Best v. Davis Sewing Machine Co. — 47 N.Y. St. Rep. 353

Majority

p. 353

William J. Best, Rec’r, App’lt, v. The Davis Sewing Machine Co. et al., Resp’ts.

(Supreme Court, General Term, First Department,

Filed July 7, 1892.)

Headnote

Limitation—Possessory judgment does not stay running on statute.

Plaintiff, upon his appointment, found among the assets of the corporation certain unsealed obligations of the defendant payable in 1876. Defendant brought action to replevin said obligations and recovered judgment, which was reversed on appeal, and upon a new trial plaintiff recovered judgment, which was sustained. He then, in 1884, brought this action upon the obligations. Held, that the running of the statute of limitations was not stayed during the time the possessory judgment in favor of defendant was in force, and that the action was, therefore, barred by the statute.

Appeal from judgment entered on verdict directed in favor of ■defendants, and from order denying motion for a new trial.

The following is the opinion of the court below:

Barrett, J. — The six years statute of limitations plainly governs, as the obligations in question are not sealed instruments. This action was not commenced within six years from the maturity of such obligations, and consequently the plea of the statute must avail, unless the commencement of the action was stayed by injunction or other order of a court or judge, or by a statutory prohibition. Code, § 406. There was here no injunction or statutory prohibition, but it is contended that there was what amounted to “an order of a court or judge” restraining the commencement of the action. It seems that the defendant, the maker of these obligations, brought replevin therefor against the plaintiff, and recovered a judgment for their possession, which judgment was subsequently reversed, and on a new trial judgment was given for the plaintiff that he was entitled to retain the instruments. The plaintiff’s present contention is that the statute did not run while the judgment in the defendants’ favor with regard to the right of possession remained in force. This contention, in my judgment, cannot be sustained. The possessory judgment did not stay the commencement of an action on the obligations. It is true that it may have been pleaded against the plaintiff’s right to recover, but that involved no prohibition of the ■action. The defense would not have been the judgment itself, but the plaintiff’s want of ownership, as to which the judgment was res adjudícala. While the judgment remained unreversed, therefore, it was simply conclusive evidence in support of a single defense to an action on the obligations ; and though in a general sense conclusive, it could have been rebutted by proof of fraud or want of jurisdiction. But, even if the judgment were thus conclusive, and could not have been rebutted, still it did not work any practical inconvenience, for, if pleaded to a complaint on the obligations, the court would undoubtedly have stayed the trial until the determination of the appeal. The rule is well settled that a party who seeks to avoid the statute, notwithstanding- the lapse of the prescribed period, must bring himself expressly within

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some of the exceptions specified in the Code. Sanford v. Sanford, 62 N. Y., 553 . He does not do this merely by showing the existence, for a specified period, of a valid defense to his claim. He must show that he was actually restrained from bringing his action ; not that such action, because of some particular incident, would probably have been unsuccessful. The plaintiff here was not only free at all times to bring an independent action upon these obligations, but I think he might have set up his present demand by way of counterclaim in the possessory action. The maker of the obligations was there the plaintiff; and the subject matter of that action was the ownership of the instruments. Such ownership was a prerequisite to recover upon the obligations, and the plaintiff’s present claim was therefore connected with the subject of the possessory action. If the situation were reversed, there would be no doubt of the defendant’s right in the present action to set up, by way of counterclaim, its ownership of the instruments, and to demand as affirmative relief that the plaintiff deliver them up. The ownership of the instruments is, in effect, the subject of both actions. It is the foundation of one and the gist of the other. Why could not the present plaintiff have said to the plaintiff in the possessory action: “ You are not the owner of these obligations, but I am; and as I am such owner, and as the obligations are due, I demand as a fitting incident to my claim of ownership, if successful, that you pay such obligations? ” It would seem to be as reasonable, and as harmonious with the Code (§ 501, subd. 1), to permit a complete determination of the substantial controversy in this manner as to permit an equitable counterclaim in an action upon the obligations, praying that the ownership be determined, and that the instruments be delivered to the defendant. A verdict must therefore be directed in favor of the defendants." Each group of defendants, appearing by separate attorneys, is entitled to costs. Thus there will be three bills taxed, but, under the circumstances, I shall grant no extra allowance.

Delos McCurdy, for app’lt; John D. Kernan, for resp’ts.

-—In December, 1877, the National Trust Company of New York became insolvent and the plaintiff was appointed receiver of its property. Final judgment of dissolution was entered in April, 1879, under which the plaintiff was continued as receiver. Among the assets which came into his hands were ten bonds purporting to be made by the Davis Sewing Machine Company for the sum of $1,000 each, which by their terms were due on November 1, 1876. These bonds, it would appear, had been pledged with the trust company as collateral for a loan to the Security Bank of Watertown, which remained unpaid at the time the receiver was appointed. In February, 1878, the Davis Sewing Machine Co., by leave of this court, brought against the receiver an action of replevin for the bonds, demanding judgment for their possession and damages for their detention. The answer of the receiver claimed a lien thereon for the unpaid balance of the loan for which they were pledged as security. A

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trial was had upon the issue thus raised in July, 1878, which resulted in favor of the sewing, machine company, awarding them possession and adjudging. that the receiver had no title to, or right to the possession of the bonds. This judgment was by the general term reversed on October 19,1883, and a new trial ordered. In May, 1884, the re-trial was had, which resulted in a judgment in favor of the receiver, awarding him possession of the <■ three bonds which are the subject of the present suit From this judgment an appeal was taken to both the general term and the court of appeals, and the right of the receiver to the possession of the three bonds was finally affirmed.

This suit was commenced as to some of the defendants in March, and as to others in April, 1884. It will be noticed that from July, 1878, to October, 1883, there was a valid outstanding judgment against the receiver denying his ownership or right to the possession of these bonds, and awarding their possession to defendant. It is conceded that if during this period while the judgment was outstanding the running of the statute of limitations was not suspended, then the statute is a bar to the action; for the obligation being promissory notes, and not sealed instruments, the six years statute of limitations applies.

The Code provides (§ 406): “ Where the commencement of an action has been stayed by injunction, or by other order of a court or judge, or by a statutory prohibition, the time of the continuance of the stay is not a part of the' time limited for the commencement of the action.’’

Although there is much force in the argument of appellant that “the effect of the action of replevin and the judgment therein against the receiver was more potent than an injunction or other order of the court, for it not only barred his remedy on the obligations, but judicially denied his right to their possession,” it must be conceded that the judgment is not one of the exceptions provided by the Code preventing the running of the statute.

The question therefore is presented, whether there is any-ground other than the exceptions provided by statute which will suspend the running of the statute of limitations after it has once commenced to run.

We agree with the view expressed by the learned judge below, “ that the rule is well settled that a party who seeks to avoid the statute, notwithstanding the lapse of the prescribed period, must bring himself expressly within some of the exceptions specified in the Code.”

In the case of McQueen v. Babcock, 41 Barb., 337 , it was decided that a right of action not expressly stayed or prevented by an injunction must be prosecuted within the prescribed period or it is barred. In the case of Sanford v. Sanford, 62 N. Y., 553 , the debtor was declared a lunatic and had no committee who could be served. Although the argument was there made that for this reason the statute did not run, the court held that there was no provision for an exception in such a case. We think that the authority of this case and an examination of the earlier cases will show that the statute when once it commenced to run was not

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suspended except pursuant to some other express provision of law ; and it was to abate the vigor of this rule that caused the enactment of § 406 of the Code.

In view of the clear and satisfactory opinion of the learned judge below, it is unnecessary for us to do more than adopt his-reasoning and concur in the result reached by him. - We are, therefore, of opinion that the judgment appealed from should be affirmed, with costs.

Van Brunt, P. J., O’Brien and Patterson, JJ., concur.