116 F.2d 298 | D.C. Cir. | 1940
This is an action by the receiver of the Montgomery Building and Loan Association, a District of Columbia corporation, against thirty of its former directors for mismanagement and depletion of capital. The complaint charges a general scheme to defraud investors, initiated by certain named promoters and original directors, as the result of which a large sum of money is claimed to have been diverted from the corporation to those individuals and as dividends to shareholders; that this scheme was carried on substantially during the entire incumbency of the defendants and until the bankruptcy and liquidation of the corporation. Appellees, Remsen, Shaw, Allanson, and Owen, resigned more than three years before the commencement of the action, and other directors were chosen in their places. These four moved to dismiss the complaint against themselves, on the ground that it was barred by limitations. The trial court granted the motion, and this appeal followed.
There is no dispute that the District of Columbia statute,
The statute of limitations has been applied in equity suits against former directors where there was actual misconduct rather than mere negligence. Curtis v. Connly, 257 U.S. 260, 42 S.Ct. 100, 66 L.Ed. 222; Farmer v. Standeven, 10 Cir., 93 F.2d 959; Payne v. Ostrus, 8 Cir., 50 F.2d 1039, 77 A.L.R. 531; Hughes v. Reed, 10 Cir., 46 F.2d 435; Anderson v. Gailey, D.C., 33 F.2d 589; Emerson v. Gaither, 103 Md. 564, 64 A. 26, 8 L.R.A.,N.S., 738, 7 Ann. Cas. 1114.
This rule of the Supreme Court was applied by the Eighth Circuit in Payne v. Ostras, supra, where the charge against the directors was actual wrongdoing, and also by Judge Sibley while District Judge, in Anderson v. Gailey, supra, in both of which it was held that the fiduciary relation between the bank and its directors ceases when they leave the board, and that for their negligent acts while in office they must be sued within the statutory period or not at all.
Since the question was not raised in the trial court and was abandoned in oral argument here, we have not considered appellant’s contention, made in the brief, that the defense of the statute of limitations should have been raised by answer rather than by motion to dismiss.
Affirmed.
D.C.Code, Tit. 24, See. 341.