Blythe v. Enslen

• Citation: 209 Ala. 96,95 So. 479
• Decision Date: 26 October 1922
• Docket Number: 6 Div. 598.
• Parties: BLYTHE ET AL. v. ENSLEN ET AL.
• Court: Supreme Court of Alabama

95 So. 479

209 Ala. 96

BLYTHE ET AL. v. ENSLEN ET AL.

6 Div. 598.

Supreme Court of Alabama

October 26, 1922

Rehearing Denied Feb. 1, 1923.

Appeal from Circuit Court, Jefferson County; Hugh A. Locke, Judge.

Bill by Sylvester V. Blythe and others against Eugene F. Enslen and others. From a decree sustaining demurrer to the bill complainants appeal. Affirmed.

John W Altman and Jerone Edmundson, both of Birmingham, for appellants.

Cabaniss Johnston, Cocke & Cabaniss, of Birmingham, for appellees.

SAYRE J.

On a former appeal (203 Ala. 692, 85 So. 1), it was held that complainants' (appellants') action was one sounding in tort and governed by the statute of limitation of one year. This appeal seeks to review that conclusion.

Complainants' bill was amended on its return to the trial court; but its claims upon the jurisdiction of equity remain substantially as they were before. The contents of the bill are sufficiently shown in the report of the former appeal; but it is not amiss now to observe that, while the bill seeks to charge defendants as for a breach of their alleged contract, as directors of the Jefferson County Savings Bank, in general to diligently supervise, watch over, and protect the interests of the bank, and, more specifically, to perform the duties imposed by the by-laws of the bank, yet the averment of contractual relation is the conclusion of the pleader drawn from the fact that defendants accepted the office of directors. More in detail, the argument now takes this form in substance: The relation between a corporation and its directors is that of principal and agent, and agency is a contractual relation; therefore the relation between their bank and the defendants here was contractual, and then, to complete the statement of complainants' case, is added the proposition, which of itself will not be denied, that the stockholder's remedy is in equity, the wrong complained of being in theory of law done to the corporation, and not to the stockholders distributively. But the question now in hand relates to the statute of limitations which the provisions of the Code, § 3091, "prescribing the time within which civil suits must be commenced after the cause of action accrued, apply to suits commenced by bill in chancery"

The point of emphasis new seems to be the fact of agency as establishing a contractual relation between the bank and its directors; but the case as thus presented does not differ in legal effect from that presented on former appeal when it was decided, upon grounds amply sustained by the authorities and satisfactory to the court, that defendant directors were trustees by implication of law only, that the bill charged a breach of duties arising out of the relation between the bank and its directors, and hence that the action against them was ex delicto and barred by the statute of one year. Considered with reference to the law of agency, the case for complainants is no stronger now than then. The argument now made, if sound, would have resulted in a reversal on former appeal without regard to the effort to charge defendants as trustees, for trustees are agents. Wallace v. Lincoln Savings Bank, 89 Tenn. 630, 15 S.W. 448, 24 Am. St. Rep. 625. The duties alleged to have been breached by defendants arise by implication out of contract, but are not matters of express contract within the meaning of our law discriminating between actions ex delicto and ex contractu. This, in effect, had been decided in this court prior to the decision on the former appeal in this case. In Godbold v. Branch Bank of Mobile, 11 Ala. 191, 46 Am. Dec. 211, cited on former appeal, the action was against defendant director for the breach of a duty imposed on him by statute, not only to take care in general of the affairs of the bank, but specifically and expressly the duty alleged to have been breached. The remedy was held to be an action ex delicto. So in Carrol v. Green, 92 U.S. 509, 23 L.Ed. 738, and Cockrill v. Butler (C. C.) 78 F. 679, where this question had elaborate consideration; Hinsdale v. Larned, 16 Mass. 68; Coddington v. Canaday, 157 Ind. 243, 61 N.E. 567. And the courts generally hold that if an action of this sort would have been barred at law, it is also barred in equity. Federal cases, supra, and authorities cited in 89 Tenn. 630, 650, 15 S.W. 448, 24 Am. St. Rep. 625.

Other objections to complainants' bill are discussed in the briefs. As to them it is not necessary to announce a decision. The bar of the statute of limitations, shown on the face of the bill, is sufficient to dispose of complainants' case.

Affirmed.

ANDERSON, C.J., and GARDNER and MILLER, JJ., concur.

On Application for Rehearing.

SAYRE J.

In their application for rehearing appellants complain that one aspect of their bill has not received the attention of the court. They segregate the second subdivision of the second paragraph of the original bill, lines 9 to 13 of the seventh section, and all of the thirteenth section of the bill as last amended, as setting forth the facts on which they claim relief according to the formula of Wynn v. Tallapoosa County Bank, 168 Ala. 469, 489, 53 So. 228, 236, a case in which the bank sought to charge the estate of its deceased cashier, and where it was said:

"The bill contains equity in so far as it seeks to charge respondent for an accounting as to the funds or property of the bank, acquired by the intestate as the bank's agent or trustee, whether by breach of contract expressed or implied, or whether by breach of duty or trust growing out of such contractual relation, though it amounted to a tort."

Montgomery Light Co. v. Lahey, 121 Ala. 131, 25 So. 1006, is cited to the...