327 U.S. 392 (1946), 505, Holmberg v. Armbrecht

Docket Nº:No. 505
Citation:327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743
Party Name:Holmberg v. Armbrecht
Case Date:February 25, 1946
Court:United States Supreme Court
 
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Page 392

327 U.S. 392 (1946)

66 S.Ct. 582, 90 L.Ed. 743

Holmberg

v.

Armbrecht

No. 505

United States Supreme Court

Feb. 25, 1946

Argued February 1, 1946

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

1. Decision of a suit in a federal court to enforce a federally created equitable right is not controlled by the statute of limitations of the State of the forum. Guaranty Trust Co. v. York, 326 U.S. 99, distinguished. Accordingly, a class suit by creditors of a joint stock land bank to enforce the liability imposed upon shareholders of the bank by § 16 of the Federal Farm Loan Act is not barred by the state statute of limitations. P. 394.

2. Statutes of limitations are not controlling measures of equitable relief, but have been drawn upon by equity solely for the light they may shed in determining that which is decisive for the chancellor's intervention, namely, whether the plaintiff has inexcusably slept on his rights, so as to make a decree against the defendant unfair. P. 396.

150 F.2d 829 reversed.

From a judgment for the plaintiffs in a suit to enforce a statutory liability of stockholders of a farm loan bank, the defendants appealed. The circuit court of appeals reversed. 150 F.2d 829. This Court granted certiorari. 326 U.S. 712. Reversed and remanded, p. 398.

Page 393

FRANKFURTER, J., lead opinion

MR. JUSTICE FRANKFURTER delivered the opinion of the Court.

This is a suit in equity by petitioners on behalf of themselves and all other creditors of the Southern Minnesota Joint Stock Land Bank of Minneapolis to enforce the liability imposed upon shareholders of the Bank by § 16 of the Federal Farm Loan Act, equal to one hundred per cent of their holdings. 39 Stat. 360, 374, 12 U.S.C. § 812. * The Bank closed its doors in May, 1932. Its debts exceeded its assets by more than $3,000,000, the amount of its outstanding stock. Suit was accordingly brought in the United States District Court for the District of Minnesota for determining and collecting the assessment due under § 16. Holmberg v. Southern Minnesota Joint Stock Land Bank of Minnesota, 10 F.Supp. 795. Armbrecht, a New York stockholder, was sued there. The suit failed on procedural grounds, and was dismissed without prejudice to further action. Holmberg v. Anchell, 24 F.Supp. 594, 598. Not until 1942, so it is alleged, did petitioners learn that Jules S. Bache had concealed his ownership of one hundred shares of the Bank stock under the name of Charles Armbrecht. The present action against Armbrecht and Bache was begun in the Southern District of New York in November, 1943. Bache died during pendency of the suit, and his executors were substituted as parties.

The respondents made two defenses: (1) They invoked a New York statute of limitation barring such an action after ten years, New York Civil Practice Act, § 53; (2) they urged laches, claiming that petitioners had unduly

Page 394

delayed commencement of the suit. Neither defense was sustained in the District Court, and judgment went against the respondents. The judgment was reversed by the Circuit Court of Appeals. 150 F.2d 829. That court did not reach the defense of...

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