Benson v. Eastern Bldg. & Loan Ass'n

• Decision Date: 06 March 1903
• Citation: 174 N.Y. 83,66 N.E. 627
• Parties: BENSON v. EASTERN BUILDING & LOAN ASS'N.
• Court: New York Court of Appeals Court of Appeals

174 N.Y. 83

66 N.E. 627

BENSON

v.EASTERN BUILDING & LOAN ASS'N.

Court of Appeals of New York.

March 6, 1903.

Appeal from Supreme Court, Appellate Division, Fourth Department.

Action by Cadwell Benson against the Eastern Building & Loan Association. From a judgment of the Appellate Division (74 N. Y. Supp. 506) affirming a judgment for defendant, plaintiff appeals. Reversed.

VENUE-EFFECT OF STIPULATION-JURISDICTION.

1. A provision, in a certificate of a building association, that an action against the association by the holder of the certificate shall be brought only in a certain county, affects only the venue of the action, and is no defense if the action is brought in another county, in violation of such stipulation, the remedy of the association being to move for a change of venue to the stipulated county.

D. P. Morehouse, for appellant.

Daniel A. Pierce, for respondent.

CULLEN, J.

The action was brought on certain certificates or contracts by which the defendant agreed to pay to the plaintiff in satisfaction of his shares the sum of $1,000 at the expiration of 78 months from the date of the certificates, provided the plaintiff made the periodical payments therein required. The venue of the action was laid in the county of Oswego. Judgment was rendered dismissing the complaint on the ground that it was provided by said certificates that ‘any action brought against this association [defendant] shall be commenced within six months after filing proofs and in the county of Onondaga and state of New York.’

We think the disposition of the case below was erroneous. After the plaintiff had established a prima facie case, he could be defeated only by disproof of his cause of action by proof of an affirmative defense, or by showing that the court had no jurisdiction of the subject-matter. The condition of the certificates that any action against the defendant should be brought in the county of Onondaga did not constitute a defense to the cause of action. It did not purport to destroy the plaintiff's claim, but merely to prescribe where that claim should be enforced. The distinction between such an agreementand one providing that an action shall not be brought after a specified time is clearly pointed out by Chief Justice Shaw in Nute v. Hamilton Mutual Insurance Company, 6 Gray, 174: ‘A stipulation that an action shall not be brought after a certain day or the happening of a certain event, although in words it may seem to be a contract respecting the remedy, yet it is so in words only. In legal effect it is a stipulation that a right shall cease and determine if not pursued in a particular way within a limited time, and then it is a fit subject for contract, affecting the right created by it. But the remedy does not depend on contract, but upon law; generally the lex fori, regardless of the lex loci contractus, which regulates the construction and legal effect of the contract. * * * We do not mean to say that many of these are stipulations which it would be unlawful to make, or void in their creation, if made on good consideration, or that they do not become executory contracts upon which an action would lie, and upon which damages, if any were sustained, might be recovered. Still they would not be conditions annexed to the contract, to defeat it if not complied with, and so to be used by way of defense to an action upon it.’

In Daley v. People's Building, Loan & Saving Association, 178 Mass. 13, 59 N. E. 452, where the provision in the contract was substantially the same as that now before us, the Supreme Court of Massachusetts held that the condition was effective to prevent any action on the contract being brought in the courts of that state. In the opinion there delivered the case of Nute v. Hamilton Ins. Co., is not overruled, but distinguished in the fact that in the earlier case the...