U.S. Supreme Court
Godfrey v. Terry, 97 U.S. 171 (1877)
Godfrey v. Terry
97 U.S. 171
The Merchants' Bank of South Carolina, at Cheraw, suspended specie payments Nov. 13, 1880, and never thereafter resumed. Its charter contains a provision that
"In case of the failure of the said bank, each stockholder, copartnership, or body politic, having a share or shares in the said bank at the time of such failure, or who shall have been interested therein at any time within twelve months previous to such failure, shall be liable and held bound individually for any sum not exceeding twice the amount of his, her, or their share or shares."
To enforce this provision, A., Dec. 2, 1870, filed, for himself and other note-holders, a bill in the circuit court against the receiver of the bank, its cashier, five of its directors, and some sixty others, as stockholders, alleging, among other matters, that he was a citizen of Virginia, but making no averment touching the citizenship of the other note-holders or of the defendants. Such citizenship does not appear by the record, and the bank was not made a party. Twenty of the defendants were served with process, and the others did not enter an appearance. Dec. 15, 1874, a final decree was rendered, which, after declaring that the persons who held shares of stock in said bank
"on the first day of the month of March, A.D. 1805, or who were interested therein within twelve months previous to said first day of March, 1865, are liable and are held bound individually to the complainants, for a sum not exceeding twice the amount of the share or shares held by said stockholders respectively,"
and reciting the names of over sixty of such stockholders, the number of shares held by each, and the amount for which each was liable, together with the names of five bill-holders, in addition to A., and the amount due to each of them, awards judgment and execution against the defendants, stockholders, as aforesaid, for the amount due said bill-holders respectively, besides costs. Held 1. that the citizenship of the parties is not sufficiently shown to give the court below jurisdiction, and, were it otherwise, the decree is erroneous, in that it was taken against parties not served, and against the defendants jointly, while a several liability was imposed by the charter upon each stockholder, not to exceed twice the amount of his shares; 2. that, within the meaning of its charter, the bank failed Nov. 13, 1800; 3. that a suit against a person who was a stockholder at that date, or within twelve months prior thereto, was, when this suit was commenced, barred by the statute of limitations.
The facts are stated in the opinion of the Court.