Holmberg v. Hannaford

• Decision Date: 09 June 1939
• Docket Number: No. 442.,442.
• Citation: 28 F. Supp. 216
• Parties: HOLMBERG et al. v. HANNAFORD et al.
• Court: U.S. District Court — Southern District of Ohio

28 F. Supp. 216

HOLMBERG et al. v. HANNAFORD et al.

No. 442.

District Court, S. D. Ohio, W. D.

June 9, 1939.

Taft, Stettinius & Hollister, of Cincinnati, Ohio, and William P. Patterson, of Dayton, Ohio, for plaintiffs.

Coolidge & Becker, of Dayton, Ohio, for Lucy Carr Reed and Walter S. Carr.

H. P. Williamson and A. P. Mercer, both of Dayton, Ohio, for Third Nat. Bank & Trust Co.

H. L. Ferneding, of Dayton, Ohio, for T. A. Ferneding.

NEVIN, District Judge.

On November 12, 1937, plaintiffs filed their bill of complaint herein. On April 20, 1938, an amended bill of complaint was filed, and, on December 2, 1938, there was filed an "Amendment to Amended Bill of Complaint".

In the amendment just referred to plaintiffs recite that, in addition to the parties named in paragraph X in the amended bill of complaint, the following persons were, on the second day of May, 1932, each the owner of a certain number of shares of the capital stock of the Southern Minnesota joint Stock Land Bank of Minneapolis, to-wit: George W. Weimer, C. J. Ferneding and Alexander G. Reed. It is further alleged that these parties are each now deceased; that the Third National Bank and Trust Company of Dayton, Ohio, is the executor of the estate of George W. Weimer; that H. L. Ferneding, T. A. Ferneding and Marie F. Keve are the executors and executrix of the estate of C. J. Ferneding, deceased, and Lucy Carr Reed and Walter S. Carr are the executor and executrix of the estate of Alexander G. Reed, deceased. In the amendment to the amended bill of complaint these parties, in their representative capacities, are respectively named as parties defendant herein and the same judgment is prayed for against them as is prayed for against the other defendants in the amended bill of complaint.

On April 18, 1939, plaintiffs filed a "Second Amended Complaint" wherein, in paragraph XVIII, et seq., the three parties defendant, just referred to, are named as defendants along with other defendants whose names and addresses are set forth in paragraph X of the said second amended complaint.

On December 22, 1938, the executor and executrix of the estate of Alexander G. Reed, deceased, by their counsel, filed a motion to dismiss the amended bill of complaint and amendment to amended bill of complaint, setting forth two grounds as the basis of their motion.

On March 24, 1939, the Third National Bank and Trust Company, as the executor of the Weimer estate, filed a motion to dismiss the amended bill and the amendment to the amended bill.

It is to be noted that both of these motions were filed prior to the filing of the second amended complaint which, as above stated, was filed on April 18, 1939.

On May 8, 1939 (subsequent to the filing of the second amended complaint), T. A. Ferneding as the executor of the estate of C. J. Ferneding, deceased, filed a motion to dismiss the amended bill and the amendment to the amended bill.

It is agreed by counsel for all of the parties that these respective motions may be considered, however, as directed not only to the amended bill of complaint and the amendment to the amended bill of complaint but also to the second amended complaint, and all counsel have so treated the motions in their respective briefs.

These motions, of course, are each separate and independent of each other — each having to do with independent parties defendant and each being presented and urged by separate counsel on behalf of the defendants respectively. However, as later pointed out, all three of the motions have certain grounds in common although some of the motions contain more grounds than the others. In view of this, and in order that counsel for all of the defendants may be fully informed as to the court's rulings, the court has concluded that it would best serve the purpose and at the same time obviate needless repetition to discuss and decide all of the motions in this one decision. However, in order to keep the record in proper shape, separate entries should be drawn and filed based on this decision as to each motion respectively. The motions will be discussed and decided in the order of their filing.

Motion of Executor and Executrix of the Estate of Alexander G. Reed. (Filed December 22, 1938)

The motion on behalf of the Reed estate is based upon two grounds, as follows:

"1. To dismiss the action because the amended bill of complaint and amendment to amended bill of complaint fail to state a claim against defendants upon which relief can be granted.

"2. To dismiss the action on the ground that the Court lacks jurisdiction over the defendants since the amount in controversy as to them is less than three thousand dollars exclusive of interest and costs."

1. With regard to the first ground of the motion, it is urged on behalf of defendants that plaintiffs' claim is barred by the statute of limitations "since the action is brought more than six years after the accrual thereof". For this defendants rely on Section 11222, Gen.Code Ohio. In this connection defendants submit that the nature of the right which plaintiffs are attempting to enforce is legal in every respect since it is founded solely on a statute prescribing double liability for shareholders of joint stock land banks; that plaintiffs invoked the aid of this court, sitting in equity, not because their claim against defendants is equitable but because the remedies they desire to effectuate necessitate the use of equitable machinery.

Defendants further urge that if plaintiffs' action is equitable in nature and the statute of limitations, as such, does not apply, then plaintiffs have been guilty of such laches as to defeat recovery; that even if this action could properly be called equitable, this court, nevertheless, would be bound to follow the state law with regard to laches and that if the claim has been allowed to run for a period equivalent to the time limit prescribed by the statute on limitations of action, it is as effectively barred as it would be by the statute itself; that "the six year statute of limitations is an effective bar to their (plaintiffs') action, whether they choose to denominate it legal or equitable" citing Bryant v. Swetland, 48 Ohio St. 194, 27 N.E. 100.

Regardless of whether or not, strictly speaking, this is an action in equity it seems now to be well settled that the suit, of necessity, is brought in equity and is to be governed by the principles of equity.

In Christopher et al. v. Brusselback et al., 302 U.S. 500, at page 502, 58 S.Ct. 350, at page 351, 82 L.Ed. 388, the Supreme Court of the United States say, "The only means of enforcing the liability left to creditors of a joint-stock land bank, as the Court pointed out in the Wheeler Case Wheeler v. Greene, 280 U.S. 49, 50 S.Ct. 21, 74 L.Ed. 160, is an adversary suit in equity against the stockholders wherever they may be found." (Italics ours). See, also, Brusselback v. Arnovitz, 6 Cir., 87 F. 2d 761. These cases and others of like purport would seem to indicate that the suit is one in equity, but, as stated, it is not necessary to enter upon an academic discussion of this question because, at any event, the suit is governed by the principles of equity. In affirming the lower court (D.C., 1 F.Supp. 788) in Todd v. Russell, the Circuit Court of Appeals 2 Cir., 104 F.2d 169, 172, in a very recent decision say, inter alia:

"Ordinarily, suits in equity are not barred absolutely by any general statute of limitations but are subject only to being dismissed for laches where by reference to some analogous limitation statute they are stale and no good excuse for the delay is shown. Yet there is ample authority to the effect that one should not be permitted to avoid the effect of such a limitation statute merely by choosing to bring a suit in equity where there is concurrent jurisdiction and an action at law has become barred. Metropolitan Nat. Bank v. St. Louis Dispatch Company, 149 U.S. 436, 448, 13 S.Ct. 944, 37 L.Ed. 799; Baker v. Cummings, 169 U.S. 189, 18 S.Ct. 367, 42 L.Ed. 711; Kelly v. Dolan, 3 Cir., 233 F. 635; Hughes v. Reed, 10 Cir., 46 F.2d 435. Even where there is concurrent jurisdiction, however, and an action at law would be barred, in New York a suit in equity is not if resort to equity is necessary to obtain complete and adequate relief. Hanover Fire Insurance Co. v. Morse Dry Dock & Repair Co., 270 N.Y. 86, 200 N.E. 589; Rundle v. Allison, 34 N.Y. 180.

"Though the basis of this action is purely statutory and in that sense the relief is not strictly equitable in its nature, there is, however, no concurrent jurisdiction at...