Rawlings v. Ray

Background

The receiver of the Lee County National Bank in Marianna, Arkansas sued a shareholder who failed to pay a fifty percent assessment ordered by the Comptroller. The Comptroller declared the bank insolvent in 1933 and on November 6, 1935 assessed shareholders fifty percent of par value. The assessment stated payment was due on or before December 13, 1935. The receiver gave notice, the shareholder did not pay, and the receiver sued on December 7, 1938. The shareholder invoked Arkansas’s three‑year statute of limitations. The District Court dismissed the suit and the Court of Appeals affirmed; the Supreme Court granted review because courts had reached conflicting results.

Reasoning

The key question was when the cause of action “accrued” so the state time limit would start. The Court explained that the statute’s phrase refers to a complete and present claim. Because the Comptroller expressly fixed December 13, 1935 as the last date for payment, the receiver could not bring suit before that date. The Court therefore held the statute of limitations began to run on the payment due date, not on the earlier date the assessment was entered. The opinion distinguished a prior case (Pufahl) as involving different facts and said federal law allows the Comptroller to set a later payment date.

Real world impact

This ruling means receivers may bring collection suits based on Comptroller assessments measured from the payment due date set by the Comptroller. Shareholders given a later payment deadline cannot be sued before that deadline, and the state time limit is counted from the due date. The Supreme Court reversed the Court of Appeals and sent the case back to the District Court for further proceedings consistent with this holding.