National Park Bank of New York v. Remsen

This was an action by the National Park Bank of New York against Charles Remsen and others, executors of William Remsen, deceased, to charge the estate of the decedent with a debt of a corporation of which he was a director. The circuit court gave judgment for the defendants. 43 Fed. 226. Plaintiff brings error. Affirmed.

This case was tried by the court without a jury, and from the findings the following facts appear: The German-American Mutual Warehousing & Security Company (hereafter called the 'Warehouse Company') was a corporation of the state of New York, incorporated by 2 Laws N. Y. 1872, c. 701, p. 1673. Section 9 of this chapter provides that 'the corporation hereby created shall possess all the general powers and privileges, and be subject to all the liabilities conferred and imposed upon corporations organized under and in pursuance of an act entitled 'An act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes,' passed February seventeenth, eighteen hundred and forty-eight, and the several acts extending and amending the same.' It never made or published any of the reports required by section 12 of the act of 1848, which directed every company within the first 20 days of each year to make and publish in some newspaper a report signed by the president and a majority of the trustees, and verified by the oath of the president or secretary, and showing the total capital stock, the proportion actually paid in, and the amount of existing debts. Robert Squires was president, and William Remsen, the defendants' testator, a director and trustee of the company. Squires, Taylor & Co. were a firm doing business in the city of New York. It was composed of Robert C. Squires (a son of the president of the warehouse company), Charles E. Taylor, and Burnett Forbes. In 1878 this firm made two promissory notes, each to the order of themselves, which notes were indorsed by themselves in blank, and, after such indorsement, were also indorsed by the warehouse company, the indorsement being made by the president of the company, and without the knowledge of Remsen or the other directors. These notes were discounted by the plaintiff. They were not paid at maturity, and, notice having been duly given, the plaintiff commenced an action in the superior court of the city of New York against the warehouse company as indorser. It recovered a judgment against the company, which was affirmed by the general term. 53 N. Y. Super. Ct. Rep. 367. The company appealed to the court of appeals of the state, and on October 8, 1889, that court reversed the judgment. 116 N. Y. 281, 22 N. E. 567. It held that the warehouse company was not liable on the ground that it was an accommodation indorser, and that the plaintiff was chargeable with notice of the character of the indorsement, because the notes were presented for discount by the makers, who received the avails thereof.

Section 12 of the act of 1848, hereinbefore referred to, provides that, for failure to file the reports specified therein, the trustees '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.' 3 Rev. St. N. Y. (8th Ed.) p. 1957.

Francis C. Barlow and Robert D. Murray, for plaintiff in error.

[Argument of Counsel from pages 339-342 intentionally omitted]

H. T. Ketchum and Wm. H. Ingersoll, for defendants in error.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.