Opinion of the Court.

[42 App. in the Commercial National Bank to the credit of Lambert and Diggs a fund in court subject to the lien here sought to be established. It was derived from a judgment in the suit of Thurstorn v. McLellan, supra, in which plaintiffs took no part as attorneys. Like a judgment, the lien can only be enforced against a fund in the control of the court, recovered in the cause in which the attorney's fees are incurred. Bozon v.

Bolland, 4 Myl. & C. 354, 359, 9 L. J. Ch. N. S. 123, 3 Jur. 884, 4 Jur. 763. The fund in bank to the credit of Lambert and Diggs was not recovered as the result of the compromise. It must be assumed that the executors of McKay stood ready to settle on the basis of the compromise, but Clark, with the assistance of plaintiff Bullowa, by the assignment to McLellan, rendered that course impossible, until the court in the judgment against Clark and McLellan ordered payment to Thurston. This fund, when paid to Thurston's attorney, Diggs, in satisfaction of the judgment, was no longer under the control of the court, and therefore could not be subjected to the satisfaction of plaintiffs' claim, as was decreed by the court below. In Lann v. Church, 4 Madd. Ch. 391, the Vice Chancellor said that he "had not been able to find any case in which it had been held that a solicitor had any lien on the fund recovered in the cause, except for his costs incurred in such cause."

We have not considered the equitable status of plaintiffs to maintain this action in the light of the contract between Lambert and Diggs, by which the funds of defendant were impounded for the purpose of furnishing a basis for this suit; nor have we touched upon the effect of Clark's power of attorney from Thurston, under which he agreed to perform the services involved in this suit for ten per cent of the amount recovered, preferring rather to dispose of the case upon less delicate questions.

The decree is reversed with costs, and the cause is remanded for further proceedings not inconsistent with this opinion. Reversed and remanded.

For motion to recall mandate, see post, p. 308.

D. C.]

Syllabus.

AMBROSE v. BROWN.

EQUITY; RECEIVERS; JOINT-STOCK ASSOCIATIONS; LIMITATION OF ACTIONS; BILLS AND NOTES; COMPUTATION OF TIME; STARE DECISIS; PROMISSORY NOTES.

1. Jurisdiction of the subject-matter of a suit against a receiver for an insolvent joint-stock association who was appointed by the same court as that in which the suit was brought is not affected by the fact that the plaintiff did not obtain leave to sue; especially where, upon demurrer to the bill, the court entered a nunc pro tunc order giving leave to sue as of the date of the original bill.

2. Equity may take jurisdiction of a suit to enjoin the receiver of an insolvent joint-stock association from distributing the assets of the stockholders, or applying them to other purposes than payment of the plaintiff's debt, which is evidenced by a note given by the association under a provision in its constitution authorizing its directors to obtain loans and making them a first lien on the assets before distribution to stockholders.

3. The day upon which a note fell due is to be excluded in computing the time allowed by sec. 1265, D. C. Code [31 Stat. at L. 1389, chap. 854], providing that no action shall be brought upon such an obligation after three years from the time when the right to maintain any such action shall have accrued.

4. Where in 1879 the then appellate court of this District laid down a rule for the computation of time in determining whether an action on a promissory note was barred by the statute of limitations, and that rule remained unquestioned until attacked in this court in 1914, this court held that it would be unjust to overrule it, even if the court were disposed to question its soundness.

5. A joint-stock association's note cannot be avoided upon the theory that it was executed without authority by its directors for money borrowed by them to redeem stock, where such redemption was one of the association's express objects, and the directors, before being given express authority to do so, had borrowed money for such purpose, giving notes therefor and reporting the same at the annual meetings of members, who made no objection, and had, by an amendment to the association's constitution, been given express power to make loans for that purpose before the execution of the note in

suit, which was given in part to take up notes executed before the amendment.

No. 2604. Submitted February 3, 1914. Decided March 2, 1914.

HEARING on an appeal by the defendant from a decree of the Supreme Court of the District of Columbia making the claim of plaintiff to the extent of a certain amount as a first lien upon all of the assets of the building association that may come into the hands of the defendant receiver. Affirmed.

The COURT in the opinion stated the facts as follows:

This is an appeal from a decree establishing an indebtedness of $25,000 against the First Co-operative Building Association of Georgetown, and making it a first lien on all the assets of the association that may come into the possession of the receiver.

July 21, 1911, the bill was filed by S. T. Brown against William E. Ambrose, receiver, and four members of the aforesaid association; the same being an unincorporated joint-stock association, and its members too numerous to be all joined in the suit. The suit is on a note executed by the association, through its president and secretary, on June 20, 1908, payable to the Farmers & Mechanics' Bank of Georgetown one. month after date, in the sum of $27,000.

Plaintiff is the holder of said note for a consideration of $25,000 paid to said bank, which indorsed the same to plaintiff without recourse.

The bill further alleges that on June 6, 1908, in a proceeding in the supreme court of the District the defendant, Ambrose, was appointed receiver of the said building association; that as the creditor of said association he is entitled to preference over the claims of plaintiffs in said suit, who sue as members and stockholders thereof. The prayers are that during the pending of the suit the receiver be enjoined from distributing any of the assets among its stockholders or from applying the same to any other purpose than the payment of plaintiff's debt; that

the assets shall by decree of the court be applied to the payment of plaintiff's debt; and for general relief. The receiver, Ambrose, filed a demurrer to the bill, the grounds of which are: 1. Plaintiff has not alleged that he has obtained leave of the court to sue the receiver. 2. The bill shows no ground for equitable relief. 3. The bill does not show that the right of action accrued within three years next preceding the bringing of the suit. 4. No excuse is shown for the delay in bringing the suit. The other defendants failed to answer, and decree pro confesso was entered against them.

The demurrer was overruled with leave to the receiver to answer, and it was further ordered that the plaintiff have leave to file his bill against the receiver nunc pro tunc as of the 21st day of July, 1911. February 23, the decree pro confesso against the other defendants was made final. The answer of the receiver put in issue the allegations of the bill. Plaintiff having died pending the litigation, his executors, William T. Brown and the National Savings & Trust Company, were substituted as plaintiffs by order entered March 25, 1913.

The evidence shows that the association had for years been a borrower of money from the Farmers & Mechanics' Bank of Georgetown. Reports made to the meetings of stockholders show large sums obtained from years to year by its notes discounted with said bank; and that the note sued on was executed to take up other notes that had been given to said bank and renewed from time to time for years previously.

The note was delivered at the time of its execution, was purchased by plaintiffs' testator November 1, 1910, and indorsed to him, and that the same remains unpaid. Article IX. §§ 2 and 3 of the constitution of the association provide for the withdrawal and payment for stock by the directors. Article XII. also provides for the cancelation and withdrawal of stock. On May 31, 1907, there was added to article IX. by amendment, § 4, which reads: "In case the funds of the association are not sufficient to meet the demands for advances or withdrawals, the board of directors are authorized to borrow sufficient funds from time to time to meet such demand, and said loans so made

Opinion of the Court.

[42 App. shall be a lien upon and paid out of the receipts and assets of the association before distribution among the stockholders." This amendment, it seems, was adopted on the suggestion of the said bank in which the deposits of the association were kept, and to which it was indebted at the time, as the yearly reports show. The only indebtedness of the association, beyond claims that may be due its stockholders, is the note in suit.

Mr. James S. Easby-Smith and Mr. John Lewis Smith for the appellant.

Mr. C. H. Cragin and Mr. J. J. Darlington for the appellees.

Mr. Chief Justice SHEPARD delivered the opinion of the

court:

The foregoing statement of the substance of the pleadings and evidence is sufficient to show the foundation of the errors that have been assigned.

1. The first question arises on the point raised by the demurrer as to the failure to obtain leave to file the bill against the receiver, and as to the effect of the nunc pro tunc order granting such leave.

It is conceded that the cause of action is not of the character on which action may be brought, without leave, by the provisions of sec. 3 of the act of March 3, 1887 (24 Stat. at L. 554, chap. 373, U. S. Comp. Stat. 1901, p. 582). The contention is that without leave previously granted the court had no jurisdiction of the suit; and reliance therefor is upon Barton v. Barbour, 104 U. S. 126, 131, 26 L. ed. 672, 675. In that case the railway company, a Virginia corporation, was operated by a receiver appointed by a court of that State.

The plaintiff, for an injury received on said railway in Virginia, brought her action against the receiver in the supreme court of the District to recover damages. The receiver filed a plea to the jurisdiction, alleging the order appointing him receiver in the State of Virginia, which authorized him to de