Sterling v. Reecher

• Decision Date: 17 May 1939
• Docket Number: 21.
• Citation: 6 A.2d 237,176 Md. 567
• Parties: STERLING v. REECHER et al.
• Court: Maryland Court of Appeals

6 A.2d 237

176 Md. 567

STERLING v. REECHER et al.

No. 21.

Court of Appeals of Maryland

May 17, 1939

Appeal from Circuit Court, Washington County; Frank G. Wagaman Judge.

Action by Warren F. Sterling, receiver of the Central Trust Company of Maryland, against David J. Reecher and another to enforce statutory double liability of the defendants as stockholders in the trust company. The plaintiff's demurrer to a plea of the defendants was overruled and judgment was entered for the defendants on the pleadings, and the plaintiff appeals.

Reversed and new trial awarded.

OFFUTT and SLOAN, JJ., dissenting.

William P. Lane, Jr., of Hagerstown, and John S Newman, of Frederick, for appellant.

John Wagaman, of Hagerstown (Scott M. Wolfinger, of Hagerstown, on the brief), for appellees.

Argued before BOND, C.J., and OFFUTT, PARKE, SLOAN, MITCHELL JOHNSON, and DELAPLAINE, JJ.

BOND Chief Judge.

The question in controversy is: which period of limitations under the Maryland statutes, three year or twelve years, applies to suits to enforce by a receiver the double liability of stockholders in trust companies under the provisions of the Code, article 11, section 72, in force prior to 1937? The Central Trust Company's stockholders were not relieved of that liability by the Act of 1937, chapter 81, Code, article 11, section 72A; their liability had been previously established. The statute imposing it contained no express limitation on the suit, such as is found in statutes in some other jurisdictions.

It is alleged in the present suit at law that the appellants were owners as tenants by the entireties of 150 shares of the stock of the Trust Company, which was placed in the hands of the Bank Commissioner as receiver on September 2, 1931; that the Circuit Court of Frederick County, having assumed jurisdiction of the receivership, ordered on October 24, 1932, that the receiver should as provided in the Code, collect and receive by suit at law or in equity, or otherwise enforce payment of, a statutory liability in an amount equal to the full par value of stock held; and on September 24, 1938, six years later, the receiver entered this suit to recover the amount for which the appellants were so liable. The appellants pleaded that the cause of action did not accrue within three years before the institution of the suit, the period of limitations under the Code, article 57, section 1, for actions of assumpsit and debt on simple contracts; and the receiver, contending that the suit was upon a statute, a specialty under the law, the period of limitations for which is twelve years under section 3 of the article, demurred to the plea. The demurrer was overruled, and judgment entered for the defendants on the pleadings; and the receiver has appealed. Section 3 provides that, 'No bill, testamentary, administration or other bond (except sheriffs' and constables' bonds), judgment, recognizance, statute merchant, or of the staple or other specialty whatsoever, except such as shall be taken for the use of the State, shall be good and pleadable, or admitted in evidence against any person in this State after the principal debtor and creditor have both been dead twelve years, or the debt or thing in action is above twelve years' standing.' Code, art. 57, § 3.

Since shortly after the enactment of the English statute of limitations on actions, 21 James 1, chapter 16, suits grounded on statutes have been held to be in debt on records of the highest rank, those of acts of Parliament, and hence specialities. Bacon, Abridgement, Limitation of Actions, (D). 'All instruments under seal, of record, and liabilities imposed by statute are specialties'. 1 Wood Limitation of Actions, 4 Ed. sec. 29; Angell, Limitations of Actions, 6 Ed. sec. 80. And suits upon them are not within the original act providing the limitation on actions on simple contracts. 'An action grounded upon a statute cannot be barred; such as debt for an escape,'--an action for which was provided by a statute of Richard II, ch. 12. Ward v. Reeder, 2 Har. & McH. 145, 154; French v. O'Neale, 2 Har. & McH. 401; Newcomer v. Keedy, 2 Md. 19. But the element of contract in a subscription to stock upon which the statute of Maryland lays the double liability, has produced uncertainty in the classification of suits to recover it. Are they grounded on contract or on the statute? 1 Wood, Limitation of Actions, sec. 19. 'The liability is wholly statutory, and its definition must be found in the words of the statute creating it.' Robinson v. Hospelhorn, 169 Md. 117, 131, 179 A. 515, 521, 184 A. 903, 103 A.L.R. 740. But the question now is one of the remedy rather than of the origin or nature of the liability.

It has been held generally that when the statute creating a liability provides the remedy and allows no other, then the remedy could be only that provided, and it would be grounded on the statute, necessarily, but that a common law action of debt might lie either when such an action is given by the statute or when the statute provides for the payment of a sum of money but does not mention any mode of recovering it. Browne, Actions at Law, (45 Law.Lib.), 347; Comyns, Dig 'Actions upon Statute,' (C), and 'Temps,' (G 15); 1 Wood, Limitation of Actions, sec. 29. And see Mattare v. Cunningham, 148 Md. 309, 129 A. 654. Possibly this statement might be broadened. What a statute has provided is a question of its intention, ascertained from express terms or by implication. And if the Maryland statute could be said to have intended merely that there should be a new plaintiff for an old action, previously open to creditors, there is room for an...