Cope v. Anderson
Headline: Court bars collection suits against bank shareholders by applying Kentucky’s five-year limit, holding these claims arose in Kentucky and preventing out-of-state suits despite longer local statutes.
Holding: The Court held that Ohio and Pennsylvania must apply Kentucky’s five-year statute because the shareholders’ liability arose in Kentucky, so the suits to collect the Comptroller’s assessment are barred as untimely.
- Prevents collection suits when the five-year Kentucky limit has expired.
- Requires courts to apply the shorter statute where the cause arose.
- Makes filing deadlines depend on where the bank’s key events occurred.
Summary
Background
The suits were brought by the bank’s federal receiver to collect assessments imposed on shareholders of an insolvent national bank. The Comptroller fixed the payment date as April 1, 1931. The receiver sued shareholders who lived in Ohio and Pennsylvania more than five but less than six years later. There is no federal time limit for these suits, so the Court looked to state statutes. Ohio and Pennsylvania have six-year general limitation statutes but also "borrowing statutes" that apply the shorter limitation of the state where the cause arose; Kentucky law imposes a five-year limit.
Reasoning
The Court addressed where the cause of action "arose" for purposes of those borrowing statutes. It held the cause arose in Kentucky because the bank was authorized and located in Louisville, the receiver’s office and liquidation activities were there, shareholders were told to pay there, and most relevant events occurred in that community. Because Kentucky’s five-year statute applied, the suits were filed too late. The practical result is that the shareholders succeed and the collection suits are barred by the shorter Kentucky time limit.
Real world impact
The decision means receivers and creditors must look to the state where a bank’s key transactions and liquidation took place when calculating time limits. Out-of-state plaintiffs cannot avoid a shorter foreign limitation period by suing where a longer local statute exists. The Comptroller’s fixed payment date governs when limitations begin. The ruling resolves the time-bar question in these cases.
Dissents or concurrances
The Chief Justice took no part in deciding these cases.
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