Wood & Selick v. Compagnie Generale Transatlantique

• Decision Date: 04 August 1930
• Docket Number: No. 390,391.,390
• Citation: 43 F.2d 941
• Parties: WOOD & SELICK, Inc., v. COMPAGNIE GENERALE TRANSATLANTIQUE. A. SALOMON, Inc., v. SAME.
• Court: U.S. Court of Appeals — Second Circuit

43 F.2d 941 (1930)

WOOD & SELICK, Inc., v. COMPAGNIE GENERALE TRANSATLANTIQUE.

A. SALOMON, Inc., v. SAME.

Nos. 390, 391.

Circuit Court of Appeals, Second Circuit.

August 4, 1930.

Edward J. Garity, Joseph P. Nolan, and Frank T. Hendl, all of New York City, for appellant.

Henry N. Longley, Bigham, Englar, Jones & Houston, and Ezra G. Benedict Fox, all of New York City, for appellees.

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

L. HAND, Circuit Judge.

These two appeals involve only the question of the statute of limitations. The libels were filed for damage to certain consignments of goods, shipped on the respondent's vessels under bills of lading, issued in France, and containing the following clause (Rule 18): "All litigations arising out of interpretation or execution of this contract or bill of lading shall be judged according to the French law at the Tribunal of the place indicated in the bill of lading, and the owners of the ship and claimants formally declare to accept its competency." The bills further provided: "Disputes resulting from the interpretation or execution of this bill of lading shall be submitted to the court provided for in Rule 18 of the Commerce Court of the Seine."

The respondent proved the French law by its relevant sections, and by a competent French lawyer, and maintained that under it the limitation of one year was made a condition of the obligation, in the sense that the lapse of that period extinguished the right. Hence it argued that the local statute did not apply as part of the lex fori, and that as the libels had not been filed within a year, though within the time allowed by the local law, the suits must fail. The following sections of the French Codes are pertinent. Section 433 of the Commercial Code, which is under the title, "Prescription," provides: "The following are barred by prescription. All claims for delivery of goods, or for damages for average losses, or delay in the carriage of them, one year after the ship's arrival." This is all that there is in the Commercial Code, but the Civil Code under chapter five, which concerns the "discharge" (extinguishment), "of obligations," provides, section 1234: "Obligations are discharged" (s'éteignent), "by payment (or performance) — by novation — by voluntary release — by set-off — by merger — by loss of the subject matter — by being void or by rescission — by the effect of a condition in avoidance, which has been explained in the preceding chapter; by prescription which will form the subject of a special title." The only evidence in the record of that special title is the following two sections: Section 2220, "The right of prescription may not be waived" (renoncé), "beforehand; prescription which has been already acquired may be waived"; section 2223, "Judges may not of their own motion base their decisions upon grounds which depend upon prescription."

The testimony of the expert was exceedingly confusing, not due to any fault of his, but inevitable because of the attempt to import into the French law the refined notion which pervades our own, of a right barred of remedy, but still existing in nubibus. He based his opinion upon the reasoning that since section 1234 of the Civil Code provides that "prescription" shall extinguish or discharge obligations, and since section 433 of the Commercial Code establishes a prescriptive period of one year for suits like those at bar, it follows that the French law extinguished these obligations. When faced with the sections from the Civil Code dealing with prescription, he became however less clear. It was apparent that time alone did not for all purposes extinguish the obligation, for the defendant must claim the defense, and might renounce it by his conduct after the prescription was complete. Without in any sense meaning to question his competence, in the upshot his testimony does not materially help us. Each party relies upon a part here and a part there; we shall not cite it, nor indeed need we consider it, for it seems in the end to leave the interpretation of the Codes much as it would be on the words themselves.

We may at the start lay aside the clauses in the bills of lading, which apparently were intended to confine any litigation over the contracts to a French court. The respondent does not pretend that, so construed, these would be valid, and it is of course well settled that they would not. Mutual Reserve Fund v. Cleveland Woolen Mills, 82 F. 508 (C. C. A. 6); Nashua River Paper Co. v. Hammermill, 223 Mass. 8, 111 N. E. 678, L. R. A. 1916D, 691; Benson v. Eastern Building & Loan Ass'n, 174 N. Y. 83, 66 N. E. 627; U. S. Asphalt Co. v. Trinidad, etc., Co. (D. C.) 222 F. 1006; Kuhnhold v. Compagnie Generale Trans. (D. C.) 251 F. 387; Williston, § 1725. If they were not so intended, but only meant to stipulate that the obligations of the contract were to be interpreted and executed according to French law, they did not incorporate the French law of prescription. "Interpretation" certainly cannot be stretched so far, and "execution" will serve no better. Its natural meaning is "performance," including excuses for performance; it would wrench that meaning quite out of measure to include within it the period within which suits must be brought. Without deciding how plainly a carrier must declare itself on such a question, it suffices to say that the contracts were not definite enough, and we cannot reverse the decrees except by force of the French law itself.

It is well settled that ordinarily the statute of limitations of the forum controls. Walsh v. Mayer, 111 U. S. 31, 4 S. Ct. 260, 28 L. Ed. 338; Flowers v. Foreman, 23 How. 132, 149, 16 L. Ed. 405; Canadian Pacific Ry. v. Johnston (C. C. A. 2) 61 F. 738, 745, 25 L. R. A. 470. But a statute of the place where the right arose may impose upon it a condition which goes to its substance, and, when this is so, the condition will be observed elsewhere. This has ordinarily come up in the case of statutory rights in which the limitation was imposed by the same statute which created the right itself. The Harrisburg, 119 U. S. 199, 7 S. Ct. 140, 30 L. Ed. 358; Arnson v. Murphy, 109 U. S. 238, 3 S. Ct. 184, 27 L. Ed. 920; Atl. Coast Line v. Burnette, 239 U. S. 199, 36 S. Ct. 75, 60 L. Ed. 226; Engel v. Davenport, 271 U. S. 33, 46 S. Ct. 410, 70 L. Ed. 813. But it is not necessary that the limitation should be in the same statute, so the purpose be plain to make it a condition. Davis v. Mills, 194 U. S. 451, 24 S. Ct. 692, 48 L. Ed. 1067. Since in France all obligations are presumably created by force of statute, we have therefore to decide how far the French law imposes such a condition upon the obligations created by bills of lading.

The embarrassment is, as we have said, that we have to interpret another system of law according to notions wholly foreign to it. It is indeed easy to say that as the French law recognizes nothing but the extinguishment of an obligation by lapse of time, we have nothing more to do than take all obligations there created as subject to such a condition. But the question does not seem to us quite so simple as that, for it is apparent that the right is not always extinguished, as, for example, if the obligor renounces the prescription, or fails to claim it. Our own statutes of limitation do in fact extinguish the right so far as they extinguish all remedies, for a right without any remedy is a meaningless scholasticism, and the distinction we make is more than formal only in that the applicable period varies with the law of the forum where the suit chances to be laid. At any rate it is permissible for us to say that if the assumed extinguishment which the French law imposes, is itself subject to conditions which assimilate it to our ordinary statutes of limitation, it makes no difference that it speaks of "extinguishment." We are to decide whether the defense falls within one class or the other recognized by us,...