Pier v. George

Gilbert, J. :

The act passed in 1875 (chap. 510), amendatory of the general manufacturing act of 1848 (chap. 40), merely'modified the provision contained in section 12 thereof respecting the time of making the *212arinnal report, and added a proviso that nothing in the amendatory act 'contained should affect any action pending at the time it became a law. In other respects the provisions contained in section 12 of the act of 1848, as amended by chapter 657 of the Laws of 1871, were left untouched. The act of 1853, chapter 333, amended the act of 1848, but it was an independent enactment, and was not an amendment of section 12 of the act of 1848, specifically. The omission to re-enact the act of 1853, in the amendatory acts subsequently passed, therefore, affords no basis for an inference that the Legislature intended to repeal that act or any of the provisions thereof. Section 12 of the act of 1848 as amended, and section 2 of the act of 1853, are in pari materia, and must be read together. So read, it seems to me to be perfectly clear that a report which treats property, purchased by the issue of stock pursuant to the act of 1853, as capital paid in, is a violation of section 12 of the act of 1848. The preceding sections of that act ¡irovide in what manner the capital of the corporation shall bo paid in. They relate exclusively to contributions in money, and section 14 expressly provides that nothing but money shall be considered as payment of any part of the capital stock. While property necessary for the business of the corporation and purchased at its value by stock issued irarsuant to section 2 of the act of 1853 may, by virtue of that section, be treated as a contribution of capital, so as to relieve stockholders from liability under the tenth section of the act, yet that section of the act of 1853 prohibits the including of such property in the annual report of the capital actually paid in, and requires that it shall be reported according to the fact. Whether the ordinary signification of the -words “capital paid in,” or the meaning thereof as modified by the act of 1853 be applied, therefore, the company failed to comply with the twelfth section of the act.

The fifteenth section of the act of 1848 provides that if any certificate or report made, or public notice given by the officers of any company incorporated under the act in pursuance of the provisions thereof, shall be false in any material representation, all the officers who shall have signed the same, knowing it-to be false, shall be jointly and severally liable, etc.

That the report in controversy did represent that $36,500 of *213the capital of the corporation had been paid in, .when in truth $25,000 of that amount represented property purchased by the issue of stock pursuant to section 2 of the act of 1853 is undisputed. It is urged that that representation was not false, because capital may be paid in with property ás well as money, and that the second section of the act of 1853 requires no discrimination in that respect. If the views on this subject already expressed are correct that argument has been sufficiently answered, and it has been shown that the representation was that the $36,500 of the capital had been paid in in cash, although the report merely stated that it had been “ paid in,” omitting the words “ in cash.” The omission to comply with the requirements contained in the second section of the act of 1853, by reporting the portion of the capital contributed by means of purchases of property, necessarily. produces that result. Such representation was, therefore, false. (See Arthur v. Griswold, 55 N. Y., 400.) I think the minutes of the proceedings of the corporation received upon the trial were properly admitted to show knowledge on the part of the defendant of the falsity of the report, and that such knowledge was satisfactorily proved.

The action, though sounding in tort, is to enforce a statutory liability against .the defendant for the debt of another. The right of action under the statute passes with an assignment of the debt. (Bonnell v. Wheeler, 1 Hun, 332; Bolen v. Crosby, 49 N. Y., 183.)

The judgment must be affirmed, with costs.

Pratt, J., concurred; BarNakd, P. J., .not sitting.

Judgment affirmed, with costs.