Adolphus Claine v. George Rankin

• Decision Date: 06 March 1905
• Docket Number: No. 58,58
• Citation: 25 S.Ct. 410,197 U.S. 154,49 L.Ed. 702
• Parties: ADOLPHUS F. McCLAINE, Plff. in Err. , v. GEORGE C. RANKIN, as Receiver of the First National Bank of South Bend, Washington
• Court: U.S. Supreme Court

197 U.S. 154

25 S.Ct. 410

49 L.Ed. 702

ADOLPHUS F. McCLAINE, Plff. in Err.,

v GEORGE C. RANKIN, as Receiver of the First National Bank of South Bend, Washington.

No. 58.

Argued November 10, 1904.

Decided March 6, 1905.

The First National Bank of South Bend, Washington, became insolvent and was closed August 10, 1895, and on the seventeenth day of the same month one Heim was appointed receiver, who was succeeded by Aldrich, and Aldrich by George C. Rankin.

August 17, 1896, the acting Comptroller of the Currency levied an assessment against the shareholders of the bank in enforcement of their statutory liability. Adolphus F. McClaine was one of the stockholders, was notified of the levy, and demand was duly made of him to pay the assessment on or before September 17, 1896, and shortly thereafter an action was commenced against him by the receiver to recover the same. Pending the action, efforts to settle the claim were made. Subsequently, the action was dismissed. Thereupon the receiver brought an action against McClaine upon an alleged contract of compromise, which went to trial, and the receiver took a nonsuit. The present action was then brought on the assessment, August 15, 1899, and McClaine set up the statute of limitations by demurrer, which the circuit court sustained, and dismissed the action. 98 Fed. 378. The cause was taken to the circuit court of appeals, and the judgment of the circuit court reversed. 45 C. C. A. 631, 106 Fed. 791.

The case having been remanded, the circuit court overruled the demurrer, McClaine answered, and a trial was had, resulting in judgment for the receiver, which was affirmed by the circuit court of appeals. 56 C. C. A. 160, 119 Fed. 110. This writ of error was then brought.

The following are sections of the statutes of Washington in relation to limitations, as found in Ballinger's Code:

'§ 4796. Actions can only be commenced within the periods herein prescribed after the cause of action shall have accrued, except when in special cases, a different limitation is prescribed by statute; but the objection that the action was not commenced within the time limited can only be taken by answer or demurrer.

'§ 4797. The period prescribed in the preceding section for the commencement of actions shall be as follows: . . .

'§ 4798. Within six years: 1. An action upon a judgment or decree of any court of the United States, or of any state or territory within the United States.

'2. An action upon a contract in writing, or liability, express or implied, arising out of a written agreement.

'3. An action for the rents and profits or for the use and occupation of real estate.'

'§ 4800. Within three years: 1. An action for waste or trespass upon real property.

'2. An action for taking, detaining, or injuring personal property, including an action for the specific recovery thereof, or for any other injury to the person or rights of another not hereinafter enumerated.

'3. An action upon a contract or liability, express or implied, which is not in writing and does not arise out of any written instrument.

'4. An action for relief upon the ground of fraud, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.

'5. An action against a sheriff, coroner, or constable upon a liability incurred by the doing of an act in his official capacity, and by virtue of his office, or by the omission of an official duty, including the nonpayment of money collected upon an execution: but this subdivision shall not apply to action for an escape.

'6. An action upon a statute for penalty or forfeiture, where an action is given to the party aggrieved, or to such party and the state, except when the statute imposing it prescribed a different penalty [limitation].

'7. An action for seduction and breach of promise of marriage.'

'§ 4805. An action for relief, not hereinbefore provided for, shall be commenced within two years after the cause of action shall have accrued.'

Mr. T. O. Abbott for plaintiff in error.

Mr. Francis F. Oldham for defendant in error.

Statement by Mr. Chief Justice Fuller:

Mr. Chief Justice Fuller delivered the opinion of the court:

It is conceded that, in the absence of any provision of the act of Congress creating the liability, fixing a limitation of time for commencing actions to enforce it, the statute of limitations of the particular state is applicable. Rev. Stat. 721, U. S. Comp. Stat. 1901, p. 581; Campbell v. Haverhill, 155 U. S. 610, 39 L. ed. 280, 15 Sup. Ct. Rep. 217. If, then, this action was barred by the statute of limitations of the state of Washington, that ended it, and both judgments below must be reversed and the cause remanded to the circuit court, with a direction that judgment be entered for defendant.

Reference to the state statutes shows that subd. 2 of § 4798 relates to 'an action upon a contract in writing, or liability, express or implied, arising out of a written agreement;' while subd. 3 of § 4800 relates to 'an action upon a contract or liability, express or implied, which is not in writing, and does not arise out of any written instrument.' The one relates to contracts or liabilities growing out of contracts in writing, and the other to contracts or liabilities growing out of contracts not in writing. The receiver's contention is that the case falls within subd. 3 of § 4800, imposing the limitation of three years. If it does not, it is not otherwise provided for, and falls within § 4805, which fixes the limitation at two years.

And as this action was commenced within three years, but not within two years, after the assessment became due and payable, the question is whether subd. 3 of § 4800 applies.

It is contended that the meaning of the word 'liability' as used in that subdivision is not restricted to contract liabilities, but, reading it with subd. 2 of § 4798, and in view of the enumeration of other actions to enforce liabilities, we think that this cannot be so, and, indeed, the subdivision has been construed by the supreme court of Washington as applicable only to contracts. Suter v. Wenatchee Water Power Co. 35 Wash. 1, 76 Pac. 298; Sargent v. Tacoma, 10 Wash. 212, 38 Pac. 1048. The circuit court was of that opinion when the case was originally disposed of, and held that the cause of action arose by force of the statute, and did not spring from contract. 98 Fed. 378. But that judgment was reversed by the circuit court of appeals on the ground that the liability was not only statutory, but contractual as well, and that the limitation of three years applied in the latter aspect. 45 C. C. A. 631, 106 Fed. 791. Conceding that a statutory liability may be contractual in its nature, or more accurately, quasi-contractual, does it follow that an action given by statute should be regarded as brought on simple contract, or for breach of a simple contract, and, therefore, as coming within the provision in question?

The national bank act provides that 'the shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares.' Rev. Stat. § 5151, U. S. Comp. Stat. 1901, p. 3465.

And under other sections the duty is imposed on the Comptroller of the Currency to give the creditors of an insolvent national bank the benefit of the enforcement of this personal liability, and to decide whether the whole, or a part, and, if only a part, how much, shall be collected, he being also authorized to make more than one assessment, as circumstances may require. Kennedy v. Gibson, 8 Wall. 498, 19 L. ed. 476; Studebaker v. Perry, 184 U. S. 258, 46 L. ed. 528, 22 Sup. Ct. Rep. 463, and cases cited. But even his decision does not determine the liability except as to contracts, debts, and engagements of the bank lawfully incurred. Schrader v. Manufacturers' Nat. Bank, 133 U. S. 67, 33 L. ed. 564, 10 Sup. Ct. Rep. 238.

The liability is conditional, and statutes of limitation do not commence to run until after assessment has been made. McDonald v. Thompson, 184 U. S. 71, 46 L. ed. 437, 22 Sup. Ct. Rep. 297.

In the latter case the statute of Nebraska provided (§ 10) that actions must be commenced within five years, 'upon a specialty, or any agreement, contract, or promise in writing, or foreign judgment;' and (§ 11) within four years 'upon a contract not in writing, express or implied; an action upon a liability created by statute other than a forfeiture or penalty.'

The action was brought on an assessment upon the stockholders of a national bank to the amount of the par value of the shares, and not to recover an amount unpaid on the original subscription, and it was held that the five-year limitation did not apply, because the cause of action was not upon a written contract, but that the four-year limitation applied, 'whether the promise raised by the statute was an implied contract not in writing or a liability created by statute,' no distinction between them as to the limitation being made by the state statute. And Mr. Justice Brown, speaking for the court, said: 'Whether the promise raised by the statute was an implied contract, not in writing, or a liability created by statute, it is immaterial to inquire. For the purposes of this case it may have been both. The statute was the origin of both the right and the remedy, but the contract was the origin of the personal responsibility of the defendant. Did the statute make a distinction between them with reference to the time within which an action must be brought, it might be necessary to make a more exact definition; but, as the action must be brought in any case within four years, it is unnecessary to go farther than to declare what seems entirely clear to us,...