Helmers v. Anderson

• Decision Date: 24 June 1946
• Docket Number: No. 10198.,10198.
• Citation: 156 F.2d 47
• Parties: HELMERS et al. v. ANDERSON.
• Court: U.S. Court of Appeals — Sixth Circuit

156 F.2d 47 (1946)

HELMERS et al. v. ANDERSON.

No. 10198.

Circuit Court of Appeals, Sixth Circuit.

June 24, 1946.

Murray Seasongood and Joseph A. Segal, both of Cincinnati, Ohio (Robert P. Goldman, of Cincinnati, Ohio, on the brief), for appellants.

Robert S. Marx, of Cincinnati, Ohio (Frank E. Wood, Harry Kasfir, and William C. Kelly, all of Cincinnati, Ohio, on the brief), for appellee.

Ralph E. Clark, of Cincinnati, Ohio, for amicus curiae.

Lewis Levy, of Cincinnati, Ohio, pro se.

Before ALLEN, MARTIN and MILLER, Circuit Judges.

MILLER, Circuit Judge.

This appeal presents the question whether appellee's action, seeking to collect a "double liability" assessment levied by the Comptroller of Currency upon the stockholders of The National Bank of Kentucky, of Louisville, Kentucky, was barred by the Statute of Limitations. The District Court held that the action was not so barred and overruled appellants' motion to dismiss the Bill of Complaint.

The Bill of Complaint, filed on December 12, 1936, in the United States District Court for the Southern District of Ohio, states that The National Bank of Kentucky of Louisville, Kentucky, was closed by resolution of its board of directors on November 16, 1930; that on November 17, 1930, the Comptroller of the Currency of the United States, being satisfied that the bank was insolvent appointed Paul C. Keyes receiver, who thereupon duly qualified and took possession of the books, records and assets of the bank and continued in control as such receiver until December 15, 1932, at which time he was succeeded by the plaintiff-appellee, A. M. Anderson; that on February 20, 1931, the Comptroller of the Currency, by virtue of the authority vested in him by law, made an assessment and requisition upon the shareholders of the bank for $4,000,000 to be paid by them on or before the first day of April, 1931, and directed the receiver "to take all necessary proceedings by suit or otherwise to enforce the individual liability of said shareholders"; that acting pursuant to the authority and direction of the Comptroller of the Currency the Receiver on March 20, 1931, sent by registered mail to the shareholders of BancoKentucky Company, a Delaware corporation which owned substantially all of the stock of The National Bank of Kentucky, the following assessment notice:

"Louisville, Ky., March 20, 1931.

"As a stockholder in the BancoKentucky Company, you will please take notice, that the Comptroller of the Currency has on February 20, 1931, levied an assessment upon the stockholders of The National Bank of Kentucky, Louisville, Ky., on the par value of each and every share, payable at the Office of the Receiver, on or before April 1, 1931. A notice of such assessment and a demand for payment of the same has been served upon the Receiver of The BancoKentucky Company as the holder of 540,484 trustees' participation certificates, issued under a certain trust agreement of April 22, 1927, which trustees' participation certificates represent the ownership of 37,721.624 shares of stock in The National Bank of Kentucky. You will, therefore, take notice that it is the intention of the undersigned, as Receiver of The National Bank of Kentucky, to proceed against you for the collection of the aforesaid assessment liability represented by the said trustees' participation certificates held by said BancoKentucky Company, to the extent that the undersigned, as Receiver of The National Bank of Kentucky, is unable to collect said assessment from The BancoKentucky Company or its Receiver.

"Paul C. Keyes "Receiver of The National Bank of Kentucky "Louisville, Kentucky";

that he enclosed and attached thereto a copy of the order of assessment made by the Comptroller; that on October 31, 1931, the Receiver filed an action against the Receiver of The BancoKentucky Company in the United States District Court for the Western District of Kentucky, praying judgment by reason of the assessment in the amount of $3,772,162.40 and on September 14, 1932, recovered judgment for the full amount of the assessment plus interest, which judgment was affirmed by the United States Circuit Court of Appeals and is wholly unpaid and unsatisfied except for a credit of $90,745.17; that the depositors and creditors of The National Bank of Kentucky had only been paid 67% of the face amount of their deposits and claims, and that there was due him as Receiver of The National Bank of Kentucky by reason of the stock assessment the unpaid balance of $3,680,719.05. The Bill of Complaint named as defendants some 300 stockholders of Banco Kentucky Company who were residents of the State of Ohio. Thereafter certain defendants filed motions to dismiss by which they raised the defense of the Statute of Limitations. Berry et al. v. Chrysler Corporation, 6 Cir., 150 F.2d 1002.

Except for the defense of the Statute of Limitations, and other special defenses available to certain defendants, the issues in this case are the same as those involved in Anderson v. Abbott, which was filed by the Receiver of The National Bank of Kentucky in the Western District of Kentucky against shareholders of BancoKentucky Company residing in Kentucky. 32 F.Supp. 328. Action in this case was suspended until that litigation, on the issues other than Statute of Limitations, could be finally disposed of by the Supreme Court of the United States. In that case the District Court rendered judgment for the defendants. The judgment was affirmed by the Court of Appeals for this Circuit. Anderson v. Abbott, 127 F.2d 696. On review the Supreme Court of the United States held the defendants liable on the assessment and remanded the case to the District Court for appropriate action. Anderson v. Abbott, 321 U.S. 349, 64 S.Ct. 531, 88 L.Ed. 793, 151 A.L.R. 1146; rehearing denied, 321 U.S. 804, 64 S.Ct. 845, 88 L.Ed. 1090. Those opinions set out fully the relationship between The National Bank of Kentucky and BancoKentucky Company and the basis of liability, making it unnecessary to repeat it here. That ruling will control the decision in this case on its merits if the action is not barred by the Statute of Limitations. Thereafter the District Court overruled the motions, and by agreement of counsel and with the Court's consent the four appellants herein declined to plead further and final judgment for their proportionate share of the assessment was rendered against them to provide a test case. From this judgment the appeal is taken.

Although the suit was brought in equity the complaint seeks to enforce a legal right for which equity provides a concurrent remedy to avoid a multiplicity of suits. Bailey v. Tillinghast, 6 Cir., 99 F. 801. In such a case the Federal Court sitting in equity will apply the applicable statute of limitations. Russell v. Todd, 309 U.S. 280, 60 S.Ct. 527, 84 L.Ed. 754. It is conceded by the parties herein that the Federal statutes provide no period of limitation for actions to enforce the liability of national bank stockholders, and accordingly the statute of limitations of the state in which the action is brought is applicable. Rawlings v. Ray, 312 U.S. 96, 61 S.Ct. 473, 85 L.Ed. 605. It is also agreed that the complaint sets forth an action "upon a liability created by statute." 38 Stat. 273, § 64, Title 12 U.S.C.A. The General Statute of Limitations of Ohio provides that an action "upon a liability created by statute other than a forfeiture or penalty, shall be brought within six years after the cause thereof accrued." G. C. § 11222. Ohio also has a special Statute of Limitations, generally known as the "Borrowing Statute" which reads —

"If the laws of any state or country where the cause of action arose limits the time for the commencement of the action to a less number of years than do the statutes of this state in like causes of action then said cause of action shall be barred in this state at the expiration of said lesser number of years." G.C. § 11234.

The Kentucky Statute of Limitations is also involved. Section 413.120, Kentucky Revised Statutes provides as follows:

"An action upon a liability created by statute, when no other time is fixed by the statute creating the liability, * * * shall be commenced within five years next after the cause of action accrued."

Regardless of some early doubt in the matter, it is now settled that in an action by the receiver of an insolvent national bank to collect a Comptroller's assessment the statute of limitations does not begin to run until the day fixed by the Comptroller for payment. Rawlings v. Ray, supra; Fisher v. Whiton, 317 U.S. 217, 63 S.Ct. 175, 87 L.Ed. 223. In the present case, that date was April 1, 1931. The Bill of Complaint was filed on December 12, 1936. If the Ohio General Statute of Limitations is applicable the complaint was filed within the 6-year period provided. On the other hand, if the Kentucky Statute of Limitations is applicable by reason of the Ohio Borrowing Statute above referred to on the ground that the cause of action arose in Kentucky, then the complaint was not filed within the 5-year limit provided by the Kentucky statute. This requires a ruling on the narrow question of "where the cause of action arose," as the words are used in the Ohio Borrowing Statute. Appellants contend that the five year Kentucky statute is applicable because the cause of action arose in Kentucky, where The National Bank of Kentucky was located and transacted business, where insolvency occurred, where the Receiver had his office and where the assessment was directed by the Receiver to be paid. They contend in the alternative that if the cause of action did not arise in Kentucky, it arose in the District of Columbia, where the applicable sta...