Cockrill v. Cooper

• Citation: 86 F. 7
• Decision Date: 21 March 1898
• Docket Number: 968.
• Parties: COCKRILL v. COOPER et al.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

86 F. 7

COCKRILL v. COOPER et al.

No. 968.

United States Court of Appeals, Eighth Circuit.

March 21, 1898

On June 19, 1895, Sterling R. Cockrill, as receiver of the First National Bank of Little Rock, Ark., the appellant, exhibited his bill of complaint against E. J. Butler, since deceased and the appellees Mark M. Cohn, John W. Goodwin, Nick Kupferle, P. F. Roots, M. G. Hall, Gus Blass, George H Sanders, C. M. Taylor, William Farrell, Henry M. Cooper, H G. Fleming, John M. Taylor, James Joyce, C. T. Abeles, and against Mrs. Emily M. Roots, P. K. Roots, and John McClure as executors of Logan H. Roots, deceased, in the circuit court of the United States for the Eastern district of Arkansas. The bill charged, in substance, that the aforesaid bank was insolvent on February 1, 1893, and that Logan H. Roots was duly appointed receiver thereof by the comptroller of the currency; that Roots subsequently died, and that the complainant had been duly appointed receiver in his place and stead; that from June 2, 1890, until February 1, 1893, E. J. Butler and certain of the above-named appellees, to wit, John W. Goodwin, Gus Blass, and Nick Kupferle, were members of the board of directors of the aforesaid bank, and that during said period Logan H. Roots, now deceased, and the other appellees above named, served respectively at various times as members of the directory; that on May 23, 1890, the bank had a capital stock of $250,000 and was then solvent and prosperous; that on June 19, 1890, H. G. Allis was elected president of the bank, in place of Logan H. Roots, who had previously served in that capacity; and that thereafter, under the direction and guidance of said Allis, and with the knowledge and consent of the aforesaid directors, the bank entered upon and pursued a business policy which soon impaired its capital, and ultimately led to its insolvency. The particular derelictions of duty complained of in the bill consisted in the charge that during their respective periods of service the above-named directors of said bank, in violation of section 5200, Rev.St.U.S., knowingly suffered and permitted loans to be made in excess of one-tenth of the amount of the capital of said bank actually paid in, to each of the following persons and corporations; that is to say, to H. G. Allis, the president of the bank; to the City Electric Street-Railway Company, a corporation of which said Allis was president; to the McCarthy-Joyce Company, a corporation in which said Allis was interested; and to the Press Printing Company, a corporation whose stock was principally owned by one George R. Brown, who was an intimate friend and business associate of said Allis. It was also alleged in the bill that by reason of such illegal and excessive loans to irresponsible parties the funds of the bank were dissipated and lost, and that it was thereby rendered insolvent. It was further charged, in substance, that on January 1, 1892, July 1, 1892, and on January 10, 1893, after the capital of the bank had become seriously impaired, so that it could not lawfully pay dividends, the directors above named nevertheless declared and paid a dividend of 4 per cent. at each of said dates, the total amount so paid being $60,000, and that the aforesaid directors, as stockholders, each received and accepted a portion of the dividends so paid. The bill also showed that the comptroller of the currency had caused an assessment of 92 per cent. to be levied on the shareholders of the bank, and that such assessment, together with all of the bank's other assets, would be insufficient to pay its liabilities. The appellees above named, who were the defendants below, demurred to the bill for the following reasons: First, that it disclosed no equity; second, because it did not appear that the comptroller of the currency had procured a forfeiture of the charter of the bank, pursuant to section 5239 of the Revised Statutes of the United States; third, because the bill was uncertain, indefinite, and insufficient in its allegations, and did not show what wrongs complained of had been committed by the respective defendants; and, fourth, because the action was barred by the statute of limitations of the state of Arkansas. The circuit court held that the first three grounds of demurrer were untenable, but that the fourth ground was well taken. It accordingly dismissed the bill, upon the assumption that the action was barred by limitation. The case comes to this court on appeal from such decree.

J. M. Moore and Sterling R. Cockrill (Ashley Cockrill, on brief), for appellant.

W. E. Hemingway and John McClure (U. M. Rose, G. B. Rose, E. W. Kimball, and Morris M. Cohn, on brief), for appellees.

Before SANBORN and THAYER, Circuit Judges, and PHILIPS, District Judge.

THAYER Circuit Judge, after stating the case as above.

Inasmuch as the case in hand was decided by the circuit court on the ground that the action was barred by limitation, that contention will be first noticed. The following provisions relative to the limitation of actions are found in Rev.St.Ark. 1837, c. 91:

'Sec. 6. The following actions shall be commenced within three years after the passage of this act * * * : First, all actions of debt founded upon any contract obligation or liability (not under seal) excepting such as are brought upon the judgment or decree of some court of record of the United States of this or some other state; second, all actions upon judgments rendered in any court not being a court of record; third, all actions for arrearages of rent (not reserved by some instrument in writing under seal); fourth, all actions of account, assumpsit or on the case, founded on any contract or liability, expressed or implied; fifth, all actions for trespass on lands or for libels; sixth, all actions for taking or injuring any goods or chattels.

'Sec. 7. The following actions shall be commenced within one year after the cause of action shall accrue, and not after: First, all special actions on the case, for criminal conversation, assault and battery and false imprisonment; second, all actions for words spoken slandering the character of another; third, all words spoken whereby special damages are sustained.'

Although it might seem from a casual reading of section 7, last quoted, that the one-year bar was only applicable to actions for crim. con., assault and battery, false imprisonment, and slander, yet in an early case (Patterson v. Thompson, 24 Ark. 55, 71, 72) the one-year bar was held applicable to an action for seduction; and language was employed from which it is plainly inferable that the court concluded that the one-year bar was applicable to all special actions on the case, as well as to those causes of action which are specifically enumerated. The foregoing sections of the limitation act appear to have remained in force, unaltered, until the adoption of the Code of Procedure during the year 1868, which contained the usual provisions abolishing all forms of action theretofore existing, and declaring that there should thereafter be but one form of action for the protection of private rights and the redress of private grievances, to be termed 'a civil action.' Mansf.Dig.Ark. Secs. 4914, 4915. Since the adoption of the Code of Procedure in 1868, the laws of Arkansas have been three times digested and published, in pursuance of legislative authority, namely, by Edward W. Gantt, in 1874; by W. W. Mansfield, in 1884; and by Sandels and Hill, in 1894. The several digesters last named appear to have acted on the assumption that the Code of Procedure necessarily repealed so much of section 7 of the limitation act, above quoted, as prescribed a limitation of one year for 'all special actions on the case. ' In accordance with that view the several digesters cast sections 6 and 7 of the limitation act, above quoted, into the following form:

'The following actions shall be commenced within three years after the cause of action shall accrue, and not after: First, all actions founded upon any contract or liability, express or implied, not in writing. * * * The following actions shall be commenced within one year after the cause of action shall accrue, and not after: First, all actions for criminal conversation, assault and battery and false imprisonment; second, all actions for words spoken slandering the character of another; third, all words spoken whereby special damages are sustained. ' Ark.Dig.St. 1874, Secs. 4120, 4121; Mansf.Dig. 1884, Secs. 4478, 4479; Sand. & H. Dig. 1894, Secs. 4822, 4823.

Such action on the part of the digesters seems to have met with the full approval of the bench and bar of the state of Arkansas for the past quarter of a century. The supreme court of the state has never decided that the provision found in section 7, c. 91, Rev.St.Ark. 1837, barring 'all special actions on the case' in one year, is still in force. On the contrary, it has expressly ruled that the limitation applicable to an action brought against a railway company for overflowing the land of an adjoining proprietor by wrongfully obstructing a ditch or drain is three years, and that the same period of limitation applies to an action to recover damages occasioned by a nuisance. Railway Co. v Morris, 35 Ark. 622; Railway Co. v. Chapman, 39 Ark. 463, 472; Railway Co. v. Biggs, 52 Ark. 240, 12 S.W. 331; Railway Co. v. Anderson, 62 Ark. 360, 365, 35 S.W. 791. Prior to the Code, wrongs of such a nature would have been redressed by actions on the case. Therefore the cases cited decide, in effect, that the provision barring all special actions on the case after the lapse of one year is no longer in force. Nor is this view, which seems to have been entertained by all the digesters of the Arkansas statutes, wholly without reasons...