We are asked to determine what statute of limitations governs liability under G.L.c. 140C, § 10 (b), as amended by St. 1972, c. 229, § 9, the Truth-in-Lending Act. We hold that an action to enforce that liability, though denominated an action of contract, is an action for a penalty under a penal statute and is subject to G.L.c. 260, § 5, requiring that the action be commenced within one year after the offense is committed. A judge of the Superior Court therefore correctly ruled that the present action was barred, and we affirm.
By writ dated June 4, 1973, the plaintiffs brought an action of contract against the defendant for $20,000 in a District Court. The action was removed to the Superior Court, and a substitute declaration was filed, alleging a loan of $3,000 by the defendant to the plaintiffs on or about November 6, 1969, breaches of the loan agreement by the defendant by failure to make disclosures required by G.L.c. 140C, and "special" or "statutory" damages totaling $13,200. The defendant filed a demurrer stating four grounds, one of which was the statute of limitations provided by G.L.c. 260, § 5, and a motion to dismiss on the same ground. The demurrer was sustained and the motion allowed, and the plaintiffs appealed. G.L.c. 231, § 96, as it appears in the Tercentenary Edition. The case was transferred from the Appeals Court to this court under G.L.c. 211A, § 10 (A).
1. Necessity for pleading. Before July 1, 1974, the statute of limitations was to be pleaded by way of defense and could not successfully be made ground for demurrer in an action at law. Aisenberg v. Royal Ins. Co. Ltd. 266 Mass. 543, 546 (1929), and cases cited. Mass. R. Civ. P. 8 (c), 12 (b), 365 Mass. 749, 754 (1974). The motion to dismiss was not within G.L.c. 231, § 59, as amended through St. 1965, c. 491, § 1. Cf. Mass. R.
2. Civil penalties. The Massachusetts Truth-in-Lending Act is closely modeled on the Federal Truth-in-Lending Act. Compare G.L.c. 140C, inserted by St. 1969, c. 517, § 1, with Pub. Law (90th Cong.) 321, 82 Stat. 146 (1968), 15 U.S.C. §§ 1601-1665 (1970). The preamble to our act states that its purpose is "that the laws of the commonwealth relative to the disclosure of consumer credit costs and terms be brought into conformity with federal law and regulations." It was designed to provide requirements "substantially similar" to those imposed under the Federal act and thus to make possible an exemption from the Federal act under § 123 of that act, 15 U.S.C. § 1633 (1970). Such an exemption was granted by the Board of Governors of the Federal Reserve System. Supp. III to Reg. Z, 12 C.F.R. (1974) Part 226, 35 Fed. Reg. 10358 (1970).
Section 10 (b) of our act provides for the recovery of twice the amount of the finance charge in a consumer credit transaction but not less than $100 nor more than $1,000 from a creditor who fails to make a required disclosure. That provision is substantially similar to § 130 (a) of the Federal act, 15 U.S.C. § 1640 (a)
Application of the one-year statute to such a liability is consistent with our prior decisions, though perhaps not required by them. We have held that double or treble damages awarded to the party aggrieved are not penal for this purpose. Goodridge v. Rogers, 22 Pick. 495, 496-498 (1839). Adams v. Palmer, 6 Gray 338, 339 (1856). Nor is the liability of a corporate officer for the debt of a corporation, though imposed by reason of his signing a false corporate statement. E.S. Parks Shellac Co. v. Harris, 237 Mass. 312, 318-323 (1921). A liability in favor of a person other than the one aggrieved, such as the Commonwealth or an informer, is penal and subject to the one-year statute. Barnicoat v. Folling, 3 Gray 134, 135 (1854) (unlawful erection of building). Cole v. Groves, 134 Mass. 471, 472 (1883) (gaming). See Donovan v. Eastern Racing Assn. Inc. 324 Mass. 393, 394 (1949) (same). Recovery of $100 by a parent for the sale of intoxicating liquor to his minor child was held penal. O'Connell v. O'Leary, 145 Mass. 311, 312-313 (1887).
In the present case the disclosure is required for the protection of the consumer, and the action must be brought by the consumer to whom disclosure should have been made. Thus the recovery is by the party aggrieved and is remedial in a certain sense, as in the O'Connell
We do not have before us and do not pass on any question with respect to the period of limitations governing an action to rescind a transaction as in the Shepard case, supra.
3. Fraudulent concealment. On the assumption that the present action is governed by the one-year statute of limitations, the plaintiffs contend that the period was tolled by G.L.c. 260, § 12, until the nondisclosures were discovered. They recognize "that ordinarily mere silence is not a fraudulent concealment, and that there must be something in the nature of positive acts with intent to deceive." Stetson v. French, 321 Mass. 195, 198 (1947), and cases cited. But, they say, mere failure to reveal may be fraudulent where there is a duty to reveal, and breach of the statutory duty imposed by the Truth-in-Lending Act should be given the same effect as breach of a fiduciary duty, citing Burns v. Massachusetts Inst. of Technology, 394 F.2d 416 (1st Cir.1968); Federal Ins. Co. v. Summers, 330 F.Supp. 1041 (D. Mass. 1970). See Samia v. Central Oil Co. of Worcester, 339 Mass. 101, 112-113 (1959); Jamesbury Corp. v. Worcester Valve Co. Inc. 443 F.2d 205, 209 (1st Cir.1971).
We reject this contention. No fiduciary relation is shown, and no positive acts of concealment. What must be fraudulently concealed is "the cause of such action," in this case the failure, at the time the loan was made, to make the disclosures required by the Truth-in-Lending Act. Wachtel v. West, 476 F.2d 1062, 1065-1066 (6th Cir.1973), cert. den. 414 U.S. 874 (1973). Stevens v. Rock Springs Natl. Bank, 497 F.2d 307, 310 (10th Cir.1974). So far as appears, the plaintiffs knew the terms