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Warner v. Buffalo Drydock Co.

November 6, 1933

WARNER ET AL.
v.
BUFFALO DRYDOCK CO.



Appeal from the District Court of the United States for the Western District of New York.

Author: Hand

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

This appeal raises two questions. The first is whether the decree in the former suit in admiralty that dismissed a libel because of laches, which was founded upon the very cause of action asserted here, is a bar to the present action. The second is whether, in case the decree in admiralty be not a bar, the plaintiffs offered sufficient proof of defendant's negligence for submission to the jury.

The Effect of the Decree in Admiralty.

The Ohio statute of limitations, which the court of admiralty held to be a bar to the cause of action, provided that: "An action for bodily injury or injuring personal property shall be brought within two years after the cause thereof arose." Gen. Code Ohio, ยง 11224-1.

The defendant insists that the decision of the court of admiralty where the same cause of action was asserted by and against the same parties as here is a bar to the present action. This is so if the decree in admiralty can be regarded as a judgment on the merits.

A decision that the Ohio statute of limitations barred the remedy was not res judicata in an action to assert plaintiffs' rights in another forum. If the Ohio statute had extinguished the plaintiffs' rights, as in case of adverse possession of real property beyond the statutory period of limitation, the situation would be different. The decisions of the Supreme Court and the English cases all indicate that the judgment of the court of a foreign state which dismisses a cause of action because of the statute of limitations of the forum is not a decision upon the merits and is not a bar to a new action upon the identical claim in the courts of another state. This is the settled doctrine of the English courts. Harris v. Quine, L.R. 4 Q.B. 652; Huber v. Steiner, 2 Bing, N.C. 202; Williams v. Jones, 13 East. 439. The same rule has been applied by the Supreme Court.

In Bank of United States v. Donnally, 8 Pet. 361, 8 L. Ed. 974, the declaration alleged that the defendant had promised, as surety, to pay a note made and payable in the state of Kentucky, that the note was not under seal, but that by the law of Kentucky such a note was placed upon the same footing as a note under seal. The defendant pleaded the five-year statute of limitations of Virginia where the action for breach of the promise to pay was brought in the United States District Court. The plaintiff demurred to the plea, and the demurrer was sustained by the District Court. The Supreme Court held that the demurrer should have been overruled because the remedy sought in Virginia was to be governed by the law of the forum and not by the law of Kentucky which allowed the time within which to sue given in case of instruments under seal. At page 370 of 8 Pet., Story, J., said: "As the contract, upon which the original suit was brought, was made in Kentucky, and is sought to be enforced in the state of Virginia, the decision of the case in favor of the defendant, upon the plea of the statute of limitations, will operate as a bar to a subsequent suit in the same state; but not necessarily as an extinguishment of the contract elsewhere, and especially in Kentucky."

At page 371 of 8 Pet., Story, J., further said: "The general principle adopted by civilized nations is, that the nature, validity and interpretation of contracts, are to be governed by the law of the country where the contracts are made, or are to be performed; but the remedies are to be governed by the laws of the country where the suit is brought; or, as it is compendiously expressed, by the lex fori. No one will pretend, that because an action of covenant will lie in Kentucky, on an unsealed contract made in that state, therefore, a like action will lie in another state, where covenant can be brought only on a contract under seal. It is an appropriate part of the remedy, which every state prescribes to its own tribunals, in the same manner in which it prescribes the times within which all suits must be brought. The nature, validity and interpretation of the contract may be admitted to be the same in both states; but the mode by which the remedy is to be pursued, and the time within which it is to be brought, may essentially differ. The remedy, in Virginia, must be sought within the time, and in the mode, and according to the descriptive character of the instrument, known to the laws of Virginia, and not by the description and character of it, prescribed in another state."

In Brent v. Bank of Washington, 10 Pet. 596, 617, 9 L. Ed. 547, the earlier decision in Bank of United States v. Donnally was cited with approval, and the Bank of Washington as the holder of certain shares of stock as security for an outlawed claim was adjudged to be entitled to enforce its lien because, while "the legal remedy is barred, * * * the debt remains as an unextinguished right."

The same line of reasoning was followed in M'Elmoyle v. Cohen, 13 Pet. 312, 10 L. Ed. 177; Townsend v. Jemison, 9 How. 407, 13 L. Ed. 194; Campbell v. Holt, 115 U.S. 620, 6 S. Ct. 209, 29 L. Ed. 483, and Le Roy v. Crowninshield, 2 Mason, 151, Fed. Cas. No. 8,269. All the court in Ohio decided was that the remedy was barred there because of laches. If another action had been brought in that court, the Ohio decree would have been a bar, for it determined the applicability of the Ohio statute of limitations which would necessarily have been involved in any jurisdiction where that statute operated. Such was the situation in People ex rel. Best v. Preston, 62 Hun, 185, 16 N.Y.S. 488, relied on by the appellee, and in Parkes v. Clift, 9 Lea, 524.

The Ohio decree does not fail to bar the remedy in the present action because it is not res judicata as to everything which it decided, but because it did not decide that the plaintiffs' claim was extinguished, but only that they could not sue in Ohio on account of the local statute of limitations.

In Brand v. Brand, 116 Ky. 785, 76 S.W. 868, 873, 63 L.R.A. 206, an action was brought in Kentucky upon a promissory note made in Missouri. There had been a previous action in New York where judgment was rendered for the defendant solely under the statute of limitations of New York. The Kentucky court held that the New York judgment was not a bar and that its only effect was to establish that the plaintiff had no remedy under the laws of New York for the enforcement of her claim. It added "that that ...


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