De Fay v. EAST & WEST INS. CO. OF NEW HAVEN

• Decision Date: 27 November 1951
• Docket Number: No. 48 C 1304.,48 C 1304.
• Court: U.S. District Court — Northern District of Illinois
• Parties: DE FAY et al. v. EAST & WEST INS. CO. OF NEW HAVEN.

101 F. Supp. 922

DE FAY et al. v. EAST & WEST INS. CO. OF NEW HAVEN.

No. 48 C 1304.

United States District Court, N. D. Illinois, E. D.

November 27, 1951.

Marshall A. Pipin and Tom L. Yates, Chicago, Ill., for plaintiffs.

Samuel Levin, Chicago, Ill., for defendant.

LA BUY, District Judge.

Defendant has filed a motion to strike plaintiff's amended complaint and to dismiss the suit. The policy of insurance sued upon provides: "It is a condition of this policy that no suit, action or proceeding for the recovery of any claim under this policy shall be maintainable in any court of law or equity unless the same be commenced within twelve (12) months next after the calendar date of the happening of the physical loss or damage out of which said claim arose."

The loss and damage alleged to have resulted from the fire and for which claim is made herein occurred on September 11, 1947. The complaint herein was filed September 10, 1948. Joseph De Fay, the named assured, died September 15, 1947 and it is alleged a new partnership "assumed and succeeded" to the rights and liabilities of the old partnership, including the insurance policy here sued on.

Chapter 110, Section 146, Section 22, Civil Practice Act, Smith-Hurd Ann.Stats. provides: "The assignee and owner of a nonnegotiable chose in action may sue thereon in his own name, and he shall in his pleading on oath, allege that he is the actual bona fide owner thereof, and set forth how and when he acquired title; * * *."

On February 16, 1951, plaintiff filed an amendment to the complaint supplying the oath and affidavit required under the Illinois statute and which the Illinois courts have held to be essential to an assignee's right of action. It is defendant's contention that this amendment was made long after the time limitation contained in the policy had expired; that the amendment must be held to state a new cause of action and cannot relate back to the date of original filing; and therefore the amended complaint must be dismissed as not having been brought in apt time. In support of this contention the defendant cites N. & G. Taylor Co. v. Anderson, et al., 7 Cir., 1926, 14 F.2d 353, affirmed 275 U.S. 431, 48 S.Ct. 144, 72 L.Ed. 354.

The facts and applicable law as set forth in the opinion of the Court of Appeals in that case are as follows:

"N. & G. Taylor Company, a copartnership, made with the defendants a nonnegotiable written contract. After defendants had defaulted thereon, the copartnership, on February 1, 1917, sold all of its assets, including its rights under the contract, to appellant, called plaintiff, and plaintiff brought suit thereon in the Northern district of Illinois. After the time had run under the applicable statute of limitations, plaintiff amended its declaration by setting out the written contract and making allegations under oath, so as to enable it to maintain its suit under section 18 of the Illinois Practice Act (chapter 110, Cahill's R.S.Ill. 1923), as assignee of the contract.

"The sole question, raised by a plea of the statute of limitations, is: Did the amendment state a new cause of action? It is urged that, because of the broad powers of amendment given by section 954 of the Revised Statutes (Comp.St. § 1591 Fed. Rules Civ.Proc. rules 1, 15, 61, 28 U.S.C. A.), the practice in the federal courts differs from that in the state courts. The authority under the Illinois statutes to make amendments is broad enough to permit such amendments to be made either before or after the running of the statute of limitations, because in Illinois the statute is raised by affirmative plea. If not so raised, the amendment is as effective as though the statute had not run. The power to make the amendment is not here in question. * * *

"In the case at bar, independent of the Illinois statute, no suit could be maintained in a court of law other than by the copartnership. There was no suit ever commenced in its name, nor in its name for the use and benefit of another. The Supreme Court of Illinois, in construing section 18 of the Illinois Practice Act, under which plaintiff is attempting to maintain its suit, held: `A declaration in a suit by an assignee of a chose in action does not state a cause of action in favor of the plaintiff, unless it contains the allegations required by section 18, showing the assignment of the chose in action, the actual ownership thereof by him, and setting forth how and when he acquired title. A declaration which fails to allege a fact without whose existence the plaintiff is not entitled to recover does not state a cause of action. Walters v. City of Ottawa, 240 Ill. 259, 88 N.E. 651; Prouty v. City of Chicago, 250 Ill. 222, 95 N.E. 147.' Gallagher v. Schmidt, 313 Ill. 40, 44, 144 N.E. 319, 321; Allis-Chalmers Mfg. Co. v. City of Chicago, 297 Ill. 444, 130 N.E. 736.

"From this holding, it necessarily follows that, as prior to the amendment there was no attempt to bring the case within the provisions of section 18, there was up to that time no statement whatever of a cause of action. A statement of a cause of action, under that section, was necessarily the statement of a new and different cause of action. The interpretation of the statute by the Supreme Court of the state should be final and binding upon this court. (Citing cases.) There was no law by which plaintiff could maintain the suit, except under section 18 of the Illinois Practice Act."

The judgment of dismissal was affirmed.

Subsequent to the decision in the above cited case, Section 39 of the Illinois Practice Act relating to amendments was amended in 1929. Present section 46(2) of the Civil Practice Act, Ch. 110, Section 170, Smith-Hurd Ann.Stats., is as follows: "(2) The cause of action, cross demand or defense...