Source: https://caselaw.findlaw.com/us-supreme-court/197/154.html
Timestamp: 2019-04-26 06:54:08+00:00

Document:
[197 U.S. 154, 155] The First National Bank of South Bend, Washington, became insolvent and was closed August 10, 1895, and on the seventeenth day of the same month one Heim was appointed receiver, who was succeeded by Aldrich, and Aldrich by George C. Rankin.
August 17, 1896, the acting Comptroller of the Currency levied an assessment against the shareholders of the bank in enforcement of their statutory liability. Adolphus F. McClaine was one of the stockholders, was notified of the levy, and demand was duly made of him to pay the assessment on or before September 17, 1896, and shortly thereafter an action was commenced against him by the receiver to recover the same. Pending the action, efforts to settle the claim were made. Subsequently, the action was dismissed. Thereupon the receiver brought an action against McClaine upon an alleged contract of compromise, which went to trial, and the receiver took a nonsuit. The present action was then brought on the assessment, August 15, 1899, and McClaine set up the statute of limitations by demurrer, which the circuit court sustained, and dismissed the action. 98 Fed. 378. The cause was taken to the circuit court of appeals, and the judgment of the circuit court reversed. 45 C. C. A. 631, 106 Fed. 791.
The case having been remanded, the circuit court overruled the demurrer, McClaine answered, and a trial was had, resulting in judgment for the receiver, which was affirmed by [197 U.S. 154, 156] the circuit court of appeals. 56 C. C. A. 160, 119 Fed. 110. This writ of error was then brought.
' 4796. Actions can only be commenced within the periods herein prescribed after the cause of action shall have accrued, except when in special cases, a different limitation is prescribed by statute; but the objection that the action was not commenced within the time limited can only be taken by answer or demurrer.
' 4797. The period prescribed in the preceding section for the commencement of actions shall be as follows: . . .
' 4798. Within six years: 1. An action upon a judgment or decree of any court of the United States, or of any state or territory within the United States.
'2. An action upon a contract in writing, or liability, express or implied, arising out of a written agreement.
' 4800. Within three years: 1. An action for waste or trespass upon real property.
'2. An action for taking, detaining, or injuring personal property, including an action for the specific recovery thereof, or for any other injury to the person or rights of another not hereinafter enumerated.
'3. An action upon a contract or liability, express or implied, which is not in writing and does not arise out of any written instrument.
'4. An action for relief upon the ground of fraud, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud.
'5. An action against a sheriff, coroner, or constable upon a liability incurred by the doing of an act in his official capacity, and by virtue of his office, or by the omission of an official duty, including the nonpayment of money collected upon [197 U.S. 154, 157] an execution: but this subdivision shall not apply to action for an escape.
'6. An action upon a statute for penalty or forfeiture, where an action is given to the party aggrieved, or to such party and the state, except when the statute imposing it prescribed a different penalty [ limitation].
Mr. T. O. Abbott for plaintiff in error.
Mr. Francis F. Oldham for defendant in error.
It is conceded that, in the absence of any provision of the act of Congress creating the liability, fixing a limitation of time for commencing actions to enforce it, the statute of limitations of the particular state is applicable. Rev. Stat. 721, U. S. Comp. Stat. 1901, p. 581; Campbell v. Haverhill, 155 U.S. 610 , 39 L. ed. 280, 15 Sup. Ct. Rep. 217. If, then, this action was barred by the statute of limitations of the state of Washington, that ended it, and both judgments below must be reversed and the cause remanded to the circuit court, with a direction that judgment be entered for defendant.
Reference to the state statutes shows that subd. 2 of 4798 relates to 'an action upon a contract in writing, or liability, express or implied, arising out of a written agreement;' while subd. 3 of 4800 relates to 'an action upon a contract or liability, express or implied, which is not in writing, and does not arise out of any written instrument.' The one relates to contracts or liabilities growing out of contracts in writing, and the other to contracts or liabilities growing out of contracts not in writing. The receiver's contention is that the case falls within subd. 3 of 4800, imposing the limitation of three years. If it does not, it is not otherwise provided for, and falls within 4805, which fixes the limitation at two years.
And as this action was commenced within three years, but not within two years, after the assessment became due and payable, the question is whether subd. 3 of 4800 applies.
It is contended that the meaning of the word 'liability' as used in that subdivision is not restricted to contract liabilities, but, reading it with subd. 2 of 4798, and in [197 U.S. 154, 159] view of the enumeration of other actions to enforce liabilities, we think that this cannot be so, and, indeed, the subdivision has been construed by the supreme court of Washington as applicable only to contracts. Suter v. Wenatchee Water Power Co. 35 Wash. 1, 76 Pac. 298; Sargent v. Tacoma, 10 Wash. 212, 38 Pac. 1048. The circuit court was of that opinion when the case was originally disposed of, and held that the cause of action arose by force of the statute, and did not spring from contract. 98 Fed. 378. But that judgment was reversed by the circuit court of appeals on the ground that the liability was not only statutory, but contractual as well, and that the limitation of three years applied in the latter aspect. 45 C. C. A. 631, 106 Fed. 791. Conceding that a statutory liability may be contractual in its nature, or more accurately, quasi-contractual, does it follow that an action given by statute should be regarded as brought on simple contract, or for breach of a simple contract, and, therefore, as coming within the provision in question?
And under other sections the duty is imposed on the Comptroller of the Currency to give the creditors of an insolvent national bank the benefit of the enforcement of this personal liability, and to decide whether the whole, or a part, and, if only a part, how much, shall be collected, he being also authorized to make more than one assessment, as circumstances may require. Kennedy v. Gibson, 8 Wall. 498, 19 L. ed. 476; Studebaker v. Perry, 184 U.S. 258 , 46 L. ed. 528, 22 Sup. Ct. Rep. 463, and cases cited. But even his decision does not determine the liability except as to contracts, debts, and engagements of the bank lawfully incurred. Schrader v. Manufacturers' Nat. Bank, 133 U.S. 67 , 33 L. ed. 564, 10 Sup. Ct. Rep. 238. [197 U.S. 154, 160] The liability is conditional, and statutes of limitation do not commence to run until after assessment has been made. McDonald v. Thompson, 184 U.S. 71 , 46 L. ed. 437, 22 Sup. Ct. Rep. 297.
In the present case the limitation imposed on an action upon a statute for penalty or forfeiture, where an action was given, was three years (subd. 6, 4800), and on any other action to enforce a statutory liability was two years, because not otherwise provided for, and, therefore, the question must be met whether this is an action brought on a contract or not. But it is an action to recover on an assessment levied by the Comptroller of the Currency by virtue of the act of Congress, and although the shareholder, in taking his shares, subjected himself to the liability prescribed by the statute, the question still remains whether that liability constituted a contract within the meaning of the statute of limitations of the state of Washington.
Some statutes imposing individual liability are merely in affirmation of the common law, while others impose an individual liability other than that at common law. If 5151 had provided that subscribing to stock or taking shares of stock amounted to a promise directly to every creditor, then that liability would have been a liability by contract. But the words of 5151 do not mean that the stockholder promises the creditor, as surety for the debts of the corporation, but merely impose a liability on him as secondary to those debts, which debts remain distinct, and to which the stockholder is not a party. The liability is a consequence of the breach by the corporation of its contract to pay, and is collateral and statutory. Brown v. Eastern Slate Co. 134 Mass. [197 U.S. 154, 162] 590; Platt v. Wilmot, 193 U.S. 602 , 48 L. ed. 809, 24 Sup. Ct. Rep. 542. In Matteson v. Dent, 176 U.S. 521 , 44 L. ed. 571, 20 Sup. Ct. Rep. 419, the stock still stood in the name of the decedent, and it was decided that the statutory liability was a debt within the state law, but not that it was a true contract.
It is true that in particular cases the liability has been held to be, in its nature, contractual, yet, it is nevertheless conditional, and enforceable only according to the Federal statute, independent of which the cause of action does not exist; so that the remedy at law in effect given by the statute is subject to the limitations imposed by the state statute on such actions.
But here the right to sue did not obtain until the Comptroller of the Currency had acted, and his order was the basis of the suit. The statute of limitations did not commence to run until assessment made, and then it ran as against an action [197 U.S. 154, 163] to enforce the statutory liability, and not an action for breach of contract.
We think that subd. 3 of 4800 did not apply, and that 4805 did.
The judgment of the Circuit Court of Appeals is reversed; the judgment of the Circuit Court is also reversed, and the cause remanded to that court with a direction to sustain the demurrer and enter judgment for defendant.
The liability sought to be enforced is the obligation of a shareholder of a national bank to pay an amount equal to the par of his shares of stock. The circuit court held the action not to be one upon contract, but to enforce a conditional liability imposed by the law as an incident to ownership of bank stock, and therefore barred by two years. 98 Fed. 378. The circuit court of appeals reversed this judgment, and decided that the period of limitation was three years, because the liability was contractual. 45 C. C. A. 631, 106 Fed. 791.
And the same principle has been applied to similar liabilities imposed upon stockholders in state corporations, the court uniformly holding that the liability, although statutory in its origin, was contractual in its nature, and therefore the cause of action was transitory. Whitman v. National Bank, 176 U.S. 559 , 44 L. ed. 587, 20 Sup. Ct. Rep. 477; Flash v. Conn, 109 U.S. 371 , 27 L. ed. 966, 3 Sup. Ct. Rep. 263.
To avoid the controlling effect of these rulings upon this case, on the theory that, by virtue of the statutes which were considered in Carrol v. Green, and the Metropolitan Railroad Case, the right to recover was direct and immediate, whilst in the case at bar, in consequence of provisions of the national banking act, the right to recover is secondary and contingent, is, in effect, in my opinion, to overrule the cases in this court determining that the liability of a stockholder in a national bank is contractual. This becomes apparent when the ground of the alleged distinction is considered. That ground is this, that, as the national banking act empowers the Comptroller to determine the necessity for an assessment on the stockholders of national banks, and to make a call for such assessment, thereby the obligation of the stockholder becomes secondary and contingent, and hence statutory, and not con- [197 U.S. 154, 169] tractual. To me it seems that this interpretation, whilst overruling the previous cases also originally considered, gives to the national banking act an erroneous construction. The mere fact that the act gives to the Comptroller the power of making a call on stockholders for the purpose of enforcing their contract liability, in my judgment lends no support to the proposition that the ministerial duty created to better enforce the contract must be considered as destroying the contract itself. The consequences which must arise from the new construction now placed upon the national banking act, it seems to me, will be of the most serious nature; and being unable to agree with such construction, I cannot concur in the opinion and judgment of the court.
I am authorized to say that Mr. Justice Brown and Mr. Justice McKenna join this dissent.

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