Seebeck v. King

McAdam, J. The action is by a creditor of a New Jersey stock corporation, doing business in this State, against its directors to enforce their statutory liability. The jury found for the plaintiffs, and the defendant Mott moves for a new trial on the ground of error .of law in refusing to dismiss the complaint. The motion is grounded on the contention that, at the time the indebtedness was contracted, the defendant Mott was not a director of the corporation. In 1897, by chapter 384,the Legislature amended section 30 of the Stock Corporation Law (Laws of 1892, chap. 688) by expressly requiring every foreign stock corporation doing business within this State, except moneyed and railroad corporations, to file the statutory annual report during the month of January; the consequence of the neglect of the corporation to make such report, and the failure of a director of the company to file with the Secretary of State, within thirty days after February first, the prescribed certificate, being to make him liable, and jointly with other defaulting directors, for the existing debts of the corporation. The indebtedness was contracted in May and June, 1898. No report was filed by the corporation in January, 1898, or at any other time, in the office of the Secretary of State of New York, nor did any of the defendants file in said office the certificate authorized by the statute. It appears from a report filed by the corporation in the office of the Secretary of State of [485] Hew Jersey that the defendant Mott was elected or appointed a director of the company on September 28, 1897, for the term of one year. The said defendant, however, testified that, at the annual meeting of directors and stockholders in September, 1897, he requested that he be dropped from the directorate; that, at the urgent request of the codefendants, he agreed to remain on the t>oard for not over two months; that, on Hovember twentieth following, he drafted a letter and told one of the codefendants that he resigned; that said codefendant said the place would be filled at once, and about a week afterwards notified Mott that they had filled it; that he (Mott) had no knowledge that anybody was elected in his place; and that he did not send the letter he had drafted to the corporation. Section 12 of “ An act concerning corporations” (Laws of New Jersey, 1896; Revision of 1896) provides that the directors of corporations shall be chosen annually, and shall hold office for one year, and until others are chosen and qualified in their stead. It does not appear that anyone was chosen to act as director in Mott’s stead. The presumption, therefore, is that Mott continued a director, and that he was a director when the indebtedness was contracted. Bank of Metropolis v. Faber, 38 App. Div. 163. As the New Jersey statute prescribing the term of office of directors is deemed the law here applicable, it is unnecessary to discuss the point whether the acts of Mott constitute a valid resignation, which might be sufficient in the case of a director of a domestic corporation to free him from liability for subsequent debts. Sinclair v. Fuller, 158 N. Y. 612; Blake v. Wheeler, 18 Hun, 496; Osborne & Cheesman Co. v. Croome, 14 id. 164; Chandler v. Hoag, 2 id. 614; Chemical Nat. Bank v. Colwell, 132 N. Y. 250. There is nothing in section 60 of the Stock Corporation Law which militates against the application of the New Jersey statute. Where a corporation, whose by-laws provided that its directors should hold office for a year, or until their successors were elected, held its last election for directors in 1892, it was decided that the directors then elected would, by virtue of the by-laws and the statutes, be presumed to have been acting as directors in January, 1897. St. George Vineyard Co. v. Fritz, 48 App. Div. 233. It is clear that the enabling act of the corporation in question is, at least, as binding upon its' directors as were the by-laws of the company in the case cited. Owing its existence in New Jersey, the corporation is controlled [486] by the laws of that State, which may and do determine the number of directors, their tenure of office and the places where they must reside. It would be absurd to hold that a person could be a legal acting director if sued in New Jersey, but that he is not a director if sued under like circumstances in New York. When ihe charter of a New Jersey corporation comes legally before the -courts of New York, the laws of the foreign State regulating and. governing the grant come with it, are read into and form part of it, and all are to be construed together. The jury have disposed of the facts, and as no error of law is apparent the motion for a new trial must be denied. Motion denied.