appearing of record are not repudiated.' It has been held that as between the company and a stockholder, by analogy to the statute of limitations, where work on a railroad had not been prosecuted according to the requirements of the act of incorporation, and no calls made within six years from the date of the subscription for stock, a presumption of abandonment of the undertaking arose in favor of the subscriber, and that the lapse of six years was a bar to the remedy by call, and to a suit to recover the installments so called for.2

§ 1997. When Defense not Raised by Demurrer. — . Where it is sought to raise the defense of the statute of limitations by demurrer it must affirmatively appear from the complaint that the action is barred by some provision of the statute. Unless, therefore, there is an averment in the complaint of the existence of some fact which would put the statute in motion, as that a call had been made upon the stockholder by the directors, or that the company had, at a date named, disbanded or ceased business, a demurrer founded on the statute of limitations will be overruled.3

§ 1998. When Declaration Required to Negative Statute. The plaintiff is not ordinarily required, in stating his cause of action, to state a case which negatives the statute of limitations, — that is, which shows that his right of action is not barred by the statute. But there are exceptions to this rule. Thus, there can be no recovery against a stockholder for a debt of the corporation which is barred by limitation, nor can a debt which is barred by limitation be proved in winding up a company under the English Companies acts. It is not clear, however, that the stockholder should be required to exhibit such a debt affirmatively in his declaration or complaint. But where the governing statute makes it a condition precedent to the liability of the stockholder that an action should be brought against the corpo

1 Kobogum v. Jackson Iron Co., 76 Mich. 498; s. c. 43 N. W. Rep. 602.

2 McCully v. Pittsburgh &c. R. Co., 32 Pa. St. 25; Pittsburgh &c. R. Co. v. Byers, 32 Pa. St. 22; s. c. 72 Am. Dec. 770; Pittsburgh &c. R. Co. v.

Graham, 36 Pa. St. 77. See ante, $$ 67, 1272.

3 Harmon v. Page, 62 Cal. 448; s. c. 9 Am. Corp. Cas. 29, 36.

Post, § 3116.

5 Mitchell's Claim, L. R. 6 Ch. 822.

ration upon the debt within a stated period from the time when it became due, the fact that the action against the corporation was so brought must be averred in the declaration in the action. against the stockholder; otherwise no right of action is exhibited.1 So, under the statute of Iowa, in order to bar an action against a stockholder of a corporation to subject his unpaid balance on stock to the satisfaction of a judgment obtained against the corporation on its note given within five years, it is necessary not only to show that the note was given for a debt which accrued more than five years previous to the commencement of the action. but that at the date of the note, the indebtedness of the corporation could not have been collected by the plaintiff.2

§ 1999. State Adjudications how far Binding on Federal Courts.-Under the well-known rule that the decisions of the State courts,construing their own statutes, are binding upon the Federal courts, it has been held that where a State court orders an assessment upon the shareholders of an insolvent corporation, and adjudges that lapse of time between the date of its decree and the failure of the corporation does not preclude relief, either under the statute of limitations or under the equitable doctrine of laches, a court of the United States will entertain a collateral action to enforce the liability of the stockholder to an assessment, unaffected by defense of limitation or lapse of time.3

SECTION

ARTICLE II. WHEN THE STATUTE BEGINS TO RUN.

2002. General doctrine.

2003. Does not begin to run until a

call has been duly made.

2004. Where the statute allows a period of grace after the call. 2005. Where the call is made by order of court, or otherwise for purposes of liquidation.

1 Tarbell v. Page, 24 Ill. 46.

2 Tama Water Power Co. v. Hopkins, 79 Iowa, 653; s. c. 44 N. W. Rep. 797.

8 Hawkins v. Glenn, 131 U. S. 319;

SECTION

2006. Whether call by corporation puts the statute to running as against creditors.

2007. General power to receiver is not
a call.

2008. Rule in Pennsylvania.
2009. Does not run against creditors
until a de facto dissolution.

s. c. 33 L. ed. 184; 9 Sup. Ct. Rep. 739; Glenn v. Liggett, 135 U. S. 533. See also Andrews v. Bacon, 38 Fed. Rep. 777.

§ 2002. General Doctrine. It is obvious that the statute begins to run from the date when the liability of the shareholder becomes fixed, in the sense that the creditor may, without obstruction, proceed against him. This period will be different according to the nature of the liability to which the law subjects the shareholder in a given case.1

§ 2003. Does not Begin to Run until a Call has been Duly Made. We have already seen that under ordinary contracts of subscription, the subscriber is under no obligation to pay anything beyond the first deposit until an assessment has been made by the directors, and he has been duly notified thereof; 2 though under some contracts and some judicial holdings, his obligation to pay is absolute, irrespective of his being notified of an assessment, in which case the statute begins to run from the date of the subscription. Where such an assessment and notice, called collectively a "call," are necessary in order to give the corporation a right of action, the statute of limitations obviously does not begin to run in favor of the stockholder and

3

1 See a learned article on this subject, collecting many American decisions, by D. H. Pingrey, Esq., in 6 Rail. & Corp. L. J. 82. Thompson v. Reno Savings Bank, 19 Nev. 171; s. c. 3 Am. St. Rep. 881.

2 Ante, § 1702.
3 Ante, § 1703.

4 See for illustration, Williams v. Meyer, 41 Hun (N. Y.), 545; s. c. 11 N. Y. Civ. Pro. 42; 3 N. Y. St. Rep. 360.

against the company, until such assessment has been duly made1 and notified, and it does begin to run from that time. The statement will be at once more accurate and more generally applicable if we say that the statute of limitations does not begin to run in respect of the right of action of the corporation against its shareholder for assessments, until the assessments have been made and the right to sue therefor has accrued.3 Thus, where the subscriptions were payable within a certain time after notice, by the company calling for them, it was held that the statute of limitations did not begin to run until that time.1

§ 2004. Where the Statute Allows a Period of Grace after the Call. This will better appear if we consider that under the provisions of some statutes and special charters thirty days must elapse after the making of the call before the right of action accrues. This must of course be taken into account in determining the period of time at which the statute begins to run. In these cases, until the stock is called for and the additional period of grace allowed the subscriber within which to respond to the call has elapsed, the relation between the stockholder and the corporation is a continuing relation of trust and confidence, to which the statute of limitations has no application.5

§ 2005. Where the Call is Made by Order of Court, or Otherwise for Purposes of Liquidation. -The rule is the same where the call is made by, or under authority of a court of justice, or by a receiver, or official liquidator, or by the directors

1 Williams v. Taylor, 120 N. Y. 244; s. c. 30 N. Y. St. Rep. 646; 24 N. E. Rep. 288.

Lewis v. Glenn, 84 Va. 947; s. c. 6 S. E. Rep. 866. This statute of limitations has been held to run in favor of subscribers to corporate stock from the time when a decree made an assessment, and not from the time when the corporation, not having made a call, executed an assignment for the benefit of creditors. Glenn v. Semple, 80 Ala. 159.

3 Baltimore &c. Co. v. Barnes, 6 Harr. and J. (Md) 57; Taggart v.

Western Maryland R. Co., 24 Md. 563; s. c. 89 Am. Dec. 760; Gibson v. Columbia &c. Turnp. Co., 18 Oh. St. 396; Macon &c. R. Co. v. Vason, 52 Ga. 326; Glenn v. Foote, 36 Fed. Rep. 824; s. c. 5 Rail. & Corp. L. J. 136. Cherry v. Lamar, 58 Ga. 541; Curry v. Woodward, 53 Ala. 376; Glenn v. Williams, 60 Md. 93; Harmon v. Pope, 62 Cal. 448.

4 Kent County R. Co. v. Wilson, 5 Del. 49.

5 Payne v. Bullard, 23 Miss. 88; s. c. 55 Am. Dec. 74.

acting as trustees under a statute after insolvency. In all such cases, until the call has been made and a right of action to collect the same has accrued, the statute does not begin to run in favor of the stockholder. And where the call is made by an order of court, to be notified and enforced by its receiver, the statute does not begin to run until the date of the order; and on the other hand, it does begin to run from that time.2

§ 2006. Whether Call by Corporation Puts the Statute to Running as Against Creditors. It would seem that, except in those cases where the call is made on behalf of creditors, as stated in a preceding section, a call by the corporation, while a going concern, would not put the statute into operation as against its creditors; because this does not give them a right of action against the stockholders, and besides they may have no knowledge of the fact of the call being made.3

§ 2007. General Power to Receiver is not a Call. Where, in a suit by stockholders to prevent waste, a receiver was appointed with the provision that "if there shall be any sums due upon the shares the receiver will collect the same, and may prosecute actions therefor," it was held that this did not amount to a call for the unpaid subscriptions so as to make the statute of limitations begin to run.*

1 Hawkins v. Glenn, 131 U. S. 319; s. c. 33 L. ed. 184; 9 Sup. Ct. Rep. 739; Glenn v. Saxton, 68 Cal. 353; s. c. 9 Pac. Rep. 420; Great West. Tel. Co. v. Gray, 122 Ill. 630; s. c. 19 Am. & Eng. Corp. Cas. 260; 14 N. E. Rep. 214; 11 West. Rep. 739; 27 Am. L. Reg. (N. s.) 160; Glenn v. Semple, 80 Ala. 159; s. c. 60 Am. Rep. 92; Lehman v. Glenn, 87 Ala. 618; s. c. 6 South Rep. 44; Glenn v. Liggett, 135 U. S. 533; s. c. 34 L. ed. 262; 8 Rail. & Corp. L. J. 52; 10 Sup. Ct. Rep. 867; Glenn v. Howard, 81 Ga. 383; s. c. 8 S. E. Rep. 636; Semple v. Glenn, 91 Ala. 245; s. c. 24 Am. St. Rep. 894.

2 A right of action for an assessment on unpaid subscriptions to the

stock of an insolvent corporation accrues when a decree of court is made calling for such assessments. Vanderwerken v. Glenn, 85 Va. 9; s. c. 6 S. E. Rep. 806; Glenn v. Foote, 36 Fed. Rep. 824. When the stock and property of a manufacturing company organized under the New York act of 1848 are sequestered through a receiver, the statute of limitations begins to run in favor of the stockholder. Hollingshead v. Woodward, 107 N. Y. 96; s. c. 10 N. E. Rep. 621; 9 Cent. Rep. 456.

54.

3 Allibone v. Hager, 46 Pa. St. 48,

Glenn v. Macon, 32 Fed. Rep. 7.