Millspaugh v. Putnam, supra; Minor v. Rogers, supra; Ray v. Simmons, supra; Barker v. Frye, supra; Terry v. Bale, 1 Dem. 452.

In Martin v. Funk the pass-book contained this entry: "The citizens' Savings Bank in account with Susan Boone in trust for Lillie Willard."

In Mabie v. Bailey the following entry was made in the pass-book: "New York Savings Bank in account with B. Bailey in trust for Ida Mabie."

In Willis v. Smyth, the entry was: Urner in trust for Sarah Urner."

"Clarinda P.

And the deposit in Minor v. Rogers aud Ray v. Simmons were accompanied by similar entries. In each of these cases it was held that a valid trust had been established. The case of Clark v. Clark, 108 Mass. 522, which is somewhat in conflict with these authorities cannot be regarded as sound in any other jurisdiction than that in which it was decided. A deposit of money and an entry of the account in the pass-book or books of the bank are not however conclusive on the question of trust. Whether the depositor has in fact created such a trust as will vest the whole beneficial interest in the deposit in the cestui que trust, depends in every case upon the intention of the depositor at the time of making the deposit. Did he mean to create a trust, or was the deposit made in that form for some other purpose or reason? This doctrine is supported by Weber v. Weber, 9 Daly, 211; Mabie v. Bailey, 95 N. Y. 206; and Brabrook v. Five Cent. Savings Bank, 104 Mass. 228.

In Weber v. Weber, the defendant deposited a sum of money in a savings bank "in trust for" the plaintiff. He made the deposit in this form for the sole pur. pose of receiving a higher rate of interest, and with no intention of divesting himself of the ownership of the fund or of giving plaintiff any interest therein. To protect himself from any claim of plaintiff to the money it was agreed between plaintiff and the bank that the money should be drawn out only on production of the pass-book, which defendant retained in his own possession. The New York Court of Common Pleas held that as the defendant had never in fact intended to establish a trust as to this money none was established.

In Mabie v. Bailey, the depositor took from the bank a pass-book containing the following entry: "New York Savings Bank in ccount with B. Bailey in trust for Ida Mabie." The Court of Appeals said: The trial court directed a verdict for the plaintiff, and refused the request of the defendant's counsel to submit to the jury the question whether the testator intended by the deposit of the money in his name as trustee for the plaintiff to create a trust for her benefit. The court in Martin v. Funk,left undecided the point whether in respect to such a transaction surrounding circumstances may not be shown to vary or explain the apparent character of the acts and the intent with which they were done. If it were now necessary to decide that point I should incline to the opinion that the character of such a transaction as creating a trust is not conclusively established by the mere fact of the deposit, so as to preclude evidence of contemporaneous facts and circumstances constituting res gesta, to show that the real motive of the depositor was not to create a trust, but to accomplish some independent and different purpose inconsistent with an intention to divest himself of the beneficial ownership of the fund." But the court held that there was no evidence to rebut the presumption of a trust, and that therefore the trial court did right in taking the case from the jury. It is true what the court said on this point was a mere dictum, but the justice and soundness of the rule are so apparent that it will undoubtedly be adopted in every jurisdiction. It is too clear for argument that the courts have no right to de

clare a trust to have been created in violation of the intention of the owner of the property; and in ascer taining that intention every fact and circumstance contemporaneous with and surrounding the transaction should be considered.

The retention of the pass-book by the depositor does not affect the validity of the trust. Martin v. Funk; Willis v. Smyth; Mabie v. Bailey; Minor v. Rogers; Ray v. Simmons.

In Martin v. Funk, the court said: "The retention of the pass-book was not necessarily inconsistent with this construction. She must be deemed to have retained it as trustee." At page 142 of the same case the court say: "There are many cases where the instrument creating the trust has been retained by the author of it until his death, especially when he made himself the trustee and yet the trust sustained. Exton v. Scott, 6 Sim. 31; Fletcher v. Fletcher, 4 Hare, 67, Souverbye v. Arden, 1 Johns. Ch. 240; Bunn v. Winthrop, id. 329.” Aud in Willis v. Smyth the court enunciated the same doctrine: "Retention of the bankbook by her for a number of years within the case cited supra must be regarded as showing that she kept it as trustee and in no other capacity; nor does the fact of her drawing the interest detract from the character in which she held the deposit as trustee." The rule expressed in the last clause of this sentence that the withdrawal by the depositor of the money from the bank raises no presumption against the existence of the trust is adopted by all the cases. Minor v. Rogers; Martin v. Funk; Mabie v. Bailey. In the last case the depositor had withdrawn the entire deposit, and it was urged that this was evidence that be never intended to create a trust; but the court declared that this position was not tenable. "The fact that the deposits for the plaintiff and others were subsequently in 1867 drawn out by Dr. Bailey is not legitimate evidence that he did not intend when the deposits were made to create a beneficial trust for the beneficiaries named If the withdrawal was with intent on his part to ignore the trust and to convert the money to his own use, it might be competent evidence of a change of purpose; but it throws no light on the original transaction."

When a valid trust has once been created by a deposit of money in trust for another or in any other manner, the trust is irrevocable, and the beneficiary may at once commence an action to recover the money or property as to which the trust has been created. Mabie v. Bailey; Martin v. Funk; Minor v. Rogers; Willis v. Smyth. The depositor cannot destroy the trust by withdrawing the money from the bank (same cases).

In Mabie v. Bailey the depositor had withdrawn in his life-time the whole sum deposited in trust for the plaintiff. The action was against the depositor's executor to recover the full amount of such deposit with interest from the day on which the deposit was withdrawn. The Court of Appeals said: "The trust once established, and no power of revocation having been reserved it was within the authorities irrevocable." It is not necessary that the beneficiary should have been notified of the trust. Unless he repudiates the trust, the title to the property or fund vests irrevocably in such beneficiary. Witzel v. Chapin, 3 Bradf. 390; Martin v. Funk; Pope v. Savings Bank.

In Martin v. Funk, it expressly appeared that the beneficiaries did not know of the creation of the trust till after the death of the depositor and trustee. The court said: "In this case the intestate might have notified the object of her bounty, but this is not regarded as indispensable by any of the authorities." And at page 138 the court reiterates the same doctrine: 'Enough must be done to pass the title, although when a trust is declared whether in a third person or

the donor, it is not essential that the property should be actually possessed by the cestui que trust, nor is it even essential that the latter should be informed of the trust."

In Pope v. Savings Bank, the court stated that: "It is not essential that the beneficiary should have notice." In fact it appears in almost every adjudication in which the trust has been sustained, that the beneficiary had no notice of the trust till after the death of the trustee or at least till some time after the creation of the trust.

The case of Witzel v. Chapin is an authority for the doctrine that to the extent that the depositor withdraws the money from the bank, before the cestui que trust is notified of the trust, the trust is revoked. In that case the intestate against whose estate the claim was made deposited a sum of money in a Savings Bank in his own name as trustee for his sister, the ́ plaintiff. Subsequently the intestate withdrew a large portion of the money, and also of the interest as it accrued. The sister claimed the whole deposit with interest from the time it was made; but the court decreed payment to her of only that portion of the money which remained on deposit at the time of the intes

In Willis v. Smyth it did not appear that the beneficiary had been advised of the deposit prior to the depositor's death. GUY C. H. CORLISS.

VIRGINIA COUPON CASE.

SUPREME COURT OF THE UNITED STATES, APRIL 20, 1885.

MARYE, AUDITOR OF THE STATE OF VIRGINIA, V. PARSONS.

The contract right of a coupon-holder under the Virginia act of March 30, 1871, whereby his coupons are receivable in payment of taxes, can be exercised only by a tax-payer; and a bill in equity, for an injunction to restrain tax col. lectors from refusing to receive them, when tendered in payment of taxes, will not lie in behalf of a coupon-holder who does not allege himself to be also a tax-payer. Such a bill calls for a decree declaring merely an abstract right and does not show any breach of the contract, or other ground of relief.

was not aware of the trust till after her brother's death. The surrogate based his decision on the doctrine that the trust was revocable until the beneficiary was notified and held that to the extent that the deposit was withdrawn the intestate had revoked the trust. The dictum of the Court of Appeals in Martin v. Funk is apparently in conflict with the decision of the surrogate. It appeared in that case that the depositor had withdrawn one year's interest, and that the beneficiaries had no notice of the trust till after the depositor's death. The court said: "And the most that can be said is that she may have believed that the deposits might be withdrawn during her life and the money converted to her own use. It is not clear that she entertained such a belief, but if she did it would not change the legal effect of her acts." A fair inference from this language leads one to the conclusion that the court intended to assert that though she may have thought she had a right to draw out the money as her own property, the beneficiaries having never been notified of the trust, yet that the law declared the trust to be irrevocable, and that her belief on the subject "would not change the legal effect of her acts." It would seem however that what the court said on this subject was a mere dictum, as it does not appear that any claim was made for the year's interest which the depositor had drawn out. This dictum however declares a more logical rule than that which the surrogate enunciated in the case cited above; and it appears to have been regarded as settled in the case of Mabie v. Bailey. In that case the beneficiary was never notified of the trust until after the death of the depositor, and yet the court affirmed the judgment which was rendered against the depositor's executor for the whole amount of the deposit which the depositor withdrew from the bank in his life-time, and of course while the beneficiary still remained in ignorance of the trust. The rule laid down by the surrogate in Witzel v. Chapin, if followed by the Court of Appeals in Mabie v. Bailey, would have been fatal to a recovery. It is true that this case is not decisive on this point as the question was not raised or discussed, and moreover it appeared that the mother of the beneficiary had been informed by the depositor of the trust. Notice to her however was not notice to the cestui que trust, and on the whole it may be said that the doctrine of revocability of such a trust before notice is opposed not only to sound principle, but also to the weight of authority.

for the Eastern District of Virginia.

MATTHEWS, J. The appellee, who was complainant, a citizen of New York, filed his bill in equity, in the Circuit Court of the United States for the Eastern District of Virginia, against Mortou Marye, described as auditor of the Commonwealth of Virginia; Samuel C. Greenhow, treasurer of the city of Richmond; A. L. Hill, treasurer of the city of Norfolk, and V. G. Dunnington, treasurer of the city of Lynchburg; R. B. Munford,commissioner of revenue for the city of Richmond, Charles W. Price, for the city of Lynchburg, and Charles D. Langley, for the city of Norfolk, all citizens of Virginia.

The complainant avers in his bill that he is the owner of overdue coupons to the amount of $28,010, cut from bonds of the State of Virginia issued under the act of March 30, 1871, which coupons are receiv. able, by the terms of that act, in paymeut, at and after maturity, for all taxes, debts, and demands due the State. A list of these coupons, described by the numbers and amounts of the bonds, is exhibited with the bill. He claims that these coupons constitute a contract with the State, by which it agreed to pay the amount of each to the holder at maturity, and second, in case of default, that the holder should have the right to assign or transfer the same to any tax-payer or other debtor of the State, with the quality of being received for taxes and other demands due the State, and with the guaranty that the State would receive them specifically in payment pro tanto for any such taxes and demands, and that they should be accepted by any of her tax collectors from any of her tax-payers or debtors in discharge and payment of such taxes or other dues.

The defendants to the bill, it is alleged, are officers of the State, charged severally with the collection of certain taxes aud license fees and other dues to the State; and it is charged that in pursuance of certain statutes passed since the act of March 30, 1871, and the issue of the bonds and coupons under it, they are forbidden to receive these and similar coupons in payment of taxes and other dues to the State, which statutes, it is averred, impair the obligation of the contract between the State and the holder of its coupons, and are accordingly in violation of the Constitution of the United States, and are null and void; but that nevertheless the defendants, as officers of the State, as is publicly known, habitually refuse to accept coupons when tendered by tax-payers, in payment of taxes and

other dues to the State, with the collection of which they are severally charged, and the General Assembly of Virginia has also passed statutes repealing all laws which provided any remedy for the enforcement of the right to have them so received.

The bill then proceeds as follows:

"And your petitioner furthermore shows, that confiding in his right to a specific performance of said contract, and in his title to equitable relief, should the same be denied, he hath made arrangements with sundry tax-payers of Virginia to use his above coupons in payment of their taxes and license taxes, now due, by which arrangement, if the said coupons can be used without delay or difficulty, he will receive nearly par therefor, and thus be able to have his coupons collected. But unless they are so accepted in payment when tendered, the said tax-payers will not use them at all, because they are compelled to pay their taxes forthwith under heavy penalties, and to obtain their licenses immediately, or cease from business, so that if the collectors of these taxes continue to refuse to accept these coupons, and so render necessary an appeal to the courts, and a separate action by each tax-payer upon each tender, such refusal will be tantamount to an utter destruction of the rights of your petitioner, because delays will thus occur which the tax-payers cannot submit to for the above-named reasons and others, and thus your petitioner will be deprived of the benefit of the arrangements he has made, as well as of all opportunity of having his coupons so used at any time save in small amounts and at rare intervals." The prayer for relief is as follows:

"In tender consideration whereof, and inasmuch as your petitioner is without adequate relief save in a court of equity, wherein such matters are properly cognizable, and inasmuch as he will suffer great and irreparable loss and damage, exceeding $500 in amount unless relief is afforded him immediately, and the above named officers are required to perform specifically the contract aforesaid, and receive his said coupons in payment of all or any of the dues and taxes above named immediately upon their being tendered therefor by any tax-payer or applicant for a license, and to avoid a multiplicity of suits and prevent an obstruction of justice, he prays that Morton Marye, auditor of Virginia, Samuel C. Greenhow, A. L. Hill, and V. G. Dunnington, treasurers of the cities of Richmond, Norfolk, and Lynchburg, respectively, and R. B. Munford, Charles D. Laugley and Charles W. Price, commissioners of the revenue for said cities, respectively, be made parties defendant hereto, with apt words to charge them, and may be required on oath to auswer fully the allegations hereof.

"And that the said defendants, their assistants, clerks, and agents, be required and compelled to specifically perform the said coupon contract according to its legal tenor and effect, and to accept your orator's said coupons, or any of them, from any tax-payer presenting them or any of them in payment of his taxes, license taxes, or other dues, and to receipt therefor, or certify the payment and deposit thereof, in cases of applications for license, in precisely the same form and with precisely the same force and effect as they would do if said tender, payment, or deposit were made in money. And that your honors will decree said coupons to be genuine, legal coupons, legally receivable for all taxes, debts, and demands due the State of Virginia, and especially for all license taxes or assessments by whatever name the same may be called. And to the end that your orator may have full relief in the premises he also prays that a preliminary restraining order and injunction may be issued without delay, enjoining and restraining the said defendants, their assistants, clerks, and agents, and each and every one of them, from refusing to accept any of the coupons

named in the Exhibit A herewith, in full payment pro tanto of the taxes, license taxes, or other dues, due by any tax-payer to the State who may tender the same in payment thereof, and enjoining and restraining them from refusing to execute and deliver forthwith to such tax-payer his tax-bill, duly receipted, or to an applicant for a license a certificate that the amount of coupons tendered by such applicant has been deposited with him in payment of the tax or deposit required or assessed for said license, and from refusing, immediately upon the presentation of such certificate, to grant and issue the license applied for to such applicant, all in the same manner, and to have precisely the same force and effect as if said payments were made in coin or currency."

There is also a prayer for general relief.

There was a final decree on bill, answer, replication and proofs, granting the injunction as prayed for, and the defendants appealed.

This bill is without precedent, and should have been dismissed. It is a clear case, as stated, of damnum absque injuria. So far as the contract with the complainant was, that the State should pay to him his coupous at maturity, there is no doubt a breach; but he asks no relief as to that, for there is no remedy by suit to compel the State to pay its debts. So far as the contract was to receive the coupons of the complainant in payment of taxes and other dues to the State, there is no breach, for he does no allege that any of them have been tendered by any tax-payer or debtor to the State in payment of taxes or other dues; nor that there has been a refusal on the part of any tax collector, or other officer of the State charged with the collection and receipt of taxes and dues to the State, to receive them in payment therefor. Personally the complainant has no right to offer them for such purpose, for he owes no taxes or other debt to the State. There is nothing shown in the bill by which he is prevented from transferring them to others who would have the legal right to use them in that way, except that being discredited for such uses by the previous refusals of the officers of the State to receive other but similar coupons, the complainant can find no one willing to purchase them from him at a reasonable price for such purposes. This damage is not actionable, because it is not a direct and legal cousequence of a breach of the contract, and is not distinguishable from the damage any creditor might suffer from the known inability or unwillinguess of his debtors to perform their obligations. Such discredit might and often does result in the bankruptcy and financial ruin of the creditor, but no action lies to recover damages for the consequential loss, which the law does not connect with the default, as cause and effect. To enable the complainant to avail himself of the benefit of his contract with the State, to receive his coupons in payment of taxes, he must first assign them to some one who has taxes to pay, as he has not; but when he does so, by the assignment, he has lost his interest in the contract and his right to demand its performance, all right to which he has transferred with the coupons. It is only when in the hands of tax-payers or other debtors that the coupons are receivable in payment of taxes and debts due to the State.

The bill as framed therefore calls for a declaration of an abstract character, that the contract set out requiring coupons to be received in payment of taxes and debts due to the State is valid; that the statutes of the General Assembly of Virginia impairing its obligations are contrary to the Constitution of the United States, and therefore void; and that it is the legal duty of the collecting officers of the State to receive them when offered in payment of such taxes and debts.

But no court sits to determine questions of law in

BRINKERHOFF V. BOSTWICK.*

B.. a stockholder 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 directors whereby the property and effects of the bank had been 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 1876. that the action was not brought "to enforce a liability created by law," within the meaning of section 394, Code Civ. Proc. That the limitation applicable to said action is ten years, as prescribed by section 388.

A

Held,

PPEAL from a judgment of the General Term of the Second Department affirming a judgment in favor of the defendant, entered upon a new suit di rected at Circuit.

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 defendant, Henry Bostwick, was appointed its receiver. From the time of its organization until that time Bostwick and the other defendants were its directors. At the time of the appointment of the receiver the entire capital of the bank had been lost, and there was a large deffciency of assets to pay its creditors, and the stockholders were rendered liable for a large sum of money to make up such deficiency.

In January, 1880, the plaintiff, 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 insolvent, 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 were 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 the 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 N. Y. 52. Thereafter upon their petition to the court other stockholders were allowed to come in and be made plaintiffs in the action, and the *Reversing 34 Hun, 352.

defendants withdrew their demurrer and answered the complaint, denying all the allegations of misconduct contained therein, and setting up the three years' and the six years' limitations in bar of the action.

The action was brought to trial at a Circuit 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 plaintiffs which happened more than three years before the commencement of the action," and the court decided that the action was subject to the limitation of three years; to which decision the plaintiffs 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. Plaintiffs' 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 had 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 plaintiffs 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 plaintiffs excepted.

From the judgment eutered at the Circuit the plaintiffs appealed to the General Term, and from judgment of affirmauce there to this court.

E. A. Brewster, O. D. M. Baker and John F. Schlosser, for appellants.

S. Hand, for respondents.

EARL, J. If the 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 any of the limitations specified in the Code, and if so, by which one of them. We are of opinion that it was not barred by section 394, 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 plaintiffs 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 commonly if ever used, in statutes to describe a liability existing at common law independently of any statutory provision. Such expressions as "required by law," "regulated 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 Code, and is always used in the sense of a thing brought into existence by or under

"

statute law. Code, §§ 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 Revised Statutes. The second title of the chapter of the Revised Statutes, 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 auy 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. It cannot be supposed that it was intended by the Legislature to change the policy which had characterized the legislation of this State for many years, when in 1849, for the first time, the reference to the liabilities created by the Revised Statutes was left out of the section of the Code, 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 Code in 1849, by leaving out the reference to the Revised Statutes, passed the 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, aud the section of the Code was probably amended to bring within its scope the new liabilities thus created.

It cannot be perceived that there would be any reason or policy for establishing a different limitation of time for the commencment 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 plaint. iffs 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 88 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. Angell & Ames Corp., §§ 312, 314; Robinson v. Smith, 3 Paige, 222; Heath v. Erie R. Co., 8 Blatchf. 347; Brinkerhoff v. Bostwick, 88 N. Y. 52.

In the latter case 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 defendants 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 had ceased to have any control of its affairs; aud hence the claim is made that the action must be treated as commenced as to them at that date, and that therefore a different limitation 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 Theodore Brinkerhoff suing in his own behalf and for the 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.