CORNELL v. ROACH

CORNELL v. ROACH. N. Y. Supreme Court, Special Term ; First Department, February, 1881. Successive Failures to File Annual Reports by Trustees of Manufacturing Corporation.—Statute of Limitations.—Pleadings. If the trustees of a manufacturing corporation fail, during successive years, to file the annual report required by statute, the right of action is barred by the statute of limitations when three years have elapsed since the first default, and the continuance of the default does not create a new liability. It is not necessary, in order to render this rule applicable, that it appear expressly from the pleading that the same persons were trustees during the several years, if enough is stated to raise an implication that they were. This was an action to recover of the defendants, trustees of a corporation known as the JEfcna Iron Works, organized under the general manufacturing act, passed February 17, 1848, and the amendments thereof. The plaintiffs were the owners and holders of five bonds of $1,000 each, made by the corporation, dated March 21,1878, payable one year from date. These bonds, as the complaint alleged, were made! and delivered by the corporation for a valuable consid-i eration, and came into the possession of the plaintiffs: before they were due. The complaint alleged that the corporation did not,, within twenty days from January 1, 1877, make,: publish and file a report, as required by law. It also alleges that the defendants were trustees during the entire month of January, 1877. The ninth defense alleged that the defendants failed to file any annual report within twenty days from January 1, 1878, and that they filed none in the years 1874, 1875 and 1876, and that before this action was brought, which was on December 22, 1879, more than three years had elapsed from the time when any penalty or claim whatever, if any, had arisen in plaintiff’s favor against the defendants herein. The plaintiff demurred to this defense (and others which it is not necessary to state), upon the ground that they are insufficient in law upon the face thereof. Talmadge W. Foster, for plaintiff, in support of demurrer. George W. Van Sielen, for'defendants, opposed. [MAJORITY — Van Vorst, J.] Van Vorst, J. [After stating that the case was governed by the decision in Losee v. Bullard, 79 N. Y. 404, and that Nimmins v. Tappan, 2 Sweeny, 652, so far as it holds differently, must be deemed overruled.)—Although it does not in words appear that the trustees, in office when the default in 1874 occurred, continued still to hold office, as such, during the subsequent years, and until 1877, yet there is enough stated to raise the implication that they were the same. That being so, their liability was fully fixed by the failure to file a report in 1874, when the debt existed. I do not consider the subsequent case in the court of appeals (Duckworth v. Roach, not yet reported, but a memorandum of which has been handed up) as disturbing the rule laid down in Losee v. Bullard. In this latter case the omission to file reports in previous years did not, as it does here, appear by the pleadings. This disposition of the second ground of demurrer adversely to the plaintiff, as it upholds the plea of the statute of limitations which is an answer to the action, renders ifc unnecessary to consider the other ground of demurrer. There should be judgment for the defendant on the demurrer, with costs. But see Anderson v. Speers, 8 Abb. New Cas. 382. See 80 N. Y. 648.