Continental Nat. Bank of Memphis v. Buford

CALDWELL, Circuit Judge, after stating the case as above, delivered the opinion of the court. It is settled by the decision of the supreme court of Arkansas in the case of Bank v. Walsh, 68 Ark. 21, 59 S. W. 952, that the statute on which this action is founded is a remedial statute, and imposes “a statutory liability, and not a penalty,” and that the three-years statute of limitations applies to actions founded thereon. The single question left for our consideration is, when did the plaintiff’s cause of action against the defendant accrue ? The contention of the plaintiff in error is that it did not accrue until the maturity of the last renewal notes; the contention of the defendant is that it accrued when the debts sued for were contracted, or, at the furthest, on the maturity of the notes given at the time the indebtedness was created. The complaint does not disclose when the debts sued for were contracted, but they must have been contracted on or before May 3, 1894, and September 6, 1894, the respective dates at which the first notes mentioned in the complaint were executed. As the action is barred whether the statute of limitations commenced to run from the creation of the debt or from the maturity of the notes given at its creation, it is not essential to the decision of the case to determine whether, when the plaintiff made a loan to the Bank of Mammoth Springs or otherwise became its creditor for a present consideration on an agreed term of credit and took a note accordingly, the plaintiff could the next day have brought suit for the amount of the debt against the defendant on his statutory liability to pay it as a debt of the bank “contracted during the period” of his neglect and refusal to file the required certificate. Under the statute the defendant did not sustain to the debtor bank the relation Df a joint principal, surety, or guarantor. His liability was primary, and not secondary. It was created by statute, and was not contingent upon the failure or inability of the bank to pay, but was absolute and unconditional. It resulted from his dereliction of official duty, and, if he had been compelled to pay the debt, he would have had no right of reclamation or indemnity from the bank. The statute imposed upon him the obligation of a principal debtor for his refusal and neglect to perform a duty enjoined upon him by law for the protection of the public. His legal liability for the debt was fixed and perfect the moment it was contracted, without regard to the solvency or insolvency of the bank, or to any proceedings against it to enforce pay [292] ment. At the time when the first renewal notes were taken, the debt and the original notes given therefor had then become due and payable. The renewal of the notes operated as an extension of time for the payment of the debts by the bank, but did not release the defendant either from his statutory liability to pay the debts or from immediate action therefor. As soon as the original notes became due and payable, if not before, the defendant was liable. The defendant was unquestionably then liable to an action, and so was the bank. These two rights of action in the plaintiff were not dependent. They were concurrent and independent. The plaintiff could assert either or both. The assertion of one would not preclude the assertion of the other. Suspending the assertion of the one would not preclude the assertion of the other. Nothing but satisfaction of the plaintiff’s debt by the pursuit of one would take away its right to follow the other. If, therefore, the right of action against the defendant on his statutory liability did not accrue on the creation of the debt, it unquestionably did on its maturity, and the statute, having once commenced to run, could not thereafter be suspended so far forth as concerned the defendant, by any action of the plaintiff and the bank which might have that effect as between them. Without pursuing the subject further, we may say that we concur in the opinion of Judge Folgcr in Jones v. Barlow, 62 N. Y. 202, 213, and have, in substance, adopted its reasoning. It seems to have been followed in later cases in that state (Hardman v. Sage, 124 N. Y. 25, 26 N. E. 354; Parrott v. Colby, 6 Hun, 55, affirmed on appeal in 71 N. Y. 597; Iron Co. v. Walker, 76 N. Y. 521) and elsewhere (Mining Co. v. Woodbury, 14 Cal. 265; Davidson v. Ranken, 34 Cal. 503; Hyman v. Coleman, 82 Cal. 650, 23 Pac. 62, 16 Am. St. Rep. 178; Young v. Rosenbaum, 39 Cal. 646). The complaint counts on an open account also, touching which it is only necessary to say that .that portion of the account contracted while the defendant was president is clearly barred, and for that portion of the account contracted after he ceased to be president he never was liable. The judgment of the circuit court is affirmed.