Thayer v. New England Lithographic Steam Printing Co.

Wells, J. This suit is brought under the provisions of the St. of 1862, o. 218, § 4, to enforce, against the officers of a manufacturing corporation organized under the general laws, a supposed liability for the debts of the corporation, imposed by the St. of 1863, o. 246, § 2. The objection, in the outset, is, that the remedy provided by the St. of 1862, e. 218, can be resorted to only for the purpose of enforcing a liability imposed or recognized by that statute; and that, for the liability relied on in this case, the only remedy is to be had under the Gen. Sts. e. 68, § 17. But the remedy given by the St. of 1862, c. 218, § 4, is not in terms so restricted. If restricted in effect, it is by force only of the same provision which defines and limits the grounds of liability. The first section declares that “ officers of manufacturing corporations shall be jointly and severally liable for its debts or contracts in the following cases, not otherwise.” The St. of 1863, c. 246, § 2, enlarged the grounds of liability, by adding the case for which this suit is brought. It made no provision in regard to the remedy. We think the remedy provided by the St. of 1862 might properly be resorted to in cases of manufacturing corporations, notwithstanding the fact that § 2 of the St. of 1863, was equally applicable to other corporations, in respect of which that remedy would not apply; and notwithstanding the existence of another remedy, applicable to all corporations alike, as provided in the Gen. Sts. c. 68, § 17, if that remedy still re, mains applicable to manufacturing corporations. But this result is made necessary and conclusive by the provisions of § 3 of the St. of 1862, c. 218, to wit: “ No stockholder oi officer of such corporation shall be held liable for its debts or con — 527 — tracts, unless a judgment is recovered against it and the corporation shall neglect for the space of thirty days, after demand made on execution, to pay the amount due,” &c. This provision remains unchanged. It precludes any proceedings against stockholders or officers, whether upon the grounds defined by the St. of 1862 or otherwise, unless a judgment shall have been recovered in a suit against the corporation, and there shall have been neglect of payment for the space of thirty days after demand made on the execution. Section 4 provides the remedy which is then open to creditors against officers or stockholders who may be liable. This remedy is not expressly declared to be in place of that allowed by the Gen. Sts. o. 68, § 17, nor to be in addition thereto. But as it is full and complete, so far as manufacturing corporations are concerned, its association with the preceding section indicates that successive steps, thus defined by the two sections, were intended to constitute one entire mode of remedy, which is exclusive of all others. We are satisfied that it is so to be regarded, and that the order of proceedings pointed out by those two sections is to be followed in all cases of manufacturing corporations, whether officers or stockholders are to be charged, upon grounds set forth in that statute or otherwise. As the claim sought to be enforced is the original debt, and the judgment is only a part of the necessary proceedings for enforcing it, the repeal of the St. of 1863 by that of 1870 does not defeat recovery; it being provided that the repeal “ shall not impair any right already acquired or liability incurred under existing laws.” The persons joined with the corporation as defendants were acting as directors during the whole period within which these iebts were contracted. They are therefore liable as such, if any Lability exists, notwithstanding the irregularity or informality of the meetings at which they were elected. They neglected to file the special certificate required by the St. of 1862, c. 210, during the whole period of their official action from February 1868, It is contended that, as these debts, or some part of them at least, were contracted within thirty days after the annual meet — 528 — ing for 1869, there could be no default then; because the certificate required to be made is of facts as they existed at the date of the last annual meeting, and that certificate is not required to be filed until the end of thirty days after such meeting ; while the certificate required for the former year becomes an impossibility upon the occurrence of the next annual meeting, so that no duty to file it remains to be performed afterwards by either the old or the new board of directors. But we think this construction of the statute is too strict and literal. The purpose is to secure, to the public, information, furnished by such a statement, of the character and condition of the corporation, so that those who may deal with it may have knowledge, or means of knowing those facts. So long as the public are deprived of this information, there is neglect on the part of the corporation; and debts contracted while this condition exists are within the spirit and intent of the statute. It may be difficult to determine, in case of a change of officers at the annual meeting, whether the liability for debts •contracted within thirty days thereafter, and before a certificate for the new year is filed, should fall upon the old board, who alone were guilty of neglect in regard to the certificate, or upon the new board, by whom such debts were contracted. But that difficulty does not arise here. That it was intended to be placed upon one or the other, we cannot doubt. The neglect of the old board is not cured until a certificate is filed. The remaining question is, whether the officers of the corporation may show the original invalidity of the claims relied on, or are concluded by the judgment against the corporation. We believe the decisions in relation to individual liability for corporate debts have been, in all aspects in which the question has been presented, uniform in sustaining the conclusiveness of the judgment against the corporation, as establishing the existence of the debt for which it is rendered. Gaskill v. Dudley, 6 Met. 546. Lane v. School District in Weymouth, 10 Met. 462. Holyoke Bank v. Goodman Paper Manufacturing Co. 9 Cush. 576. Farnum v. Ballardvale Machine Shop, 12 Cush. 507. Johnson v. Somerville Dyeing & Bleaching Co. 15 Gray, 216. — 529 — It follows, that the plaintiff is entitled to recover his debt against the remaining defendants, as officers of the corporation. Decree accordingly.