Case ID: miss_21/html/0509-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice Sharkey Mr. Justice Clayton", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William Robertson, trustee of Commercial Bank of Natchez, vs. Richard E. Alford, administrator de bonis non of Robert Cooper, deceased.
    An injunction issued under the sixth section of the act of 1843, establishing the mode of proceeding against hanks which have forfeited their charters, against a bank does not suspend the operation of the statute of limitations as to claims held by the bank.
    The operation of the statute of limitations will not be suspended except by legislative provision to that effect; and the direction for an injunction to issue, restraining a bank, against which proceedings are commenced under the law of 1843, from the collection of its claims, such injunction to have the force and effect of an injunction in chancery, is not a legislative prohibition of suit; for such is not'the force and effect of an injunction in chancery, such an injunction being always subject to modification in the discretion of the chancellor; and upon application, the chancellor, if the party were enjoined from suing, and the debt were thereby likely to be lost, would qualify the injunction so as to enable the party to bring his suit.
    Mr. Justice Clayton dissented, and considered that the bank, when-proceeded against under the act of 1843, was prohibited from suit upon her demands until a termination of the proceedings against her; and that, therefore, being without power to sue, the statute of limitations was of necessity suspended in its operation; and this, by express legislative enactment.
    On appeal from the circuit court of Madison county; Hon. Robert C. Perry, judge.
    • On the 22d of April, A. D. 1847, William Robertson, trustee of the Commercial Bank of Natchez, sued Richard E. Alford, administrator de bonis non of Robert Cooper, deceased, upon a note made by Cooper, dated May 2, 1838, and due twelve months after date. The defendant plead, 1. Non assumpsit; 2. The statute of limitations of six years. The plaintiff replied, in substance, that on the 8th of March, 1844, a writ of quo warranto and injunction were sued out under the act of 1843, against the bank, from the circuit court of Adams county, by which the bank, pending the proceedings which terminated in a judgment of forfeiture on the 19th of May, 1846, against the bank, was prohibited from bringing suit on the note; and by excluding this prohibited period, the cause of action had accrued within six years.
    The defendant rejoined, that the judgment'of forfeiture against the bank was rendered on the 12th of June, 1845, and the plaintiff appointed trustee of the bank, at which time his right to sue begun; and so deducting the period from the institution of the proceedings against the bank, to the judgment of forfeiture, and six years still had expired.
    
      The plaintiff surrejoined that the bank appealed from the judgment of June 12, A. D. 1845, which suspended all plaintiff’s rights, and this appeal was not determined until the 19th of May, 1846, when plaintiff’s right to sue accrued.
    The defendant demurred to this surrejoinder, and the court sustained the demurrer, and gave judgment for the defendant. The plaintiff appealed.
    , T. C. Tapper, for appellant,
    Contended that, during the pendency of the injunction, there was no party having the right to sue on- the note. He cited-Robertson v. Hoy, 12 S. & M. 566; Abbott v. McElroy, 10 lb. 100; Dowell v. Webber, 2 lb. 456; Moses v. Jones, 2 Nott & McCord, 259; Wall v:- Robeson, lb. 508, 509.
    
      A. H. Handy, for appellee,
    Argued the case, and cited 3 Johns. Ch. Rep. 142 ; Mclver v. Ragan,- 2 Wheat. 29; 1 Cow. 356; Ang. on Lim. 205, '■§> 3 ;■ Dwarris on Stat. 703; Ang. Lim. 216, $ 5; lb. 534, § 4; 3 McCord, 457; Rholes v. iSmethhurst, 4 Mees. &. Welsb. (Eng.Com. L. Rep.) 42; Ang. Lim. 57, § 3; Barker v. Millard, 16 Wend. 572; Oreen v. Johnson, 3 Gill &. John. 394; Bell v:. Morrison, 1 Peters, 360.
    
      L. M. Garrett, on same side,
    Cited, in addition, Ang. Lim. 144; Beckford v. Wade, 17-Ves. 87; Wilson v. Appleton, 17 Mass. 180; Ang. Lim. 215; lb. 147-149; 3 S. & M. 194; 4 Mass. 188, 189; 6 S. & M. 573.
   Mr. Chief Justice Sharkey

delivered the opinion of the court.

The note on which this suit was brought, bears date the 2d ■ of May, 1838, and was payable twelve months thereafter. The suit was brought on the 22d of April, 1847. The defendant pleaded .the statute of limitations. The note was payable to - the Commercial Bank of Natchez, against which a proceeding in the nature of a quo warranto was commenced on the 8th of March, 1844, and injunction issued under the provisions of the act of the legislature of 1843. A judgment of forfeiture was tendered by the circuit court, in June, 1845, and a trustee appointed, which judgment was affirmed by this court on appeal, in May, 1846. The question raised and discussed, is, “ Did the injunction issued against the bank, under the act of 1843, suspend the operation of the statute of limitations 1 ”

To the question propounded I respond in the negative, and proceed to state the reasons on which that response is founded. In the first place, there is no such exception in the statute. The act of 1822 contains a saving in favor of infants, femes covert, and persons insane, and then stops. But it is insisted, that, although there is no saving or exception in the statute which expressly reaches the present case, yet, as there was no person who could sue pending the injunctioh, it is within the reason of the exceptions in the statute. The statute of limitations is one of good policy; it is a'Statute of repose, and should not be so construed as to defeat the object intended, by creating exceptions in cases supposed to be analogous in principle to those expressly excepted. To do so, would be to undertake to supply defective legislation, by ingrafting new provisions on the statutes. And if it can be done in regard to one statute, it can also be done in regard to all. The subject was before the legislature, and certain exceptions created; we must suppose that the legislature went as far in making these exceptions as was deemed necessary or proper. Cases not excepted by the legislature cannot be excepted by the courts. We are to construe existing laws, and not to enlarge their plain provisions by supplying supposed omissions. In the construction of the statute of limitations, it is a settled rule that courts must adhere to the exceptions in the act, and where there is not an express exception, the court cannot create one. McIver v. Ragan, 2 Wheat. 25; Demarest v. Wynkoop, 3 Johns. Ch. R. 129; Ang. on Lim. 205. There are cases decided by this court which may seem to establish a different rule, but they do not; they rest upon plain legislative exceptions, contained in the legislation on kindred subjects. Thus, in the case of Dowell v. Webber, we decided that as an administrator is exempted from suits for the space of nine months after administration, that time must be excluded from the operation of the general statute of limitations. By declaring that an administrator should not be sued until the expiration of nine months, the legislature created an exception, as much so as if it had been contained in the statute of limitations. Both acts have rélation to the time in which suits may be brought, and they must be construed together. One declares that suits must be brought within six years after the cause of action shall have accrued; the other declares that, in a given case, suit shall not be brought within a certain time. They are inconsistent unless one be construed as creating an exception. This it must do, or it repeals the general statute in certain cases, or is itself repealed. The bar only begins to run after a right to sue has accrued, and continues concurrently with the right to sue. By suspending the latter, the former is necessarily also suspended. ■

The case of Abbott v. McElroy, 10 S. & M. 100, has been cited, but it does not support the position contended for; on the contrary, it is opposed to it. The question was this, Does the statute continue to run after the death of the debtor, before administration taken out, or is it suspended because there is no party in being who can be sued? We decided that the statute, having commenced running during the life of the debtor, is not suspended by his death; that having commenced running, it continues to do so, _ notwithstanding the death of the party; though it is otherwise where the debt was not due in the lifetime of the debtor; there the statute does not begin to run until there is a person who can be sued. The same principle applied to this case would defeat the action. The statute had been running four years before the injunction was issued.

But there is another view of this question,' which I think even more conclusive than the foregoing. There was no disability to sue growing out of a positive statutory prohibition. I do not mean to controvert the well settled principle, that an injunction before suit brought, has, in general, the effect to prevent the party enjoined from bringing his suit. The power of a court of chancery to control proceedings in the courts of law, is exercised in cases where full justice cannot be administered under the forms of the law. It is not an opposing jurisdiction, but a more comprehensive one, intended to mitigate the rigor of the law, by applying more liberal rules in the attainment of justice. Where the inflexible rules of law would work hardship or oppression, a court of chancery may interpose its more ample powers, and accomplish justice by enjoining proceedings in the courts of law. An injunction is granted at the discretion of the chancellor upon the special circumstances of the case, and may be continued or not as the justice of the case may require. 1 Madd. Ch. R. 125 ; Boyd v. Anderson, 2 Johns. Ch. R. 202. As the chief object of an injunction to stay proceedings at law, is to prevent the plaintiff at law from obtaining an undue advantage of the defendant, it should not be granted where it must necessarily operate to the prejudice of the other party. This would be to pervert its object, and to employ the powers of the court to defeat right. Surely no chancellor would grant an injunction which would prevent-a suit at law, when, by doing so, the cause of action would be barred. In such a case, the injunction should go no further than to restrain the collection. Or if an injunction had been granted, and the statute was about to create a bar, certainly it would be dissolved on application, so far as to allow the party to bring his suit. In most cases perhaps no such difficulty can occur, as the party who goes into chancery usually withdraws the whole matter from the courts of law. But it may occur when the injunction is granted until some collateral question is tried; as in this case, it was granted until the question of forfeiture could be tried. But suppose the injunction should be granted without restriction as to its effect, it does not operate on the cause of action, by creating a bar which can be pleaded like a statutory prohibition. It operates on the person, merely by subjecting him to punishment for a contempt in case suit should be brought. A suit which has been brought in violation of an injunction will not, for that reason, be dismissed. The party injured is left to his recourse against the person of the plaintiff for a contempt. This point was decided in Robertson, Trustee, v. Hoy, 12 S. & M. 566. In punishing for a contempt by breach of injunction, the court will consider whether it was erroneously granted or not. Sullivan v. Judah, 4 Paige, 444. Now I would ask, whether a chancellor would be likely to inflict any punishment for bringing suit, when it was obviously necessary to prevent the loss of the debt? A contempt is a wilful disregard of process. But, furthermore, it does not appear by this record whether the injunction would have been even violated by bringing suit. What amounts to a breach of an injunction, will depend upon the form of the process, and the nature of the act prohibited. Daniel, Ch. Pr. 1907. Then, if it be true that an injunction is granted or retained at the discretion of the chancellor, and should not be granted when it will work an injury to the other party, or, having been granted, it should not be retained when its retention will be attended by such a consequence, it seems to follow that it does not create such á disability as to stop the operation of the statute of limitations. We must suppose that a chancellor would not abuse his discretionary power. But if he should do so, such act does not seem to present a legal ground for stopping the operation o,f the statute of limitations. Certainly, the statute does not stop running merely because - a chancellor may happen to act indiscreetly in granting an injunction. Nothing short of a positive legislative prohibition can have that effect.

These remarks have reference to an injunction granted in the usual mode. Do they apply with equal propriety to the injunction issued under the act of. 1843 by the clerk ? The validity and nature of this injunction were very fully considered in the case of the Bank of Rodney v. The State, 4 S. & M. 439. By a majority .of the court, the sixth section of the act which gives the injunction was sustained as a valid law. And although there was a difference of opinion' as.to the court in which the process was to be returned, the result of that decision seems to justify the conclusion, that it was what the act declares it to be, an injunction having “the office and effect of an injunction in chancery.” If it was an injunction in chancery, whether returnable in the circuit or chancery court, it was subject to the control of the court, precisely as other writs of that description are. If it were not, it was more than an injunction in chancery, and could not be sustained, as there was not a majority of the court in favor of giving to it any other character. Then I think it must follow, that the court had power so to limit or qualify it as to authorize the bank to bring its suit. If it had not this power over the injunction, it was far more than an injunction in chancery, and the act stood confessedly void as cutting off all remedy, and as such presented no impediment to the right to sue. My conclusion is, then, that there was no such obstacle thrown in the way of a suit by a legislative act as to stop the operation of the statute after it had begun to run. I may add, that in a case reported in Cameron & Norwood’s Rep. (p. 71) it was .expressly ruled, that an injunction did not suspend the operation of the statute of limitations; and this is the only case that has been found directly on the point. I am therefore of opinion that the judgment should be affirmed. See also Barker v. Millard, 16 Wend. 572. It may be well to remark, that that part of the act of 1843, which directed the continuance of the injunction until the quo warranto should be disposed of, was expressly held to be invalid by a majority of the court in the Bank of Rodney v. The State, 4 S. & M.

Smith, J., concurs.

Mr. Justice Clayton

delivered the following dissenting opinion.

The only question in this case is, whether the action is barred by the statute of limitations. Its solution depends upon the construction to be given and the effect to be ascribed to the Briscoe bill. This will make it necessary to examine its provisions with some degree of minuteness.

The sixth section enacts, that “ upon the filing of an information in the nature of a quo warranto against a bank, it shall be the duty of the clerk, as a matter of right, to issue an injunction to restrain all persons from the collection of any demands claimed by such bank until the said information be finally tried and determined, and said injunction shall have the office and effect of an injunction in chancery.”

The seventh section directs that “ none of the provisions of the act shall be so construed as to prevent any bank, or assignee, or any of its officers or agents, from suing out attachments in the same manner, and for the same cause, that other creditors are allowed lawfully to do.”

The eighth provides, that upon judgment of forfeiture against any bank, the debtors of such bank shall not be released by such judgment from their debts and liabilities to the same; but it shall be the duty of the court rendering such judgment to appoint one or more trustees to take charge of the books and assets of the same, and to sue for and collect all debts due to such bank.

These are the clauses which mainly bear upon the point.

In the outset, it will be proper to state what has already been said by the members of this court, as to the prohibition contained in the 6th section, to the bringing of suits by the bank, after the issuance of an information and injunction against it. In the Bank of Rodney v. The State of Mississippi, (4 S. & M. 485,) Judge Thacher said, “It has been urged that the injunction deprives the bank of the right to sue, and thereby abridges the duration of that franchise. The right of the bank to sue, is derived from its charter. As has already been said, the information makes a prima fade case of forfeiture; a forfeiture annuls all the rights of the bank, including the right to sue; the injunction therefore restrains only the wrongful'.use of that franchise. By enjoining the bank from the collection of its assets, it is thereby most effectually deprived of the power to waste them.”

Clayton, J., said, “it is insisted that the writ, thus issued, impairs the obligation of the charter as a contract, because by it the bank is invested with the power to sue, in the usual terms. The power to sue for and collect its debts, is indisputable to the existence of a bank of discount. The question then is, whether this right can be restrained, before a judgment of forfeiture, in any. other way than by the interposition of a court of equity.” The opinion then goes on to uphold the provision as constitutional, because it is declared,'that the injunction is to have the office and effect of an injunction in chancery, is therefore properly to be returned into chancery, and to be there decided upon as any other injunction in chancery. Ib. 494 et seq. It is assumed throughout, that the bringing of suits is prohibited, as •well as the collection of debts in any other mode.

The chief justice said, It is insisted that the bank, by its charter, has the power to sue, and that it is deprived of this right by injunction. The act only declares that the bank shall nor collect, not. that it shall not sue. But suppose it to extend to suits. It does not violate any right granted by the charter; it merely postpones the remedy, on the supposition that the corporation has lost its right to sue, or ought not to exert it; but it is a legal suspension, if warranted by the facts, and if not so warranted, the corporation may have a speedy remedy.” Ib. 508,509.

From this, view of that case, it will be seen that two of the judges expressed the opinion, that the sixth section does prohibit the institution of suits from the time of the issuance of the injunction, until the quo warrtínto is finally disposed of; and that the chief justice, giving no positive opinion upon the point, yet sustained that portion of the Briscoe bill, conceding that the opinions of the others in this regard was correct.

In the case of Nevit v. The Bank of Port Gibson, 6 S. & M. 513, nothing was directly said upon this point. But it was held by a majority of the court, that “ a judgment of forfeiture and the appointment of trustees under the act, is an assignment by operation of law of all the property and assets of the bank to the trustees for the benefit of creditors, which relates back to the issuance of the injunction, and preserves the assets from that time for the creditors.” If this assignment by law takes effect by relation from the issuance of the injunction and quo warranto, and vests the assignees with the property and effects from that period, it would seem to follow that no suit could be sustained by the bank during the pendency of those proceedings. Otherwise the assignees could not occupy the position which the bank did, at the issuance of the process.

When we advert to the provisions of the statute itself, this construction, it seems to me, is clearly borne out. The seventh section, by way of exception, expressly authorizes suits by attachment to be commenced when a proper case occurs. This carries with it very strongly the idea, that suits were not to be commenced under any other circumstances.

Suit is the compulsory process of collection, its object is execution, the “finis et effectus legis,” the end and effect of the law. The prohibition of the end to be obtained, would seem to imply the prohibition of the means. The bank is not to collect; if this does not prevent the bringing of suits, where is the suit, if brought, to stop ? The manifest intention is, that the money shall not be paid to the bank. If we say it may sue and obtain judgment, shall we then say it shall not issue execution ? If we say that execution may be issued, shall we say that the sheriff may collect, but not pay over the money? In short, can we say any thing else but that suits are restrained, unless we go farther, and impose some arbitrary limit not contained in the statute?

The effect of an injunction in chancery is to stay proceedings at law, in the precise condition in which they exist, at the time of its issuance, unless there be some special order, or some general statute to the contrary. The party may be required to confess a judgment, or waive a defence at law, before the injunction is granted. A statute may make a release of errors at law, a condition precedent to the granting of the injunction. In the absence of all such requisitions, the injunction arrests all progress, and keeps matters in the state they were when it issued. The injunction, under this act, is to have the office and effect of an injunction in chancery. The legislature gives this effect to it. Any breach of it would have been punished by attachment. If suits had been brought, it would, in my view, have constituted a violation of the injunction and of the law. The court, upon application, would have punished such violation, and compelled obedience, even to the extent of compelling a dismission of the suit. The sixth section amounted to a prohibition of suit by law for certain purposes, and it operated a necessary exception, by legislative enactment, to the running of the statute of limitations.

The decision in Nevit v. Bank of Port Gibson, 6 S. & M. 513, that the constitutionality of this sixth section could only be sustained on the ground that it preserved all the assets of the banks during litigation for ultimate distribution among the creditors, rests upon the assumption that it stays all action upon the part of the banks, and preserves their effects in the precise condition in which they were when the injunction and quo warranto issued. It would present a singular result, if the very law, which, by the construction placed upon it, was intended to preserve the assets during litigation, should yet fall so far short of its object as to prove the means of discharging the debtors from their liabilities, in consequence of the time which elapsed during such litigation.

In Planters' Bank v. Bank of Alexandria, 10 Gill & Johns. 346, it was decided, “ That if the defendant, a corporation, cease to be subject to suit by the provisions of an act of assembly, the statute of limitations would be no bar to the claims of creditors.”

. In Abbott v. McElroy, 10 S. & M. 102, this court said, “The law cannot be supposed to be so inconsistent as to prohibit suit, and at the, same time to permit a bar to run.” It is this principle Avhich governs the decisions in regard to executors and administrators. ' Dowell v. Webber, 2 S. & M. 452; Abbott v. McElroy, above cited. The statute of limitations is suspended during the first nine months after administration granted, because in that period no suit can be maintained against the administrator.

The principle here is precisely the same. The legal suspension of the right to sue, by act of the legislature, is what suspends the statute of limitations. The fact that the time of suspension is definite or indefinite, cannot vary the principle. We cannot suppose that the legislature Avould prohibit suit, and permit the statute to run during the continuance of such prohibition. I think it is already settled by this court, that the sixth section does amount to a prohibition of suit in the given case, and that the statute does not run during the pendency of the injunction.

It may be necessary to say a few words in explanation of the cases of Robertson, Trusteee, v. Hoy, 12 S. & M. 567, and Commercial Bank of Manchester v. Waters, 10 Ib. 559. The latter of these holds, that for breach of an injunction, by the levy, of an execution, the remedy is not by supersedeas to stay it, but by attachment against the party. The other holds, that a court of law will not dismiss a suit brought in violation of an injunction, but will leave the party injured to his remedy by attachment against his-adversary. These cases only recognize a very familiar principle, that every court must watch over and protect its own process. In case of a breach of injunction, the court of chancery will punish the breach and enforce obedience. It may require the party to dismiss a suit brought in violation of its mandate, and to restore’things to their previous condition. The injunction operates on the person of the suitor, not on the court in which the suit is brought; hence, the remedy is against the person who is guilty of the breach. Hence there is no precedent of a plea in a court of law which sets up the pendency of an injunction, either in abatement or in bar of a suit at law. For these reasons, it was held, in the two cases cited, that the circuit court had not the power to dismiss the suit. It might very properly refuse to permit the party to proceed, but thp only way in which a dismission can be compelled, is by attachment from the court having jurisdiction of the injunction, against the party for contempt. On that process the court would compel obedience to its order.

It is true that an injunction does not usually stop the running of the statute of limitations. The remedy in such case is with the court in which it is pending, which may either dissolve the injunction, or so modify it, as to authorize the suit at law, or require a confession of judgment at law. But this case is different. The statute provides that collections shall not be made during the pendency of the quo warranto, which a majority of this court held to prohibit the bringing of suits. It was as competent for the legislature to do this, as to say that suits should not be brought against the representatives of deceased persons, until nine months after administration granted. The one has been held to form a necessary legislative exception out of the statute of limitations; the same principle would, in my view, operate an exception in this case. In neither case is the exception created by the court, but by a construction of express legislative intention. The corporation, in this instance, acquiesced in the action of the legislature, and brought no suit during the pendency of the quo warranto; such acquiescence, I think, should not operate to its prejudice.

This is my opinion, but as the other members of the court have come to a different conclusion, my duty is discharged when I have stated my dissent, and the reasons therefor.