GOODRICH, Circuit Judge.
This is a suit by the receiver of a defunct national bank to recover against shareholders their liability upon an assessment.
This moves us to the question in the case.
The theory upon which the defendants urge that this action arose in Kentucky is something like this. The liability of the shareholders to pay an assessment upon stock is contractual in its nature. This contract was performable at the office of the Receiver at his stated address in the City of Louisville, Kentucky, because that is really where the Receiver's notice to shareholders indicated that payment should be made. The cause of action for breach of contract arises under the law of the place where the promisor had a duty to perform and failed to perform. Since that place was the specified office building in Louisville, the cause of action arose there just as the cause of action in tort would arise under the law of the place of wrong. There are authorities which, applying these borrowing statutes, follow the rules suggested as to the place of claim for breach of contract and tort.
This argument is all right if it is said quickly without parsing it. But we do not think that it is accurate as a matter of legal analysis to say that a shareholder's liability on his stock is contractual.
There is a wider ground, however, on which we think the defendants are wrong and which compels a reversal of the judgment of the District Court. The approach, we think, is found in the language of Mr. Justice Frankfurter speaking for the Court in Holmberg et al. v. Armbrecht, et al., 66 S.Ct. 582, 584. In the case which involved liability of shareholders in the Southern Minnesota Joint Stock Land Bank he said: "We do not have the duty of a federal court, sitting as it were as a court of State, to approximate as closely as may be State law in order to vindicate without discrimination a right derived solely from a State. We have the duty of federal courts, sitting as national courts throughout the country, to apply their own principles in enforcing an equitable right created by Congress." In our case the liability imposed upon the shareholders of national banks for the benefits of their creditors is not a state created right, but one created by United States statute. The liability extends to all shareholders regardless of the state where the bank has its principle place of business and regardless of where shareholders live. In dealing with it the rules applicable are not those in which a federal court, sitting in a diversity case, applies state law as accurately as it can. It is, rather, one of those instances where federal courts are enforcing rights arising out of transactions governed by the federal government acting within its constitutional field. Ordinary state rules of law are not applicable to create or to limit the claim.
In reaching this conclusion we are quite conscious that we are in disagreement with our brethren of the Sixth Circuit in the decision they reached in Helmers et al. v. Anderson, 6 Cir., 1946, 156 F.2d 47, a case decided since the submission of the one at bar. We have read the carefully prepared opinion in that case, but are still constrained to follow the view of the matter which we have expressed above.
The judgment of the District Court is reversed and the case remanded for further proceedings in conformity with this opinion.
a. If the litigation is a law suit, the state statute of limitations of the state where the cause of action arose will govern. Chattanooga Foundry & Pipe Works v. City of Atlanta, 1906, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241; Campbell v. City of Haverhill, 1895, 155 U.S. 610, 15 S.Ct. 217, 39 L.Ed. 280.
b. If the litigation is solely in equity the federal courts may adopt similar state equity limitations. Benedict v. City of New York, 1919, 250 U.S. 321, 39 S.Ct. 476, 63 L.Ed. 1005. The federal courts are not bound, however, to adopt state criteria and apply them by analogy. Russell v. Todd, 1940, 309 U.S. 280, 288, n. 1, 60 S.Ct. 527, 84 L.Ed. 754.
c. If litigation is solely in equity and the state wherein the cause of action arose has no analogous equitable action the federal courts will use the doctrine of laches. Speidel v. Henrici, 1887, 120 U.S. 377, 7 S.Ct. 610, 30 L.Ed. 718; Wagner v. Baird, 1849, 7 How. 234, 12 L.Ed. 681.
d. If the litigation in equity is to aid a legal right equity will withhold its remedy if the legal right is barred by a local statute of limitation. Russell v. Todd, 1940, 309 U.S. 280, 289, 60 S.Ct. 527, 84 L.Ed. 754; McDonald v. Thompson, 1902, 184 U.S. 71, 22 S.Ct. 297, 46 L. Ed. 437; Wilson v. Koontz, 1812, 7 Cranch 202, 3 L.Ed. 315.
e. If the litigation involves facts where there is concurrent equity jurisdiction the statute of limitations that bars the legal right also bars recovery in a suit in equity. Guaranty Trust Co. v. York, 1945, 326 U.S. 99, 65 S.Ct. 1464, 89 L. Ed. 2079, 160 A.L.R. 1231; Overfield et al. v. Pennroad Corporation, 3 Cir., 1944, 146 F.2d 889.
"(1) An action upon a contract not in writing, expressed or implied.
"(2) An action upon a liability created by statute, when no other time is fixed by the statute creating the liability. * * *" Kentucky Revised Statutes, Sec. 413.120 (2nd Ed., 1944).