« ΠροηγούμενηΣυνέχεια »
brace the tract subsequently selected and designated and described in the patent of October 23, 1858. And the references which must be relied on to furnish any description whatever for the land conveyed by the deed, when applied, result simply in restoring to the deed the particular description by boundaries which for imputed error had for purposes of interpretation been struck out.
The case is not one to which the maxim invoked for the construction of the deed can be applied. That rule of interpretation, which rejects erroneous particulars of description, where what is left sufficiently identifies the subject of the grant, is adopted in aid of the intention of the grantor, as gathered from the instrument itself, read in the light of the circumstances in which it was written. But here it is expressly found as a fact by the court, in reference to the land originally selected by Buffalo, and described in the deed from Armstrong to the plaintiff, “that the land Buffalo had in view and intended in such designation is not included, nor any part thereof, in the patents subsequently issued by the United States to the relatives of said Buffalo named above," and "that a large portion of the land embraced within the courses and distances of said deed is covered by water, and that portion which is not covered by water in said description is land which Chief Buffalo had in view and intended to embrace in his selection as aforesaid, but does not embrace the land involved in this suit." So that the description of the land in the deed which it is sought to reject, because it is inconsistent with that of the patent, is an accurate and not an erroneous description of the land intended by the parties to be embraced and conveyed by the deed from Armstrong to the plaintiff.
It follows that there is no error in the judgment of the circuit court, and it is accordingly affirmed.
(113 U. S. 452)
CHASE 0. CURTIS and another.
(March 2, 1885.) 1. CORPORATION-LIABILITY OF TRUSTEE UNDER LAWS OF NEW YORK.
The twelfth section of the New York legislative act of February 17, 1848, controlling “the formation of corporations for manufacturing, mining, mechanical, or chemical purposes," is penal in its character, and must be construed most favor. ably for those sought to be charged under it, and with strictness against their alleged liability. Under such a rule of construction the language of the act is limited by its own terms to a liability, on the part of tbe trustees, to debts of the cor
poration arising ex contractu. 2. SAME-EVIDENCE-Effect op New YORK ACT- JUDGMENT AGAINST CORPORATION AS
EVIDENCE AGAINST TRUSTEE.
The effect of the New York legislative act of February 17, 1848, is not to make a judgment against a corporation evidence or a ground of liability against the trustees. Such liability is founded upon the obligation of the corporation on which
the judgment itself rests. 3. SAME-JUDGMENT IN ACTION OF TORT-CONTRACT.
A liability for a tort created by statute, although reduced to judgment by a recovery for the damages suffered, does not thereby become a debt by contract.
In Error to the Circuit Court of the United States for the Southern District of New York.
* The complaint in this action, after alleging that the plaintiff, who is plaintiff in error, was a citizen of Pennsylvania, and the defendants citizens of New York, proceeds as follows:
“Second. That at the times hereinafter mentioned the defendants were trustees of the Union Petroleum Company of New York.
"Third. That the said company is, and at the times hereinafter mentioned was, a corporation organized pursuant to an act of the legislature of the state of New York, entitled 'An act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes,' passed on the seventeenth day of February, 1848, and the amendments thereto, its principal place of business being in the city of New York.
“Fourth. That the said plaintiffs brought their plea of trespass on the case against the said Union Petroleum Company of New York in the court of common pleas for the county of Venango, in the state of Pennsylvania, in which the said Union Petroleum Company duly appeared, and that the said action was thereafter, and on or about the ninth day of September, 1873, on the petition of the said Union Petroleum Company, verified by the affidavit of Abijah Curtis, one of the defendants above named, removed to the United States circuit court for the Western district of Pennsylvania. And that on the thirtieth day of July, 1874, and before the time for filing the annual report hereinafter mentioned, the above-named plaintiffs duly recovered a judgment in the said action against the said Union Petroleuin Company of New York in the circuit court of the United States in and for the Western district of Pennsylvania, by the judgment and consideration of said court having jurisdiction therein, and of the said Union Petroleum Company of New York, for forty thousand five hundred dollars*($40,500.00) dainages, and three hundred and twenty-eight dollars and ninety-seven cents ($328.97) costs, which judgment was duly given, and still remains in full force and effect, not satisfied or annulled, and no part thereof has been paid.
“Fifth. That the said Union Petroleum Company of New York did not within twenty (20) days from the first day of January, 1875, make and publish a report as required by law in such case made and provided, signed by its president and a majority of its trustees, and verified by the oaths of the president or secretary thereof, and did not file the same in the office of the clerk of the county where the business of the company was carried on, to-wit, the county of New York; nor have they made, published, signed, verified, or filed any such report whatsoever as by law required, but have wholly failed so to do.
'Wherefore, the plaintiffs demand judgment against the above-named defendants in the sum of $40,828.97, with interest on $40,500.00 from the thirtieth day of July, 1874, and on $328.97 from the third day of October, 1874, besides the costs and disbursements of this action."
To this coniplaint the defendants severally demurred, on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained, and judgment rendered in favor of the defendants, dismissing the complaint, to reverse which this writ of error is prosecuted.
The statute on which the action is founded is as follows, (Laws N. Y. 1875, C. 510, passed June 7, 1875:)
“Section 1. The twelfth section of the Act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes,' passed February 17, 1848, as said section was amended by chapter 657 of the Laws of 1871, is hereby further amended, so that section 12 shall read as fol. lows:
“Sec. 12. Every such company shall, within twenty days from the first day of January, if a year from the time of the filing of the certificate of incorporation shall then have expired, and if so long a time shall not have expired, then within twenty days from the first day of January in each year after the expiration of a year from the time of filing such certificate, make a report, which shall be published in some newspaper published in the town, city, or village; or, if there be no newspaper published in said town, city, or village, then in some newspaper published nearest the place where the business of the company is carried on,—which shall state the amount of capital, and of the
proportion actually paid in, and the amount of its existing debts; which report shall be signed by the president and a majority of the trustees, and shall be verified by the oath of the president or secretary of said company, and filed in the office of the clerk of the county where the business of the company shall be carried on; and if any of said companies shall fail so to do, all the trustees of the company shall be jointly and severally liable for all the debts of the company then existing, and for all that shall be contracted before such report shall be made. But whenever, under this section, a judgment shall be recovered against a trustee severally, all the trustees of the company shall contribute a ratable share of the amount paid by such trustee on such judgment, and such trustee shall have a right of action against his co-trustees, jointly or severally, to recover from them their proportion of the amount so paid on such judgment: provided, that nothing in this act contained shall affect any action now pending."
H. J. Scudder and G. A. Black, for plaintiff in error. G. P. Lowrey, for defendants in error.
* MATTHEWS, J. It is the well-settled rule of decision, established by the court of appeals of New York in numerous cases, that this section of the statute, to enforce which the present action was brought, is penal in its character, and must be construed with strictness as against those sought to be subjected to its liabilities. Merchants' Bank v. Bliss, 35 N. Y. 412; Wiles v. Suydam, 64 N. Y. 173; Easterly v. Barber, 65 N. Y. 252; Knox v. Baldwin, 80 N. Y. 610; Veeder v. Baker, 83 N. Y. 156; Pier v. George, 86 N. Y. · 613; Stokes v. Stickney, 96 N. Y. 323. In the case last cited the action authorized by it was held to be ex delicto, and that it did not survive as against the personal representative of a trustee sought to be charged. In Bruce v. Platt, 80 N. Y. 379, it was said: “It is settled, by repeated decisions applicable to this case, that the statute in question (Laws 1848, c. 40, § 12) is-penal, and not to be extended by construction; that in an action to enforce a liability thereby created, nothing can be presumed against the defendants, but that every fact necessary to establish their liability must be affirmatively proved;" citing Garrison v. Howe, 17 N. Y. 458; Miller v. White, 50 N. Y. 137; Whitney Arms Co. v. Barlow, 63 N. Y. 62. The rule of construction in reference to this and similar statutory provisions has been heretofore adopted and applied by this court. Steam-engine Co. y. Hubbard, 101 U. S. 188; Flash v. Conn, 109 U. S. 371; S. C. 3 Sup. CT. REP. 263.
In the case last mentioned this court, following the court of appeals of New York in the case of Wiles v. Suydam, 64 N. Y. 173, showed the distinction between the liability of stockholders for the debts of the corporation, under a section of the same act, making them severally individually liable for the debts and contracts of the company to an amount equal to the amount of stock held by them, respectively, until the whole amount of the capital stock fixed and limited by the company has been paid in, and the liability imposed upon the trustees by the section now under discussion. It was held that the former was a liability ex contractu, enforceable beyond the jurisdiction of the state, and that the statute should be construed liberally in furtherance of the remedy; that the latter was for the enforcement of a penalty, and subject to all the rules applicable to actions upon statutes of that description. The distinction is illustrated and enforced in Hastings v. Drew, 76 N. Y. 9, and Stephens v. Fox, 83 N. Y. 313.
The precise question involved here was decided by the court of appeals of New York in the case of Miller v. White, 50 N. Y. 137. In that case the complaint set forth the recovery of a judgment against the company, but not the original cause of action against it, on which the judgment was founded. The defendant moved for a dismissal on this ground, which was refused, and judgment was rendered in favor of the plaintiff on the production in evidence
of the judgment roll. This was held to be erroneous on the ground that the judgment was not competent as evidence of any debt due from the corporation, and that no action could be maintained thereon against the trustees un. der this section of the act. Judge PECKHAM, delivering the unanimous opinion of the court, said: “It will be perceived that this is a highly penal act, extremely rigorous in its provisions. It is absolute that the trustees shall be liable for all the debts of the company, if the report be not made, no matter by whose default. If one of the trustees did all in his power to have it made, yet if the president, or a sufficient number of his co-trustees to constitute a majority, declined to sign it, or if the president and secretary declined to verify it by oath, the faithful trustee seems to be absolutely liable as well as those who refuse to do their duty.” It was accordingly held, “that, as against these defendants, the judgment did not legally exist, as they were neither parties nor privies to it. * It is not a judgment as to these defendants; no action could be maintained thereon against them. *
Nor is the judgment prima facie evidence of the debt as against these defendants."
This doctrine was repeated and reaffirmed by the same court in Whitney Arms Co. v. Barlow, 63 N. Y. 62-72. In that case the court said: “The debt must be proved by evidence competent against the defendants. The facts upon which the debt is founded must be proved. The naked admissions of the corporation, or judgment against the corporation, are not evidence against the trustees. They are res inter alios acta; but when facts are proved which would establish the existence of a debt against the corporation, the liability of the trustees for the debt follows upon the proof of the other facts upon which the liability is made by statute to depend."
The case of Miller v. White, ubi supra, has never been overruled nor questioned by the New York court of appeals. On the contrary, it has been repeatedly and expressly cited and approved, and either followed or distinguished from the case under decision in the following cases: Rorke v. Thomas, 56 N. Y.559-565; Hastings v. Drew, 76 N. Y.9–15; Stephens v. Fox, 83 N. Y. 313317; Knox v. Baldwin, 80 N. Y. 610-613; Bruce v. Platt, Id. 379-381.
It is attempted, bowever, in argument to distinguish the present case from that of Miller v. White, ubi supra, upon the-facts, so as to except this from the rule of that decision. In the case of Miller v.White, ubi supra, the judgment sued on was not recovered until after the alleged default on the part of the defendants, as trustees, in filing their report; whereas, in the present case, the default is alleged to have occurred after the recovery of the judgment sued on. But, in Miller v. White, the plaintiffs did aver defaults occurring after the rendition of the judgment, although none were proved, except one, occurring before it was recovered; and the court said, (50 N. Y. 140:) “The right of action in this case arose, if ever, at the expiration of the twenty days from the first day of January, 1865. At that time the judgment had no existence. It was not recovered until June, 1866.” But this language plainly shows that the very point of the decision was that no right of action could arise upon the judgment itself, but upon the debt alone, on which the judgment was founded; and, as to this, it is, as we have already seen from other parts of the opinion, expressly declared that the judgment was, as against the trustees, evidence neither conclusive nor prima facie of the existence of a debt due from the corporation, for the payment of which they could be charged.
Upon this point, it is further said in argument that it is reduced to a question of evidence, and that the rules of evidence enforced in the courts of a state do not necessarily govern courts of the United States, although sitting in the same state. However this may be in other cases, or where the laws of the United States prescribe rules of evidence for their own tribunals, it is not true that the courts of the United States, in a special statutory proceeding, would give to a judginent of a state court any other or greater effect, either
as matter of evidence or as ground of action, than must be lawfully given to it in the courts of the state, whose laws are invoked to enforce it.
It is, however, further urged upon us in argument that in cases like the present, which is shown by the record and admitted to be founded on an action on the case for a tort, the judgment against the corporation must be evi. dence of the debt ex necessitate. On this head the language of counsel in their printed argument is as follows:
*“The action was for trespass on the case, for a tort, (entering upon and taking oils from the lands of the plaintiff,) which was unliquidated except by the verdict, which possibly contained an allowance in the nature of punitive damages. It was impossible of exact computation, containing allowances for costs provable in no other way. It would be absurd, unreasonable, and productive of uncertainty and confusion, to require the submission to another jury of the facts which led to this verdict, for if they found a less amount it is palpable that a part only of the debt of the company would be recovered against these defendants, who are liable for all the debts of the company. If they gave a larger verdict, these defendants would be the first to complain. Under the statute they are severally as well as jointly liable. Each one could be sued apart from the others, and if one trustee is sued alone, all the trustees shall contribute a ratable share of the amount paid on such judgment. If in each suit against each trustee the whole evidence of the original claim had to be gone into and separate verdicts rendered, which might be for very dissimilar amounts, the contribution would become a matter more involved than the original claim; as the theory on which the judgment is made conclusive is that, as the parties to it have had their day in court and have exbausted their proofs, they are thereby estopped from denying its validity."
But if this proves anything it proves too much, and instead of showing the thing to be proved, that the judgment is conclusive evidence of a debt, it establishes, on the contrary, that a liability on the part of the corporation for a tort, though afterwards reduced to judgment against it, is not a debt of the corporation, even when in judgment, within the meaning of the statute imposing upon the trustees the penalty sought to be enforced in this action for not making and publishing an annual report showing, among other things, the amount of its existing debts. For, keeping in view the statement now urged by counsel, of the impossibility, in advance of liquidation by the verdict of a jury, of even approximately, much less accurately, stating the amount of such liability, can it be supposed that the duty to do so is devolved upon the trustees, within either the letter or spirit of this statute, under penalty of becoming personally liable to pay whatever judgment may be thereafter rendered on account thereof against the corporation? Surely not. Such claims are not within the contemplation of the act. The mischief to be prevented by its requirements has no relation to liabilities of that description. The creditors to be protected are those only who become such by voluntary transactions, in reference to which, for their benefit, the information becomes important as to the debts of the company,
The precise point does not appear to have arisen under this act, so as to have become the subject of a decision by the New York court of appeals. But it seems to be virtually decided in Heacock v. Sherman, 14 Wend. 59. That was an action on the case for the recovery of damages against the stockholders of a corporation, occasioned by not keeping in repair a bridge, the liability arising, as it was alleged, upon the eighth section of the act incorporate ing the Buffalo Hydraulic Association, (St. N. Y. 1827, p. 45,) which was as follows:
“That the stockholders of the said corporation shall be holden jointly and severally to the nominal amount of their stock for the payment of all debts contracted by the said corporation or by their agents; and any person or persons