Link v. McLeod

• Decision Date: 05 February 1900
• Docket Number: 346,328
• Citation: 194 Pa. 566,45 A. 340
• Parties: Simon Link, Administrator of Annie R. Link, Widow of Ammon Link, Deceased, and Warren W. Link, a Minor Child of said Ammon Link, Deceased, by his next friend, Lott W. Reiff et al., Appellants, v. Archibald A. McLeod, Samuel R. Shipley, Anthony J. Antelo, James Boyd, Thomas P. Dolan, Elisha P. Wilbur, Joseph S. Sinnott and the Philadelphia and Reading Railroad Company
• Court: Pennsylvania Supreme Court

45 A. 340

194 Pa. 566

Simon Link, Administrator of Annie R. Link, Widow of Ammon Link, Deceased, and Warren W. Link, a Minor Child of said Ammon Link, Deceased, by his next friend, Lott W. Reiff et al., Appellants, v. Archibald A. McLeod, Samuel R. Shipley, Anthony J. Antelo, James Boyd, Thomas P. Dolan, Elisha P. Wilbur, Joseph S. Sinnott and the Philadelphia and Reading Railroad Company

Nos. 328, 346

Supreme Court of Pennsylvania

February 5, 1900

Argued January 18, 1900

Appeals, Nos. 328 and 346, Jan. T., 1899, by plaintiffs, from decree of C.P. No. 1, Phila. Co., Dec. T., 1898, No. 671, on bill in equity. Affirmed.

Bill in equity by a creditor of a corporation against the directors to account for moneys of company alleged to have been wrongly paid through the action of the directors.

BIDDLE P.J., filed the following opinion:

This is a bill filed by judgment creditors of the Philadelphia &amp Reading Railroad Company against it and its former managers to recover from them the amount of the plaintiffs' judgment by reason of these former managers being indebted to the railroad company in the sum of $268,341.63, unlawfully paid to the defendant McLeod, on February 16, 1893. How this liability of the former managers arose is set forth in detail in the bill. All of the defendants except A.A. McLeod, who is not within the state, have demurred to it. There are three sets of demurrers, not precisely identical, but with one exception the principal question raised by them is that of the statute of limitation. If that point is well taken it, of course, disposes of the case, no matter whether the other points are well taken or not. It is obvious, therefore, that until that question is disposed of it is superfluous to consider the others. The indebtedness is alleged to have arisen under the following circumstances: A.A. McLeod was president of the railroad company, and Messrs. Shipley Antelo, Boyd, Dolan and Wilbur were, in 1892, managers of the said railroad company, and said defendant and Sinnott were managers on February 16, 1893, on which day $268,341.63 was, by direction of the said defendants, as managers of the said railroad company, unlawfully paid to Mr. McLeod in compliance with an unlawful resolution of the board of managers, passed December 24, 1892, to reimburse him for losses sustained by him in Boston & Maine and New York & New England Railroad Company stock transactions, which McLeod at first conducted on his own account, and on December 24, 1892, fraudulently induced defendants, as managers, to assume for the railroad company, "which action was known by the said defendants to be wholly unlawful as well as financially indefensible."

The date from which the statute begins to run is the date upon which the cause of action arose. The bill in this case was filed upon January 18, 1899. The resolution of the board of managers, approving the purchase of stock, was adopted December 24, 1892. The actual payment of the money thereunder was made upon February 16, 1893. The defendants contend that the alleged cause of action against the managers was their action in adopting the said resolution, and its date is therefore, to be regarded as conclusive of the question. The plaintiffs contend that the cause of action arose on the actual payment of the money thereunder, being February 16, 1893; or even if December 24, 1892 is the proper date, that the ignorance of the plaintiffs "of the facts" prevented the running of the statute. The adoption, by the managers, of the resolution of December 24, 1892, is all that it is alleged that they themselves personally did. Everything else that was done was done in compliance with that order, and was a necessary consequence of it. In the case of the Lehigh Coal & Navigation Co. v. Blakeslee, 189 Pa. 13, it was held that when a person, in good faith, guarantees a signature, which is, in fact, a forgery, the implied promise of the guarantor is broken; when it is made, the right of action accrues immediately and the statute runs from the date of the guarantee. So, also, in Owen v. The Western Saving Fund, 97 Pa. 47. In an action upon the case against a recorder of deeds for damage suffered by reason of a false certificate of search, in absence of fraud, the statute begins to run from the time the search was given and not from the development of the damage. In Binney's Appeal, 116 Pa. 169, the statute was held to run from the erroneous entry of satisfaction on the record of a mortgage, though the plaintiff's loss did not arise until more than six years afterward. Under our act of March 28, 1867, P.L. 48, entitled "An act declaratory of the statute of imitation," it refers to the case of a bill in equity against a director charged with neglect of duty, and especially provides that the statute runs from the commission of the act of negligence by the director. We think, therefore, in this case the statute clearly began to run from December 24, 1892. Has there anything been shown to stop it running? Does the ignorance of the plaintiff "of the facts" have that effect? It is universally held that mere ignorance of his rights, on the part of the plaintiff, without any fraud by the defendant, will not toll the statute: 13 Am. & Eng. Ency. of Law, 720. In Owen v. The Western Saving Fund, and Binney v. Brown, supra, the plaintiff had no knowledge of the facts originating the cause of action,...