the exercise of that degree of care and vigilance that the law generally exacts of persons holding similar positions.

Nor can I yield to the plea that is so much pressed in the briefs of counsel, that most of the neglects and misfeasances charged in this bill are of such long standing that they are shielded from inquiry by the statute of limitations. After careful examination, my clear conviction is that the statute in question has no place in this proceeding.

It is a mistake, sure to mislead, to regard this suit as one solely in right of the insolvent corporation. It does not rest upon that narrow footing, for the receiver represents not only the corporate body, but likewise the depositors and creditors; and the question which presents itself, therefore, is as to the status of the managers with reference to the latter two classes of persons; and as to them, I entertain no doubt whatever that these officers must respond to them in the character of their trustees.

In reaching this conclusion, the principle so often stated in the decisions and text-books is in nowise controverted, that a trust, to be exempt from the operation of the statute of limitations, must be of a nature to stand the triple test, viz.: first, it must be a direct trust; second, it must be of a kind belonging exclusively to the jurisdiction of a court of equity; and, third, the question must arise between the✔ trustee and the cestui que trust. And in each of these respects, the present case harmonizes with the standard. If it is a trust at all, it certainly is a direct one, for it arises immediately upon the placing of the funds under the control of this body of officers. Such a transaction has nothing of the nature or qualities of those indirect trusts that require, for their creation, a decree of a court of chancery, as, for example, where money, under certain circumstances, has been fraudulently secreted, and a decree in equity will ofttimes convert it into a trust.

It is admitted, on all sides, that depositors in one of these banks acquire, ipso facto, an equitable right, which, by taking a certain course. they can put in force against the directors or managers, if they have sustained a loss by reason of the misfeasance of such officers; and if such a right exist, what is it, if not the right of a cestui que trust against his trustee? This right, thus referred to, is, very plainly, not a right inherent in a contract, for a depositor pays his money to the corporation, and makes no bargain with the managers. And yet the law indisputably establishes an equitable right in his favor from the naked fact of his relationship with this class of officers. And it would be singular, indeed, if the law did not raise up a trust out of such a connection.

The affair between the depositor and the managers embraces all the materials out of which trusts are created, for I know of no reason why the transactions denominated trusts have been invested by law with their peculiar qualities and characteristics, except that the prop

erty that they embrace is put, by way of confidence, under the absolute control of the person called the trustee, and that the person in whose favor it is so placed cannot enforce or protect his interest in a court of law. And this in all respects is the situation when a man places his money in one of these banks; the transfer of such money is nominally to the corporation, but with the intent to put it under the unsupervised control of the managers, in whose appointment the depositor takes no part, his sole reliance being in the honesty and general trustworthiness of such officers, and such an affair, as it admittedly creates an equitable right on the one side, and a correlative obligation on the other, necessarily establishes a direct trust.

It will be also observed that the transaction exhibits the second and third requisites of a trust, inasmuch as the right of the depositor to look to the managers for reparation when a loss has been occasioned by their default, is an equitable one, cognizable only in a court of conscience, and the present proceeding is between the trustee and the legal representative of the cestuis que trustent. And upon this subject the court of appeals of New York, in the case of Hun v. Cary, 82 N. Y. 65, 37 Am. Rep. 546, decides that the relation between a savings bank and its directors is that of principal and agent, and the relation between its directors and depositors is similar to that of trustee and cestui que trust.

Nor is a contrary view upon this subject expressed by the supreme court of Pennsylvania in Spering's Appeal, 71 Pa. 11, 10 Am. Rep. 684, and which is a decision much relied on by the counsel of some of the defendants. The only pertinent point decided in that case is that the statute of limitations began to run in favor of a director as soon as he vacated his office, but in so deciding the court was careful to say that the case before it was one between the stockholders and directors, and not one between the latter class of officers and creditors or depositors. With respect to the effect of the statute upon the doings. of the officers so long as they continued in office, the court expressly refused to express an opinion upon the question. It is obvious, therefore, that his case has but small pertinency to the present inquiry.

And looking upon the present controversy as growing out of a trusteeship, it seems to me incompatible with such a conclusion to hold that the statute in question will begin to run upon the vacation of his office by the manager, because such an act has not changed the essential nature of the transaction, for the right of the depositor remains, as before, a purely equitable one, which he cannot enforce in a court of common law. And it is the accrual of the right of action at law which calls the statute, by force of its own terms, into play. Lapse of time, therefore, is not an absolute bar to an equity of this nature, but lapse of time is often a strong, and sometimes a conclusive, circumstance in the administration of the law of equity."

79 See In re National Funds Assurance Co., L. R. 10 Ch. Div. 118 (1878).

[The Court concluded that the bill showed delinquency in official duty by the defendant officers.]

The decision below should be reversed, and a decree made in favor of the receiver on all the demurrers. Decree unanimously reversed.

MITCHELL et al. v. HOTCHKISS.

(Supreme Court of Connecticut, 1880. 48 Conn. 9, 40 Am. Rep. 146.

LOOMIS, J. This action was originally brought by the plaintiffs, as creditors of the Star Tool Company, a joint stock corporation located at Middletown in this state, against Julius Hotchkiss, then in life, but since deceased, to recover the amount of their debt contracted during the period that Hotchkiss as president of the corporation intentionally neglected to comply with the statutory requirements as to filing with the town clerk of Middletown certain certificates showing the condition of the affairs of the corporation. For the purposes of this case it is conceded that Hotchkiss had by his neglect become liable under the statute referred to. But pending the suit and before trial he died leaving a will. The plaintiffs thereupon caused to be issued a scire facias, summoning his executors into court to show cause why they should not be made parties defendant to the suit. The executors appeared and filed a plea in abatement on the ground that the action, originally begun against Hotchkiss, did not upon his death survive against them. To this plea the plaintiffs demurred, but the court overruled the demurrer and dismissed the scire facias, and the question comes before this court for review by the plaintiffs' motion in error. There is no statute controlling the question under consideration. The only provision is that found in the General Statutes, p. 421, § 6, that "if the defendant in any action shall die before final judgment, it shall not abate if it might originally have been prosecuted against his executor or administrator." To determine the question whether an action might originally have been brought to charge the estate of Hotchkiss with the statutory liability referred to incurred by him in his life time, we must invoke the aid of the common law.

The principles of the common law on this subject are embodied in the maxim-"Actio personalis moritur cum persona."

The executor represents the person of the testator, and in legal consequence may be said to continue his existence with respect to all his debts, covenants and contract obligations, which became due during his life or after his death, except such as depend on his personal skill, in which is always implied the condition that the contractor is not prevented from completing his contract by the act of God.

But all private as well as public wrongs and crimes are buried with

80 Facts sufficiently stated in the opinion, a part of which is omitted.

the offender. The executor does not represent or stand in the place of the testator as to these, or as to any acts of malfeasance or misfeasance to the person or property of another, unless some valuable fruits of such acts have been carried into the estate; and this in strictness constitutes no exception to the rule, for the executor in such case cannot be made liable for the tort of his testator, but only for the implied promise which the law raises and allows the injured party to put in the place of the wrong.

In the light of these principles we are called upon to determine the nature of the liability imposed by the statute in question.

By section 17, p. 280, of the General Statutes, it is made the duty of the president and secretary of joint stock corporations annually, on or before the 15th day of February or of August, to make and lodge with the town clerk where the corporation is located, a certificate signed and sworn to by them, showing the condition of its affairs as nearly as the same can be ascertained on the first day of January or of July next preceding the time of making such certificate, stating the amount of paid capital, the cash value of its real and personal estate and credits, and the name, residence and number of shares of each stockholder.

Section 18, which creates the liability on which this action is founded, is in these words: "Any president or secretary of such à corporation who shall intentionally neglect or refuse to comply with the provisions of the preceding section, shall be liable for all the debts of said corporation contracted during the period of such neglect."

We do not see how it is possible to construe this statute as creating or attempting to create any contract relation or duty between the creditors of a corporation and its president. The adoption of such a construction would suggest grave doubts as to the validity of the act which should attempt so arbitrarily to make a debtor out of a stranger to the debt, or in other words, to make the debt of one person the debt of another. There was no privity between Hotchkiss and the plain-/ tiffs; they had no transaction with each other, and the former owed the latter no private duty from which a promise might be implied.

The argument for the plaintiffs seems to be based principally upon the assumption that the officers of a corporation are under some original common law liability to pay all the debts contracted by it while they as officers are in default as to the performance of any of the duties prescribed by statute; that their exemption from personal liability under the corporate organization is not an absolute but only a conditional one.

This reasoning in fallacious. There may be cases where the organization is so defective that creditors need not recognize it as a corporate being at all, in which case the so-called officers or active agents in its business transactions may perhaps under some circumstances make themselves personally liable. But conceding the lawful organization and existence of the corporation, the existence of all its members, of

ficers as well as stockholders, so far as its transactions are concerned, become merged in the artificial being, so that in contemplation of law they are utter strangers to those who deal with the corporation; and as stockholders and officers they are never liable except so far as the law makes them liable.

The theory of the plaintiffs' declaration also tends to confute the argument. The action does not profess to be predicated on any promise, original or collateral, express or implied, but is an action on the case founded on the statute. There is nothing in the record to suggest a possibility that the estate of the testator could in any way have been increased or benefited by the misfeasance or non-feasance complained of.

It seems clear that the duty to be performed was a public duty, required by public policy for the general welfare. In the language-of Mr. Justice Clifford, in giving the opinion relative to the identical statute we are considering, in the case of Providence Steam Engine Co. v. Hubbard, 101 U. S. 188, 25 L. Ed. 786, the act was passed "by the state to enable the business public to ascertain the pecuniary standing of joint stock corporations.'

The wilful neglect of the prescribed duty was a public wrong invoking the penalty of the statute; and the statute comes clearly within the definition of a penal one, as given in 2 Bouvier's Law Dictionary, where it is defined as "a statute that inflicts a penalty for the violation of some of its provisions."

The Supreme Court of the United States in the case just referred to, after full discussion, unhesitatingly pronounced this statute a penal one, to be strictly construed as such, and if penal it necessarily follows that the action upon it will not survive the death of the person for. whom the penalty was intended, and the executors are not liable. 3 Williams on Executors (6th Am. Ed.) bottom page 1729; Hambly v. Trott, Cowp. 372; United States v. Daniel, 6 How. 11, 12 L. Ed. 323. * *

There is no error in the judgment complained of. In this opinion the other Judges concurred.81

81 Compare Huntington v. Attrill, 146 U. S. 657, 13 Sup. Ct. 224, 36 L. Ed 1123 (1892).