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Secretary of State v. Gpak Corp.

Decided: May 8, 1967.


Goldmann, Kilkenny and Collester. The opinion of the court was delivered by Goldmann, S.j.a.d.


The State appeals from a Law Division order setting aside a judgment against defendant GPAK Corporation, docketed pursuant to the provisions of N.J.S.A. 14:6-2. The case is one of first impression.

N.J.S.A. 14:6-2 requires every domestic and every foreign corporation doing business in New Jersey to file a report with the Secretary of State within 30 days after the first election of directors and officers or within 60 days after the date of its incorporation or registering to do business (whichever comes first), and annually thereafter within 30 days after the time appointed for holding the annual election of directors and officers or the anniversary date of filing in the preceding year (whichever comes first). The report must state, among other things, the corporate name, the address of its registered office in this State and the name of the agent upon whom process may be served, the character of its business, the amount of authorized capital stock and the amount actually issued and outstanding, the names and addresses of the directors and officers and when their respective terms expire, and the date of the next annual meeting of stockholders for the election of directors. Upon failure to file such report the corporation, after written demand served upon it by the Secretary of State by certified or registered mail to its last address

appearing of record in his office, shall forfeit $200 to the State for each report not filed within the preceding five years. The penalty may be recovered with costs in a civil action prosecuted by the Attorney General. However, the corporation is not subject to the penalty if, within 30 days after service of the written demand, it files the required reports and pays the Secretary of State a $10 filing fee for each.

The statute provides for an additional or alternative remedy:

"* * * [T]he Secretary of State may issue a certificate to the Clerk of the Superior Court that a corporation is indebted for the payment of such penalty, and thereupon the clerk shall immediately enter upon his record of docketed judgments the name of such corporation, and of the State, a designation of the statute under which the penalty is imposed, the amount of the penalty so certified, and the date of making such certification. The making of the entries shall have the same force and effect as the entry of a docketed judgment in the office of such clerk, and the Secretary of State shall have all of the remedies and may take all of the proceedings for the collection thereof which may be had or taken upon the recovery of a judgment in a civil action, but without prejudice to the corporation's right of appeal. * * *"

It appears without contradiction that GPAK was incorporated under Title 14 of the Revised Statutes of New Jersey ("Corporations, General") on July 21, 1961, its principal office being designated as 9 Parmley Place, Summit, with Frederick G. Kentz as registered agent. The 1964 annual report, the only one timely filed, lists Kentz as a director and treasurer of the corporation.

On April 4, 1966 the Secretary of State's office sent Kentz a certified mail letter advising that GPAK had not filed its annual reports for 1961, 1962, 1963 and 1965, and if they were not filed within 30 days pursuant to the statute, the Secretary of State would have a docketed judgment entered against the corporation in the amount of $200 for each report. GPAK did nothing, with the result that on May 9 the Secretary of State sent to the Superior Court Clerk a "judgment" (actually, a certificate) stating that the corporation

was indebted to the State for $800. The clerk entered the certificate on his record of docketed judgments on May 11, 1966. On May 19 the clerk, by letter addressed to the corporation c/o Kentz, notified it of the entry of that judgment.

More than a month later, on June 24, Kentz wrote the Superior Court Clerk explaining that the corporation had been inactive for the past few years and that its failure to file the annual reports "was through inadvertence and was not deliberate or with intent to evade the law." He also represented that the corporation was about to be dissolved. (The records of the Secretary of State show there has been no dissolution as of the date of this opinion.) Kentz inquired whether the clerk would be willing to waive the $800 and accept the regular annual payment ($10) for the years reports were not filed, and he enclosed a $40 check payable to the Secretary of State for the four years GPAK was delinquent. The request was denied, with the result that on August 17, 1966 a notice of motion was filed on behalf of the corporation seeking relief from the judgment under R.R. 4:62-2 "because of excusable negligence or mistake." By way of supporting affidavit Kentz stated that the corporation had been inactive for several years, that his firm had been retained in April 1966 to take such steps as were necessary to dissolve it, and that in the course of doing so he discovered the docketed judgment. Upon further investigation he found that the Secretary of State's letter of April 4 had been receipted for by a member of his firm's clerical staff. He represented that neither this notice nor the notice of entry of judgment had ever been brought to his attention; they had been received and placed in the file without his knowledge.

After considering this affidavit and hearing oral argument, the county judge temporarily assigned to the Law Division set the judgment aside and ordered the Secretary of State to accept GPAK's past annual ...

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