Breck v. Brewster

Miller, J.: Upon a former appeal in this case we reversed a judgment in favor of the defendant (150 App. Div. 202). The point was not' raised that a trustee in bankruptcy could not maintain [801] an action to enforce the obligation of stockholders to creditors, imposed by section 56 of the Stock Corporation Law,-and it was assumed that section 47 of the Bankruptcy Act, as amended by the act of 1910 (30 U. S. Stat. at Large, 557, § 47, as amd. by 36 id. 840, § 8), applied. The point is now raised and our attention is called to the error in assuming that the amendment of 1910 applied to the case. That amendment by its terms (36 U. S. Stat. at Large, 842, § 14) was not to apply to bankruptcy cases pending when it took effect, and the proceeding, in which the plaintiff was appointed trustee, was pending at that time. The defendant is sued, not as a subscriber, to recover an unpaid subscription, but as a holder to enforce a statutory liability given to creditors. It is quite plain that that liability is not an asset of the corporation. Even though the defendant had been a subscriber, the subscription agreement would have limited his liability to the corporation. (Southworth v. Morgan, 205 N. Y. 293.) As a mere holder, he is liable only perforce of the statute, and the statute in terms provides that that liability is to creditors. The Bankruptcy Law nowhere provides that a trustee may enforce the statutory liability of stockholders to creditors and the amendment of 1910, to which we referred in our former opinion, quite plainly refers to the assets of the corporation. We have recently had occasion to observe, with respect to the statutory liability of stockholders, that it is not to the corporation or to all creditors but only to those within- prescribed conditions. (Mosler Safe Co. v. Guardian Trust Co., 153 App. Div. 117, 126, and cases cited.) It follows that, in the absence of an express provision of statute authorizing the trustee in bankruptcy to maintain the action, he has no standing to do so. The judgment should, therefore, be reversed, with costs, and a judgment entered dismissing the complaint, with costs. Ingraham, P. J., McLaughlin and Dowling, JJ.,.concurred; Laughlin, J., concurred in result. Judgment reversed, with costs, and judgment ordered dismissing complaint, with costs. Order to be settled on notice.