Source: http://openjurist.org/327/us/392
Timestamp: 2015-10-13 11:56:33
Document Index: 147449655

Matched Legal Cases: ['§ 16', '§ 812', '§ 812', '§ 16', '§ 53', '§ 2']

327 US 392 Holmberg v. Armbrecht | OpenJurist
327 U.S. 392 - Holmberg v. Armbrecht Homethe United States Reports327 U.S.
327 US 392 Holmberg v. Armbrecht 327 U.S. 392
66 S.Ct. 582
90 L.Ed. 743
HOLMBERG et al.v.ARMBRECHT et al.
Mr.Clarence Fried, of New York City, for petitioners.
Mr. Edgar M. Souza, of New York City, for respondents.
This is a suit in equity by petitioners on behalf of themselves and all other creditors of the Southern Minnesota Joint Stock Land Bank of Minneapolis to enforce the liability imposed upon shareholders of the Bank by § 16 of the Federal Farm Loan Act, equal to one hundred per cent of their holdings. 39 Stat. 360, 374, 12 U.S.C. § 812, 12 U.S.C.A. § 812.1 The Bank closed its doors in May, 1932. Its debts exceeded its assets by more than $3,000,000, the amount of its outstanding stock. Suit was accordingly brought in the United States District Court for the District of Minnesota for determining and collecting the assessment due under § 16. Holmberg v. Southern Minnesota Joint Stock Land Bank of Minnesota, D.C., 10 F.Supp. 795. Armbrecht, a New York stockholder, was sued there. The suit failed on procedural grounds and was dismissed without prejudice to further action. Holmberg v. Anchell, D.C., 24 F.Supp. 594, 598. Not until 1942, so it is alleged, did petitioners learn that Jules S. Bache had concealed his ownership of one hundred shares of the Bank stock under the name of Charles Armbrecht. The present action against Armbrecht and Bache was begun in the Southern District of New York in November, 1943. Bache died during pendency of the suit and his executors were substituted as parties.
The respondents made two defenses: (1) They invoked a New York statute of limitation barring such an action after ten years, New York Civil Practice Act, § 53; (2) they urged laches, claiming that petitioners had unduly delayed commencement of the suit. Neither defense was sustained in the District Court, and judgment went against the respondents. The judgment was reversed by the Circuit Court of Appeals. 2 Cir., 150 F.2d 829. That court did not reach the defense of laches because it held, relying on Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, that the New York statute of limitation was controlling and that the mere lapse of ten years barred the action. Since the case raises a question of considerable importance in enforcing liability under federal equitable enactments, we brought it here for review. 326 U.S. 712, 66 S.Ct. 176.
In Guaranty Trust Co. v. York, supra, we ruled that when a State statute bars recovery of a suit in a State court on a State-created right, it likewise bars recovery of such a suit on the equity side of a federal court brought there merely because it was 'between citizens of different States' under Art. III, § 2 of the Constitution. The amenability of such a federal suit to a State statute of limitation cannot be regarded as a problem in terminology, whereby the practical effect of a statute of limitation would turn on the content which abstract analysis may attribute to 'substance' and 'procedure.' We held, on the contrary, that a statute of limitation is a significant part of the legal rules which determine the outcome of a litigation. As such, it is as significant in enforcing a State