Price v. Yates

19 Alb. Law J. 295 | U.S. Circuit Court for the District of Western Pennsylvania | 1879

McKENNAN, Circuit Judge.

The order of the court was made in the exercise of authority supposed to be given to it by the 5234th section of the Revised Statutes, and without an order of the court; which it was competent to make, the composition could have no effect By a separate classification, in the act of congress of the subject of the suit, as well as by the import of the terms of the act, the contested claim is excluded-from the category of “bad or doubtful debts,” which alone the court is authorized to order the receiver to “sell or compound,” and hence the alleged composition was ineffectual for want of power in the court to direct or sanction it.

Is this suit barred by delay in the institution of it? It is brought to enforce the personal liability of a shareholder in a national banking association. This liability is clearly contradicted. By his stock subscription the shareholder stipulates to pay an additional sum equal to the par value of the shares subscribed for by him, to discharge the debts of the association, when he is legally called upon to do so. The obligation to pay is assumed when the subscription is made, and proof of subscription is plenary evidence of the whole of the shareholder’s enjoyment,, and of his consequent individual liability. This liability then accrues at the date of the subscription, but is - not enforceable until needed to meet the debts of the association, and the comptroller has so decided and in-

strutted the receiver. Hence it has been held, that this action of the comptroller is an essential preliminary to a suit against a shareholder. Kennedy v. Gibson, 8 Wall. [75 U. S.] 498. A right of action upon the contract does not therefore accrue until the comptroller has acted; and by the terms of the general currency act, all suits by against a receiver are alike cognizable by the state and federal courts. Where there is this concurrence of jurisdiction a state statute of limitation may be pleaded as effectively in a federal court as it could be in a state court; and in such case the federal courts will follow the decisions of the local state tribunals, and will administer the same justice which the state courts would administer between the same parties. The supreme court of Pennsylvania has repeatedly recognized the general rule, that an act necessarily preliminary to the commencement of a suit upon a contract must be done within six years to avert the bar of the statute, unless sufficient reason for the delay is shown. In Laforge v. Jayne, 9 Barr. [9 Pa. St.] 410, it was applied, the court saying, “It was ruled in the case of Codman v. Kogers, 10 Pick. 112, that although an action will not lie in some cases without a previous demand, and that in such cases the statute did not run until demand, that nevertheless the demand' ought to be made in a reasonable time, and when no cause for the delay is shown it ought to be made within the time limited by the statute for bringing the action.” The. same doctrine was re-affirmed and decisively applied in Pittsburgh & C. R. Co. v. Byers, 8 Casey [32 Pa St.] 22, and in Pittsburgh & C. R. Co. v. Graham, 12 Casey [36 Pa. St.] 79.

[The application of this principle in this case is peculiarly appropriate. The date of the defendant’s subscription, when his alleged indebtedness accrued, does not appear, but it existed before the 5th day of May, 1866, when the receiver was appointed. Nothing was done to authorize a legal demand upon the defendant to respond to his individual liability, until the 28th day of June, 1876, when the comptroller decided that the enforcement of this liability to its full limit was necessary, and instructed the receiver accordingly. This suit was shortly afterward brought. Not only six but more than ten years from the date of the defendant’s enjoyment, was permitted to elapse before the essential conditions precedent to a legal call upon him to pay were performed. The delay seems to have been purely arbitrary — at least it is unexplained — and hence the strongest considerations of justice, and the obvious policy of the act of congress demand that the defendant should not be vexed with litigation, touching a claim which has about it such an odor of staleness.] ²

Let judgment be entered for the defendant, non obstante veredicto.

2 [Prom 19 Alb. Law J. 295.]