Church v. Butterfield

Chase, J. The complaint in this action alleges that the Pleasure Island Company, Limited, is a domestic corporation, and that defendants, during the years 1893, 1894, 1895 and 1896, were directors of said. Pleasure Island Company, Limited. The plaintiff is the owner of fourteen bonds'of $500 each issued by the Pleasure .Island Company, .Limited, in 1883, on which -default has been made in payment of interest, and it is alleged that the principal and interest of such' bonds are now due, and that they have been demanded of the corporation and of the defendants, * and payment refused. The plaintiff also asserts that, the complaint alleges, that the Pleasure Island Company, Limited, failed to file its annual report in each of the years 1893, 1894, 1895 and 1896, as provided-by the Stock Corporation Law, and that the defendants are now liable to him for the' amount of such bonds and interest by reason of their failure to make and file such reports. Section 30 of the Stock Corporation Law1 provides: “Every stock corporation except moneyed and railroad corporations shall annually, during the month of January, or if doing business without the United States, before the first day of May, malee a report as-of the first day of January which shall state * * *. Such report shall be signed by a majority of its directors and verified by the oath of the president or vice-president, and treasurer or secretary', and filed in the office of the secretary of- state, and in the office of the county clerk of the county where its principal business office may be located. If such report is .not so made and filed all the directors of the corporation shall jointly and severally be personally liable for all of the debts of the corporation then existing and for all contracted before such report shall be made * * . * » This statute is highly penal in its -nature, and the court should ' not impose the penalty except in cases where the plain language of the section requires- it: Whitaker v. Masterton, 106 N. Y. [267] 277; Brackett v. Griswold, 103 id. 425; Wiles v. Suydam, 64 id. 173. To entitle the plaintiff to recover it is necessary for him to allege and prove that the Pleasure Island Company, Limited, is a stock corporation other than a moneyed or railroad corporation. ■ This may be alleged in direct words stating the fact, or it may be inferred from all the facts stated in the complaint. The allegation that the Pleasure Island Company^ Limited, is a domestic corporation includes every corporation incorporated by or under the laws of the state or colony of Hew York. General Corporation Law, § 3. A business corporation is a stock corporation other than a moneyed or railroad corporation. General Corporation Law, § 2. It is claimed by the learned counsel for the plaintiff that the allegations of the complaint by fair intendment show that the Pleasure Island Company, Limited, is a business corporation. It may be assumed, therefore, that if the complaint by fair intendment does show that the Pleasure Island Company, Limited, is a business corporation, the first objection to the sufficiency of the complaint is obviated. The allegations of the complaint from which the plaintiff claims that it may be fairly inferred that the Pleasure Island Company, Limited, is a business corporation are: “The Pleasure Island Company, Limited, is a domestic corporation having its principal business office at Pleasure Island, Albany county, Hew York.” ' “ By a certain mortgage bearing date the 30th day of June, 1883, upon certain lands, tenements and hereditaments to said Pleasure Island Company, Limited, belonging, duly executed by said company to David J.. King and John A. Deady, trustees, and duly filed and recorded on or about the 2d day of July, 1883, in' the office of the clerk of the county of Albany, in which county the said certain lands, tenements and hereditaments covered by the said mortgage are situated.” “ The said Pleasure Island Company, Limited, its officers and directors and the defendants as such directors thereof filed in the office of the secretary of state in the city of Albany, Hew York, and in the office of the clerk of the county of Albany, where the principal business office of said company is located, no annual reports during the said respective years of 1893, 1894, 1895 and-1896, as required by section 30, chapter 564 of the Laws of 1890 of this state, as amended by chapters 2 and 688 of the Laws of 1892.” [268] ■ All of the allegations of fact in the complaint are as applicable to some nonstock corporations, and to moneyed and railroad corporations as they are to stock corporations other than moneyed corporations and railroad corporations. • The demurrer does not admit either conclusions, of fact or law. Douglas v. Phenix Ins. Co., 63 Hun, 393. The question to be determined on this d'emurrer is whether, assuming every fact alleged in the complaint to be true, enough has been well stated to constitute any cause of action whatever. ■ In determining this all facts that can be implied from the. alie-, gations of the complaint by reasonable and fair intendment are deemed to be well stated. Sage v. Culver, 147 N. Y. 241; Kain v. Larkin, 141 id. 144; Cornwell v. Clement, 87 Hun, 50. There is not sufficient stated in the complaint under this rule to show that' the Pleasure Island Company, Limited, is a stock corporation other than a moneyed or railroad corporation and the plaintiff is not entitled to recover on the complaint as it. stands for that reason. Having found that the demurrer should be sustained for the reason stated, it is unnecessary .for me to consider the other three grounds raised by the defendants as the plaintiff should have leave to amend his complaint even if the demurrer is sustained upon any or all of the grounds stated. Demurrer is sustained, with costs to be taxed by the' clerk of Albany county, plaintiff to have leave to serve an amended complaint within twenty days on payment of such costs. Ordered accordingly.