director and it being shown by independent evidence that he accepted the position and took part in the business and affairs of the corporation, he cannot, in order to avoid liability arising out of the failure to file an annual report, claim that he was not eligible as a direetor. This does not result from an estoppel, but as a consequence “ of the rule of law that he who enters upon an office and exercises its functions is responsible for his acts therein to the same extent as though he of right occupied the position.” (Donnelly v. Pancoast, 15 App. Div. 323.)
It was claimed at the trial that the plaintiff, a foreign corporation, had not filed the certificate required by law to enable it to do business within this State. Upon that point it is sufficient to say that it is not raised by the pleadings. ■
As'said before, the protection of this amendment is not claimed by the defendant in his pleading. The plaintiff’s contention is, that that should have been done, it insisting that the requirement of section 34 is a proviso only and not an exception, and invoking the rule that the plaintiff is not bound to anticipate by negative allegations a proviso, but may leave that to his adversary. (Rowell v. Janvrin, 151 N. Y. 67.) In the view we take of the effect of this amendment, it is unnecessary to consider whether what is enacted as to notice by the 34th section constitutes an exception or a proviso. It seems to require the service of a written notice as a condition precedent to liability, and, if that is so, the performance of the condition precedent would be a part of the cause of action. But we do not pass upon that point, as we think the proper construction of the statute is such as to render it unnecessary to determine a question of pleading in this case. The amendment does, in express words, refer to cases in which there has been a failure to file a report, either before or after its enactment, but there is nothing in its terms, or by necessary implication therefrom, to authorize the construction that .its retroactive operation shall be such as to destroy causes of action already put in suit, and in which the parties are awaiting the judgment of the court. This action was begun and was at issue nearly two years before the amendment to the statute was passed.- The
We. have had occasion to consider the effect of legislation depriving creditors of insolvent banking corporations of their right to enforce the statutory liability of stockholders under the 52d section of the Banking Law of 1892 (Chap. 689). By chapter 441 of the Laws of 1897, that section was amended so as to provide that wherever such corporation was dissolved by final order of the court having' jurisdiction, and a permanent receiver or receivers shall have been appointed, all actions or proceedings to enforce the liability of stockholders should be begun and prosecuted only in the name and in behalf of such receiver or receivers, unless they have refused to take any action, upon proper request. In Mahoney v. Bernhard, which was a creditor’s suit against a stockholder (45 App. Div. 499), it was held that the contention that that amendment applied to an action actually pending when it was passed, was untenable, and that the retrospective language used in the amendment did not affect such pending action. We think the same construction should be given to the amendment of 1899, of the Stock Corporation Law, although it .may affect a right, while the other statutes affected only a remedy, and that the Legislature, in amending the Stock Corporation Law, intended nothing else. In pending actions a written notice of the election of the creditor to. hold the director liable had already been given In .the summons and complaint. . The amendment does not require any particular form of written notice, and it would be an unreasonable construction to hold that an action in which the issue
There must have been some legislative purpose or intent in passing this amendment of 1899. We are unable to perceive that there could have been any other legitimate object than to give an opportunity to a director to make payment or settlement of a claim against him and thus save himself the costs of an action, or put himself in a position by paying the debt to be subrogated to the rights of the creditor or enforce contribution from his co-directors. Subrogation and contribution do not depend on the notice to be given by the creditor, but upon the payment of the creditor’s claim. To that end it is not essential that existing actions should be discontinued. It is not required to effectuate all that it was intended to accomplish by the provision, that it shall be held to apply to causes of action already in suit to which the defendant has pleaded and in which a written notice has been given by the complaint. Full effect can be given to the retrospective requirement of the amendment without resorting to such a construction or impute to the Legislature such an extraordinary intent. If the whole liability had been repealed, a different question would arise, but the case is not to be treated asoné in which a ¡Denal statute has been repealed. There still exists a law under which after trial judgment would be authorized. The liability still exists, but is only
The judgment and order appealed from must be affirmed, with cost's. *
Van Brunt, P. J., Barrett, O’Brien and McLaughlin, JJ., concurred. '
Judgment and order affirmed, with costs.