The Exchange Bank of Columbia, S.C., failed in February, 1865.
In June, 1872, its creditors filed a bill in equity to enforce
their claims against the stockholders under a clause of the charter
which, "upon the failure of the bank," rendered them individually
liable for any sum not exceeding double the value of their
respective shares. The defense set up the statute of
Page 92 U. S. 510
limitations of 1712, which requires actions upon the case, and
actions of debt, grounded upon any contract without specialty, to
be brought within four years. Held
that as the liability
of the stockholders arose from their acceptance of the act creating
the corporation, and their implied promises to fulfill its
requirements, the proper remedy was an action upon the case; and
that, as the statute barred such an action at law, it was also a
good defense in equity.
MR. JUSTICE SWAYNE delivered the opinion of the Court.
A number of important questions arising in this case have been
fully argued, which we shall pass by without remark. We have not
examined any of them exhaustively, and have not found it necessary
to do so. Our judgment will be placed upon the defense of the
statute of limitations, and our opinion will be confined to that
The appellees filed this bill, and the subpoenas were issued in
the court below, on the 18th of June, 1872. The bill seeks to make
the appellants individually liable as stockholders of the Exchange
Bank of Columbia, which was incorporated by an act of the
legislature of South Carolina of the 16th of December, 1852. It is
alleged in the bill that by this act the Exchange Bank
"was endowed with the same rights and privileges, and was made
subject to the same duties, liabilities, obligations, and
restrictions, provided for the said Planters' and Mechanics'
and that, by the fourth section of the act incorporating the
last-named bank, it was declared
"That in case of the failure of said bank, each stockholder,
copartnership, or body politic, having a share in such bank at the
time of such failure, or who shall have been interested therein at
any time within twelve months previous to such failure, shall be
liable and held bound individually for any sum not exceeding twice
the amount of his, her, or their share or shares."
It is conceded for the purposes of this opinion that the
provision, quoted from the Act of 1852, applies to the stockholders
of the Exchange Bank as well as to the bank itself.
The master found, and the court below affirmed the finding
Page 92 U. S. 511
as correct, that the Exchange Bank failed in the month of
February, 1865, and never resumed business after that time.
The defendants severally set forth in their answers "that the
cause of action stated in the bill did not accrue within four years
before the exhibiting of said bill." The complainants replied and
took issue. It appears that the bank suspended specie payment
several years before its failure at the time specified by the
master, and some stress is laid upon this fact by the counsel for
the appellants in discussing the case in this aspect. We have
preferred to adopt the finding of the master, because it is the
view most favorable to the appellees and because the proof as to
that period brings the case clearly within the terms of the
statute, while the proof is further that the bank paid specie until
its suspension was legalized, and that, if it had been put in
liquidation on the 1st of February, 1865, it could then have met
all its liabilities and redeemed its outstanding bills in specie or
its equivalent. Its subsequent losses arose from the war. 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. From the last of February, 1865, four years expired
on the 1st of March, 1869. But there are certain interruptions of
the running of the statute to be taken into account. An act of the
legislature of the state of the 21st December, 1861, suspended the
statute of limitations until the close of the first session of the
next general assembly. This suspension was continued by successive
acts. The last one was passed on the 22d of December, 1865, and
prolonged the suspension "until the adjournment of the next regular
session of the general assembly." The supreme court of the state
held that these acts arrested the effect of the statute of
limitations from Dec. 21, 1861, until December, 1866. Wardlow
15 Rich. 158.
It does not appear in the case at what time in December, 1866,
the general assembly adjourned. From December, 1866, the statute
was in full force. Four years from that time expired in December,
1870. The war in South Carolina ended on the 2d of April, 1866.
12 Wall. 701.
Page 92 U. S. 512
The Circuit Court of the United States for South Carolina was
open for business on and after the 12th of June, 1866.
In any view of the facts that can be taken, more than four years
elapsed after the statute began to run before this suit was
The statute of limitations of South Carolina in force when this
cause of action accrued, and under which the case must be decided,
was that of 1712. Angel on Lim., App. p. 98.
The sixth section declares, among other things,
"That . . . all actions of account and upon the case (other than
such accounts as concern the trade of merchandise), . . . all
actions of debt grounded upon any lending or contract without
specialty, all actions for arrearages of rent reserved by
indenture, all actions of covenant . . . which shall be brought at
any time after the ratification of this act, shall be commenced and
sued within the time of limitation hereafter expressed, and not
after; that is to say, the said actions upon the case other than
for slanders, and the said actions for accounts, . . . and the said
actions for . . . debt, . . . within three years next after the
ratification of this act, or within four years next after the cause
of such actions or suits, and not after."
The statute contains no exception as to actions on the case,
save that for slander. All others are expressly barred at the
expiration of the time named.
The section of the Act of 1852 above quoted, which is said to
create the individual liability here in question, is silent as to
who shall sue. The suit was therefore necessarily to be brought by
and for the benefit of the parties injured. 2 Inst. 650; Com.Dig.
Debt, A, 1.
Individual liability is repugnant to the law of corporations,
and qualifies in this case an exemption which would otherwise
exist. Stockholders in such cases are liable according to the plain
meaning of the terms employed by the legislature, and not
otherwise. The section is silent as to a preference to any class of
creditors. All, therefore, in this case, stood upon a footing of
equality and were entitled to share alike in the proceeds of the
litigation. The remedy against the stockholders was necessarily in
equity. Pollard v.
20 Wall. 521.
They were severally compellable to contribute according to the
amount of the stock they respectively held, and the liabilities
Page 92 U. S. 513
of the bank to be met, after exhausting its means, the maximum
of the liability of each stockholder not to exceed in any event
twice the amount of his stock. Iglehart v. Bank of
6 McLean 568.
It is obvious from this statement that if there had been a suit
at law against the stockholders, debt could not have been
The action of debt lies on a statute where it is brought for a
sum certain, or where the sum is capable of being readily reduced
to a certainty. It is not sustainable for unliquidated damages. 1
Ch.Pl. 108, 113; Stockwell v. United
13 Wall. 542.
"The action of debt is in legal contemplation for the recovery
of a debt eo nomine
and in numero.
" "Case, now
usually called assumpsit," is founded on a contract express or
implied. 1 Ch. 99; Metcalf v. Robinson,
2 McLean 364.
Let us apply these tests to the case in hand. Certainly the
amount sought to be recovered was not certain, and could not
readily be reduced to certainty, and there was clearly an implied
promise on the part of the stockholders.
The legislature created the corporation and prescribed certain
terms to which the stockholders should be subjected. This was an
offer on the part of the state. It could be accepted or declined.
There was no constraint. By taking the stock, the terms were
acceded to, the contract became complete, and the stockholders were
bound accordingly. The same result followed which would have ensued
under the like circumstances between individuals. The assent thus
given and the promise implied are of the essence of the liability
sought to be enforced in this proceeding. If a remedy at law were
necessary, clearly it must have been case.
Case is a generic term which embraces many different species of
actions. "There are two, however, of more frequent use than any
other form of action whatever: these are assumpsit and trover."
Steph. Plead. 18.
"The more legal denomination of the action of assumpsit is
trespass on the case upon promises." 3 Woodison's Lect. 168. This
form of action originated, like many others, under the Stat. of
Westm. 2, 13 Edw. I., c. 24, sec. 2. Its establishment
Page 92 U. S. 514
was strenuously resisted through several reigns. 2 Reeves's
Hist. 394, 507, 608. It was sustained, upon full consideration, in
4 Coke, 92, which was decided in 44
Elizabeth. When the statute of South Carolina of 1712, here in
question, was enacted, the term case was as well understood to
embrace assumpsit as anything else in the law of procedure to which
it is now held to apply.
Blackstone thought that one of the most important amendments of
the law during the century in which he lived was effected
"by extending the equitable writ of trespass on the case,
according to its primitive institution by King Edward the First, to
almost every instance of injustice not remedied by any other
4 Com. 442.
But if debt were the proper form of action if this were a suit
at law, the result must be the same. The act bars "all actions of
debt" grounded upon any lending or contract without specialty; also
"after the lapse of four years." The contract here was of the class
last designated. The statute was only inducement. The implied
premise of the stockholders to fulfill its requirements was the
agreement on their part, and it was without specialty.
Where a deed poll was executed by a lessor, and the lessee
entered and enjoyed the premises, it was held that he was liable
according to the terms of the lease, but that he was suable only in
assumpsit. Goodwin v. Gilbert,
9 Mass. 484; Newell v.
2 Met. 180.
So where one conveys land by deed pursuant to a parol agreement,
the law implies a promise by the grantee to pay the purchase money,
and it may be recovered; but the action must be in case, and not
debt on the specialty. Butler v. Lee,
11 Ala. 885;
Bowen v. Bell,
20 Johns. 338; Wilkinson v. Scott,
17 Mass. 249.
In Lindsay v. Hyatt,
4 Ed. Ch. 104, the Act of
incorporation declared that the directors and stockholders might be
sued for the debts of the corporation, either at law or in equity,
as if they were joint debtors or copartners. The Vice-Chancellor
said, "It appears to me that the six years within which actions on
simple contract indebtedness must be brought does apply."
Speaking of a suit at law, he said,
"In such an action, the
Page 92 U. S. 515
declaration must be in case founded on the statute. . . . The
form of the action and the nature of the liability to be enforced
fall within the provisions of the statute which takes away the
right to sue after six years."
Corning v. Horner & McCullough,
1 Comst. 58, was a
suit at law against stockholders upon a similar statute, and
involving the same statute of limitations. It was said that the
action must "necessarily be an action on the case at common law
upon the liability of the stockholders for the debt of the
company." The same conclusion was reached, as to the time when such
actions were barred, as in Lindsay v. Hyatt.
Baker v. Atlas Bank,
9 Met. 182, was a bill in equity
founded upon a statute making the stockholders liable in the cases
specified. The defendants relied upon a statute of limitations
which declared that
"All actions founded upon any contract or liability not under
seal shall be commenced within six years next after the cause of
action shall accrue, and not afterwards."
It was held that the statute applied in equity as well as at
law, and that, after the lapse of six years, the bar was
The Commonwealth v. Cochituate Bank,
3 Allen 42, was
also a case in equity involving a statute creating a liability on
the part of the stockholders of the bank, and the same statute of
limitations. The same conclusions were reached by the court as in
the preceding case.
It is insisted by the learned counsel for the appellees that
while the Limitation Act of 1712 provided that "actions of debt
upon any lending or contract, without specialty," should be brought
within four years, it did not limit actions of debt upon
specialties; and that the liability here in question, being created
by a statute, is to be regarded as falling within the latter
It is said that an obligation to pay money, arising under a
statute, is a debt by specialty. In support of this point,
Bullard v. Bell,
1 Mas. 243, has been pressed upon our
attention. Fully to examine that case would unnecessarily extend
this opinion. It was cited in Baker v. Atlas Bank
Corning v. McCullough
without effect. We think it is
distinguishable from the case in hand in several material points.
Page 92 U. S. 516
it be in conflict with the cases to which we have referred in
this connection, we think the results in the latter were controlled
by the better reason.
If a claim like that of the appellees sued at law would have
been barred at law, their claim is barred in equity. This
proposition is too clear to require argument or authorities to
Decree reversed, with directions to dismiss the