Platt v. Wilmot - 193 U.S. 602 (1904)
U.S. Supreme Court
Platt v. Wilmot, 193 U.S. 602 (1904)
Platt v. Wilmot
Argued March 2, 1904
Decided April 4, 1904
193 U.S. 602
The provisions of § 394 of the New York Code of Civil Procedure limiting the time within which an action may be brought against a director or stockholder of a moneyed corporation or banking association to recover a penalty or forfeiture imposed, or to enforce a liability created, by the common law or by statute, extends to actions against directors and stockholders of foreign corporations.
Whether a foreign corporation is or is not a moneyed corporation within the meaning of § 394 of the New York Code of Civil Procedure will be determined for the purpose of construing the New York statute of limitations by reference to the meaning given to the term by the legislature and courts of New York, rather than of the state under whose laws the corporation is organized.
Although the double liability of a stockholder of a moneyed corporation may be contractual in its nature if it is statutory in origin, it is a liability created by statute within the meaning of § 394 of the New York Code of Civil Procedure.
Plaintiff in error brings the case here to review the judgment of the United States Circuit Court of Appeals for the
Second Circuit, which affirmed the judgment of the Circuit Court for the Northern District of New York dismissing the plaintiff's complaint upon the merits. The action was commenced in the last-named court by the service of a summons on the defendant on October 1, 1898, and was brought by the plaintiff as receiver of the Commercial National Bank of Denver, Colorado, to recover from the defendant the double liability imposed upon him as stockholder in the Western Farm Mortgage Trust Company of Lawrence, Kansas, hereinafter called the trust company.
The defendant answered the complaint, and, among other things, set up the defense of the three years' statute of limitations of the State of New York.
The action was tried in the Circuit Court for the Northern District of New York without a jury, and findings of fact were made by the court upon which the conclusion of law was based that the plaintiff's cause of action was barred by section 394 of the Code of Civil Procedure of the State of New York, being the three years' statute of limitations, and that his complaint should therefore be dismissed with costs.
The court found that the bank of which plaintiff was subsequently appointed receiver had commenced an action against the trust company, and on June 3, 1893, had recovered a personal judgment against it for the sum of $4,930.72, with interest thereon from the date of the recovery of the judgment. Execution had been issued upon said judgment on August 29, 1894, and returned unsatisfied on September 7, 1894.
At the time of the rendition of the judgment and the return of the execution unsatisfied, the defendant was the holder of, and has continued since that time to hold, twenty shares of the capital stock of the trust company.
By the terms of its articles of association, the corporate powers of the trust company were, among others, as follows:
"Article II. The purposes for which it is formed are to receive deposits of money, bonds, and securities; to loan money on real estate and personal security; to negotiate loans on real
estate and other securities; to purchase and sell bonds and notes secured by mortgages and deeds of trusts on real estate; to purchase and sell municipal bonds and the bonds, assets, and franchises and securities of other corporations; to issue and sell its debentures and secure the same by pledge of notes, bonds, and other securities, real or personal; to guarantee the payment of principal and interest of loans by it negotiated or made and sold; to act as financial agent of any state, municipality, corporation, association, company, or person; to purchase, hold, sell, and convey such real estate and personal property as it may require for its use; to purchase, hold, sell, and convey such real estate and personal property as may be necessary for the security or collection of claims due or owing it; to accept and execute any trust committed to it by any municipality, corporation, association, company, person, or other authority."
Judgment dismissing the complaint having been entered, the plaintiff, by virtue of a writ of error, obtained a review of the judgment by the Circuit Court of Appeals of the Second Circuit, where it was affirmed, without any opinion, upon the authority, as stated in a memorandum by the court, of the case of Hobbs v. National Bank of Commerce, 96 F. 396.
The Constitution and statutes of Kansas provide for the individual liability of the stockholders in a corporation to an additional amount equal to the stock owned by each stockholder, but the provision does not apply to a railroad corporation nor to corporations for religious or charitable purposes.