Brunswick Terminal Co. v. National Bank of Baltimore

• Decision Date: 06 February 1900
• Docket Number: 293.
• Citation: 99 F. 635
• Parties: BRUNSWICK TERMINAL CO. et al. v. NATIONAL BANK OF BALTIMORE.
• Court: U.S. Court of Appeals — Fourth Circuit

99 F. 635

BRUNSWICK TERMINAL CO. et al. v. NATIONAL BANK OF BALTIMORE.

No. 293.

United States Court of Appeals, Fourth Circuit.

February 6, 1900

Henry W. Williams (Goodyear & Kay and Williams & Williams, on the brief), for appellants.

D. K Este Fisher and Allan McLane (William A. Fisher and James L McLane, on the brief), for appellee.

Before GOFF, Circuit Judge, and BRAWLEY and WADDILL, District Judges.

WADDILL District Judge.

This is an appeal from the decree of the circuit court of the United States for the district of Maryland dismissing the bill in equity filed in that court by the appellants against the appellee. 88 F. 607. The bill was filed by the appellants creditors of the Brunswick State Bank of Georgia, on their won behalf and on behalf of such other creditors as might intervene against the appellee, the National Bank of Baltimore, alleged to be liable as a stockholder in the Brunswick State Bank. The Brunswick State Bank was incorporated by an act of the Georgia legislature of October 24, 1881, and discontinued business, being insolvent on the 25th of May, 1893. By its charter (section 9, p. 522, Laws 1889) it is provided:

'That said corporation shall be responsible to its creditors to the extent of its property and assets, and the stockholders, in addition thereto, shall be individually liable, equally and ratably, and not one for the other, as sureties to the creditors of such corporation, for all, contracts and debts of the said corporation, to the extent of the amount of their stock therein, at the par value thereof, respectively, at the time the debt was created, in addition to the amount invested in such shares.'

Code Ga. 1882, Sec. 1496, further provides:

'When a stockholder in any bank or other corporation is individually liable under its charter, and shall transfer his stock, he shall be exempt from such a liability, unless he receives a written notice from a creditor, within six months after such transfer, of his intention to hold him liable: provided, he shall give notice for once a month, for six months, of such transfer, immediately thereafter, in two newspapers in and nearest the places where said institution shall keep its principal office.'

The appellee was at one time a stockholder of the Brunswick State Bank of Georgia, and, upon transfer of its stock, failed to comply with the statutory provisions last set forth, and appellants claim that it has incurred the stockholders' liability provided for in the charter hereinbefore recited, and is liable to them in this suit.

In the lower court the appellee appeared, and filed its answer, setting up, among other defenses, that of the statute of limitations, and insisted that the case was governed by the Maryland statute of limitations, applicable to actions of assumpsit or actions of debt on simple contracts (Code Md. (Pub. Gen. Laws) art. 57, Sec. 1), which requires the suit in such cases to be commenced within three years from the time the right of action accrues. The appellants, complainants in the lower court, demurred to the plea of the statute of limitations thus set up, and elected to stand upon the demurrer, and the case turned upon that question solely, the court overruling the demurrer to said plea, and dismissing the bill.

The single question to be determined in this case is whether the statute of limitations of the state of Maryland or of the state of Georgia applies to the claim sued on. The merits of the case were not touched upon by the decision of the lower court, and it is not the purpose of this court to express any opinion thereon. It is a general rule, too well settled to admit of serious controversy at this late day, that the remedies, as distinguished from the rights of the parties, are determined by the law of the forum, and that the statutes of limitations are part of the remedy, and not of the laws affecting rights. McElmoyle v. Cohen, 13 Pet. 312, 327, 10 L.Ed. 177; Bank v. Eldred, 130 U.S. 693, 696, 9 Sup.Ct. 690, 32 L.Ed. 1080; Telegraph Co. v. Purdy, 162 U.S. 329, 339, 16 Sup.Ct. 810, 40 L.Ed. 986; Willard v. Wood, 164 U.S. 502, 520, 17 Sup.Ct. 176, 41 L.Ed. 531; Townsend v. Jemison, 9 How. 407, 18 L.Ed. 194; Railway Co. v. Wyler, 158 U.S. 285, 289, 15 Sup.Ct. 877, 39 L.Ed. 983. There are, however, exceptions to this rule; one being where a statutory liability is sought to be enforced, and the statute prescribes the period of limitation. In this case the general rule, adopting the statutes of limitations of the forums, is departed from, and the limitation prescribed by the act fixing the liability is applicable. Indeed, this principle was recognized by the learned judge in the court below in his opinion, but he proceeded upon the theory that there was no statute of the state of Georgia fixing the limitation in actions to enforce stockholders' liability. This, it seems, was a mistake, and that there existed such a statute. Code Ga. 1882, Sec. 2916 (Code 1895, Sec. 3766), is as follows:

'All suits for the enforcement of rights accruing to individuals under statutes, acts of incorporation, or by operation of the law, shall be brought within twenty years after the right of action accrues.'

This statute, in our opinion, governs in this case, and not the Maryland statute. It is exceedingly broad in its terms, and is expressly made applicable to suits for the enforcement of rights accruing to individuals under statutes and acts of incorporations. This statute has been construed by the supreme court of the state of Georgia, and by it held applicable to causes of action arising under acts of incorporation in that state. Insurance Co. v. Davis, 63 Ga. 471. This case turned upon the question of whether the liability arising under the act of the Georgia legislature incorporating the Georgia Masonic Mutual Life Insurance Company was subject to the period of limitation prescribed by the law of that state applicable to simple contracts, or by the act now under consideration, and the court decided that the liability was a statutory one, lasting for 20 years, and that this act applied. A further presentation of the general doctrine of a stockholder's statutory liability by the supreme court of the state of Georgia will be found in Banks v. Darden, 18 Ga. 318, 341. This court will follow the construction given by the supreme court of the state of Georgia to a statute of limitations of that state. No rule is, perhaps, more thoroughly established, and we know of no reason for disregarding it in the present case. Bauserman v. Blunt, 147 U.S. 647, 13 Sup.Ct. 466, 37 L.Ed. 316; Balkam v. Iron Co., 154 U.S. 177, 188, 14 Sup.Ct. 1010, 38 L.Ed. 953. In Balkam v. Iron Co., supra, Mr. Justice White, speaking for the court, said:

'No laws of the several states have been more steadfastly or more often recognized by this court, from the beginning, as rules of decision in courts of the United States, than statutes of limitations of action, real and personal, as enacted by the legislature of a state, and as construed by its highest court.'

And in support of this position the unbroken decisions of the supreme court, commencing as early as 4 Cranch, and running down to the time of its delivery, were cited by the learned justice. In Flash v. Conn, 109 U.S. 371, 381, 3 Sup.Ct. 263, 27 L.Ed. 966, on an appeal from the circuit court of the United States for the district of Florida, it was held that the decision of the New York court of appeals holding a certain statutory stockholder's liability not to be a penalty, but in the nature of a contract, and therefore not barred by the three-years limitation, as in the case of a penalty, but by the six-years limitation prescribed as to contracts, was binding in all jurisdictions. The court (Mr. Justice Woods) says: 'We think this is a case where the construction of the state court is entitled to great, if not conclusive, weight with us. It is the settled construction of the law of the state, upon which the rights and liabilities of a large number of its citizens must depend. if the liability of a stockholder under section 10 arises upon contract, the six-years limitation applies to it; if the liability is in the nature of a penalty, the three-years limitation applies. It is clear that confusion and uncertainty would result should the state and federal courts place different constructions on the section. Such result ought, if possible, to be avoided. * * * If this were a case arising in the state of New York, we should, therefore, follow the construction put upon the statute by the courts of that state. The circumstance that the case comes here from the state of Florida should not leave the statute open to a different construction. It would be an anomaly for this court to put one interpretation on the statute in a case arising in New York, and a different interpretation in a case arising in Florida. Our conclusion, therefore, is that this action was not brought to enforce a...