Lindsay v. Hyatt and others, 4 Edw. Ch. 97

The Vice-Chancellor : The bill shows that the demand in question accrued to the complainant in the year one thousand eight hundred and twenty-six. The liability attempted to be enforced arose at that time. Then, there was no statute of limitations expressly applicable to the court of chancery.

But, in the revised statutes, which took effect in January one thousand eight hundred and thirty, the time for commencing suits in this court was expressly limited, in cases of concurrent remedy, to the same time allowed for bringing actions in a court of law ; and, in all other cases of exclusive cognizance in equity, to ten years : 1 R. S. 301, § 49 to 52.

The time which elapsed upon this demand before the passing of this statute, that is to say, from the year one thousand eight hundred and twenty-six to one thousand eight hundred and thirty, is not to be taken into the account, yet the statute began to ran and attached itself to the demand, though a previously existing one, from January one thousand eight hundred and thirty, and the bill in this cause was not filed—according to the date of the jurat which the court, on demurrer, will officially notice—until the thirty-first day of July one thousand eight hundred and forty, a period of two years and six months from the time the statute began to run.

If, then, this is a demand of exclusively equitable cognizance, it was barred by the statute, at least, six months before the bill was filed ; and there is nothing stated in the bill to bring the case within any of the exceptions arising from disability or otherwise as provided by the statute. But this is not a case of a purely equitable demand.

The act of incorporation of the Lombard Association (Laws of 1825, p. 184, § 14,) declares that the directors and stockholders of the corporation may be sued and prosecuted for the debts of the corporation either at law or in equity in the same manner as though they were joint debtors or copartners. Here, there is a concurrent jurisdiction declared, and if there is any

section of the statute which bars the remedy at law, the same is a bar in this court. Since the opinion of Chief Justice Nelson in Van Hook'v. Whitlock, in Error, 26 Wend. R. 43,1 will not presume to say that the three years limitation applies, but it appears to me that the six years within which actions on simple contract indebtedness must be brought, does apply. The liability of the defendants arises from the terms of the act of incorporation, which puts them on the same footing as partners or joint dealers contracting a debt and as if no act incorporating them existed.

The bond or sealed instrument of the corporation, which the complainant holds, is not the bond or sealed instrument of the defendants which can be declared on as such against them in an action at law. In such an action, the declaration must be in case founded on the statute, and the bond, if valid at all, may be given in evidence as proof of the indebtedness of the corporation. The farm 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.

Other objections, in support of the demurrer, are taken : such as the entire invalidity of the bond as being unauthorized by the company’s charter, its illegality in that respect, and the want of a proper assignment to the complainant. I am at a loss to perceive where the corporation got its authority for the issuing such paper and am inclined to think the complainant is bound to show it originated in a bona fide actual indebtedness of the company or for a consideration lawful in itself and passing between the complainant and the company.

But these points of the case need not be considered, since I am of opinion the statute of limitations, upon the complainants’ own showing, protects the defendants. Demurrers allowed and bill dismissed, with costs.