§ 2901. Election of remedies. Where the debt is represented by a note, the unpaid creditor has a choice of remedies: He can proceed to recover on the note, or he can proceed against the corporate officers for their official neglect. He can pursue these remedies simultaneously, but can have only one satisfaction of his demand.97

§ 2902. Joinder of causes of action-In general. An action to enforce liability of an officer imposed by statute for making a false annual report by reason of which a party became a stockholder in the corporation may be joined with an action at common law against the officer on practically the same facts and for the same damage.98

§ 2903. Joinder of violations of statute. A number of alleged violations of the statute may be joined together in one count, and the plaintiff may prove any one of them, where they constitute separately or together but one cause of action.99 A complaint alleging the liability of defendant as trustee for the failure to file a report and also charging liability of the defendant as a stockholder, because a certificate has not been made and recorded showing that the capital stock has been paid in, states two causes of action independent of each other, and the transactions are different, there being no legal affinity between them.1

§ 2904. Survival of action. The rule as to the survival of actions is that applicable to actions on obligations in the nature of contract, and not to actions on obligations imposed as a penalty. Accordingly, it has been held that where the liability imposed upon directors because of disregarding statutes as to reports is in the nature of an ordinary contract, the cause of action survives the death of the officer. If directors are jointly liable for the debts of the corporation and one of them dies before suit is brought, his exec

tion of replevin for the goods. Steel v. Webster, 188 Mass. 478, 74 N. E. 686.

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

98 Hutchinson v. Young, 93 N. Y. App. Div. 407, 87 N. Y. Supp. 678.

99 Loveland v. Garner, 71 Cal. 541, 12 Pac. 616.

1 Wiles v. Suydam, 64 N. Y. 173.

2 Hughes v. Kelley, 95 Ark. 327, 129. S. W. 784.

3 Hughes v. Kelley, 95 Ark. 327, 129

S. W. 784.

The right of action created by Mont. Rev. Codes, § 3850, as amended by Laws 1909, p. 217, § 1, as to annual reports, survives the death of the delinquent director, and may be prosecuted against his estate (§ 6494). First Nat. Bank of Missoula v. Cottonwood Land Co., 51 Mont. 544, 154 Pac. 582.

utor cannot be sued jointly with the survivors, and if he dies after suit brought against all of them, it is optional with the plaintiff to bring in his administrator or to proceed against his survivors without doing so.1

But where the liability is considered as a penalty, the action dies with the creditor.5

The cause of action is not such a cause as would survive at common law, and it is not within a statute as to the survival of actions for wrongs to property rights or interests.

§ 2905. Limitation of actions. In conformity with the view that view that these statutes as to reports are penal, and in proceedings under those statutes which provide for the recovery of definite penalties, it is held that the statutes of limitations governing actions for penalties, or to recover a penalty, apply. But where the statutes are construed as creating a contractual or quasi contractual liability, the statute of limitations governing actions ex contractu or actions to enforce a liability created by statute applies, instead of the provisions as to the recovery of penalties.10 Under some statutes, the period of limitations is six months,11 and it has been held that

an action to enforce the liability of officers for failure to file reports (§ 1337 et seq.), since debt was the proper action for enforcing such statutory liability before forms of action were abolished. Nebraska Nat. Bank v. Walsh, 68 Ark. 433, 82 Am. St. Rep. 301, 59 S. W. 952. Kirby's Dig., § 5068, requiring all actions on penal statutes to be brought within two years, cannot be invoked in bar of remedial portion of statute as to liability for failure to file reports (Kirby's Dig., §§ 848 and 859 as amended by Acts 1909, No. 222, p. 643), but the three-year statute applies. McDonald v. Mueller, 123 Ark. 226, 183 S. W. 751.

11 State v. Missouri Exploration & Land Co., 97 Mo. App. 226, 70 S. W. 1107.

In an action under N. Y. Laws 1897, c. 384, p. 313, § 30, as to annual reports and imposing liability upon directors, Laws 1901, c. 354, p. 961, shortening

such a period of time is not unreasonable.12 In other states the limitation period extends up to six years.13

A statute shortening the limitation period is not void as interfering with vested property rights, since the right to recover a penalty is not an existing right but is merely executory.14

A statute providing that the liability must be enforced within a certain time applies when it is sought to enforce such liability in another state.1 15 The statute of limitations must be said to be in motion when a complete cause of action exists in favor of any creditor,16 but the right of action against an officer does not accrue on the creation of a debt, but on its maturity.17 A cause of action does not accrue against

directors until after the time has expired within which they may file their report.18 Under some statutes, it has been held that the limitation act begins to run when there is a failure to file the report, both as to accrued and contingent liabilities, and the dates when the debts fall due or are contracted are immaterial.19

The cause of action accruing to creditors of a corporation against the directors or trustees who fail to file an annual report as required by statute, is not extended by the continuance of the default nor by subsequent defaults in filing reports,20 nor is it extended by renewals or extensions of time of payment given to the corporation by the creditor without the director's consent, nor by part payments made by the corporation.2

21

18 Clough v. Rocky Mountain Oil Co., 25 Colo. 520, 55 Pac. 809.

19 Dart v. Hughes, 49 Colo. 465, 109 Pac. 952; Clough v. Rocky Mountain Oil Co., 25 Colo. 520, 55 Pac. 809; Cannon v. Breckenridge Mercantile Co., 18 Colo. App. 38, 69 Pac. 269.

20 State Sav. Bank of Butte City v. Johnson, 18 Mont. 440, 33 L. R. A. 552, 56 Am. St. Rep. 591, 45 Pac. 662; Chapman v. Lynch, 156 N. Y. 551, 51 N. E. 275; Trinity Church v. Vanderbilt, 98 N. Y. 170; Losee v. Bullard, 79 N. Y. 404, 54 How. Pr. 319.

21 Patterson v. Thompson, 86 Fed. 85; Blake v. Clausen, 10 N. Y. App. Div. 223, 41 N. Y. Supp. 772, aff'd 158 N. Y. 727, 53 N. E. 1123.

Under Sand. & H. Dig. Ark., § 1347, as to annual reports, the renewal of a note given for a corporate debt by the corporation does not toll a cause of action against the president and the limitation period runs from the maturity of the note.

Continental

Nat. Bank of Memphis, Tennessee v. Buford, 114 Fed. 290, 107 Fed. 188. In discussing this case the federal court said: "Under the statute the defendant did not sustain to the debtor bank the relation of a joint principal, surety, or guarantor. His liability was primary, and not secondary. It was created by statute, and was not contingent upon the failure or inabil

ity of the bank to pay, but was absolute and unconditional. It resulted from his dereliction of official duty, and, if he had been compelled to pay the debt, he would have had no right of reclamation or indemnity from the bank. The statute imposed upon him the obligation of a principal debtor for his refusal and neglect to perform a duty enjoined upon him by law for the protection of the public. His legal liability for the debt was fixed and perfect the moment it was contracted, without regard to the solvency or insolvency of the bank, or to any proceedings against it to enforce payment. At the time when the first renewal notes were taken, the debt and the original notes given therefor had then become due and payable. The renewal of the notes operated as an extension of time for the payment of the debts by the bank, but did not release the defendant either from his statutory liability to pay the debts or from immediate action therefor. As soon as the original notes became due and payable, if not before, the defendant was liable. The defendant was unquestionably then liable to an action, and so was the bank. These two rights of action in the plaintiff were not dependent. They were concur rent and independent. The plaintiff could assert either or both. The as

Where a statute as to annual reports, and imposing liability upon the officers, is repealed with a saving clause providing that the rights of creditors shall not be affected if an action is commenced within a certain time, such saving clause does not operate as a statute of limitations, but imposes a condition precedent to the action,22 and such a condition precedent may be waived.23

§ 2906. Estoppel. The statement by an officer of the creditor that the officers would not be held personally liable on a note executed by them for a debt of their corporation does not estop the creditor to sue to hold the officers liable for such debt by reason of their failure to file the report required by the statute.24 If a creditor was not induced by the directors to believe that a report was filed, the directors are not estopped from questioning such report.25 A director or other officer who is also a creditor cannot hold the other directors or officers liable for his debt because of acts or omissions of which he is equally guilty and for which he would be liable, equally with them, to other creditors; for he cannot thus take advantage of his own neglect or misconduct,26 and this estoppel extends also to his

sertion of one would not preclude the assertion of the other. Suspending the assertion of the one would not preclude the assertion of the other. Nothing but satisfaction of the plaintiff's debt by the pursuit of one would take away its right to follow the other. If, therefore, the right of action against the defendant on his statutory liability did not accrue on the creation of the debt, it unquestionably did on its maturity, and the statute, having once commenced to run, could not thereafter be suspended so far forth as concerned the defendant, by any action of the plaintiff and the bank which might have that effect as between them." Continental Nat. Bank of Memphis, Tennessee v. Buford. 114 Fed. 290.

22 Watertown Nat. Bank of Watertown v. Bagley, 62 N. Y. Misc. 380, 116 N. Y. Supp. 772.

23 Watertown Nat. Bank of Watertown v. Bagley, 62 N. Y. Misc. 380, 116 N. Y. Supp. 772.

Where a condition precedent requiring suit against directors within six months was waived by a valid agreement, such agreement was not a mere temporary waiver, since the general rule is that if a condition precedent is waived, it is gone forever. Watertown Nat. Bank of Watertown v. Bagley, 62 N. Y. Misc. 380, 116 N. Y. Supp. 772.

24 Breitzke v. Bank of Grand Prairie, 124 Ark. 495, 187 S. W. 660.

25 Colorado Fuel & Iron Co. v. Lenhart, 6 Colo. App. 511, 41 Pac. 834. 26 Wingett v. Williams, Colo., 158 Pac. 139; Knox v. Baldwin, 80 N. Y. 610; Easterly v. Barber, 65 N. Y. 252; Bronson v. Dimock, 4 Hun (N. Y.) 614; Wait v. Ferguson, 14 Abb. Pr. (N. Y.) 379; Briggs v. Easterly, 62 Barb. (N. Y.) 51; Roach v. Duckworth, 61 How. Pr. (N. Y.) 128, aff'd 65 How. Pr. 303; Estes v. Burns, 5 Jones & S. (N. Y.) 1.

Contra, under the Massachusetts statute making officers liable for mak