Bertha Building Corp. v. National Theatres Corp.

• Decision Date: 15 October 1958
• Docket Number: Civ. No. 12073.
• Citation: 166 F. Supp. 805
• Parties: BERTHA BUILDING CORPORATION, Plaintiff, v. NATIONAL THEATRES CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of New York

166 F. Supp. 805

BERTHA BUILDING CORPORATION, Plaintiff, v.NATIONAL THEATRES CORPORATION, Defendant.

Civ. No. 12073.

United States District Court E. D. New York.

October 15, 1958.

Corcoran, Kostelanetz & Gladstone, New York City, for plaintiff, Nick C. Spanos, Los Angeles, Cal., Francis J. Mulderig, New York City, of counsel.

Royall, Koegel, Harris & Caskey, New York City, for defendant, Frederick W. R. Pride, John F. Caskey, Charles F. Young, New York City, of counsel.

ZAVATT, District Judge.

This is a civil anti-trust action instituted in this Court by a California corporation upon an alleged cause of action, which, the plaintiff concedes, accrued in California no later than July 4, 1935.The complaint was not filed until September 5, 1951.The plaintiff pleaded the following statutes of limitations as being pertinent herein:

(1)Section 48 of the New York Civil Practice Act, providing:

"§ 48.Actions to be commenced within six years.The following actions must be commenced within six years after the cause of action has accrued:

* * * * * *

"2.An action to recover upon a liability created by statute, except a penalty or forfeiture."

(2)Section 19 of the New York Civil Practice Act, providing:

"§ 19.Effect of defendant's absence from state or residence under false name.If, when the cause of action accrues against a person, he is without the state, the action may be commenced, within the time limited therefor, after his coming into or return to the state.* * * But this section does not apply in either of the following cases:

* * * * * *

"2.While a foreign corporation has had or shall have one or more officers or other persons in the state on whom a summons for such corporation may be served."

(3)Section 13 of the New York Civil Practice Act, providing:

"§ 13.Limitation where cause of action arises outside of the state.Where a cause of action arises outside of this state, an action cannot be brought in a court of this state to enforce such cause of action after the expiration of the time limited by the laws either of this state or of the state or country where the cause of action arose, for bringing an action upon the cause of action, * * *."

(4)Paragraphs 335 and 338 of the West's Ann.Code of Civil Procedure of the State of California, providing, as set forth in the complaint:

"Paragraph 335.Periods of Limitation Prescribed: The periods prescribed for the commencement of actions other than for the recovery of real property, are as follows:

* * * * * *

"Paragraph 338.(Within Three Years).Within three (3) years: 1.An action upon a liability created by statute, other than a penalty or forfeiture."

(5)Paragraph 351 of the West's Ann. Code of Civil Procedure of the State of California, providing, as set forth in the complaint:

"Paragraph 351.Exception, where Defendant Is Out Of The State.If, when the cause of action accrues against a person, he is out of the state, the action may be commenced within the time herein limited, after his return to the state and if, after the cause of action accrues, he departs from the state, the time of his absence is not part of the time limited for the commencement of the action."

The plaintiff alleged that the defendant was not amenable to suit in California since the accrual of the cause of action, and that the defendant was without the State of New York at all times since the accrual of the cause of action, and, prior to December 16, 1949, did not have one or more officers within the State of New York, nor did it designate a resident of the State of New York upon whom a summons may have been served.The complaint further alleged that on or about July 20, 1938, the United States of America filed a petition in equity under the anti-trust laws of the United States in the United States District Court for the Southern District of New York(hereafter referred to as the Paramount action) against the defendant and others to enjoin and restrain the acts complained of in the instant action.United States v. Paramount Pictures, 85 F. Supp. 881.It was alleged that the Paramount action was still pending against the defendant at the time of the filing of the complaint in the instant action, and that the running of the statute of limitations in respect of the instant cause of action was suspended during the pendency of the Paramount action by virtue of Title 15, United States Code, Section 16, which provided at the time of the filing of the complaint:

"* * * Whenever any suit or proceeding in equity or criminal prosecution is instituted by the United States to prevent, restrain or punish violations of any of the antitrust laws, the running of the statute of limitations in respect of each and every private right of action arising under said laws and based in whole or in part on any matter complained of in said suit or proceeding shall be suspended during the pendency thereof."

The defendant's answer set up the following as affirmative defenses:

"Third Separate and Affirmative Defense

"Plaintiff's claim, if any, is barred by Section 13 of the New York Civil Practice Act and the statutes of limitations of the State of California.

"Fourth Separate and Affirmative Defense

"Plaintiff's claim, if any, is barred by Sections 48and49 of the New York Civil Practice Act."

Section 49 of the New York Civil Practice Act provides:

"§ 49.Actions to be commenced within three years.The following actions must be commenced within three years after the cause of action has accrued:

* * * * * *

"3.An action upon a statute for a penalty or forfeiture where the action is given to the person aggrieved or to that person and the people of the state, except where the statute imposing it prescribes a different limitation."

At this point it may be noted that the defendant pleaded in effect, that this action, having accrued no later than July 4, 1935 and having been commenced on September 5, 1951, was barred both under the California three-year statute of limitations and the New York three-year and six-year statutes of limitations.The plaintiff, on the other hand, contended that the California statute was tolled by reason of the claimed fact that the defendant was not amenable to suit therein and that the New York six-year statute, allegedly applicable herein, was tolled by reason of the defendant not having been amenable to suit in New York prior to December 16, 1949.

On the day this action was commenced a civil anti-trust action was instituted against this same defendant by Gumbiner Theatrical Enterprises, Inc.(Civil Number 12074 in this Court).The Gumbiner cause of action, which arose in California no later than December 8, 1931, was grounded upon the same acts of the defendant and others which are set forth in the instant complaint and the pleadings in Gumbiner raised the same issues respecting the statutes of limitations of California and New York as did the pleadings in the instant action.140 F.Supp. 909.

On July 3, 1953, the plaintiffs in both Gumbiner and the instant case moved for orders "directing that the issues concerning the defense of the Statute of Limitations, contained in defendant's answer" be tried separately by Court and jury.On the argument of the motions the defendant consented to a separate trial of the statute of limitations issues, but consented only to a trial by the Court without a jury.On June 25, 1954, orders were entered directing that the defenses of the statute of limitations contained in defendant's answers be tried separately to the Court without a jury and thereafter Gumbiner and the instant case were consolidated for the purpose of the trial of these issues.A trial of said issues was conducted by my illustrious predecessor, Judge Galston, on July 12, 13, 14, 15 and 16, 1955.

On the trial the defendant submitted two printed briefs to Judge Galston; one captioned "Separate Brief of National Theatres Corporation In Support Of Its Motion For Judgment On The Pleadings Dismissing The Complaints As Barred As A Matter Of Law By The Statute Of Limitations Of California," and a second captioned "Brief Of National Theatres Corporation In Support Of Its Defenses That The Claims In Both Cases Are Barred By The Statutes of Limitations."In the former brief the defendant recognized that there was a question in this case as to whether the applicable New York statute of limitations was three years or six years, but did not see fit to take a position on the question.(Of course, the fact that the defendant pleaded both New York statutes in its answer charges it with an appreciation of the problem involved at that early date.)In the latter brief the defendant maintained what was consistently its position at the trial, i. e., that both the Gumbiner case and the instant case were barred by the California three-year statute of limitations regardless of whether the New York statute was three years or six years.However, in this brief the defendant did "concede that the cases seem to hold that the New York statute is six years," while claiming that "Recent decisions of the Supreme Court, however, cast considerable doubt on the correctness of that view."The citations of authority by the defendant indicate that by this stage of the action its counsel had studied the problem of whether a civil anti-trust action fell within the New York three-year or six-year statute of limitations.

At the trial defendant's counsel clearly stated his position as to the New York statute under which he believed himself to be operating:

"So that my whole position may be clear here in the development of the evidence, of course we will endeavor to show that National was doing business in both New York and California at the same time.In other words, if by any chance it could be held that the California statute was not applicable, the New York statute of six years would be applicable.In other words, they will have to show both that it was tolled in California and in New York."(

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