Guaranty Trust Co. v. York
United States Supreme Court
326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079 (1945)
- Written by DeAnna Swearingen, LLM
Facts
Guaranty Trust Co. (Guaranty) (defendant) was the trustee tasked with protecting the interests of the purchasers of notes issued by Van Sweringen Corporation. When Van Sweringen defaulted on its debt, Guaranty helped it buy back the notes for less than face value. Noteholder Grace York (plaintiff) sued Guaranty in federal court, asserting a state-law claim for breach of trust based on Guaranty’s failure to protect the noteholders’ interests. Because York sought an accounting, rather than monetary damages, the action was an action in equity, not an action at law. The suit was brought in federal court based only on the diversity of citizenship between the parties, and consequently New York substantive law governed. Guaranty claimed the suit was time-barred by a New York statute of limitations. York argued that since the action was in equity, as opposed to at law, the federal court was not bound by the statute of limitations. The district court granted summary judgment in Guaranty’s favor, finding York’s claim was time-barred. However, the court of appeals reversed, agreeing with York that the New York statute of limitations did not bar her equitable claim. The United States Supreme Court granted certiorari.
Rule of Law
Issue
Holding and Reasoning (Frankfurter, J.)
Dissent (Rutledge, J.)
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