Edmisten v. Smith & Company

No. 9152. Edmisten v. Smith & Company. Corporations — Annual Report — Directors’ liability — Statute construed. The directors of a corporation, which fails to file annual report required by c. 102 of the Acts of 1911, are liable for the debts of the corporation, even though the report is subsequently filed before action brought. Error to Alamosa District Court, Hon. Jesse C. Wiley, Judge. Mr. Fred D. Stanley, Mr. Albert L. Moses, for plaintiff in error. Mr. J. T. Adams, Messrs. Baldridge, Keller & Keller, for defendant in error. [MAJORITY — Mr. Chief Justice Garrigues] Mr. Chief Justice Garrigues delivered the opinion of the court: July 12, 1915, the Emporium Stores Company, a Colorado corporation, was indebted to defendant in error for goods, wares and merchandise purchased between June 24 and December 18, 1914. The corporation failed to file the annual report required by chapter 102, page 254, Laws 1911, within 60 days next after January 1, 1915, but did file such report April 8, 1915. This suit, commenced July 12, 1915, is based upon the statute to enforce against Edmisten the collection of the debt, he being a director of the corporation. It is claimed, inasmuch as no default existed when the indebtedness was contracted, and as the report was filed before the suit was commenced, that the statute making the directors liable does not apply. The statute provides that, if the report is not filed within time (60 days next after the first day of January in each year) the directors shall be liable for' all debts of the corporation contracted during the year preceding, and until it shall be filed. The latter clause, “and until such report shall be made and filed,” means that the directors shall be liable for all debts contracted after the 60 days, and until the report is filed, as well as for all debts contracted the year preceding. The directors are clearly within the provision of the statute fixing their liability for failure to file the report within time, and they could not relieve themselves or escape the consequences of such liability by filing a report after-wards. Austin v. Berlin, 13 Colo. 198, 201, 22 Pac. 433; Cavanaugh v. Patterson, 41 Colo. 158, 161, 91 Pac. 1117; Bradford v. Gulley, 10 Colo. App. 146, 148, 50 Pac. 314; Thatcher v. Salomon, 16 Colo. App. 150, 153, 64 Pac. 368; Hazelton v. Porter, 17 Colo. App. 1, 4, 67 Pac. 170; Cannon v. Breckenridge Merc. Co., 18 Colo. App. 38, 69 Pac. 269; Reuter Hub & Spoke Co. v. Hicks, 181 Mich. 250, 148 N. W. 339. Judgment affirmed. Affirmed. Mr. Justice Teller and Mr. Justice Bailey concur.