« EelmineJätka »
Millspaugh v. Putnam, supra; Minor v. Rogers, supra ; clare a trust to have been created in violation of the inRay v. Simmons, supra; Barker v. Frye, supra; Terry tentiou of the owner of the property; and in ascerv. Bale, 1 Dem. 452.
taining that intention every fact and circumstance In Marlin v. Funke the pass-book contained this en contemporaneous with and surrounding the transactry: “The citizens' Savings Bauk in account with tion should be considered. Susan Boone in trust for Lillie Willard."
The retention of the pass-book by the depositor does In Mabie v. Bailey the following entry was made in not affect the validity of the trust. Martin v. Funk; the pass-book: New York Savings Bank in account Willis v. Smyth; Mabie v. Bailey; Minor v. Rogers; with B. Bailey in trust for Ida Mabie.”
Ray v. Simmons. In Willis v. Smyth, the entry was: “Clarinda P. In Martin v. Funk, the court said: “The retention Urner in trust for Sarah Urner."
of the pass-book was not necessarily inconsistent with And the deposit in Minor v. Rogers aud Ruy v. Sim this construction. She must be deemed to have remons were accompanied by similar entries. In each tained it as trustee.” At page 142 of the same case the of these cases it was held that a valid trust had been court say: “There are many cases where the instruestablished. The case of Clark v. Clark, 108 Mass. 522, ment creating the trust has been retained by the auwhich is somewhat in conflict with these authorities thor of it until his death, especially when he made cannot be regarded as sound in any other jurisdiction himself the trustee and yet the trust sustained. Exton than that in which it was decided. A deposit of V. Scott, 6 Sim. 31; Fletcher v. Fletcher, 4 Hare, 67, money and an entry of the account in the pass-book or Souverbye v. Arden, 1 Johns. Ch. 240; Bunn v. Winthbooks of the bank are not however conclusive ou the rop, id. 329.” Aud in Willis v. Smyth the court enunquestion of trust. Whether the depositor has in fact ciated the same doctrine: “Retentiou of the bankcreated such a trust as will rest the whole beneficial book by her for a number of years within the case cited interest in the deposit in the cestui que trust, depends supra must be regarded as showing that she kept it as in every case upon the intention of tbe depositor at the trustee and in no other capacity; por does the fact of time of making the deposit. Did he mean to create a her drawing the interest detract from the cbaracter in trust, or was the deposit made in that form for some which she held the deposit as trustee.” The rule exother purpose or reason? This doctrine is supported pressed in the last clause of this sentence that the by IVeber v. Weber, 9 Daly, 211; Alabie v. Bailey, 95 N. withdrawal by the depositor of the money from the Y. 206; and Brabrook v. Five Cent. Savings Bunk, 104 bank raises no presumption against the existence of Mass. 228.
the trust is adopted by all the cases. Minor v. Rogers; In Weber v. Weber, the defendant deposited a sum of Martin v. Funk; Mlabie v. Bailey. In the last case the money in a savings bank“in trust for” the plaintiff. depositor had withdrawn the entire deposit, and it He made the deposit in this form for the sole pur was urged that this was evidence that be never inpose of receiving a higher rate of interest, and with no tended to create a trust; but the court declared that intention of divesting himself of the ownership of the this position was not tenable. "The fact that the defund or of giving plaintiff any interest therein. To posits for the plaintiff and others were subsequently in protect himself from any claim of plaintiff to the 1807 drawn out by Dr. Bailey is not legitimate evimoney it was agreed between plaintiff and the bank dence that he did not intend when the deposits were that the money should be drawn out only on produc made to create a beneficial trust for the beneficiaries tion of the pass-book, which defendant retained in his named If the withdrawal was with intent on his own possession. The Ne York ('ourt of Common part to ignore the trust and to convert the money to Pleas held that as the defendant had never in fact in his own use, it might be competent evidence of a change tended to establish a trust as to this money none was of purpose; but it throws no light on the original transestablished.
action." In Mubie v. Bailey, the depositor took from the bank When a valid trust has once been created by a dea pass-book containing the following entry: “New posit of money in trust for another or in any other York Savings Bank in ccount with B. Bailey in trust manner, the trust is irrevocable, and the beneficiary for Ida Mabie.” The Court of Appeals said: The trial may at once commence an action to recover the money court directed a verdict for the plaintiff, and refused or property as to which the trust has been created. the request of the defendant's counselto submit to the Mabie v. Builey; Jartin v. Funk; Minor v. Rogers; jury the question whether the testator intended by Willis v. Smyth. The depositor cannot destroy the the deposit of the money in his name as trustee for trust by withdrawing the money from the bank (same the plaintiff to create a trust for her benelit. The court cases). in Martin v. Funk,left undecided the point whether in In Mabie v. Bailey tho depositor had withdrawn in respect to such transaction surrounding cir his life-time the whole sum deposited in trust for the cumstances nray not be shown to vary or explain plaintiff'. The action was against the depositor's exethe apparent character of tho acts and the intent cutor to recover the full amount of such deposit with with which they were done. If it were now necessary interest from the day on which the deposit was withto decide that point I should incline to the opinion drawn. The ('ourt of Appeals said: “The trust once that tho character of such a transaction as creating a established, and no power of revocation having been trust is not conclusively established by the mero fact reserved it was within the authorities irrevocable." It of the deposit, so as to preclude evidence of contem is not necessary that the beneficiary should have been poraneous facts and circumstances constituting res notified of the trust. Unless ho repudiates the trust, geslie, to show that the real motive of the depositor the title to the property or fund vests irrevocably in was not to create a trust, but to accomplish some in such beneficiary. W’itzel v. CH in, 3 Bradf. 390; Mardependent and different purpose inconsistent with an tin v. Funk; Pope v. Savings Bank. intention to direst himself of the beneficial owner In Martin v. Funk, it expressly appeared that the ship of the fund.” But the court held that there was beneficiaries did not know of the creation of the trust no evidence to rebut the presumption of a trust, and till after the death of the depositor and trustee. The that therefore the trial court aid right in taking the court said: “In this case the intestate might have case from the jury. It is true what the court said on notified the object of her bounty, but this is not rethis point was a mere dictum, but the justice and garded as indispensable by any of the authorities." soundness of the rule are so apparent that it will un And at page 133 the court reiterates the same doctrine: doubtedly be adopted in every jurisdiction. It is too “Enough must be done to pass the title, although clear for argument that the courts have no right to do whou a trust is declared whether iu a third person or
the donor, it is not essential that the property should In Il’illis y. Smyth it did not appear that the benebe actually possessed by the cestui que trust, nor is it ficiary had been advised of the deposit prior to the decren essential that the latter should be informed of the positor's death. trust."
GUY ('. 11. CORLISS. In Pope v. Savings Bank, the court stated that: “It is not essential that the beneficiary should have notice." In fact it appears in alınost every adjudication
JIRGLVIA COUPOV CASE. in which the trust has been sustained, that the beneficiary bad no notice of the trust till after the death of
SUPREME COURT OF THE UNITED STATES, the trusteo or at least till some time after the creation
APRIL 20, 1887, of the trust.
The case of Nilzel v. Chupin is an authority for the MARYE, AUDITOR OF THE STATE OF VIRGINIA, V. doctrine that to the extent that the depositor with
PARSONS. draws the money from the bank, before the cestui que
The contract right of a coupon-holder under the Virginia act trust is notified of the trust, the trust is revoked. In
of March 30, 1871, whereby his coupons are receivable in that case the intestate against whose estate the claimi was made deposited a
payment of taxes, can be exercise l only by a tax-payer ; sum of money in a Savings Bank in his own
and a bill in equity, for an injunction to restrain tax col. name as trusteo for his sister, the
lectors from refusing to receive them, when tendered in plaintiff. Subsequently the intestate withdrew a large
payment of taxes, will not lie in behalf of a coupon-holder portion of the money, and also of the interest as it ac
who does not allege himself to be also a tax-payer. Such crued. The sister claimed the whole deposit with in
a bill calls for a decree declaring merely an abstract right terest from the time it was made; but the court de
and does not show any breach of the contract, or other creed payment to her of only that portion of the money
fround of relief. wbich remained on deposit at the time of the intes
tate's death with interest from that time. The sister APPOMAL. from the Circuit Court of tho Unitod States
for the . The surrogate based his decision on the doctrino that MATTHEWS, J. The appellee, who was complainant, the trust was revocable until the beneficiary was poti a citizen of New York, filed his bill in equity, in the fied and held that to the extent that the deposit was Circuit ('ourt of the United States for the Eastern Diswithdrawn the intestate had revoked the trust. The trict of Virginia, against Morton Mary(), described as dictum of the Court of Appeals in Martin v. Funk is auditor of the ('ommonwealth of Virginia; Samuel ('. apparently in conflict with the decision of the surro Greenhow, treasurer of the city of Richmond; A. L. gate. It appeared in that case that the depositor had Hill, treasurer of the city of Norfolk, id \'. G. Dunwithdrawn one year's interest, and that the benefi- | nington, treasurer of the city of Lynchburg; R. B. ciaries had no notice of the trust till after the deposi-Munford,commissioner of revenue for the city of Richtor's death. The court said: “And the most that can mond, Charles W. Price, for the city of Lynchburg, be said is that she may have believed that the deposits and Charles 1). Langley, for the city of Norfolk, all citimight be withdrawn during her life and the money zens of Virginia. converted to her own use. It is not clear that she Tho complainant avers in his bill that he is the entertained such a belief, but if she did it would not owner of overdue coupons to the amount of $28,010, chimnge the legal effect of her ucts." A fair inference cut from bonds of the State of Virginia issued under from this language leads one to the conclusion that the act of March 30, 1571, which coupons are receiv. the court intended to assert that though she may have able, by the terms of that act, in payment, at and after thought she had a right to draw out the money as her maturity, for all taxes, debts, and demands due the own property, the beneficiaries having never been no State. A list of these coupons, described by the numtified of the trust, yet that the law declared the trust bers and amounts of the bonds, is exhibited with the to be irrevocable, and that her belief on the subject bill. llo claims that these coupons constitute il con“would not change the legal effect of her acts.” It tract with the State, by which it agreed to pay the would seem however that what the court said on this amount of each to the holder at miturity, and second, subject was a mere dictum, is it does not appear that
in case of default, that the holler should have the any claim was made for the year's interest which the right to assign or transfer the same to any tax-payer depositor had drawn out. This dictum however de or other debtor of the State, with the quality of being clares a more logical rule than that which the surro received for taxes and other demands clue the State, gato enunciatod in the casu cited above; and it appears and with the guaranty that the Statu would receive to have been regarded as settled in the case of Blubie v. them specifically in payment pro tanto for any such Builey. In that case the beneficiary was nerer noti taxes and demands, and that they should be accepted tied of the trust until after the death of the depositor, by any of her tax collectors from any of her tax-payers and yet the court affirmed the judgment which was or debtors in discharge and payment of such taxes or rendered against the depositor's esecutor for the whole other dues. amount of the deposit which the depositor withdrew The defendants to the bill, it is alleged, are officers from the bank in his life-time, and of courso while the
of the State', charged severally with the collection of beneficiary still remained in ignorance of the trust. certain taxes and license fers and other dues to tho The rule laid down by the surrogate in Iloitzol v. (ha State; and it is charged that in pursuance of certain poin, if followed by the ('ourt of Appeals in Mabie r.
statutes passed since the act of March 30, 1571, and the Builey, would have been fatal to a recovery. It is true issue of the bonds and coupons under it, they are forthat this caso is not decisive on this point is the ques bidden to receive these and similar coupons in paytion was not raised or discussed, and moreover it ap ment of taxes and other clues to the state', which statpeared that the mother of the beneficiary had been in utes, it is a verred, impair the obligation of the conformed by the depositor of the trust. Notice to her tract between the State and the holder of its coupons, howerer was not notice to the cestui que frust, and on
and are accordingls in violation of the Constitution of the whole it may be said that the doctrine of revoca
the l'nited States, and are null and void; but that bility of such a trust before notice is opposed not only nevertheless the defendants, as officers of the State, as to sound principle, but also to the weight of author- | is publicly known, habitually refuse to accept coupons ity.
when tendered by tax-payers, in payment of taxes and
other dues to the State, with the collection of which named in the Exhibit A herewith, in full payment pro they are severally charged, and the General Assembly tanto of the taxes, license taxes, or other dues, due by of Virginia has also passed statutes repealing all laws any tax-payer to the State who may tender the same whicle provided any remedy for the euforcement of in payment thereof, aud enjoining and restraining the right to have them so received.
them from refusing to execute and deliver forthwith The bill then proceeds as follows:
to such tas-payer his tax-bill, duly receipted, or to an “And your petitioner furthermore shows, that con applicant for a license a certificate that the amount of fiding in his right to a specific performance of said coupons tendered by such applicant has been deposcontract, and in his title to equitable relief, should the ited with him in paymeut of the tax or deposit required same be denied, he hath made arrangements with sun or assessed for said license, and from refusing, imdry tax-payers of Virginia to use his above coupons in mediately upon the presentation of such certificate, to payment of their taxes and license taxes, now due, by grant and issue the license applied for to such appliwhich arrangement, if the said coupons can be used cant, all in the same manner, and to have precisely the without delay or difficulty, he will receive nearly par same force and effect as if said payments were made in therefor, and thus be able to have his coupons col coin or currency.” lected. But unless they are so accepted in payment There is also a prayer for general relief. when tendered, the said tax-payers will not use them There was a final decree on bill, answer, replication at all, because they are compelled to pay their taxes and proofs, granting the injunction as prayed for, and forth with under heavy penalties, and to obtain their the defendants appealed. licenses immediately, or cease from business, so that This bill is without precedent, and should have been if the collectors of these taxes continue to refuse to ac dismissed. It is a clear case, as stated, of damnum cept these coupons, and so render necessary an appeal absque injuria. So far as the contract with the comto the courts, and a separate action by each tax-payer plainant was, that the State should pay to him his upon each tender, such refusal will be tantamount to coupons at maturity, there is no doubt a breach; but an utter destruction of the rights of your petitioner, he asks no relief as to that, for there is no remedy by because delays will thus occur which the tax-payers suit to compel the State to pay its debts. So far as the cannot submit to for the above-pamed reasons and contract was to receive the coupons of the complainothers, and thus your petitioner will be deprived of the ant in payment of taxes and other dues to the State, benefit of the arrangements he has made, as well as of there is no breach, for he does no allege that any of all opportunity of having his coupons so used at any them have been tendered by any tax-payer or debtor time save in small amounts and at rare intervals." to the State in payment of taxes or other dues; nor The prayer for relief is as follows:
that there has been a refusal on the part of any tax “In tender consideration whereof, and inasmuch as collector, or other officer of the State charged with the your petitioner is without adequate relief save in a collection and receipt of taxes and dues to the State, court of equity, wherein such matters are properly to receive them in payment therefor. Personally the cognizable, and inasmuch as he will suffer great and complainant has no right to offer them for such purirreparable loss and damage, exceeding $500 in amount pose, for he owes no taxes or other debt to the State, unless relief is afforded him immediately, and the There is nothing shown in the bill by which he is preabove named officers are required to perform specifi vented from transferring them to others who would cally the contract aforesaid, and receive his said cou have the legal right to use them in that way, except pons in payment of all or any of the dues aud taxes that being discredited for such uses by the previous above named immediately upon their being tendered refusals of the oflicers of the State to receive other therefor by any tax-payer or applicant for a license, but similar coupons, the complainant can find and to avoid a multiplicity of suits and prevent an ob no one willing to purcbase them from him at a struction of justice, he prays that Morton Marye, aud reasonable price for such purposes. This damage is not itor of Virginia, Samuel ('. Greenhow, A. L. Hill, and actionable, because it is not a direot and legal conseV. G. Dunnington, treasurers of the cities of Rich
quence of a breaeh of the contract, and is not distinmond, Norfolk, and Lynchburg, respectively, and R. guishable from the damage any creditor might suffer B. Munford, Charles D). Langley and Charles W. from the known inability or unwillinguess of his debtPrice, commissioners of the revenue for said cities, re ors to perform their obligations. Such discredit might spectively, be made parties defendant horeto, with apt and often does result in the bankruptoy and financial words to charge them, and may be required on oath to ruin of the creditor, but no action lies to recover damanswer fully the allegations hereof.
ages for the consequential loss, which the law does not “And that the said defendants, their assistants, connect with the default, as cause and effect. To euclerks, and agents, be required and compelled to speci able the complainant to avail himself of the benefit of fically perform tho said coupon contract according to his contract with the State, to receive his coupons in its legal tenor and effect, and to accept your orator's payment of taxes, he must first assign them to some said coupons, or any of them, from any tax-payer pre one who has taxes to pay, as he has not; but when he senting theu or any of them in payment of his taxes, does so, by the assigunent, he has lost his interest in license taxes, or other dues, and to receipt therefor, or the contract and his right to demand its performance, certify the payment and deposit thereof, in cases of all right to which he has transferred with the coupons. applications for license, in precisely the same form and It is only when in the hands of tax-payers or other with precisely the same force and effect as they would debtors that the coupons are receivable in payment of do if said tender, payment, or deposit were made in taxes and debts due to the State. money. And that your honors will decroe said cou Tho bill as framed therefore calls for a declaration pons to be genuine, legal coupons, legally receivable of an abstract character, that the contract set out refor all taxes, debts, and demands due the State of Vir- quiring coupons to be received in payment of taxes ginia, and especially for all license taxes or assess and debts due to the State is valid ; that the statutes inents by whatever name the same inay be called. And of the General Assembly of Virginia impairing its obto the end that your orator may have full relief in the ligations are contrary to the Constitution of the l'uipremises he also prays that a preliminary restraining ted States, and therefore void; and that it is the legal order and injunction may be issued without delay, en duty of the collecting officers of the State to receive joining and restraining the said defendants, their as them when offered in payment of such taxes and sistants, clerks, and agents, and each and every one of debts. them, from refusing to accept any of the coupons But no court sits to determine questions of law in
defendants withdrew their demurrer and answered the complaint, denying all the allegations of misconduct contained therein, and setting up the threo years' and tho six years' limitations in bar of the action.
The action was brought to trial at a ('ircuit Court, and after some evidence had been given to sustain the allegations of the complaint, the defendants objected to certain evidence offered, on the ground that “the plaintiffs in this action cannot maintain the action for any transactions or thing whereby loss resulted to the plaintiff's which happened more than three years before the commencement of tho action," and the court decided that the action was subject to the limitation of three years; to which decision the plaintiff's excepted.
Plaintiffs' counsel then offered evidence tending to establish a cause of action, as alleged in the complaint, against the defendants for losses arising from transactions between the years 1871, and December 31, 1876, and defendants' counsel objected to the competency of such evidence on the same grounds as before, which objection was sustained by the court and the plaintiffs duly excepted. Plaintiff's' counsel thereupon stated that they could offer no evidence of a transaction by defendants tending to establish the cause of action alleged in the complaint which hall not happened at some time between the year 1871 and December 31, 1876. The court thereupon ruled that none of such evidence was admissible under the statute of limitations, to which ruling plaintiff's duly excepted, and then rested their case; and upon motion of defendants' counsel the court dismissed the complaint on the ground that the three years' limitation applied; and plaintiff's excepted.
From the judgment entered at the ('ircuit the plaintiffs appealed to the General Term, and from judgment of aflirmance there to this court.
E. :1. Brewster, (). 1). 11. Baker and John F. Schlosser, for appellants.
S. Hland, for respondents.
EARL, J. If tho cause of action alleged in the complaint was barred by lapse of time as to the original plaintiff, Theodore Brinkerhoff, then the plaintiffs were properly nonsuited. The important questions to be determined are whether the action was barred by ans of the limitations specified in the ('ode, and if so, by which one of them. We are os opinion that it was mot barred by section 391, which controlled the decision of the trial judge, and which provides that “this chapter does not affect an action against a director or stockholder of a moneyed corporation or banking association to recover a penalty or a forfeiture imposed. or to enforce a liability created by law; but such an action must be brought within three years after the cause of action has accrued."
The claim on the part of the defendants is that the word “a liability created by law” in this section means simply a legal liability. On the other hand, it is claimed on the part of the plaintiff's that these words mean a liability created by some statute; and we are of that opinion. The phrase is not such as would have been used, and certainly is not such as is cominionly if oror used, in statutes to describe a liability existing at common law independently of any statutory provision. Such expressions as required by law," "regilated by law,” "allowed by law," "made by law,” “limited by law,' as prescribed by law," "a law of the State," are of frequent occurrence in the codes and other legislative enactments; and they are always used as referring to statutory provisions only. The phrase “created by or under the laws of the State" occurs several times in the ('odo, and is always used in the sense of a thing brought into existence bs or under
BRINKERIOFF V. BOSTWICK.* B.. a stockholler of an insolvent National bank, in behalf of
himself and all others similarly situated, brought, an action against the directors of said bank to recover damages occasioned by the negligent and wrongful acts of said lirectors whereby the property and effects of the bank had beeu stolen, wasted and squandered, and the bank rendered utterly insolvent. The action was commenced January 10, 1880, and alleged the commission of the wrongful acts to have been between 1871 and 1870. Hell, that the action was not brought to enforce a liability created by law,” within the meaning of section 391, Code Civ. Proc. That the limitation applicable to said action is ten years, as prescribed by section 355. PPEAL from a julgment of the General Term of
the Second Department aflirming a judgment in favor of the defendant, entered upon a new suit di rected at ('ircuit.
The National Bank of Fishkill was organized in April, 1865, with a capital of $200,000, and continued to do business thereafter until January, 1877, when it became insolvent, and the clefendant, llenry Bostwick, was appointed its receiver. From the time of its organization until that time Bostwick and the other clefendants were its directors. At the time of the appointment of the receiver the entiro capital of the bank had been lost, and there was a largo deffciency of assets to pay its creditors, and the stockhollers were rendered liable for a largo sum of money to mako up such deficiency.
In January, 1880, the plaintif, Theodore Brinkerhoff, a stockholder, suing in his own behalf and for the benefit of all the other stockholders of the bank, commenced this action against the defendants, alleging in his complaint that they during all the time mentioned had been directors of the bank, and that by their misconduct, carelessness and negligence and their inattention to its affairs, the property and effects of 'the bank had been stolen, wasted and squandered, so that the bank was rendered utterly insolrent, and its stockholders were thus greatly damaged ; and relief was demanded, that the damages which the bank and its stockholders had sustained by reason of the matters stated be ascertained and determined, and that the defendants, who wero directors of the bank, be adjudged to pay such damages, and that the defendant Bostwick, as receiver of such bank, recover, collect and receive such damages for the benefit of tho creditors and stockholders of the bank.
The defendants demurred to the complaint upon various grounds, but the demurrer was finally overruled in this court. 88. X. Y. 52. Thereafter upon their pe. tition to the court other stockholders were allowed to oome in and be made plaintitfs in the action, and the
* Reversing 31 Hun, 352.
statute law. Code, SS 1775, 1784, 1785, 1797, 1798, 1812. The liability referred to is one created by the same law which imposes penalties and forfeitures, and they are always imposed by statute law. The section would have taken a different form if the Legislature had meant by the phrase "liability created by law," because then their sense would have been precisely expressed if the words “to recover a penalty or forfeiture imposed, or to enforce a liability created by law,” had been entirely omitted from the section, and then all actions against directors and stockholders of moneyed corporations must have been commenced within the three years.
The construction we give to this section is made quite obvious if we trace the history of the law embodied therein. It was copied from section 109 of the Code of Procedure, as amended in 1849, which was similar except as to time of limitation. Section 109 was section 89 of the Code of 1848, and there read as follows: “This title shall not affect actions against directtors or stockholders of a moneyed corporation to recover a penalty or forfeiture imposed, or to enforce a liability created by the second title of the chapter of the Revised Statutes entitled 'of moneyed corporations, but such action must be brought within six years after the discovery by the aggrieved party of the facts upon which the penalty or forfeiture attached, or the liability was created ;” and that section was copied from section 44, chapter 4, part 3, of the Rerised Statutes. The second title of the chapter of the RevisedStatutes, entitled “of moneyed corporations,” was one imposing liabilities upon directors and stockholders of moneyed corporations for a variety of matters and acts particularly specified, and that title was largely copied from the act, chapter 325, of the Laws of 1825, where similar liabilities were imposed upon directors with a provision that no statute of limitation should bar any suit in law or equity against them for any sum of money for which they were made liable by that act. The title and chapter of the Revised Statutes referred to were in force in 1849, and also in 1877, when section 394 of the Code took its present shape; and the same liabilities against directors and stockholders are imposed by the provisions of the act, chapter 409 of the laws of 1882, entitled, “An act to revise the statutes of this State relating to banks, banking and trust companies.” It is clear therefore that the words, “liabilities created by law” could have, and can now have full scope by confining the liabilities to such as are imposed by statute law only. 10 cannot be supposed that it was intended by the Legislature to change the policy which had characterizod the legislation of this State for many years, when in 1849, for tho first time, the reference to the liabilities created by the Revised Statutes was left out of the section of the ("ode, and the phrase “a liability created by law” substituted. Statutory liabilities were still intended, and the new phrase comprehended not only liabilities created by the title and chapter of the Revised Statutes referred to, but also those created by other statutes and the Constitution of 1846, art. 8, $ 7. The same Legislature which amended the ('ode in 1819, by leaving out the reference to the Revised Statutes, passed tho act, chapter 226 of the laws of that year, to impose liabilities upon stockholders of moneyed corporations, and thus to give effect to the constitutional provision referred to, and the section of the Code was probably amended to bring within its scope the new liabilities thus created.
It cannot be perceived ibat there would be any reason or policy for establishing a different limitation of time for the cominencment of actions to enforce the common-law liabilities of directors from that established for actions to enforce the same kind of liabilities against other persons, while it might be very
proper that actions to enforce the special liabilities of directors and stockholders for penalties and forfeitures and statutory obligations should be limited to three years.
For all these reasons we feel quite sure that the Legislature intended by the phrase a liability created by law,” in section 109 of the Code of Procedure, and in section 394 of the present Code, a liability created by statute law.
It is not claimed that the liability which the plaintiffs seek to enforce in this action against the directors is one created by any statute, but as we held when the case was here before, it is a common-law liability springing out of their relations to the bank and the manner in which they discharged or omitted to discharge their obligations and duties directors thereof.
What limitation of time then was applicable to this action? We think the limitation is regulated by chapter 4 of the Code of Civil Procedure. Section 414 provides that the provisions of that chapter shall apply and constitute the only rule of limitation applicable to a civil action or special proceeding, except as mentioned in that section, and this section does not come within any of the exceptions. It does not come within subdivision three of that section because it was not commenced within two years after the Code took effect.
We think the limitation applicable to this action is ten years, that which is prescribed by section 388 of the Code.
This is unquestionably an equitable action, and the plaintiffs stand in the place of the receiver, and if he had prosecuted the action he would have stood in the place of the bank and had the same rights which it would have had if plaintiff. So this action, for the purpose of determining the limitation of time applicable to it, must be governed by the same law which would have been applicable if the action had been brought by the bank. The action is against the directors as trustees to call them to account for the manner in which they discharged their trust, and is one of which courts of equity always have jurisdiction. An. gell & Ames Corp., SS 312, 314; Robinson v. Smith, 3 Paige, 222; Ileath v. Erie R. Co., 8 Blatchf. 347; Brinkerhoff v. Bostwick, 88 N. Y. 52.
In the latter caso Rapallo, J., said: “The liability of the directors of corporations for violations of their duty or breaches of the trust committed to them, and the jurisdiction of courts of equity to afford redress to the corporation, and in proper cases to its shareholders for such wrongs, exist independently of any statute."
There is no doubt therefore that as to the original plaintiff in this action the proof of violations of duty and breaches of trust by the defeudants could range through ten years prior to the commencement of the action.
But the other plaintiffs became parties to the action upon their petition January 27, 1883, more than six years after the bank became insolvent and its directors bad ceased to have any control of its affairs; and hence the claim is made that the action must be treated as commenced as to theon at that date, and that therefore a different livnitation of time is applicable to them from that which is applicable to the original plaintiff. We are of the opinion that this claim is not well founded. The action was commenced by Theodoro Brinkerhoff suing in his own behalf and for tbe benefit of the other stockholders of the bank; and therefore for the purpose of the statute of limitations the action must be treated as if all the stockholders were plaintiffs. The action is really the action of all the stockholders, as it was necessarily commenced in their behalf and for their benefit. It could not have been commenced by one stockholder for himself alone.