John Donald v. David Thompson, 95

CourtUnited States Supreme Court
Citation184 U.S. 71,22 S.Ct. 297,46 L.Ed. 437
Docket NumberNo. 95,95
PartiesJOHN W. McDONALD, Receiver, etc., Appt. v. DAVID E. THOMPSON
Decision Date03 February 1902

This was a bill in equity originally filed May 20, 1898, in the circuit court for the district of Nebraska, by Kent K. Hayden, receiver of the Capital National Bank of Lincoln, Nebraska (of whom the present appelant is the successor in office), against David E. Thompson, to recover defendant's proportion of an assessment upon the stockholders of the bank to the amount of the par value of their shares. The bank failed on January 23, 1893, and a receiver was shortly thereafter appointed. On June 10, 1893, the Comptroller of the Currency ordered the assessment, which was made payable July 10, 1893.

The bill alleged Thompson to have been the owner of 210 shares of the capital stock, which he had acquired upon subscription to such stock and as a part of the original issue; that he, knowing the bank to be in a failing condition and practically insolvent, and in anticipation of its approaching failure, had sold and caused such stock to be transferred to certain irresponsible parties, and that such transfer was made with intent to defraud the bank, its depositors and creditors.

Defendant demurred upon the ground that it appeared by the bill that the cause of action was barred by the statute of limitations. The demurrer was sustained, the bill amended, another demurrer interposed and sustained, and the bill dismissed. An appeal was taken to the circuit court of appeals, which affirmed the judgment of the circuit court.

Messrs. J. R. Webster, John H. Ames, and Andrew E. Harvey for appellant.

Messrs. Halleck F. Rose and C. E. Magoon for appellee.

Mr. Justice Brown delivered the opinion of the court:

This bill is founded upon Rev. Stat. § 5151, which declares that 'the shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein at the par value thereof, in addition to the amount invested in such shares,' etc. By § 5234 the Comptroller of the Currency is authorized to appoint a receiver of insolvent banks, who 'may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders.'

The case turns upon the applicability of the state statute of limitations, which, so far as it is material, reads as follows:

'Sec. 5. Civil actions can only be commenced within the time prescribed in this title after the cause of action shall have accrued.

'Sec. 10. Within five years, an action upon a specialty, or any agreement, contract, or promise in writing, or foreign judgment.

'Sec. 11. Within four years, an action upon a contract not in writing, express or implied; an action upon a liability created by statute other than a forfeiture or penalty.'

As the cause of action in this case accrued on July 10, 1893, when the assessment was made payable (Hawkins v. Glenn, 131 U. S. 319, 33 L. ed. 184, 9 Sup. Ct. Rep. 739; Glenn v. Marbury, 145 U. S. 499, 36 L. ed. 790, 12 Sup. Ct. Rep. 914; Thompson v. German Ins. Co. 76 Fed. 892; Van Pelt v Gardner, 54 Neb. 701, 74 N. W. 1083, 75 N. W. 874), and the action was begun on May 20, 1898, more than four but less than five years thereafter, the case really turns upon the question whether the action is upon a 'contract or promise in writing,' or 'upon a contract not in writing, express or implied,' or 'upon a liability created by statute.' If the cause of action be upon a written contract, the action was brought in time. If upon a contract not in writing, or a statutory liability, the statute of limitations is a complete bar.

Used in this connection and as distinguished from a contract not in writing, express or implied, we think it entirely clear that § 10 contemplates an action between the immediate parties or their privies to a written contract, and that the only contract covered by that definition in this case is the one arising from the allegation of the bill that Thompson was the owner of 210 shares of the original capital stock, and 'that he acquired the same upon subscription to such capital stock,' and by a receipt of certificates for such shares. The only contract to be gathered from this allegation is one between the bank on the one hand and the defendant on the other, by which the latter agreed to take and pay for a certain number of shares, and the former agreed to issue certificates to him for the same. Had the action been brought upon this contract,—as, for instance, by the bank to recover an unpaid assessment upon the original shares,—the case would have fallen within § 10, and the suit might have been brought within five years.

But there was no contract in writing with the creditors or depositors of the bank, and none with the bank itself, to which the receiver could be said to be a privy, except to pay for the stock as originally issued. Granting there was a contract with the creditors to pay a sum equal to the value of the stock taken, in addition to the sum invested in the shares, this was a contract created by the statute, and obligatory upon the stockholders by reason of the statute existing at the time of their subscription; but it was not a contract in writing within the meaning of the Nebraska act, since the writing—that is, the subscription contained no reference whatever to the statutory obligation and no promise to respond beyond the amount of the subscription. In none of the numerous cases upon the subject in this court is this obligation treated as an express contract, but as one created by the statute and implied from the express contract of the stockholders to take and pay for shares in the association. Carrol v. Green, 92 U. S. 509, 512, 23 L. ed. 738, 739; Terry v. Little, 101 U. S. 216, 25 L. ed. 864; First Nat. Bank v. Hawkins, 174 U. S. 364, 43 L. ed. 1007, 19 Sup. Ct. Rep. 739; Matteson v. Dent, 176 U. S. 521, 44 L. ed. 571, 20 Sup. Ct. Rep. 419; Whitman v. National Bank, 176 U. S. 559, 44 L. ed. 587, 20 Sup. Ct. Rep. 477.

While § 10 does not use the words 'express contract,' but the words 'contract or promise in writing,' we think that, taken in connection with § 11, which is confined to contracts not in writing, express or implied, express contracts are primarily and principally intended by the earlier section. These are defined to be those contracts in which the terms of the agreement are fully and openly incorporated at the time the contract is entered into, while implied contracts are such as arise by legal inference...

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