Freedom Finance Co., Inc. v. Steeples

• Decision Date: 31 March 1976
• Citation: 140 N.J.Super. 449,356 A.2d 444
• Parties: FREEDOM FINANCE CO., INC., a corporation of the State of New York, Plaintiff-Appellant, v. Jack STEEPLES and Dolores Steeples, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 449

140 N.J.Super. 449

356 A.2d 444

FREEDOM FINANCE CO., INC., a corporation of the State of New York, Plaintiff-Appellant, v. Jack STEEPLES and Dolores Steeples, Defendants-Respondents.

Superior Court of New Jersey Appellate Division.

Argued March 9, 1976.

Decided March 31, 1976.

John S. Giava, Newark, for plaintiff-appellant.

There was no appearance on behalf of defendants-respondents.

Before Judges MATTHEWS, LORA and MORGAN.

PER CURIAM.

This is an action in which plaintiff, a New York corporation, seeks to recover on an 11-year old promissory note signed, sealed and delivered in New York by a New Jersey resident. The statute of limitations with respect to a sealed instrument in New York is six years. C.P.L.R. 213(3) (McKinney 1966). The statute of limitations with respect to sealed instruments in New Jersey is 16 years. N.J.S.A. 2A:14--4. The issue raised on appeal is whether New Jersey has a substantial interest in allowing a New York corporation to sue a New Jersey resident on a note signed and delivered in New York and barred by the latter state's statute of limitations. The trial judge, sitting without a jury, held that the note and security agreement constituted an 'instrument under seal' which was controlled by New York's statute and the action was therefore untimely. However, 'in the interest of justice' to the parties the judge considered the merits of the case and judgment was entered for defendants.

The facts in this case are largely undisputed. On August 19, 1963 defendant Jack Steeples went to Great Eastern Motors in Newark, New Jersey, (hereinafter GEM) and inquired about an automobile he wished to purchase. Adhering to its 'no credit refused' policy GEM brought defendant to Staten Island to see plaintiff about a loan. The loan was granted that day and the promissory note for $971 ($800 plus $171 representing two years' pre-computed interest) was executed. The proceeds of the note were immediately turned over to GEM in exchange for a 1958 Pontiac. The note was to be paid in installments, commencing October 4, 1963. Defendant, at the time he signed the note, also signed an understanding that plaintiff Freedom Finance Co., Inc., was in no way responsible for the quality of the goods to be purchased with the loan proceeds. He also executed a wage assignment.

Before two weeks had elapsed defendant realized the Pontiac had a cracked block and brought it back to GEM who gave him a 1958 Buick in exchange. A few days later the Buick developed the same defect as the Pontiac. Believing that the car was worthless, defendant called plaintiff and told it to pick up the car. The car was picked up. Defendant heard nothing from Freedom Finance Co., Inc., until 11 years later, when he received notice through the institution of this action that $1853.72 was owed to plaintiff.

Plaintiff testified that after the car was repossessed it received a bid for $95; that a telegram to this effect was sent to the last known address of defendant; that the telegram was returned with a notation that defendant had moved to Florida, and that consequently the car was sold for $95. Plaintiff also elicited testimony and produced records to establish that in total $303 was credited to defendant's name, representing the wages garnished and $95 from the sale of the car. Evidence, however, supports the finding of the trial judge that despite the notation on the returned telegram, the defendant had never moved from New Jersey, although he had in fact moved from the address to which the telegram was sent without notifying plaintiff.

Plaintiff first contends that New Jersey's 16-year statute of limitations with respect to sealed instruments governs the institution and maintenance of this suit, and that therefore the action is not untimely. We disagree. While the agreement constituted an 'instrument under seal' both under New Jersey and New York law, since it contains a witnessing clause and the word 'seal' typed next to the parties' names, Beneficial Finance Co. v. Dixon, 130 N.J.Super. 508, ...