Where the statute definitely prescribes the time for filing the report, failure to file at the stated time may subject the officers to liability.38 Thus, where the statute provides for the filing of the report on the first day of January of each year, and such a report is filed on a subsequent day, there being no suggestion that the report was made on the first day of the month, there is no substantial compliance with the statute.37 And where a statute provides that reports shall be made and published "within twenty days from the 1st day of January in each year," a report filed or published in December of the preceding year within twenty days of the first day of January, does not comply with the statute. The fact that the directors acted in good faith in such a case does not render the report sufficient.38

Incoming directors are usually entitled to a reasonable time after election to acquaint themselves with the affairs of the company and to supply the annual report, if there has been a default on the part of their predecessors.39 And a statute providing for reports is usually enacted with the object of making it to the interest of the officers to file such report as soon as possible when the oversight is discovered. Accordingly if a definite time for filing reports is provided, and such time has expired, the statute will not be construed so as to prevent the filing of the report until the following year. Instead, in such cases, the report should be filed as soon as possible, and the directors are then relieved from liability until another default occurs.40

§ 2871. Place of filing. Under some statutes the report must be filed both in the office of the secretary of state and in the office of the recorder of deeds of the county where the business of the cor

lished as soon thereafter as practicable. Cameron v. Seaman, 69 N. Y. 396, 25 Am. Rep. 212.

If the trustees make and verify the report within the time prescribed by N. Y. Act of 1848, § 12, as amended by Laws of 1875, c. 510, it may be filed or published as soon as practicable thereafter, without incurring penalty. Whitney v. Cammann, 137 N. Y. 342, 33 N. E. 305.

36 Continental Nat. Bank of Memphis, Tennessee v. Buford, 107 Fed. 188.

So where the statute is mandatory

in regard to the time, the directors are not relieved by the fact that the report is posted before the commencement of the action. Schenck v. Bandmann, 81 Cal. 231, 22 Pac. 654.

37 Winthrop Press v. Perkins, 47 N. Y. Misc. 460, 95 N. Y. Supp. 931.

38 Cincinnati Cooperage Co. V. O'Keefe, 120 N. Y. 603, 24 N. E. 993, aff'g 44 Hun (N. Y.) 64.

39 Risdon Iron & Locomotive Works v. Von Storch, 166 Fed. 936.

40 Beekman Lumber Co. v. Ahern, 75 Ark. 107, 86 S. W. 842.

poration is carried on.41 And under other statutes the report must be filed with the county clerk of the county where the corporation does business or where its principal office is located. If the poration changes its principal business office to another county and there files its certificate, its action is legal and the statute is complied with.43

§ 2872. Failure of public officer to file. It has been held that directors are not liable where the required annual report is properly made out, and is mailed to the secretary of state for filing, together with the filing fee, but is not received or filed."

V. LIABILITY FOR NONCOMPLIANCE WITH STATUTE

§ 2873. Nature of liability of officers and directors. The liability of corporate officers or directors for the debts contracted by their corporation, where there is a failure to file reports as required by the statute, is purely statutory, and such liability is in the nature of a penalty imposed for the failure to comply with the law.46 Accordingly some cases hold that since the liability is imposed as a punishment for the breach of a statutory duty, the officers and directors cannot be said to be primarily liable,47 and the liability imposed does not partake of the nature of a contract between creditors of the corporation and the corporate officer. It must be remem

41 Thatcher v. Salomon, 16 Colo. App. 150, 64 Pac. 368.

42 Beekman Lumber Co. v. Ahern, 75 Ark. 107, 86 S. W. 842; Uptegrove v. Schwarzwaelder, 46 N. Y. App. Div. 20, 61 N. Y. Supp. 623, aff'd 167 N. Y. 587, 60 N. E. 1121.

43 Uptegrove v. Schwarzwaelder, 46 N. Y. App. Div. 20, 61 N. Y. Supp. 623, aff'd 167 N. Y. 587, 60 N. E. 1121.

44 Ford River Lumber Co. v. Perron, 148 Mich. 399, 111 N. W. 1074, 13 Det. L. N. 201.

45 McDonald v. Mueller, 123 Ark. 226, 183 S. W. 751; Breitung v. Lindauer, 37 Mich. 217; Benjamin v. Laffray, 79 N. J. L. 310, 75 Atl. 775.

46 Gregory v. German Bank, 3 Colo. 332, 25 Am. Rep. 760; Colorado Fuel & Iron Co. v. Lenhart, 6 Colo. App. 511, 41 Pac. 834; Gadsen v. Woodward,

bered, however, that it is possible for a statute to impose a contractual or quasi contractual liability for corporate debts upon officers as well as stockholders. And presumably this theory is the basis of the later decisions holding directly contra to the foregoing cases. Such decisions state that the liability imposed by the statutes is direct and primary,50 and that the officer who is guilty of dereliction of official duty does not sustain either the relation of joint principal, surety or guarantor.51 By accepting office and entering upon his duties, the officer impliedly undertakes, if he neglects the statutory duty, to pay all the debts of the corporation contracted during the period of neglect, and the liability created is in the nature of a contractual obligation.5

53

While the liability imposed for disregarding the statute is personal,54 the duty required attaches to the officers, as officers of the company, and not to each individually.55

Both the statutes as to reports, and the similar statutes as to false reports, usually provide that the officers who disregard the statute shall be jointly and severally liable for the debts contracted.56

port as required by statute, the debt is only against the corporation, and the relation of debtor and creditor arose and existed between the creditors and corporation. Breitung v. Lindauer, 37 Mich. 217.

49 See Chap. 42, §§ 2519-2533, supra. 50 McDonald v. Mueller, 123 Ark. 226, 183 S. W. 751; Bailey v. O'Neal, 92 Ark. 327, 135 Am. St. Rep. 185, 122 S. W. 503; Jones v. Harris, 90 Ark. 51, 117 S. W. 1077; First Nat. Bank of Missoula v. Cottonwood Land Co., 51 Mont. 544, 154 Pac. 582.

51 McDonald v. Mueller, 123 Ark. 226, 183 S. W. 751.

A director is neither surety nor guarantor for the corporation. First Nat. Bank of Missoula v. Cottonwood Land Co., 51 Mont. 544, 154 Pac. 582.

62 Hughes v. Kelley, 95 Ark. 327, 129 S. W. 784; Nickerson v. Wheeler, 118 Mass. 295.

53 Hughes v. Kelley, 95 Ark. 327,

129 S. W. 784.

54 Cavanaugh v. Patterson, 41 Colo. 158, 91 Pac. 1117; Halsey v. McLean, 12 Allen (Mass.) 439, 90 Am. Dec. 157.

55 Thus, though the president and secretary are made individually liable both civilly and criminally for having failed to comply with the statute as to reports (Kirby's Dig., § 484; Acts 1909, No. 222, p. 643), yet the duty which the statute imposes attaches to them as officials of the corporation, and not to each individually. Breitzke v. Bank of Grand Prairie, 124 Ark. 495, 187 S. W. 660.

Duty imposed upon manufacturing corporations by N. Y. Laws, 1848, c. 40, 12, as to annual reports, is a corporate duty to be discharged by making reports, signed by the president and a majority of trustees. Cornell v. Roach, 101 N. Y. 373, 5 N. E. 52.

56 Risdon Iron & Locomotive Works v. Von Storch, 166 Fed. 936; Taylor v. Dexter, Ark. 189 S. W. 1060; Matthews v. Patterson, 16 Colo. 215, 26 Pac. 812; Felker v. Standard Yarn Co., 148 Mass. 226, 19 N. E. 220. See also Halsey v. McLean, 12 Allen (Mass.) 439, 90 Am. Dec. 157.

Section 15 of the Indiana Act as to

§ 2874. Officers and directors who are liable-In general. The statutes usually specify the officers who shall make and file reports, and such statutes vary considerably in their terms, the duty being imposed on directors or trustees, upon the president or secretary or both, and upon similar officers.57

Where a statute provides that the president and secretary shall file an annual statement, and the duty is performed by the vice-president and the secretary during the president's absence, the president cannot be held liable.58 Since a proper statement has been filed, it would be needless to require the filing of a second statement.59

The liability for the failure to make and file reports, or for the making of false reports, usually attaches only to those officers or di rectors who hold office at or during the time of the default, or when the false report is made.60 The statutes cannot be extended by con

manufacturing and mining companies as originally passed in 1852 (1 G. & H. p. 425; 1 Rev. St. 1852, p. 358) provided that if a certificate or report of officers should be false in any material representation, or if officers failed to make a report, they should be jointly and severally liable for all debts of company contracted while they were stockholders or officers. Stafford v. St. John, 164 Ind. 277, 73 N. E. 596.

*

A certificate of incorporation of a company filed for the purpose of its organization is not an act of the "officers of the company" within the meaning of a statute providing that, "if any certificate made by the officers of any company, in pursuance of the provisions of this act, shall be false in any material representation, all the officers who shall have signed the same shall be jointly, and severally liable for all the debts of the company contracted while they were stockholders or officers thereof." Thompson-Houston Elec. Co. v. Murray, 60 N. J. L. 20, 37 Atl. 443.

57 See § 2852, supra.

58 Myar v. Poe, 79 Ark. 465, 95 S. W. 1005.

Indiana. Schofield v. Henderson, 67 Ind. 258.

Maine. Bank of Mutual Redemp tion v. Hill, 56 Me. 385, 96 Am. Dec. 470.

New York. Boughton v. Otis, 21 N. Y. 261; Chandler v. Hoag, 2 Hun 613, aff'd 63 N. Y. 624; Shaler & Hall Quarry Co. v. Brewster, 10 Abb. Pr. 464; Shaler & Hall Quarry Co. Bliss, 34 Barb. 309, aff'd 27 N. Y. 297; Vincent v. Sands, 42 How. Pr. 231. See also §§ 2895, 2896, infra.

V.

§16 <all

Under Colo. Gen. Corp. Act, (Gen. St. § 252), providing that the directors or trustees of company Ishall be jointly and severally liable for all the debts of the company"

where there is a failure to file the an nual report, the quoted words must be construed to apply to such directors or trustees only as are chargeable with Austin v. Berlin, 13 Colo. 198, 22 Pac. 433.

default.

struction to apply to all directors who have previously held an official position.61

One who has been elected a director, but who has never evinced his assent to the election, or in any manner acted as director, cannot be held liable,62 and the same rule applies to a person who has been held out as a director but who has never accepted the office or acted as an officer.63 But persons acting as officers of corporations, publicly, are ordinarily presumed to be rightfully in office.64

§ 2875. Married women.

A married woman, under the modern statutes giving her a separate estate, may be a stockholder, director or officer of a corporation,65 and in the case of a violation of the statutes as to reports, such a married woman may be held liable to creditors.66.

§ 2876. Intent to disregard statute. The intention in failing to file a report as required by the statute is immaterial, unless it is made otherwise by the express provisions of the statute.67 If the

61 Jackson v. Clifford, 5 App. Cas. (D. C.) 312.

62 Cameron v. Seaman, 69 N. Y. 396, 25 Am. Rep. 212; Osborne & Cheesman Co. v. Croome, 14 Hun (N. Y.) 164, aff'd 77 N. Y. 629.

63 Hume v. Commercial Bank, 9 Lea (Tenn.) 728.

64 Providence Steam-Engine Co. v. Hubbard, 101 U. S. 188, 25 L. Ed. 786. 65 Arkansas Stables v. Samstag, 78 Ark. 517, 94 S. W. 699. See also § 1780.

33 N. E. 305; Butler v. Smalley, 17 Jones & S. (N. Y.) 492.

Under the statute (Kirby's Dig., §§ 848, 859), the question whether an officer neglected or refused to make an annual statement intentionally or not was immaterial. Hughes v. Kelley, 95 Ark. 327, 129 S. W. 784.

"If the plaintiff should be required in the first instance to prove by direct evidence the actual intent in the minds of the delinquent directors, and should be precluded from making proof by inference from the fact of omission to perform the act required by the statute, the object of the law would be seriously obstructed, if not in many cases altogether defeated. The directors might at their pleasure neglect to report, and by a careful abstinence from any overt act or word to mark their design, make their liability depend upon their own testimony, and a resort to that, by one seeking to fix a liability upon them might be made difficult and sometimes impossible by accident or contrivance. It is hardly credible that the legisla

66 Under the Arkansas statute (Kirby's Dig., § 848), a married woman who is the president of a corporation may be held liable to a creditor for failure to file the annual statement required by the statute, since she acts on behalf of her separate estate, or earns a separate income, and in these respects is freed of her coverture, and may be sued under Kirby's Dig., § 5214. Arkansas Stables v. Samstag, 78 Ark. 517, 94 S. W. 699.

67 Whitney v. Cammann, 28 Jones & S. (N. Y.) 391, aff'd 137 N. Y. 342,