Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/787

 CHAP. XIV.] OFFICERS AND CREDITORS. [§ 775. § 774. A provision of the following character is not infre- quent in enabling acts. " If any certificate or report made, or public notice given by the officers of any fofsignmg such company, in pursuance of the provisions of this ports.™" act, shall be false in any material representation, 1 all the officers who shall have signed the same, knowing it to be false, shall be jointly and severally liable for all the debts of the company contracted while they are stockholders or officers thereof." 2 Under a provision of this kind, in order to charge the officers signing the false report, some fact must be proved showing bad faith, or wilful and fraudulent intent to deceive on the part of the officers. 3 § 775. In regard to the form in which actions to enforce the statutory liability of directors should be brought, little of general value can be said ; since this is a actions. matter so largely dependent on the terms of the partieT ' statute itself, as well as on the rules of procedure in force in the different states. It may be said, however, that if the apparent intention of the statute creating the liability is to provide a fund for the security of all the creditors, then, on principles heretofore discussed in relation to the statutory lia- v. Clark, 108 N. Y. 269; Felker v. Standard Yarn Co., 148 Mass. 226. A claim in tort is not a "debt" within the meaning of such a stat- ute. Chase v. Curtis, 113 U. S. 452; Leighton v. Campbell, 17 R. I. 51; nor is the liability for damages which arises from the infringement of a patent. Child u. Boston, etc., Iron Works, 137 Mass. 516. Com- pare Trinity Church v. Vanderbilt, 98 N. Y. 170. See § 734. i See Butler v. Smalley, 101 N. Y. 71; which held that knowingly omit- ting certain liabilities of the com- pany did not make the report " false in any material representation." Compare Whitaker v. Masterton, 106 N. Y. 277. 2 Chap. 40, N. Y. Laws of 1848, sec. 15; see § 31, chap. 688, laws of 1892. 8 Pier v. Hanmore, 86 N. Y. 95; Bonnell v. Griswold, 89 N. Y. 122; Stebbins v. Edmands, 12 Gray, 203. See Arthur v. Griswold, 55 N. Y. 401; Waters v. Quimby, 27 N. J. L. 296. But see Huntington v. Attrill, 118 N. Y. 365; Hatch v. Attrill, ib. 383; American Credit Indemnity Co. v. Eld, 156 Ind. 212. Where directors are made liable for all debts of the company con- tracted by them in excess of a cer- tain amount, a director who protests verbally against contracting the debt is not liable. Schofield v. Hender- son, 67 Ind. 258; Aimen v. Hardin, 60 Ind. 119; see Raber v. Jones, 40 Ind. 436. Compare in regard to pro- visions of this kind, White v. How, 3 McLean, 111; Cornwall ». East- ham, 2 Bush (Ky.), 561; Irvine v. 767