Supreme Court of United States.
*113 Mr. Josiah H. Drummond for appellants.
Mr. Edwin B. Smith for appellee.
MR. JUSTICE HARLAN delivered the opinion of the court. He stated the facts in the foregoing language and continued:
The only point seriously insisted upon in argument, or which is necessary to be considered, is, that this suit was barred by limitation. The Revised Statutes of Maine, in force when it was brought, provided that "all actions of assumpsit or upon the case founded on any contract or liability, express or implied," should be commenced "within six years next after the cause of action accrues, and not afterwards." Rev. Stat. Maine, 1857, ch. 81, ยง 92. The judgment against the company was entered more than six years before the commencement of this suit. It is insisted that appellee's cause of action accrued upon the entry of the judgment; while it is contended, in behalf of appellee, that even if the foregoing limitation has any application in a suit in equity, brought in the Circuit Court of the United States, by a citizen of another State, his cause of action did not accrue until the return of execution against the company, which occurred within six years prior to this suit.
The counsel for appellee also insist that this suit can be maintained upon the general equitable principles recognized in the cases which hold that the capital stock of a corporation is a trust fund which may be followed by creditors into the hands of those who have notice of the trust; and, consequently that the right of a Circuit Court of the United States to give relief, according to the received principles of equity, cannot be controlled by any limitation prescribed by the State in actions of *114 assumpsit or upon the case founded on contract or liability, express or implied. Without entering upon a discussion of that question, and assuming, for the purposes of this case only, that the Circuit Court, in analogy to the limitation prescribed by the local statute, could properly have denied the relief asked, where the suit was not brought within six years after the cause of action accrued, we are of opinion that the decree was right and should be affirmed.
The proposition that Bowker's cause of action accrued upon the entry of his judgment against the company rests upon a very technical interpretation of the statute, which, in terms, gives a judgment creditor the right to file his bill in equity against any corporation which has unlawfully made a division of its property, or has property which cannot be attached, or is not, by law, attachable. As this right is given to a judgment creditor, his cause of action, it is claimed, accrues the moment he becomes such, that is, when he obtains a judgment. But such, we think, was not the intention of the legislature. The provisions, upon this subject, in the Revised Statutes of 1871, are brought forward from the revision of 1857. In respect of these matters, there is no difference, even of phraseology, in the two revisions. In reference to the revision of 1857, it was expressly decided, in Hughes v. Farrar, 45 Me. 72, that the principal design was to revise, collate and arrange the public laws, and, in revising, to condense, as far as practicable; that a mere change of phraseology should not be deemed a change of law unless there was an evident intention upon the part of the legislature to make such change. The special remedies given by the Revised Statutes of 1857, and which were not affected or withdrawn by the act of February 28th, 1867, were not then, for the first time, provided. Going back to the Laws of 1848, we find that, by an act approved August 10th, 1848, it was made unlawful for corporations, other than those for literary and benevolent purposes, banking, and such as, by the common law, were termed quasi corporations, to make any division of their corporate funds, or property, so as to reduce their stock below par value, except to close up the concerns of the corporation after all its debts are paid. And by the same *115 act it was provided that in all such cases of unlawful division of corporate property, "and in all cases where such corporation has corporate property of any kind which is undivided, and which cannot be come at readily to be attached, or which is not attachable, any judgment creditor or creditors of such corporation, or his or their attorney, may make complaint thereof to the Supreme Judicial Court, therein setting forth in substance his or their judgment, and alleging the same to be unsatisfied by reason of inability to find corporate property wherewith to satisfy the same," &c.
The provisions of the act of 1848 are preserved, although much condensed in words, in the later revisions of the statutes. Clearly, the special remedy given to a creditor by the act of 1848, was given upon the condition that his judgment was unsatisfied, "by reason of inability to find corporate property wherewith to satisfy the same." This condition could only be met, within the settled doctrines of the courts of Maine, by an issue of execution upon the judgment. But, because these words were omitted in subsequent revisions, it is claimed that the legislature intended that the creditor should have the privilege of filing his bill in the Supreme Judicial Court, even though it was in his power, by execution, to find corporate property wherewith to satisfy his judgment. In this construction of the revisions of 1857 and 1871 we do not concur. Although they do not, in terms, as did the act of 1848, require the creditor to allege in his bill, that his judgment remained unsatisfied by reason of his inability to find corporate property wherewith to satisfy it, we are not satisfied that there was any purpose to change the law, or to modify the grounds upon which relief in equity could be obtained in the Supreme Judicial Court. That court, as we infer from its decisions, would not have given relief under the revisions of 1857 and 1871, unless it appeared that the creditor could not otherwise obtain satisfaction of his judgment; for, as early as in 1848, in Webster v. Clark, 25 Maine, 313, it was announced, as a general rule, that "courts of equity are not tribunals for the collection of debts; and yet they afford their aid to enable creditors to obtain payment, when their legal remedies have proved to be inadequate. It is only by the *116 exhibition of such facts as show that these have been exhausted, that their jurisdiction attaches. Hence it is, that when an attempt is made by a process in equity to reach equitable interests, choses in action, or the avails of property fraudulently conveyed, the bill should state that judgment has been obtained, and that execution has been issued and that it has been returned by an officer without satisfaction." See, also, Corey v. Greene, 51 Maine, 114; Griffin v. Nitcher, 57 id. 270; Howe v. Whitney, 66 id. 17. A different construction of the revisions of 1857 and 1871 can be maintained only upon the theory, that the legislature intended to abrogate or modify the established rule of equity announced in repeated decisions of the State court. We are not prepared to say that such was its intention.
But it is suggested that the insurance company, by the surrender of its charter, under the act of February 28th, 1867, ceased to exist, and that an execution upon a judgment obtained against it was unauthorized by law, and void; consequently, the appellee had a right to institute his suit in equity immediately upon the rendition of the judgment. This position is not, in our opinion, well taken. That act expressly saved special remedies given by former legislation, and provided that suits, pending at its passage, might be discontinued without payment of costs, or continued, tried, and judgment rendered as in other cases; and that all judgments should be satisfied in the same manner as other claims against the company are satisfied by the trustees. When the act of 1867 gave a creditor in pending suits the privilege of proceeding to judgment, and thereby establishing these demands, it gave him the right, if it did not impose upon him the duty, of putting himself in such a condition that he could, according to the principles of equity, have invoked the aid of the court to remove all obstacles in the way of obtaining satisfaction of his judgment. It is true that the corporate property was in the possession and charge of the trustees when the execution issued, and the effort to levy it became, perhaps, a form; but, as was well said by the circuit judge, it is by no means certain, in view of the strictness with which statutory forms are often required to be followed, that if this *117 form had been neglected the defendant might not have successfully contended that the complainant had neglected to meet the requirements of the statute. Besides, the act of 1867 did not, upon its face, show that the funds of the corporation would be insufficient to meet its debts in full. When the execution issued the trustees might, for aught that the judgment creditor knew, have caused it to be satisfied, and thereby dispensed with further proceedings upon the complainant's part against those who were supposed to have unlawfully received the property of the corporation. It was proper, therefore, that a creditor, desiring to resort to the special remedies reserved to him, should attempt by execution to secure payment of his judgment against the corporation before resorting to a court of equity.
For these reasons we are of opinion that the complainant's cause of action should not be deemed to have accrued until the return of the execution; consequently his suit was not barred by the limitation of six years.
The decree is affirmed.
