Farnum v. Harrison

167 A.D. 704, 152 N.Y.S. 835, 1915 N.Y. App. Div. LEXIS 7450
Appellate Division of the Supreme Court of the State of New York·Decided April 16, 1915·Published·Cited by 12 cases

Opinions

Dowling, J.:

Plaintiff has recovered a judgment against the defendant, one of the stockholders of the Wishart-Dayton Auto Truck Company, for the amount of unpaid salary due him for services rendered to the company as a bookkeeper. The plaintiff originally sued the company itself for his services and recovered [705] judgment therefor. An execution issued thereon having been returned wholly unsatisfied, he commenced this action within thirty days thereafter against the defendant. The action is .brought pursuant to section 57 of the Stock Corporation Law (Consol. Laws, chap. 59; Laws of 1909, chap. 61), reading as follows: “Liabilities of stockholders to laborers, servants or employees. The stockholders of every stock corporation shall jointly and severally be personally liable for all debts due and owing to any of its laborers, servants or employees other than contractors, for services performed by them for such corporation. Before such laborer, servant or employee shall charge such stockholder for such services, he shall give him notice in writing, within thirty days after the termination of such services, that he intends to hold him liable, and shall commence an action therefor within thirty days after the return of an execution unsatisfied against the corporation upon a judgment recovered against it for services.” All the requirements of this section have been complied with. The sole question presented by this appeal is whether the plaintiff, who was a bookkeeper in the employ of said company, and who was to be paid for his services at the rate of fifty dollars a week, is within the scope of the statute. His services consisted of keeping the books of the company, attending to the banking business thereof and discharging the usual duties of a bookkeeper in a business. In addition thereto, in the absence of Mr. Wishart, president of the company (under whose orders he acted), and one Peix (who was in charge of the office in Wishart’s absence), the plaintiff answered the inquiries of persons who might call at the office. It is the defendant’s contention that a bookkeeper is not a “laborer, servant or employee” within the meaning of the statute, and that, therefore, plaintiff cannot recover against a stockholder of the corporation by which he was employed. The original source of this legislation is to be found in chapter 40 of the Laws of 1848, entitled “An act to authorise the formation of corporations for manufacturing, mining, mechanical or chemical purposes,” section 18 of which read as follows: “The stockholders of any company organized under the provisions of fhiq act, [706] shall be jointly and severally individually liable for all debts that may be due and owing to all their laborers, servants and apprentices, for services performed for such corporation.” This provision was construed in Wakefield v. Fargo (90 N. Y. 213) where it was held that one employed at a yearly salary as a bookkeeper and general manager was not a laborer, servant or apprentice within the meaning of the provision in question, and that the services referred to were manual or menial services performed by one of the class whose members usually look to the reward for a day’s services for immediate or present support. The court reached this conclusion by a consideration of the meaning of the terms “ laborers, servants and'apprentices,” and quoted the definition of Blackstone (Book I, chap. 14) as follows: “ The first sort of servant acknowledged by the law of England are menial servants. * * * Another species of servants are called apprentices. * * * A third species of servants are laborers, who are only hired by the day or week.” The court said that although the word “servant ” was general, it was limited by the more specific ones “ laborer ” and “ apprentice ” with which it was associated, and comprehended only persons performing the same kind of service. It held that a general manager was not ejusdem generis with an apprentice or laborer, and would not, in popular language, be deemed a servant. “Laborer” and “apprentice,” the court further said, were words of limited meaning, and referred to a particular class of persons employed for a defined and low grade of service performed without responsibility for the acts of others, and necessarily excluded persons of higher dignity, as a statute which treats of persons of inferior rank could not by any general word be so extended as to embrace a superior. Thereafter, by section 57 of the former Stock Corporation Law (Hen. Laws, chap. 36; Laws of 1890, chap. 564), which act was entitled “An act in relation to stock corporations,” etc., the liability of stockholders for debts owing to any of its ‘ ‘ laborers, servants, or employes, other than contractors, for services performed by them for such corporation,” was created in the identical language with that used in the statute now under consideration. It will be seen that this changed the former condition of the law by removing as one of the classes entitled to relief against stockholders “apprentices,” [707] and inserted in place thereof an entirely new class, “employes, other than contractors. ” (See, also, Stock Corp. Law [Gen. Laws, chap. 36; Laws of 1892, chap. 688], § 64, as amd. by Laws of 1901, chap. 354.) In Palmer v. Van Santvoord (153 N. Y. 612), which involved the construction to be placed upon the word “ employees ” under chapter 376 of the Laws of 1885, whereby wages were given a preference against the assets of domestic corporations in the hands of a receiver, Andrews, Oh. J., said: “ The case of bookkeepers or persons employed to make sales of merchandise, or of property manufactured by the corporation, are * * * ‘employees ’ within the meaning of the act, and their compensation earned is ‘wages,’ whether such persons are employed by the day, or month, or year, and whether the compensation is denominated ‘ salary ’ or ‘ wages ’ in the contract of employment. ” In Matter of Stryker (158 N. Y. 526) the court distinguished the case of Palmer v. Van Santvoord (supra) on the ground that in that case the services performed by the claimant were those of a mechanic or laborer, and held in the case before it that the statute for preference was not intended to secure a preference for claims due to the clerical forces engaged in transacting the business, nor to the superintendent, foremen or officers of the corporation who are compensated by a fixed yearly salary. The court based its opinion, however, largely on the proposition that the most important word in the statute was “wages,” and held that the Legislature by the use of such word intended to prefer in the distribution of the assets of the insolvent corporation, not salaries, nor earnings, nor compensation, and that it was not intended to prefer the claims of all employees, but it was manifestly intended to limit the preference to the particular class whose claims would be properly expressed by the use of the word “wages;” that such word was commonly applied to the payment made for manual labor, or other labor of a menial or mechanical kind, as distinguished from a salary or fee, which denotes compensation paid to professional men. In concurring Judge Gray called attention to the decision in Palmer v. Van Santvoord and to the language used by Andrews, Oh. J., therein, including the holding by the latter that the statute preferring wages proceeded upon a broader legislative policy than the provisions of the act of 1848, [708] heretofore quoted, imposing a liability upon stockholders of corporations for debts due to employees. The statute which we are now considering i

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Farnum v. Harrison, 167 A.D. 704, 152 N.Y.S. 835, 1915 N.Y. App. Div. LEXIS 7450 (N.Y. Ct. App. 1915).

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