Source: https://supreme.justia.com/cases/federal/us/251/68/
Timestamp: 2019-04-22 18:43:40+00:00

Document:
A loan made by a national bank to two persons jointly, or in form one half to each but in substance as a single loan, violates the National Bank Act if in excess of the limit set by Rev.Stats., § 5200, and, in a complaint filed by the bank to recover resulting damages from a director under § 5239, a designation of the borrowers as a firm is descriptive merely, and not essential. P. 251 U. S. 80.
There was substantial evidence in this case from which the jury might find that there was a single, excessive loan to two persons, in making which defendant, as a director of the plaintiff bank, knowingly participated, rather than two loans, neither of them excessive, made to the borrowers severally. Id.
Contingent liabilities incurred by one person avowedly and in fact as surety or as indorser for money borrowed by another are not " liabilities . . . for money borrowed" in the sense of Rev.Stats. § 5200. P. 251 U. S. 82. Cochran v. United States, 157 U. S. 286; Rev.Stats. § 5211, distinguished.
And where the surety signs ostensibly as joint maker, a director who knew and relied upon his suretyship is entitled to prove it when sued under § 5239 for participating in the making of an alleged excessive loan. P. 251 U. S. 83.
A director's liability for knowingly participating in the making of a loan in excess of the limit prescribed by Rev.Stats. § 5200 is not affected by the supposed standing of the borrowers, the propriety of his motive, the continued prosperity of the bank, its failure to sue other officers or directors, or to sue him until after a change in the stockholding interest or control, or by the fact that incoming stockholders purchased their shares with knowledge of the loan and of his alleged liability and may profit by a recovery against him. Id.
is not barred in two years, but in four. Vernon's Sayles' Civ.Stats. 1914, Arts. 5687, 5690. P. 251 U. S. 85.
The liability imposed upon the director under Rev.Stats. § 5239 is direct, not contingent or collateral; the cause of action and the damages are complete when the money is loaned, and, while the damages may be diminished by what the bank collects from the borrowers, it is not obliged to proceed primarily against them. P. 251 U. S. 86.
The excessive loan being unlawful in toto, the bank's damage in such cases is not measured by the part in excess of what might have been lent lawfully, but by the whole amount plus interest and less salvage. P. 251 U. S. 87.
When a director and vice-president of a national bank makes an excessive loan, and, afterwards, knowing the borrowers to have become insolvent, joins in causing their paper to be transferred for full consideration but "without recourse" from the bank to a loan corporation, closely affiliated with the bank and having identical officers, directors, and shareholders with ratable distribution of shares, the transaction, not having been ratified or acquiesced in by the shareholders, is subject to rescission by the loan company through resolution of a majority in interest at a regular shareholders' meeting, followed by appropriate action of its directors and officers, and an acquiescence in such rescission upon the part of the bank, through its shareholders, directors, and officers, is not to be regarded as a voluntary reacceptance of the paper in such a sense that the damages resulting from nonpayment of the loan must be treated, in an action against the director under Rev.Stats. § 5239, as flowing from such voluntary action, and not from the unlawful loan itself. P. 251 U. S. 88.
In such a case, although the two corporations are distinct insofar that a loss on the paper to the loan company would not be the same in law as a loss to the bank, the shareholders nevertheless have a right to consider the practical effect of the transfer upon their common interest, and to be guided by that interest in determining whether and upon what terms to rescind the transfer. P. 251 U. S. 89.
Since the transfer would operate only provisionally to satisfy the damages to the bank from the excessive loan, the rescission leaves the director liable for the damages in full; nor is it open to him to object that the rescission was brought about for the purpose of holding him so liable, through changes in the boards of directors involving the introduction of figureheads or "dummies," nor to criticise the terms of the retransfer agreed to by the two corporations. P. 251 U. S. 93.
This was an action brought under § 5239 Rev.Stats. in the then Circuit (now District) Court of the United States for the Northern District of Texas by plaintiff in error, a national banking association which we may call for convenience the bank, against defendant in error, formerly a member of its board of directors and its vice-president, to hold him liable personally for damages sustained by the bank in consequence of his having knowingly violated, as was alleged, the provisions of § 5200 Rev.Stats. as amended June 22, 1906, c. 3516, 34 Stat. 451, by participating as such director and vice-president in a loan of the bank's funds to an amount exceeding one-tenth of its paid-in capital and surplus.
The action appears to have been commenced in February, 1910, and, after delays not necessary to be recounted, was tried before the district court with a jury. A verdict was directed in favor of defendant, and the judgment thereon was affirmed by the circuit court of appeals, no opinion being delivered in either court. The judgment of affirmance is now under review.
or firm, the liabilities of the several members thereof, shall at no time exceed one-tenth part of the amount of the capital stock of such association actually paid in [and unimpaired and one-tenth part of its unimpaired surplus fund: Provided, however, that the total of such liabilities shall in no event exceed thirty percentum of the capital stock of the association]. But the discount of bills of exchange drawn in good faith against actually existing values, and the discount of commercial or business paper actually owned by the person negotiating the same, shall not be considered as money borrowed."
"Sec. 5239. If the directors of any national banking association shall knowingly violate, or knowingly permit any of the officers, agents, or servants of the association to violate any of the provisions of this title, all the rights, privileges, and franchises of the association shall be thereby forfeited. . . . And in cases of such violation, every director who participated in or assented to the same shall be held liable in his personal and individual capacity for all damages which the association, its shareholders, or any other person, shall have sustained in consequence of such violation."
Under the rule settled by familiar decisions of this Court, in order for the bank to prevail in this action, it must appear not only that the liabilities of a person, company, firm, etc., to the bank for money borrowed were permitted to exceed the prescribed limit, but that defendant, while a director, participated in, or assented to the excessive loan or loans not through mere negligence, but knowingly and in effect intentionally, Yates v. Jones Nat. Bank, 206 U. S. 158, 206 U. S. 180, with this qualification, that, if he deliberately refrained from investigating that which it was his duty to investigate, any resulting violation of the statute must be regarded as "in effect intentional,"
Thomas v. Taylor, 224 U. S. 73, 224 U. S. 82; Jones Nat. Bank v. Yates, 240 U. S. 541, 240 U. S. 555.
The facts are involved, and need to be fully stated. And necessarily, in order to test the propriety of the peremptory instruction given by the trial judge, we must bring into view the facts and the reasonable inferences which tended to a different conclusion, and, where the evidence was in substantial dispute, must adopt a view of it favorable to plaintiff; but, of course, we do this without intending to intimate what view the jury ought to have taken had the case been submitted to it.
On June 10, 1907, plaintiff, whose banking house was at Corsicana, Texas, had $100,000 capital and $100,000 surplus, aggregating $200,000, and making $20,000 the applicable limit under § 5200. Defendant was a director and vice-president of the bank, active -- perhaps dominant -- in the conduct of it banking business and familiar with the state of its finances.
whether the dissolution applied to their other branches, or to the Corsicana business only, were points concerning which under the evidence there was some doubt.
"We have deducted the discount, $900.00, and hand you herewith our draft No. A-7830, on Western Bank & Trust Company, order Fleming & Templeton, for $29,000.00."
The retained copy of this letter appears to have been introduced in evidence; at the foot, opposite the place of signature, are the initials "V.P." With regard to this, as also to certain other "V.P." letters, dated in the following December and relating to renewal of the notes, defendant testified: "I think I signed the letters which are offered in evidence as Exhibit H," etc.
There was evidence that the draft for $29,100 was indorsed in the firm name by Templeton and deposited in the Western Bank & Trust Company at Dallas to the credit of the joint account of Fleming & Templeton, to make up in part an overdraft amounting to more than $125,000; this account having been overdrawn constantly, and in large but varying amounts, since the preceding April.
As a result of an examination of the bank made a few days later, the Comptroller of the Currency wrote to its president under date June 22, severely criticizing the Fleming-Templeton loan, among others, as excessive under § 5200 Rev.Stats., and saying: "Immediate arrangements must be made to reduce these loans to the legal limit." It was a fair inference that defendant knew of this letter, or in the proper performance of his duties would have known of it. Whether any reply was made to it did not appear.
item to the Western Bank & Trust Company, for account of the borrowers, and the latter institution acknowledged the charge, gave credit to plaintiff for the amount, and charged it against the joint account of Fleming & Templeton. During December, some correspondence passed between defendant at Corsicana, he writing as vice-president of the bank, and Templeton at Dallas, relating to the renewal of the notes, tending to show that they were regarded by both writers as representing a single obligation of "Fleming & Templeton." Thus, Templeton on December 3d wrote to defendant, "Referring to the notes of Fleming & Templeton," etc., and defendant wrote to him on the following day, mentioning "renewal notes of loan to you and Mr. Fleming."
The evidence tended to show that, up to the time of the renewal, the borrowers were apparently solvent, but that, about January 15, 1908, they became manifestly and notoriously insolvent. The Western Bank & Trust Company closed its doors on that date and went into liquidation, with Fleming and Templeton owing it several hundred thousand dollars. About the same time, Fleming and perhaps Templeton went into bankruptcy, and Templeton afterwards died, and their respective estates paid small dividends upon their obligations. The jury would have been warranted in finding that it was evident to defendant, as a banker, on and after the 15th of January, that there would be a substantial loss upon the Fleming and Templeton notes.
them to be made should assume liability for any loss that may be sustained thereon, and not throw the burden of such loss on innocent stockholders."
"Reference to the Fleming & Templeton item of $30,000, we beg to say that this item has been disposed of by the bank, and they now owe us nothing."
It was a reasonable inference that defendant intended to admit that it was a single loan and in excess of the limit.
In explanation of the statement that it had been "disposed of by the bank," the evidence tended to show that, on February 12, 1908, nearly a month after the insolvency of Fleming and Templeton had become notorious, and a few days after the bank examiner's visit, defendant and the president of the bank caused the two notes of December 10 to be transferred "without recourse" to an affiliated corporation known as the Corsicana National Land & Loan Company (they being directors and officers of this corporation also), upon payment of $29,400, the full face value, less discount, as consideration; the payment being made by a transfer of credit upon the books of the bank. Defendant relies upon this as wholly relieving the bank from loss by reason of the loan, and consequently as releasing him from responsibility to the bank. But the evidence tended to show further that the loan company, in January, 1910, shortly before this suit was brought, rescinded the transaction upon the ground of fraud, and that there was a settlement as between the loan company and the bank based upon an acknowledgment by the latter of the former's right to rescind.
"The purpose of the loan company, a state corporation, was to take such paper as the bank could not handle. It was organized by the stockholders of the bank, and paid for out of the earnings of our bank. . . . The loans of the loan company were largely real estate loans. It was to help out the bank in every possible [way]."
From the organization of the company in the spring of 1907 until the spring of 1909, defendant was a director and active in the management of the company as well as of the bank. He testified that the stockholders of the two corporations were identical, and continued to be so during the entire period just mentioned; that "whenever there was a sale of bank stock, it carried with it that particular shareholder's stock in the loan company." During the same period, the two corporations had the same president, vice-president, and directors, while the assistant cashier of the bank was secretary of the loan company.
So far as appeared, the transfer of the Fleming and Templeton notes to the loan company, and the payment made by the company to the bank, were never expressly authorized or ratified by the stockholders of either corporation, nor did it appear that the stockholders of the loan company ever authorized its directors to employ its funds in taking bad or doubtful paper off the hands of the bank at a loss, much less to relieve the directors of the bank from responsibility for its losses.
by a change of officers, defendant retiring as both stockholder and director. The corresponding shares of the stock of the loan company were transferred at the same time, and the new management officered the company as well as the bank. So far as appeared from the evidence, the transfer of defendant's stock carried with it no agreement that he should not be held responsible to the bank because of the Fleming and Templeton loan, nor any approval of the transfer of the loan to the loan company.
would pay it, provided the company would purchase from the bank a certain cotton mill property for the sum of $65,000, accept $30,000 of this in payment of its demand against the bank, transfer to the bank the Fleming and Templeton notes and indebtedness, with all collateral securing the same, and execute to the bank its own promissory note for the remaining $35,000, with the cotton mill property as security. This was agreed to by the directors of the loan company, and the settlement was carried out accordingly. Shortly after this, the present action was brought.
The "collateral security" above referred to appears to have consisted of certain shares of stock in a corporation known as the Fleming Ranch & Cattle Company, acquired in the winding-up of the bankrupt estate of Fleming. These shares, so far as the evidence showed, were the only thing of value recovered either by the loan company or by the bank from the estates of the borrowers. After the present suit was commenced, the Fleming Ranch & Cattle Company was liquidated, and in the distribution of its assets, the bank received sums aggregating $9,149.34, which are credited as payments on account of its claim against defendant.
So far as the above-recited facts were in dispute, there was substantial evidence tending to support a view of them favorable to plaintiff's contentions. What weight should be given to it was for the jury, not the court, to determine. Hepburn v. Dubois, 12 Pet. 345, 37 U. S. 376; Lancaster v. Collins, 115 U. S. 222, 115 U. S. 225; Chicago & Northwestern Ry. Co. v. Ohle, 117 U. S. 123, 117 U. S. 129; Aetna Life Ins. Co. v. Ward, 140 U. S. 76, 140 U. S. 91; Troxell v. Del., Lack. & Western R. Co., 227 U. S. 434, 227 U. S. 444.
We proceed to consider, in the order of convenience, the questions raised upon the record.
"was an excessive loan, whether regarded as one loan to the firm to Fleming & Templeton, as plaintiff alleges the fact to be, or regarded as two loans, as contended for by the defendant in his pleadings heretofore filed herein."
The designation of Fleming & Templeton as a "firm" is but descriptive, and not essential, and the pleading is sufficient if the proof tended to show a single and excessive loan made to them jointly in any capacity, or made in form one-half to each, but in substance as a single loan.
by yourself and Fred Fleming," and, having "deducted the discount, $900," enclosed the bank's draft "order Fleming & Templeton for $29,100;" that, when the notes fell due in December, the correspondence concerning their renewal was conducted by defendant with Templeton alone, and they were treated as representing a single loan, and the discount was charged by defendant or under his direction in a single item; that, after the borrowers had become notoriously insolvent, in February, 1908, defendant took part in transferring the notes "without recourse" to the affiliated loan company in the manner and under the circumstances above stated; that the transfer was effected a few days after the visit of the bank examiner; that, when the Deputy Comptroller wrote to the bank, classifying "Fleming & Templeton $30,000" as an excessive loan and demanding that the directors responsible from making it should assume the loss, defendant joined in signing the reply that has been quoted -- all this, to say nothing of other circumstances that might be mentioned, would have warranted the jury in finding, notwithstanding defendant's denial, that in fact the disputed transaction was a single loan of $30,000, less discount, or, to be precise, $29,100 made to Fleming and Templeton jointly; that defendant knew and assented to this at the time, and that the taking of two notes was but a device to conceal the true nature of the transaction.
that the word "liabilities," as employed in § 5211 Rev.Stats., included contingent liabilities. We do not regard the case as controlling, because the purpose of that section, and the language employed, differ materially from the purpose and the language of the provision we are dealing with. As to whether, in § 5200, the words "the total liabilities . . . of any person . . . for money borrowed," etc., require the liability of a surety or of an indorser for money borrowed by another to be added to his direct liability for money borrowed by himself in ascertaining whether the limit is exceeded -- whatever view we might entertain, were the matter res nova -- we are advised that, by the practice and administrative rulings of the Comptroller of the Currency during a long period, if not from the beginning of national banking, liabilities which are incurred by one person avowedly and in fact as surety or as indorser for money borrowed by another are not included in the computation. We feel constrained to accept this as a practical construction of the section, and we are not prepared to say that, in an action against a director who knows and relies upon the fact that a particular obligation is signed by one merely as surety, although not so described, the defendant may not be permitted to show the truth.
in spite of a loss upon this transaction, the bank remained solvent, or even prosperous. Neither is the question of defendant's liability or the extent of it to be affected by the fact, if it be a fact, that other officers or directors of the bank were in part responsible, yet defendant alone was sued; nor that the bank refrained from suing him until after a change in the stockholding interest or control. Again, in the absence of some special agreement -- and none such appears -- it is immaterial whether the new stockholders were aware of the excessive loan, or of defendant's alleged liability in the premises at the time they acquired their stock, or whether they possibly may now profit by an increase in the value of the shares in the event of a recovery against him.
neither they nor the bank would be thereby estopped from having full recovery from defendant. There is no reason in the law to dissentitle a purchaser of shares from even relying upon the responsibility of directors to make good previous losses as an element adding intrinsic value to the shares. Compare Bigelow v. Old Dominion Copper Co., 74 N.J.Eq. 457, 500.
(4) Defendant, among other defenses, pleaded the two-year statute of limitations of the State of Texas. Plaintiff demurred on the ground that this limitation was not a bar, and also replied, setting up certain facts that need not now be recited. The demurrer was overruled.
In our opinion, the action is not one of the kinds specified in Article 5687, to which the two-year limitation applies, but is within the general description of Article 5690, and subject only to the limitation of four years. Hence, the limitation pleaded was no defense, and it is not contended that there was any basis in fact for pleading the four-year limitation.
course, whatever of value the bank recovered from the borrowers on account of the loan would go in diminution of the damages, but the responsible officials would have no right to require the bank to pursue its remedies against the borrowers or await the liquidation of their estates. The liability imposed by the statute upon the directors is a direct liability, not contingent or collateral.
the damages resulting from a breach of his statutory duty by resorting to the hypothesis that, if he had not disregarded the law in this respect, he would have pursued a different course of action within the law would be an unwarranted resort to fiction in aid of a wrongdoer, and at the expense of the party injured. Hence, the entire excessive loan would have to be regarded as the basis for computing the damages of the bank.
(7) In behalf of defendant, it is insisted that, assuming the loan was excessive, no loss accrued to the bank by reason of it because the Fleming and Templeton notes and indebtedness were transferred to the loan company February 12, 1908, for a cash consideration equivalent to their face value, less interest to maturity.
Plaintiff in error contends that the bank and the loan company were so identical in ownership and united in management that the latter was but the alter ego of the former, and a loss to the loan company on the notes was the same as a loss to the bank, not only practically, but in contemplation of law. On the other hand, the argument of defendant in error regards the two corporations as if they were wholly independent, treats the transfer of the notes from the bank to the loan company, in February, 1908, as valid and the money or credit contemporaneously transferred to the bank like money coming from an outside party, and looks upon the retransfer in January, 1910, as voluntary on the part of the bank, and an unnecessary assumption of loss that otherwise it had escaped.
instance, as being capable in law of contracting with each other. See Nashua Railroad v. Lowell Railroad, 136 U. S. 356, 136 U. S. 372-375, et seq. But, in considering the practical effect of such intercorporate dealings, especially as bearing upon the duties of the common directors and the authority of the stockholders to control them, we need not and ought not to overlook the identity of stock ownership. Thus, the transfer of the notes in February, 1908, from the bank to the loan company in consideration of their full face value ostensibly or actually paid by the company to the bank evidently could have no effect in relieving the stockholding interest from loss, since each stockholder of one corporation had a corresponding interest in the stock of the other, and any theoretical saving that accrued to him as a stockholder of the bank was balanced by a corresponding loss sustained in his capacity as a stockholder of the company. At the same time, the stockholders, in reviewing that transaction, might lawfully and properly base their action upon all the facts af the situation, recognizing the legal separateness of the corporations as existing in order to test the validity of the transfer and the feasibility of setting it aside without litigation, while giving effect to their community of interest in deciding whether this should be done, and, if so, then in what manner and upon what terms.
under circumstances rendering it voidable by the loan company or the stockholders, neither the bank nor defendant was entitled to have the transaction stand for their benefit, and if in fact it was avoided for good cause, the bank would be entitled to its action against defendant the same as if the annulled transaction never had occurred.
Was there good cause for the rescission? The fact that the same persons were directors and managers of both corporations subjects their dealings inter sese to close scrutiny. That two corporations have a majority or even the whole membership of their boards of directors in common does not necessarily render transactions between them void; but transactions resulting from the agency of officers or directors acting at the same time for both must be deemed presumptively fraudulent unless expressly authorized or ratified by the stockholders, and certainly, where the circumstances show, as by the undisputed evidence they tended to show in this case, that the transaction would be of great advantage to one corporation at the expense of the other, especially where, in addition to this, the personal interests of the directors, or any of them, would be enhanced at the expense of the stockholders, the transaction is voidable by the stockholders within a reasonable time after discovery of the fraud. Twin Lick Oil Co. v. Marbury, 91 U. S. 587, 91 U. S. 589; Wardell v. Railroad Co., 103 U. S. 651, 103 U. S. 657 et seq.; Thomas v. Brownville, etc., R. Co., 109 U. S. 522, 109 U. S. 524; Richardson v. Green, 133 U. S. 30, 133 U. S. 43; McGourkey v. Toledo & Ohio Ry. Co., 146 U. S. 536, 146 U. S. 552, 146 U. S. 565.
officers who acted as agents or trustees for both corporations, and one at least of whom, as the jury might find, was subject to criticism from the Comptroller of the Currency, and to an action at the suit of the bank, for making an excessive loan, it clearly was open to the jury to find that the transfer was fraudulent as against the loan company, and as against the stockholders of both companies. The jury should have been instructed to this effect, and, further, that, if they found the transfer to have been fraudulent, the stockholders had the right to rescind it within a reasonable time after discovery of the fraud, and that if, having such right, the stockholders of the loan company asserted it and gave notice of its claim to the bank in the manner shown by the minutes, and the bank, recognizing and acknowledging the justness of the claim, restored to the loan company what was accepted as the equivalent in value of that which the bank had received in the transaction of February, 1908, this was not to be regarded as a voluntary or unnecessary assumption of loss by the bank, but, on the contrary, the result, so far as defendant was concerned, was the same as if, by court decree in a suit brought by the loan company or by the stockholders, the bank had been compelled to make such restitution, and that thereafter the rescinded transaction could not be regarded as amounting, even in form of law, to a satisfaction of the damages sustained by the bank as a result of the Fleming and Templeton loan.
So far as the evidence showed, neither the stockholders of the loan company nor indeed its board of directors ever expressly ratified or affirmed the transfer. Nor does it appear that there was any unreasonable delay on the part of the stockholders in taking action to set it aside after they had become aware of the circumstances; such delay as there was the bank waived, as it had a right to do, and defendant does not appear to have changed his position, or to have been prejudiced, by reason of it.
Assuming, in defendant's favor, that, because the corporations were legally separate, they could not undo the transaction of February, 1908, without formal corporate action, the procedure adopted was sufficient for the purpose. It is objected that the personnel of the boards was changed for the very purpose of accomplishing the rescission, and that the new members were mere figureheads or dummies for the controlling stockholders, and had no bona fide stock of their own. But if the transaction of 1908 was a fraud as against the loan company, and done without authority of the stockholders, they were quite within their rights in acting through dummies, if necessary, in order to set it aside. We do not think it was necessary to change the membership of the boards; similar action by boards having identical membership would have had the same effect if done by the express authority of the stockholders in order to undo an improper and unlawful act of former directors injurious to their interests.
in effect as a screen to protect him from suit by the bank under § 5239 Rev.Stats. So far as it may be supposed to have protected him while it remained unrescinded, the result was entirely gratuitous, no consideration having proceeded from him in the matter. Indeed, if his act in shifting the discredited loan was done in part to give him immunity from such an action as the present, this would furnish an additional ground entitling the stockholders to set the transfer aside. And if, either on this ground or on the ground that the transfer was put through for the advantage of one corporation at the expense of the other, by officers or directors acting at the same time for both and without the authority of the stockholders, the transaction was voidable by the stockholders and they resolved to avoid it, it would savor of absurdity to sustain defendant's contention that this was done in order to enable the bank to sue him, for, of course, they would have the right to do it for that very purpose.
and Templeton loan, and when the real parties affected by this loss undertook on just grounds to set aside the transfer of the notes, and took such proceedings through action of the two corporations as were necessary for that purpose, they had a right to recognize the community of interest in settling the terms upon which this should be done, and defendant has no standing to complain.
If there be a seeming inconsistency in sustaining a rescission of the 1908 transaction avowedly based upon the ground that the loan company had unjustly been subjected to a loss therein, while at the same time we treat as unimportant the question whether upon such rescission full restitution was made to that company, it should be said that we treat it as unimportant only so far as defendant is concerned, and, if there be inconsistency, it is no more than corrective of the unreality of the 1908 transaction itself. It is defendant who invokes that transaction as an actual realization by the bank of full value through a sale of the notes that it held as collateral security for its claim against him. If, regarding it as an actual sale, it was voidable because done by agents acting at the same time in a dual capacity, or for other reasons, he cannot complain that the parties entitled to avoid it treated it as actual for the purpose of setting it aside, and in the consequent readjustment recognized a substantial identity of interest between seller and purchaser in the rescinded transaction that rendered it hardly an actual sale. For, to the extent that the sale was a sham, there was no realization by the bank upon the collateral security, and hence no satisfaction of the damages claimed against him.
The judgment under review must be reversed, to the end that there may be a new trial in accordance with the views above expressed.
Judgment reversed, and the cause remanded to the district court for further proceedings in conformity with this opinion.
"Art. 5687. There shall be commenced and prosecuted within two years after the cause of action shall have accrued, and not afterward, all actions or suits in court of the following description:"
"1. Actions of trespass for injury done to the estate or the property of another."
"2. Actions for detaining the personal property of another, and for converting such personal property to one's own use."
"3. Actions for taking or carrying away the goods and chattels of another."
"4. Actions for debt where the indebtedness is not evidenced by a contract in writing."
"5. Actions upon stated or open accounts, other than such mutual and current accounts as concern the trade of merchandise between merchant and merchant, their factors or agents. In all accounts, except those between merchant and merchant, as aforesaid, their factors and agents, the respective times or dates of the delivery of the several articles charged shall be particularly specified, and limitations shall run against each item from the date of such delivery, unless otherwise specially contracted."
"6. Action for injury done to the person of another."
"7. Action for injury done to the person of another where death ensued from such injury, and the cause of action shall be considered as having accrued at the death of the party injured."
"Art. 5688. There shall be commenced and prosecuted within four years after the cause of action shall have accrued, and not afterward, all actions or suits in court of the following description:"
"1. Actions for debt where the indebtedness is evidenced by or founded upon any contract in writing."
"2. Actions for the penalty or for damages on the penal clause of a bond to convey real estate."
"3. Actions by one partner against his copartner for a settlement of the partnership accounts, or upon mutual and current accounts concerning the trade of merchandise between merchant and merchant, their factors or agents, and the cause of action shall be considered as having accrued on a cessation of the dealings in which they were interested together."
"Art. 5690. Every action other than for the recovery of real estate, for which no limitation is otherwise prescribed, shall be brought within four years next after the right to bring the same shall have accrued, and not afterward."

References: § 5200
 § 5239
 § 5200
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 § 5211
 § 5239
 § 5200
 § 5239
 § 5239
 § 5239
 § 5200
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 § 5200
 § 5200
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 § 5211
 § 5200
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 § 5239