McNair v. Burt, 6998.

• Decision Date: 07 February 1934
• Docket Number: No. 6998.,6998.
• Citation: 68 F.2d 814
• Parties: McNAIR v. BURT et al.
• Court: U.S. Court of Appeals — Fifth Circuit

68 F.2d 814 (1934)

McNAIR v. BURT et al.

No. 6998.

Circuit Court of Appeals, Fifth Circuit.

February 7, 1934.

Kenneth I. McKay, of Tampa, Fla., for appellant.

D. C. Hull and Joseph A. Scarlett, both of De Land, Fla., and Fred B. Noble, John C. Cooper, Jr., and H. P. Adair, all of Jacksonville, Fla., for appellees.

Before BRYAN, SIBLEY, and WALKER, Circuit Judges.

BRYAN, Circuit Judge.

This is an appeal from an order dismissing on motion a bill of complaint brought by the receiver of a failed national bank against its former directors. The bill seeks an accounting and recovery for losses sustained by the bank because of dividends paid out of capital assets and improvident and excessive loans made or permitted by the majority of the board of directors with the acquiescence of the minority. There is no charge of conspiracy or concealment of any act complained of; on the contrary, it is repeatedly alleged that the directors disregarded frequent warnings given to them by national bank examiners and the Comptroller of the Currency concerning the loans, although it is also asserted that the stockholders and creditors of the bank were kept in ignorance of the management of its affairs until after the closing of the bank and the appointment of a receiver. During the period covered by the prayer for accounting new directors were from time to time elected on the board; at least one of them served from some time in 1926 until the bank closed in July, 1929. No charge was made against that director of active participation in or of personal benefit derived from any violation of duty. Of the dividends and loans in question, some were made within five years, others within four years, but none within three years, before January 7, 1932, the date of bringing suit. The motions to dismiss were sustained on the ground that the suit was barred by a Florida statute which prescribes a limitation of three years for an action upon an "obligation or liability not founded upon an instrument of writing." C. G. L. § 4663 (5).

As this is a case which could have been brought in an action at law, the jurisdiction at law and in equity is concurrent. In such a case of concurrent jurisdiction, the equity court does not enforce the doctrine of laches, but instead is bound by the statute of limitations which governs in actions at law. Metropolitan Nat. Bank v. St. Louis Dispatch Co., 149 U. S. 436, 448, 13 S. Ct. 944, 37 L. Ed. 799; Curtis v. Connly, 257 U. S. 260, 42 S. Ct. 100, 66 L. Ed. 222. There is no applicable federal statute of limitations, and therefore the appropriate state statute on that subject controls. McClaine v. Rankin, 197 U. S. 154, 25 S. Ct. 410, 49 L. Ed. 702, 3 Ann. Cas. 500; Curtis v. Connly, supra. Appellant argues that, whatever statute of limitations is applicable, it did not begin to run until the bank closed, because until then the stockholders and creditors of the bank were without knowledge of its affairs or financial condition. This argument fails when it is recalled that there is no claim of conspiracy or concealment; that bank examiners and the Comptroller of the Currency knew about the condition of the bank, that the personnel of the board of directors did not always remain the same, since new directors were elected from time to time to represent the stockholders, and that the...