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April 16, 1969

Lindsley, et al.

Cooper, District Judge.

The opinion of the court was delivered by: COOPER

COOPER, District Judge:

On February 18, 1965 plaintiff Saylor, a stockholder of Tonopah Mining Company of Nevada (Tonopah), commenced this derivative action on behalf of his corporation against several of its directors as well as certain corporations allegedly affiliated with Tonopah or under the control of its directors. Jurisdiction is based upon federal statutes *fn1" and the doctrine of pendant jurisdiction, with no allegation of diversity of citizenship.

 The complaint is based upon the sale and transfer by Tonopah to Mines Incorporated (Mines), in 1951 of 60%, and in 1953 of the remaining 40% of the stock of a subsidiary, Tonopah Nicaragua Company (Tonopah Nicaragua) the principal asset of which was a copper mine located in Nicaragua (the Rosita Mine), and the subsequent transfer in 1955 of the Rosita Mine to Rosita Mines Ltd., a wholly-owned subsidiary of LaLuz Mines Ltd. (LaLuz). It alleges that both during and since these transactions the seller Tonopah, the buyer Mines, and the eventual transferee LaLuz, were all under defendants' domination and control; that the sale of Tonopah Nicaragua stock to Mines was effected at less than a fair consideration; that defendants conspired to invest ownership of the Rosita Mine in Rosita Mines Ltd., the wholly-owned LaLuz subsidiary, for the personal benefit of certain of the defendants; and that in furtherance of the conspiracy, information pertaining to the true extent and value of the copper reserves at the Rosita Mine and concerning which defendants were aware, was concealed from, and certain other facts misrepresented to, the stockholders of Tonopah.

 It is alleged that these acts constitute violations of the Investment Company Act of 1940, *fn2" the Securities Act of 1933, *fn3" the Securities Exchange Act of 1934 *fn4" and the rules and regulations thereunder, *fn5" and a waste and spoilation of the Tonopah assets and a breach of fiduciary duty on the part of the defendant directors of Tonopah.

 By way of relief, the complaint demands a judgment (1) voiding the sales and transfers of Tonopah Nicaragua stock; (2) rescinding such sales of stock; (3) declaring the stock and assets of Tonopah Nicaragua to be the property of Tonopah and impressing a trust thereon; (4) requiring that all stock and assets of Tonopah Nicaragua subject to the control of defendants be reconveyed to Tonopah; (5) requiring LaLuz to turn over to Tonopah the stock of Rosita Mines Ltd.; (6) requiring defendants to account to Tonopah for damages and profits; and (7) enjoining further transfers by defendants of Tonopah Nicaragua stock or Tonopah assets.

 Certain defendants moved for summary judgment on the ground of res judicata and, alternatively, on the ground that the suit was barred by the applicable statute of limitations. Defendant Tonopah moved in the alternative for an order requiring plaintiff to post security for the reasonable expenses which Tonopah may incur in connection with this suit. This Court granted defendants' motion for summary judgment holding that dismissal *fn6" of a prior stockholders derivative suit instituted in 1957 in this District by one Hawkins and involving the same operative facts as the Saylor complaint constituted res judicata as to Saylor's claims. See Saylor v. Lindsley, 274 F. Supp. 253 (S.D.N.Y. 1967). That judgment was reversed on the ground that the dismissal in Hawkins was not on the merits, and remanded to us for consideration of defendants' contention that the statute of limitations has run. Saylor v. Lindsley, 391 F.2d 965 (2d Cir. 1968).

 Plaintiff's contention that this Court disposed of defendants' motion for summary judgment in toto by virtue of our order granting defendant summary judgment on the ground of res judicata is without merit. *fn7" Plaintiff's allegation in support thereof that factual issues must be resolved before the statute of limitations issue can be determined will, of course, be considered in connection with plaintiff's defenses to defendants' motion for summary judgment. *fn8" General Rule 34 of the Local Court Rules requires that further proceedings be referred to the same Judge, after remand by an Appellate Court, when "further proceedings not requiring the trial of an issue of fact are appropriate."

 Defendants' motion for summary judgment on the ground the statute of limitations has run is properly still before us, since only in the absence of factual issues could defendant be entitled to summary judgment. See Rule 56, F.R. Civ. P. Thus, upon defendants' moving papers renewing their motion for summary judgment on the ground the statute of limitations has run (without the need for the filing of a new motion), we proceed to a consideration of the issues.

 I Statute of Limitations

 A. Federal claims

 1. The applicable period

 We consider initially whether the statute of limitations presents a bar to plaintiff's federal claims. None of the federal statutory provisions allegedly violated by defendants contain a statute of limitations applicable to civil actions for violations thereof; nor is there any general federal statute of limitations applicable to civil actions based upon federal statutes. In such instances where Congress creates a federal right but does not prescribe a period for its enforcement, the federal court will "borrow" the statute of limitations applicable under the law of the forum state. See Cope v. Anderson, 331 U.S. 461, 91 L. Ed. 1602, 67 S. Ct. 1340 (1947); Holmberg v. Armbrecht, 327 U.S. 392, 90 L. Ed. 743, 66 S. Ct. 582 (1946); Rawlings v. Ray, 312 U.S. 96, 85 L. Ed. 605, 61 S. Ct. 473 (1941); Moviecolor Ltd. v. Eastman Kodak Co., 288 F.2d 80, 83, 90 A.L.R.2d 252 (2d Cir. N.Y. 1961), cert. denied 368 U.S. 821, 7 L. Ed. 2d 26, 82 S. Ct. 39.

 Judge Friendly set forth in Moviecolor the standards to be followed and law to be consulted by a federal court faced with borrowing a state statute of limitations:

"[When] a state has established different periods of limitation for different types of action, a federal court enforcing a federally created claim looks first to federal law to determine the nature of the claim and then to state court interpretations of the statutory catalogue to see where the claim fits into the state scheme. . . . Similarly, a federal court will follow state decisions as to how far a cause of action must be 'complete' to have 'accrued' under state limitation statutes but will look to federal law to determine what needs be done to advance a federally created right to the level so required . . .; it will also look to state decisions to determine where the cause of action accrued . . . ."

 Defendants maintain the appropriate period to be six years, contending that the sale of Tonopah Nicaragua stock giving rise to the cause of action took place in Pennsylvania where Tonopah had its headquarters and principal place of business. See Zeckhausen Affidavit, paras. 5 and 9. Upon this they argue that plaintiff's cause of action arose, if at all, in Pennsylvania; and that, accordingly, Section 13 of the Civil Practice Act, *fn9" New York's "borrowing statute," applies here. *fn10" See Cope v. Anderson, 331 U.S. 461, 91 L. Ed. 1602, 67 S. Ct. 1340 (1947). If so, the shorter of the periods provided by New York and Pennsylvania as to actions such as the instant complaint would limit the time within which suit may be brought. In determining which is shorter we must consider not only the statutory period, but "all its accouterments," including tolling doctrines and rules governing accrual of causes of action. See Lowell Wiper Supply v. Helen Shop, Inc., 235 F. Supp. 640, 644 (S.D.N.Y. 1964).

 The applicable Pennsylvania period of limitations as to each of plaintiff's claims is six years. See 12 P.S. Pa. §§ 31 and 41. Where there is an affirmative independent act of concealment of the facts giving rise to the cause of action, and not mere silence or non-disclosure, the right of action does not accrue and the Pennsylvania statute of limitations does not begin to run until discovery, or until discovery could have been made, by the exercise of reasonable diligence. See Lutherland, Inc. v. Dahlen, 357 Pa. 143, 53 A.2d 143 (1947); Overfield v. Pennroad Corp., 146 F.2d 889 (3d Cir. 1945); Federal Deposit Insurance Corp. v. Ciaffoni, 176 Pa. Super. 91, 107 A.2d 211 (1954); American Auto Insurance Co. v. Rosamilia, 36 North. 102 (1965); Daugherty v. Theires, 26 D. & C. 2d 517 (1963); Iacaponi v. New Amsterdam Casualty Co., 258 F. Supp. 880 (W.D. Pa. 1966).

 New York also limits all claims, legal or equitable, against officers, directors or shareholders of a corporation to a period of six years. *fn11" See CPA § 48(8). See also, Augstein v. Levey, 3 AD 2d 595, 162 N.Y.S.2d 269 (1st Dept. 1957), aff'd 4 N.Y. 2d 791, 173 N.Y.S.2d 27, 149 N.E.2d 528 (1958). However, the statute begins to run from the time of the wrongdoing without regard to the date of discovery. *fn12" See CPA § 11. In view of the New York accrual rule, we may consider the New York period shorter than that of Pennsylvania, *fn13" at least with respect to those federal claims of plaintiff's that fail to meet ...

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