Fellows v. National Can Co.

• Decision Date: 31 October 1921
• Docket Number: 5986.
• Citation: 276 F. 309
• Parties: FELLOWS v. NATIONAL CAN CO.
• Court: U.S. District Court — Eastern District of Michigan

276 F. 309

FELLOWS v. NATIONAL CAN CO.

No. 5986.

United States District Court, E.D. Michigan, Southern Division.

October 31, 1921

William R. Moss, of Chicago, Ill., for plaintiff.

Bigelow & Rankin, of Detroit, Mich., for defendant.

TUTTLE District Judge.

This action is now before the court upon a motion by the defendant to dismiss the action on various grounds hereinafter discussed. The jurisdiction of this court is properly invoked on the ground of diversity of citizenship, the matter in controversy exceeding the requisite jurisdictional amount.

The material facts, substantially as set forth in the undisputed statement of facts filed in the cause, are as follows:

An action in assumpsit was instituted in this court by Olin S Fellows (plaintiff herein) against the National Can Company (defendant herein) on the 18th day of May, 1915, to recover for a balance alleged to be due as annual minimum royalty growing out of a lease under seal entered into between the parties during the year 1905, whereby the defendant, National Can Company, leased certain solder-saving devices from the plaintiff. The amount sought to be recovered in that action was for royalties that accrued during the years 1906 to 1912 both years inclusive. Action was commenced in assumpsit on the theory that the suit involved an entire contract, and that no cause of action arose until the last payment was made, in the early part of 1913, when the contract was terminated. During the pendency of that action, namely, on the 26th day of December, 1916, the present action in debt was instituted in this court growing out of the same subject-matter, primarily to save the running of the statute of limitations, for the annual minimum royalties that accrued during the years 1906, 1907, and 1908, in the event that the contract should be held, in the action in assumpsit, not to be entire but severable by years, the first action having been commenced more than six years after the royalties had accrued for said years 1906, 1907, and 1908. Upon the trial of the action in assumpsit, recently determined in this court, no evidence was admitted by the court with respect to the royalties claimed by plaintiff to be due for the years 1906, 1907, and 1908, or any of them, the court holding that the statute of limitations barred a recovery for all of those years, but the court permitted a recovery for the years 1909 1910, 1911, and 1912, directing a verdict in favor of plaintiff therefor.

The first action in assumpsit having been terminated, the present action is, as already stated, now before the court upon what is treated by both parties as a motion to dismiss (although no formal written motion has yet been filed), demurrers having been abolished by the Michigan statute applicable section 12456 of the Michigan Compiled Laws of 1915.

The grounds upon which the defendant relies may be conveniently grouped and considered under three heads, as follows: (1) That the cause of action upon which plaintiff here seeks to recover has been barred by the Michigan statutes of limitation; (2) that the institution of the first action by plaintiff constituted an election of remedies depriving him of the right to maintain the present action; and (3) that the judgment in the former action operates as res judicata in the latter, concluding the matters involved in, and precluding plaintiff from maintaining, the cause at bar.

1. Is the plaintiff barred from the right to bring the instant action by the statutes of limitation of the state of Michigan, the subject-matter herein being a Michigan contract, and being therefore governed by the statutes of limitation of that state? Fellows v. National Can Co., 257 F. 970, 169 C.C.A. 120. This action, having been brought to recover on a contract under seal, was required, by the applicable statute, in force at the time of the making of such contract, to be instituted within ten years after the date of the accrual of the cause of action on which it is based. Section 9734 of the Michigan Compiled Laws of 1897, being section 14141 of Howell's Michigan Statutes of 1913; Stewart v. Sprague, 71 Mich. 50, 38 N.W. 673. As the cause of action for the recovery of the royalty due under such contract for each year accrued after the end of such year, and 'within a reasonable time after defendant's monthly report showed that the aggregate of solder-savings payments were less than the annual minimum' (Fellows v. National Can Company, supra), the right to recover the royalty due for the year 1906 accrued after the 1st of January, 1907 (Fellows v. National Can Co., supra), and under the statute of limitations just cited, which was then in force, the right to sue on such cause of action, based, as it was, on a contract under seal, would not be barred until ten years thereafter, that is, until after the 1st of January, 1917, which was subsequent to the time of the commencement of the present action.

It is urged, however, by the defendant, that the Michigan Judicature Act, which took effect on the 1st day of January 1916, before the commencement of this action, not only abolished the action of debt (section 12350, Michigan Compiled Laws of 1915), but abrogated the ten-year statute of limitations for actions on contracts under seal and substituted therefor a six-year period within which such actions must be brought (section 12323, Michigan Compiled Laws of 1915); and that therefore plaintiff is precluded from...