Beneficial Finance Co. v. Dixon

• Decision Date: 16 October 1974
• Citation: 327 A.2d 695,130 N.J.Super. 508
• Parties: BENEFICIAL FINANCE CO., Plaintiff, v. Margaret Kelleher DIXON and Thomas Dixon, Defendants.
• Court: New Jersey District Court

Page 508

130 N.J.Super. 508

327 A.2d 695

BENEFICIAL FINANCE CO., Plaintiff, v. Margaret Kelleher DIXON and Thomas Dixon, Defendants.

District Court, Essex County New Jersey.

Oct. 16, 1974.

Henry M. Raff, Bayonne, and Stanley P. Fishman, West Orange, for plaintiff (Feuerstein, Sachs & Maitlin, West Orange, attorneys).

Bernard A. Kuttner, Newark, for defendants.

ALBANO, J.D.C.

At the request of the parties, this action has been bifurcated. Liability depends on the resolution of a question of law, given various stipulated facts.

The facts stipulated:

1. On May 6, 1963 defendants Margaret Kelleher and Thomas Dixon signed a note and security agreement in which they promised to repay a sum of money in monthly installments.

2. Plaintiff is the holder of that note.

3. Required monthly payments were made for a period of time.

4. The last payment was made on or about September 25, 1964.

5. The debt has not been paid in full and a balance is due.

6. The complaint in this action was filed on or about November 15, 1973, more than nine years after the last monthly payment was made.

The question of law: Is the six-year or the 16-year statute of limitations applicable? Obviously, if the six-year statute of limitations applies, the action is barred, but if the 16-year statute applies, the action is not barred.

For the purpose of determining the question of law only the concluding parts of the note need to be considered. The note is a printed form, and the last paragraph, the witness lines and the signatory lines appear as follows:

IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals on the date of loan above written.

Signed, Sealed, and Delivered in the presence of:

Witness: _ _ (Seal)

Witness: _ _ (husband or wife) (Seal)

Witness: _ _ (Seal)

The '(Seal)' is printed on the form and clearly was not affixed, in the sense of a scroll or wax seal, by defendants who signed their names on the top and bottom signatory lines; two separate witnesses signed the witness lines.

Parenthetically, the observation is made that plaintiff pleaded a 'Specialty,' an instrument under seal wherein an obligation is embodied. Ballentine's Law Dictionary (3 ed. 1969).

The pertinent parts of our six-year statute of limitations, N.J.S.A. 2A:14--1, are:

Every action at law * * * for recovery upon a contractual claim or liability, express or implied, not under seal, * * * shall be commenced within 6 years next after the cause of any such action shall have accrued.

The pertinent parts of our 16-year statute of limitations, N.J.S.A. 2A:14--4 are:

Every action at law * * * upon an obligation under seal conditioned for the payment of money only * * * shall be commenced within 16 years next after the cause of any such action shall have accrued.

Each statute requires an action to be commenced within a period of time after accrual of the cause of action. Here, the last monthly payment was made more than nine years before the action was commenced, and it can be assumed that there was no default in payment, no accrual of a cause of action, until a month after the date of the last monthly payment, a period still in excess of nine years. The late Judge Jayne noted that the accrual of a cause of action under our statute is the prescribed event from which the period of limitations is to be computed, and by accrual of cause of action is to be understood the right to institute and maintain a suit. Howell v. Fogg, 17 N.J.Misc. 200, 7 A.2d 282 (Cir.Ct., 1939). Plaintiff had no right to institute and maintain its action until default in monthly payments and, in fact, it did commence this action nine years after its cause of action accrued.

The significant reference in our two statutes of limitations is the word 'seal.' If the instrument is not under seal, N.J.S.A. 2A:14--1, the six-year statute controls; if the instrument is under seal, N.J.S.A. 2A:14--4, the 16-year statute, controls.

Under 'Definitions and General Rules' of our statutes is N.J.S.A. 1:1--2.1, 'Seal; Sealed':

Every instrument, to which it is required or permitted by law that a seal be attached, shall be deemed to be sealed when there is affixed thereto, or printed, impressed, or marked thereon a scroll or other device by way of a seal, and no such instrument shall be impeached or questioned for lack of a wax seal. This section shall apply to sealings by corporations as well as individuals; but any sealing required or permitted by law of a public officer, board, body, or...