Gadsden v. Woodward

Rapallo, J.

The Code of Civil Procedure provides that the verification of an answer may be omitted (where not otherwise expressly prescribed), where the party pleading would *244 be privileged from testifying as a witness concerning an allegation or denial contained in the pleading. (§ 523.)

Section 837 declares that a witness shall not be required to give an answer which will tend to expose him to a penalty or forfeiture.

This action is brought against the defendant to recover a debt due by a manufacturing corporation of which he was a trustee, and he is sought to be made hable therefor on the ground that he failed to make the annual report required by the general manufacturing law. The action is not to recover a debt which he owes, but to impose upon him, as a penalty for his default, the payment of the debt of the corporation.

We have repeatedly held that such an action is an action for a penalty, or forfeiture. Any admission which he might make in his answer, in support of the plaintiff’s allegations, would, therefore, necessarily tend to expose him to a penalty. (Mer chants’ Bank v. Bliss, 35 N. Y. 412 .

Veeder v. Baker, 83 id. 156;

Stokes v. Stickney, 96 id. 326.)

The liability sought to be enforced against the defendant does not arise out of any contract obligation but is imposed by the statute-as a penalty for disobedience of its requirement.

The distinction between the nature of this liability and that of stockholders under the same statute is clearly pointed out in Wiles v. Suydam ( 64 N. Y. 173 ), and Veeder v. Baker (83 id. 156, 160).

This action is not founded on any debt owing by the defendant. The debts owing by the company are made the measure the penalty.

The orders should be reversed and the motion granted with costs in the court'below and one bill of costs in this court.

All concur.

Orders reversed.