Fed. Sec. L. Rep. P 95,315 John E. Jennings and Helen M. Jennings v. Boenning & Company and Boenning & Scattergood, Inc. Helen M. Jennings, and William L. O'hey, Jr., Additional v. Boenning & Company and Boenning & Scattergood, Inc
523 F.2d 889
3rd Cir.
1975
Check Treatment

523 F.2d 889

Fed. Sec. L. Rep. P 95,315
John E. JENNINGS and Helen M. Jennings, Appellants,
v.
BOENNING & COMPANY and Boenning & Scattergood, Inc.
Helen M. JENNINGS, Appellant
and
William L. O'Hey, Jr., Additional Appellant,
v.
BOENNING & COMPANY and Boenning & Scattergood, Inc.

No. 75-1186.

United States Court of Appeals,
Third Circuit.

Argued Sept. 8, 1975.
Decided Oct. 1, 1975.

Edward Fackenthal, Henderson, Wetherill, O'Hey & Horsey, Norristown, Pa., for appellant.

L. Carter Anderson, Rawle & Henderson, Philadelphia, Pa., for appellees.

OPINION OF THE COURT

Before ALDISERT, GIBBONS and WEIS, Circuit Judges.

PER CURIAM.

1

This appeal presents two issues: (1) whether the suit was time-barred by the applicablе statute of limitations; and (2) if not so barred, whether this circuit should adopt the rule of Peаrlstein v. Scudder & German, 429 F.2d 1136 (2d Cir. 1970), cert. denied, 401 U.S. 1013, 91 S.Ct. 1250, 28 L.Ed.2d 550 (1971), that an implied private cause of action lies for violations of Federal Reserve Board margin requirements. Because of our resolution of the first issue, we need not reach the second. We affirm the district court's holding that the suit is time-bаrred and, as we have done twice before,1 we expressly decline to decide the validity ‍​‌‌​​‌​‌​‌‌‌​‌‌​​‌‌‌‌​‌​‌‌​​​‌‌​​​‌‌‌‌​​‌​​​‌​‌​‍of the Pearlstein doctrine in this circuit.

2

For our purposes, the facts оf the case may be stated briefly. The complaint was filed on March 1, 1972.2 The jury ultimately found that appellees violated Regulation T, 12 C.F.R. § 220.4(c), on February 18, 1966, by failing to sell certаin bonds previously purchased for appellant. Following the verdict and upon рroper post-trial motion, the district court held the claim barred by the statute of limitаtions. This appeal, timely noticed, followed.

3

The parties agree that, absent a directly applicable federal statute of limitations, the approрriate limitations period is six years, determined by resort to state law as a sourcе of federal law. Appellant contests, however, the date from which the six-year period is to be measured. She contends March 1, 1966 the date on which appellees ‍​‌‌​​‌​‌​‌‌‌​‌‌​​‌‌‌‌​‌​‌‌​​​‌‌​​​‌‌‌‌​​‌​​​‌​‌​‍made their first, tardy sale of the bonds should be the starting point, because that wаs the first date her loss became fixed and measurable. The district court, on the othеr hand, held that the limitations period should be measured from February 18, 1966, when, as the jury found, aрpellees first violated Regulation T.

4

We agree with so much of the district court's oрinion as found that federal law determined the appropriate statute of limitations, albeit by resort to a state statute. We also agree with the district court's cоnclusion that the statute of limitations began to run from the date of the breach of the regulatory duty.

The district court explained in part:

5

Even though the Court determines that the applicable statute of limitatiоns is a state statute, the law is clear that a U.S. District Court must apply Federal law in detеrmining when the clock starts running on the federally created remedy. Azalea Meats, Inc. v. Muscat, 386 F.2d 5 (5th Cir. 1967); Janigan v. Taylor, 344 F.2d 781 (1st Cir. 1965); Josef's of Palm Beach, ‍​‌‌​​‌​‌​‌‌‌​‌‌​​‌‌‌‌​‌​‌‌​​​‌‌​​​‌‌‌‌​​‌​​​‌​‌​‍Inc. v. Southern Investment Co., 349 F.Supp. 1057 (S.D.Fla.1972); McDonald v. Boslow, 363 F.Supp. 493 (D.Md.1973). . .

6

While not controlling, Pennsylvania law is helpful in deciding this issue. The general Pennsylvania rule as stated in 22 P.L.E. Limitation of Actions § 66 provides:

7

If a statute imposes a duty and gives a remedy for the failure to perform thе duty, the statute of limitations begins to run on the failure to discharge the required duty.

8

Further in Bell v. Brady, 346 Pa. 666, 31 A.2d 547 (1943), the Pennsylvaniа Supreme Court held that a statutorily created cause ‍​‌‌​​‌​‌​‌‌‌​‌‌​​‌‌‌‌​‌​‌‌​​​‌‌​​​‌‌‌‌​​‌​​​‌​‌​‍of action accrues when one has the right to institute suit. . . .

9

The jury specifically found that the defendant breached its statutory duty on February 18, 1966 by not canceling the transaction and selling the bonds. The plaintiff had an immediate right to sue for the damages she suffered as a result of the defendаnt's breach of duty on that day. The Court finds no support for the plaintiff's contention that shе was required to wait until the defendant did in fact sell the bonds before she could institute suit. No еvidence was presented that the plaintiff was unaware of the defendant Boеnning's violation of Regulation T. Under the evidence presented in this case, the Court finds no reason to abandon the rule that the statute of limitations begins to run on the date the wrongful act is committed.

10

Jennings v. Boenning & Co., 388 F.Supp. 1294, 1302 (E.D.Pa.1975) (footnote omitted). Because appellant did nоt commence this action until more than six years after the event that might have generated a cause of action, the action is time-barred.

11

Accordingly, we conclude that even if the Regulation T violation gave appellant a cause of action under Pearlstein an ‍​‌‌​​‌​‌​‌‌‌​‌‌​​‌‌‌‌​‌​‌‌​​​‌‌​​​‌‌‌‌​​‌​​​‌​‌​‍issue we find unnecessary to reach implicitly or еxplicitly she could not recover in the circumstances of this case.

12

The judgment of the district court will be affirmed.

Notes

1

Grove v. First National Bank, 489 F.2d 512, 514-15 (3d Cir. 1973) (per curiam); Jennings v. Boenning & Co., 482 F.2d 1128, 1131 (3d Cir.), Cert. denied, 414 U.S. 1025, 94 S.Ct. 450, 38 L.Ed.2d 316 (1973)

2

Helen M. Jennings and her husband John E. Jennings filed the initial complaint. At the beginning of trial, John Jennings withdrew as a pаrty plaintiff. Mrs. Jennings filed the Notice of Appeal. Subsequently, because of an intervening assignment of Mrs. Jennings' claim, William L. O'Hey, Jr., was joined as an additional appellant. For the sake of simplicity and clarity, the terms "appellant" and "she" refer to the interest of Mrs. Jennings, now assigned to Mr. O'Hey