1. Within the meaning of the Ohio "borrowing statute," the
"cause of action" in a suit brought in Ohio against residents of
that State to enforce their statutory double liability on shares of
an insolvent Kentucky national bank "arose" in Kentucky, and the
applicable statute of limitations was the five-year statute of
Kentucky. Pp.
331 U. S.
464-468.
2. Within the meaning of the Pennsylvania "borrowing statute,"
the "cause of action" in a suit brought in Pennsylvania against a
resident of that State to enforce a statutory double liability on
shares of an insolvent Kentucky national bank "arose" in Kentucky,
and the applicable statute of limitations was the five-year statute
of Kentucky. P.
331 U. S.
468.
3. The national bank having been authorized to do its banking
business in a Kentucky city and not having done business elsewhere,
the fact that its shares were held in the portfolio of a Delaware
corporation did not make its business any the less local. P.
331 U. S.
467.
4. No federal statute having fixed any period of limitations in
respect of suits to enforce the statutory double liability of
shareholders of insolvent national banks, the statute of
limitations of the State in which the suit is brought applies. P.
331 U. S.
463.
5. Where the concurrent jurisdiction of equity to enforce a
legal obligation derives only from the scope of the relief sought
and the multitude of the parties sued, equity will withhold relief
if the applicable statute of limitations would bar the concurrent
legal remedy. Pp.
331 U. S.
463-464.
Page 331 U. S. 462
6. Although the period in which a suit to enforce the statutory
double liability of a shareholder of an insolvent national bank
must be brought is governed by state statutes of limitation,the
question of when the period begins to run depends upon when, under
federal law, the Comptroller of the Currency, or his authorized
agent, is empowered by federal law to bring suit. P.
331 U. S.
464.
7. In the instant cases, the suits could not be brought by the
Comptroller or his agent until the date fixed by the Comptroller
for payment, so the period of limitations did not begin to run
until that date. P.
331 U. S.
464.
156 F.2d 972 reversed. 156 F.2d 47 affirmed.
No. 593. A suit brought against petitioner to enforce a
statutory double liability on shares in an insolvent national bank
was dismissed by the District Court as barred by limitations. 62 F.
Supp. 705. The Circuit Court of Appeals reversed. 156 F.2d 972.
This Court granted certiorari. 329 U.S. 707.
Reversed, p.
331 U. S.
468.
No. 656. In a suit against respondents to enforce a statutory
double liability on shares of an insolvent national bank, a motion
to dismiss on the ground,
inter alia, that the suit was
barred by limitations was overruled by the District Court. The
Circuit Court of Appeals reversed. 156 F.2d 47. This Court granted
certiorari. 329 U.S. 707.
Affirmed, p.
331 U. S.
468.
Page 331 U. S. 463
MR. JUSTICE BLACK delivered the opinion of the Court.
In
Anderson v. Abbott, 321 U.
S. 349, we held that the shareholders of BancoKentucky
Company, a bank stockholding company, were liable under 12 U.S.C.
§§ 63, 64, for an assessment on shares on an insolvent national
bank held in the portfolio of the holding company. That suit was
brought in Kentucky District Court against Banco stockholders
residing in that District. These suits in equity were brought in
Federal District Courts in Ohio and Pennsylvania to enforce
assessments against Ohio and Pennsylvania stockholders of Banco. In
No. 656 the District Court in Ohio overruled a motion to dismiss
made on the ground, among others, that the bill showed on its face
that the action was barred by an Ohio statute of limitations.
[
Footnote 1] The Sixth Circuit
of Appeals reversed. 156 F.2d 47. In No. 593, the Third Circuit
Court of Appeals reversed the decision of the District Court in
Pennsylvania which had held the action there barred by the
Pennsylvania statute of limitations. 156 F.2d 972. We granted
certiorari to consider both cases. 329 U.S. 707.
There is no federal statute of limitations fixing the period
within which suits must be brought to enforce the statutory double
liability of shareholders of insolvent national banks. For this
reason, we look to Ohio and Pennsylvania law to determine the
period in which these suits may be brought.
McDonald v.
Thompson, 184 U. S. 71;
McClaine v. Rankin, 197 U. S. 154,
197 U. S. 158;
Rawlings v. Ray, 312 U. S. 96,
312 U. S. 97.
Even though these suits are in equity, the states' statutes of
limitations apply. For it is only the
Page 331 U. S. 464
scope of the relief sought and the multitude of parties sued
which gives equity concurrent jurisdiction to enforce the legal
obligation here asserted. And equity will withhold its relief in
such a case where the applicable statute of limitations would bar
the concurrent legal remedy.
Russell v. Todd, 309 U.
S. 280,
309 U. S. 289
and cases cited.
See also Guaranty Trust Co. v. York,
326 U. S. 99;
Holmberg v. Armbrecht, 327 U. S. 392,
327 U. S.
395-396.
But even though the period in which suit must be brought is
governed by state limitations statutes, we have previously decided
that the question of when the applicable state statute of
limitations begins to run depends upon when, under federal law, the
Comptroller of the Currency, or his authorized agent, is empowered
by federal law to bring suit. And the Comptroller's agent, the
Receiver here, could not bring these actions until the date for
payment fixed by the Comptroller.
Rawlings v. Ray, supra,
at
312 U. S. 98-99;
Fisher v. Whiton, 317 U. S. 217,
317 U. S.
220-221. The date for payment fixed by the Comptroller
in this instance was April 1, 1931. These actions were instituted
more than five but less than six years after the payments became
due under the Comptroller's assessment order.
With regard to No. 656, the Ohio proceeding, the Ohio statute of
limitations provides that suit "upon a liability created by statute
other than a forfeiture or penalty, shall be brought within six
years after the cause thereof accrued." Ohio Gen.Code (Page, 1939)
§ 11222. This statute describes the liability sued on here, and, if
applicable, does not bar this suit. But the scope of this general
provision is narrowed by another known as the "borrowing statute"
which reads:
"If the laws of any state or country where the cause of action
arose limits the time for the commencement of the action to a less
number of years than do the
Page 331 U. S. 465
statutes of this state in like causes of action, then said cause
of action shall be barred in this state at the expiration of said
lesser number of years."
Ohio Gen.Code (Page, 1939) § 11234. If the cause of action arose
in Kentucky, the "borrowing statute" applies Kentucky's statute of
limitations, and this suit is barred. For Kentucky's law requires
that an "action upon a liability created by statute . . . shall be
commenced within five years after the cause of action accrued."
Ky.Rev.Stat. (Baldwin, 1943) § 413.120.
The Receiver contends that the Ohio borrowing statute's language
"the laws of any state or country where the cause of action arose"
has reference to "a system of jurisprudence other than Ohio's," and
does not refer "necessarily to territorial limits" within which
events occurred giving rise to enforceable obligation. The place
where the events giving rise to a cause of action occur is said to
be "important only insofar as the laws of that place are
controlling." Under this argument, the cause of action here could
not have "arisen" in any state, since the statutory obligations of
shareholders was not imposed or controlled by state law. Hence, the
argument runs, the Ohio law did not contemplate borrowing any state
statute of limitations in a case where liability is governed by
federal law. And no federal statute of limitations could be
borrowed in this case, for none existed. Therefore, it is argued,
only Ohio's general six-year statute of limitations applies.
The consequence of accepting this contention would be that the
Ohio borrowing statute would have no effect at all as to suits
brought in Ohio state courts to enforce actions authorized by
federal law. For, of course, Ohio courts could never borrow a
nonexistent federal statute of limitations. And if there were a
federal statute of limitations governing a federally created right,
that statute
Page 331 U. S. 466
would control of its own force.
Herget v. Central National
Bank & Trust Co., 324 U. S. 4. We have
been cited to no decision by any Ohio court which would lead us to
believe that its borrowing statute should be given such a
sterilizing interpretation.
Cf. Townsend v. Eichelberger,
51 Ohio, St. 213, 216, 38 N.E. 207, 208.
We find it unnecessary to our decision to discuss the
contentions made here concerning differences between a "cause of
action" and a "liability." The Ohio Supreme Court has itself said
that a "cause of action is the fact or combination of facts which
gives rise to a right of action, the existence of which affords a
party a right to judicial interference in his behalf."
Baltimore & O. R. Co. v. Larwill, 83 Ohio St. 108,
115, 116, 93 N.E. 619, 621. We have been referred to nothing in
Ohio statutes or decisions which indicates that it used "cause of
action" in any different sense in its borrowing statute. The
purpose of the state's borrowing statute, [
Footnote 2] as those of other states, [
Footnote 3] was apparently to require its
courts to bar suits against an Ohio resident if the right to sue
him had already expired in another state where the combination of
circumstances giving rise to the right to sue had taken place.
Moreover, limitations on federally created rights to sue have
similarly been considered to be governed by the limitations law of
the state where the crucial combination of events transpired.
Seaboard Terminals Corp. v. Standard Oil
Co., 24 F. Supp.
1018, 104 F.2d 659;
Bluefields S.S. Co. v. United Fruit
Co., 243 F. 1, 19-20.
See Campbell v. Haverhill,
155 U. S. 610;
Chattanooga Foundry & Pipe Works v. Atlanta,
203 U. S. 390,
203 U. S.
397.
Our appraisal of the Ohio borrowing statute, the opinions of the
courts of that state, and the circumstances
Page 331 U. S. 467
leading to this suit, persuade us that the cause of action
"arose" in Kentucky within the meaning of the Ohio borrowing
statute. The bank was authorized to do its banking business in
Louisville, and did business in no other place.
See 12
U.S.C. § 81. Nor was this bank's business any the less local,
because its shares were held in the portfolio of a Delaware
corporation. Many provisions of federal law make national banks, in
important aspects peculiarly local institutions.
See 12
U.S.C. §§ 30, 33, 34a, 36, 51, 62, 72. For jurisdictional purposes,
a national bank is a "citizen" of the state in which it is
established or located, 28 U.S.C. § 41(16), and in that district
alone can it be sued. 12 U.S.C. § 94. True, when insolvency occurs,
there is a shift in bank management, but the bank's activities are
still necessarily rooted in its local habitat. In this case, the
Receiver's office was located in Louisville, the home of the bank;
payment of assessments, like other obligations due the bank, could
have been made there, and, in fact shareholders were notified by
the Receiver to pay at his office in Louisville. [
Footnote 4] Liquidation of a local bank, like
its daily operations, must, from necessity and in the interest of
good business, be carried on, in the main, in the community where
the bank did business with its depositors and other customers.
Practically everything that preceded the final fixing of liability
of shareholders derived from Kentucky transactions. We have been
referred to no Ohio decisions, and have been unable to find any,
which contradict our conclusion that events which culminated in
this suit justify our holding that this "cause of action" "arose"
in Kentucky within the meaning of the Ohio statute.
See Hunter
v. Niagara Fire Ins. Co., 73 Ohio St. 110, 76 N.E. 563;
Alropa Corp. v. Kirchwehm,
Page 331 U. S. 468
138 Ohio St. 30, 33 N.E.2d 655;
Payne v. Kirchwehm, 141
Ohio St. 384, 48 N.E.2d 224;
Bowers v. Holabird, 51 Ohio
App. 413, 1 N.E.2d 326;
National Bondholders Corp. v.
Stoddard, 8 Ohio Supp. 19.
See also Hilliard v.
Pennsylvania R. Co., 73 F.2d 473, 475, 476; Note, 15 U. of
Cin.L.Rev. 337 (1941); Note, 21 Ohio O. 107 (1941). Therefore, the
judgment in No. 656 is affirmed.
In No. 593, the Pennsylvania action, the same considerations are
controlling. The general statute of limitations of that state which
would be applicable to this action had it arisen in Pennsylvania,
like Ohio's general statute, provides a six-year period in which
this suit could be brought. 12 Pa.Stat. § 31 (Purdon, 1931). But
Pennsylvania also has a "borrowing statute" which provides:
"When a cause of action has been fully barred by the laws of the
state or country in which it arose, such bar shall be a complete
defense to an action thereon brought in any of the courts of this
commonwealth."
12 Pa.Stat. § 39 (Purdon, 1931). Our review of Pennsylvania
decisions construing this statute persuades us that the borrowing
statute is applicable to this case, that, under that statute, this
cause of action "arose" in Kentucky, and that the five-year statute
of Kentucky bars this action.
See Mister v. Burkholder, 56
Pa.Super. 517;
In re Fletcher's Estate, 45 Pa.Dist. &
Co.R. 673, 674;
Bell v. Brady, 346 Pa. 666, 31 A.2d 547;
In re Shaffer's Estate, 228 Pa. 36, 40, 76 A. 716, 717.
Cf. Rosenzweig v. Heller, 302 Pa. 279, 153 A. 346.
See
also Notes, 88 U. of Pa.L.Rev. 878 (1941), 4 U. of Pitt.L.Rev.
215 (1938). The judgment of the Circuit Court of Appeals in No. 593
is therefore reversed.
So ordered.
THE CHIEF JUSTICE took no part in the consideration or decision
of these cases.
* Together with No. 656,
Anderson, Receiver v. Helmers et
al., on certiorari to the Circuit Court of Appeals for the
Sixth Circuit.
[
Footnote 1]
For convenience, the motion was made by only four defendants who
are respondents here. The case was continued as to the others
pending final disposition of the question concerning the statute of
limitations, the only ground of the motion to dismiss upon which
the District Court passed.
[
Footnote 2]
See 25 Ohio Jurisprudence (1932), 435-440.
[
Footnote 3]
See Note, 75 A.L.R. 203 (1931); Note, 35 Col.L.Rev. 762
(1935).
[
Footnote 4]
Whether notice by the Receiver to pay at a particular place
could alter the conclusive situation as to where a cause of action
might be considered to "arise" under other circumstances is a
question we need not decide.