In the absence of any provision of the act of Congress creating
the liability of stockholders of national banks, fixing a
limitation of time for commencing actions to enforce it, the
statute of limitations of the particular state is applicable.
Although a statutory liability may be contractual, or
Page 197 U. S. 155
in it nature, an action given by statute is not necessarily to
be regarded a brought on simple contract, or breach of simple
The liability of stockholder of national bank is conditional,
and, the right to sue does not obtain until the Comptroller of the
Currency has acted; his order is the basis of the suit, and the
statute of limitations does not commence to run until assessment
made, and then it run as against an action to enforce the statutory
liability, and not an action for breach of contract.
As the statute of limitations of Washington has been construed
by the court of that state, the time within which such an action
must be brought is two years under § 4805, Ballinger's Code, and
not within three year under subd. 3 of § 4800.
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 F. 378. The cause was taken to the circuit
court of appeals, and the judgment of the circuit court reversed.
106 F. 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
Page 197 U. S. 156
the circuit court of appeals. 119 F. 110. This writ of error was
The following are sections of the statutes of Washington in
relation to limitations, as found in Ballinger's Code:
"SEC. 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
"SEC. 4797. The period prescribed in the preceding section for
the commencement of actions shall be as follows: . . ."
"SEC. 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."
"3. An action for the rents and profits or for the use and
occupation of real estate."
"SEC. 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
"3. An action upon a contract or liability, express or implied,
which is not in writing and does not arise out of any written
"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
"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
Page 197 U. S. 157
an execution; but this subdivision shall not apply to action for
"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
"7. An action for seduction and breach of promise of
"SEC. 4805. An action for relief not hereinbefore provided for
shall be commenced within two years after the cause of action shall
have accrued. "
Page 197 U. S. 158
MR. CHIEF JUSTICE FULLER delivered the opinion of the Court.
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; Campbell v.
Haverhill, 155 U. S. 610
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 subdivision 2 of §
4798 relates to "an action upon a contract in writing, or
liability, express or implied, arising out of a written agreement,"
while subdivision 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
subdivision 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 subdivision 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 subdivision 2 of § 4798, and
Page 197 U. S. 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 Company,
35 Wash. 1; Sargent v. Tacoma,
10 Wash. 212. 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 F. 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. 106 F.
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?
The National Bank Act provides that
"the shareholders of every national banking association shall be
held individually responsible, equally and ratably, and not one for
another, for all contracts, debts, and engagements of such
association to the extent of the amount of their stock therein at
the par value thereof, in addition to the amount invested in such
Rev.Stat. § 5151.
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.
8 Wall. 498; Studebaker v. Perry,
184 U. S. 258
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' National Bank,
133 U. S. 67
Page 197 U. S. 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
In the latter case, the statute of Nebraska provided (§ 10) that
actions must be commenced within five years, "upon a specialty, or
any agreement, contract, or promise in writing, or foreign
judgment," and (§ 11) within four years "upon a contract not in
writing, express or implied; an action upon a liability created by
statute other than a forfeiture or penalty."
The action was brought on an assessment upon the stockholders of
a national bank to the amount of the par value of the shares, and
not to recover an amount unpaid on the original subscription, and
it was held that the five-year limitation did not apply, because
the cause of action was not upon a written contract, but that the
four-year limitation applied, "whether the promise raised by the
statute was an implied contract not in writing or a liability
created by statute," no distinction between them as to the
limitation being made by the state statute. And MR. JUSTICE BROWN,
speaking for the Court, said:
"Whether the promise raised by the statute was an implied
contract, not in writing, or a liability created by statute, it is
immaterial to inquire. For the purposes of this case it may have
been both. The statute was the origin of both the right and the
remedy, but the contract was the origin of the personal
responsibility of the defendant. Did the statute make a distinction
between them with reference to the time within which an action must
be brought, it might be necessary to make a more exact definition;
but, as the action must be brought in any case within four years,
it is unnecessary to go farther than to declare what seems entirely
clear to us, that it is not a contract in writing within the
meaning of § 10 of the Nebraska act."
And it was also said:
"Granting there was a contract with the creditors to pay a sum
equal to the value of the stock taken, in addition to the sum
invested in the shares, this was a contract created by the statute,
and obligatory upon the stockholders by reason of
Page 197 U. S. 161
the statute existing at the time of their subscription; but it
was not a contract in writing within the meaning of the Nebraska
act, since the writing -- that is, the subscription -- contained no
reference whatever to the statutory obligation, and no promise to
respond beyond the amount of the subscription. In none of the
numerous cases upon the subject in this Court is this obligation
treated as an express contract, but as one created by the statute
and implied from the express contract of the stockholders to take
and pay for shares in the association."
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 (sub. 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 Company,
Page 197 U. S. 162
590; Platt v. Wilmot, 193 U. S. 602
Matteson v. Dent, 176 U. S. 521
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.
Cases such as Carrol v. Green, 92 U. S.
, and Metropolitan Railroad Company v. District
of Columbia, 132 U. S. 1
, are not
controlling, for in them the right to recover was direct and
immediate, and not secondary and contingent. In Metropolitan
Railroad Company v. District of Columbia,
the charter of the
"that the said corporation hereby created shall be bound to keep
said tracks, and for the space of two feet beyond the outer rail
thereof, and also the space between the tracks at all times well
paved and in good order, without expense to the United States or to
the City of Washington."
The declaration set out a large amount of paving done by the
city, which it was averred should have been done by the company.
The action was based on the implied obligation on the part of
defendant to reimburse plaintiff for moneys expended in performing
the duty which the statute imposed on defendant. In Carrol v.
it was said:
"According to the statute, the liability of 'each stockholder'
arose upon 'the failure of the bank.' The liability gave at once
the right to sue; and, by necessary consequence, the period of
limitation began at the same time."
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
Page 197 U. S. 163
to enforce the statutory liability, and not an action for breach
We think that subdivision 3 of § 4800 did not apply, and that §
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.
MR. JUSTICE WHITE, with whom concur MR. JUSTICE BROWN and MR.
JUSTICE McKENNA, dissenting:
The statutes of the State of Washington limit to three years the
right to bring "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 cause of action here involved is now held
not to be embraced within this statute, and therefore barred by the
following provision: "An action for relief, not hereinbefore
provided for, shall be commenced within two years after the cause
of action shall have accrued."
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 F. 378. The circuit court of appeals
reversed this judgment, and decided that the period of limitation
was three years, because the liability was contractual. 106 F.
In Suter v. Wenatchee Water Power Company,
April 18, 1904, 35 Wash. 1, the Supreme Court of Washington
construed the provision of the statutes of limitation here
involved, providing that an action might be brought within three
years "upon a contract or liability, express or implied, which is
not in writing," and held that it did not embrace torts, "but was
evidently intended to refer to a contractual
Page 197 U. S. 164
liability." The court, in its opinion, among other authorities,
referred to this case as decided below, saying:
"Such, in effect, was the decision in Sargent v.
10 Wash. 212, 215. The same statute was construed by
the United States Circuit Court, district of Washington, in
Aldrich v. Skinner,
98 F. 375, and also in Aldrich v.
98 F. 378. The last-named case was, on appeal to the
United States circuit court of appeals, reversed. Aldrich v.
106 F. 791. The reversal was, however, upon the
ground that the liability involved was a contractual one, the lower
court having held otherwise. The appellate court construed the
statute itself as did the lower court."
It might well be considered that the Supreme Court of Washington
regarded the interpretation of the court of appeals as harmonizing
with its own views of the meaning of the provision in question. But
be this as it may, the prior decisions of this Court to me seem
conclusive, since, in deciding various questions concerning the
liability of stockholders in national banks to pay the double
liability, this Court has expressly held that such liability is
contractual. Matteson v. Dent, 176 U.
, 176 U. S.
-526; Concord First National Bank v.
Hawkins, 174 U. S. 364
174 U. S. 372
Richmond v. Irons, 121 U. S. 27
121 U. S. 55
In Richmond v. Irons,
the Court said (pp. 121 U. S.
"Under that act, the individual liability of the stockholders is
an essential element in the contract by which the stockholders
became members of the corporation. It is voluntarily entered into
by subscribing for and accepting shares of stock. Its obligation
becomes a part of every contract, debt, and engagement of the bank
itself -- as much so as if they were made directly by the
stockholder, instead of by the corporation. There is nothing in the
statute to indicate that the obligation arising upon these
undertakings and promises should not have the same force and
effect, and be as binding in all respects, as any other contracts
of the individual stockholder. We hold, therefore, that the
obligation of the stockholder survives as
Page 197 U. S. 165
against his personal representatives. Flash v. Conn,
109 U. S.
; Hobart v. Johnson,
19 Blatchf. 359. In
Massachusetts, it was held, in Grew v. Breed,
10 Met. 569,
that administrators of deceased stockholders were chargeable in
equity, as for other debts of their intestate, in their
In Matteson v. Dent,
the evidence showed that, at the
time of the death of Matteson, he was the owner of ten shares of
stock in a national bank -- a going concern. His widow and heirs,
by the decree of a probate court of Minnesota, became the joint and
undivided owners of the stock, which continued, however, to stand
in the name of Matteson. Thereafter, the bank failed, and, on the
ground that they had received assets of the estate, a suit was
brought against the widow and heirs for the amount of an assessment
made by the Comptroller against the stock. The suit was defended on
two grounds -- first, that the assessment was not binding, because
the bank had not failed at the time of Matteson's death, and at the
time when, by the decree of the probate court, the widow and heirs
had become the owners in indivision of the stock, and, second,
that, under the national banking law, they could only be made
liable, in any event, each in proportion to his or her interest in
the stock. In considering the first ground, the Court, approvingly
citing the passage from Richmond v. Irons
said (p. 176 U. S.
"Because the insolvency of the bank took place after the death
of Matteson, did it result that the assessment, which was
predicated upon the insolvency, was not a debt of his estate? To so
decide, the statute must be construed as imposing the liability on
the shareholder for the amount of his subscription when necessary
to pay debts only in case insolvency arises during the lifetime of
the shareholder. In order words, that all liability of shareholders
to contribute to pay debts ceases by death. This construction,
however, would be manifestly unsound. The obligation of a
subscriber to stock to contribute to the amount of his
Page 197 U. S. 166
for the purpose of the payment of debts is contractual, and
arises from the subscription to the stock. True, whether there is
to be a call for the performance of this obligation depends on
whether it becomes necessary to do so in consequence of the
happening of insolvency. But the obligation to respond is
engendered by, and relates to, the contract from which it arises.
This contract obligation, existing during life, is not extinguished
by death, but, like other contract obligations, survives, and is
enforceable against the estate of the stockholder."
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. Oxford National Bank,
176 U. S. 559
Flash v. Conn, 109 U. S. 371
In Whitman v. National Bank,
discussing a statute of
the State of Kansas, the Court, through MR. JUSTICE BREWER, said
(p. 176 U. S.
"The liability which, by the Constitution and statutes, is thus
declared to rest upon the stockholder, though statutory in its
origin, is contractual in its nature. It would not be doubted that,
if the stockholders in this corporation had formed a partnership,
the obligations of each partner to the others and to creditors
would be contractual, and determined by the general common law in
respect to partnerships. If Kansas had provided for partnerships
with limited liability, and these parties, complying with the
provisions of the statute, had formed such a partnership, it would
also be true that their obligations to one another and to creditors
would be contractual, although only in the statute was to be found
the authority for the creation of such obligations. And it is
nonetheless so when these same stockholders organized a corporation
under a law of Kansas which prescribed the nature of the
obligations which each thereby assumed to the others and to the
creditors. While the statute of Kansas permitted the forming of the
corporation under certain conditions, the action
Page 197 U. S. 167
of these parties was purely voluntary. In other words, they
entered into a contract authorized by statute."
And the principle sustained by the previous decisions of this
Court is also supported by the decisions of state courts of last
resort. Thus, the Supreme Judicial Court of Maine, in Pulsifer
96 Me. 438, held the doctrine to be consonant with
reason and natural justice and sustained by the weight of
authority, the court citing not only the decisions of this Court
previously referred to, but also decisions of the courts of
California, Connecticut, Illinois, Kansas, Massachusetts, and
Michigan. And the decisions of the state courts of last resort thus
referred to were, in many cases, in part rested upon the previous
adjudications of this Court to which I have referred, those
decisions being considered as conclusive on the subject of the
contract nature of the liability. My mind sees no reason for saying
that the doctrine thus settled is not applicable to a statute of
limitations, for if the liability of the stockholder be
contractual, for the purpose of enforcing the obligation, it is not
by me perceived upon what principle it can be held that it is not
contractual, but purely statutory, for the purpose of determining
whether an action to enforce the liability is barred by a statute
of limitations. But the unsoundness of the distinction as an
original question, in my opinion, does not require to be
demonstrated, since it is absolutely foreclosed by previous
decisions of this Court. Thus, in Carrol v. Green,
92 U. S. 509
action against stockholders of a South Carolina bank to enforce a
double liability provided for in the act of incorporation -- it was
expressly held that, as the liability was contractual, it was
barred by a statute of limitations applicable to simple contract
indebtedness. Reference was made to decisions of the courts of New
York and Massachusetts, holding the same doctrine in analogous
cases (pp. 92 U. S.
-515), and, in concluding the opinion, the Court
expressly noticed and overruled the contention "that the liability
here in question, being created by a statute, is to be regarded as
a debt by specialty."
Page 197 U. S. 168
Carrol v. Green
was subsequently approved and followed
in Metropolitan Railroad v. District of Columbia,
132 U. S. 1
action was to recover the cost of certain street paving, the
liability being recited in the act of incorporation. The trial
court overruled demurrers to pleas of the statute of limitations,
among other reasons, upon the ground that the action was founded on
a statute, and that the statute of limitations did no apply to
actions founded on statutes or other records or specialties. This
ruling was held to be erroneous, the Court saying (p. 132 U. S.
"It is an action on the case upon an implied assumpsit arising
out of the defendant's breach of a duty imposed by statute, and the
required performance of that duty by the plaintiff in consequence.
This raised an implied obligation on the part of the defendant to
reimburse and pay to the plaintiff the moneys expended in that
behalf. The action is founded on this implied obligation, and not
on the statute, and is really an action of assumpsit. The fact that
the duty which the defendant failed to perform was a statutory one
does not make the action one upon the statute. The action is
clearly one of those described in the statute of limitations."
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 contractual.
Page 197 U. S. 169
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.