Humphreys v. Walsh

• Decision Date: 19 February 1918
• Docket Number: 2294.
• Citation: 248 F. 414
• Parties: HUMPHREYS v. WALSH et al.
• Court: U.S. Court of Appeals — Third Circuit

248 F. 414

HUMPHREYS v. WALSH et al.

No. 2294.

United States Court of Appeals, Third Circuit.

February 19, 1918

[Copyrighted Material Omitted]

Martin Conboy, of New York City, for appellant.

Frank S. Katzenbach, Jr., of Trenton, N.J., and M. E. Harby, of New York City, for appellees.

Before BUFFINGTON, McPHERSON, and WOOLLEY, Circuit Judges.

WOOLLEY Circuit Judge.

The question in this case concerns the defense of laches in an equity action as affected by a state statute of limitations which, if applicable by analogy, purports to save the right of action throughout the non-residence of the defendants. The case is before us on appeal from a decree, whereby the District Court, disregarding the statute, dismissed the bill on the ground of laches. The averments of the bill are in substance as follows:

In 1882, Edward Walsh, Jr., gave Solon Humphreys his promissory note for $42,825.65, payable six months after date. In 1900 Solon Humphreys died testate, after naming the plaintiff his executor and residuary legatee. In 1901, Edward Walsh, Jr. died intestate, leaving to survive him, as his next of kin, a widow and son, the defendants in this suit, to whom, after administration, his estate was distributed. Edward J. Walsh, the son-- who is the only defendant served in this suit and is therefore the only one we shall consider-- received in the distribution certain shares of the Mississippi Glass Company, the value of which exceeds the amount involved in this litigation.

It is averred that the note remains due and unpaid, but it is not averred that demand for payment was ever made by either the payee or his executor upon either the maker or his administrator, or upon the defendant in this action as a distributee of the maker's estate before the filing of the bill in 1916.

Edward Walsh, Jr., the maker of the note, was a resident of the State of Missouri to the date of his death, and Edward J. Walsh, the defendant, was a resident of the same state from the death of his father to the date of service in this suit. Solon Humphreys, the payee of the note, and Edward W. Humphreys, the plaintiff, were at all times residents of the State of New Jersey. The estates of the maker and payee were administered respectively in the states of their domicile.

The object of the bill is to follow the debtor's personal estate into the hands of the distributee and impress upon it a trust for the payment of the debt. March v. Russell, 3 Mylne & Cr. 31; Alexander v. Russell, 3 Russ. 136; O'Donnell v. McCann, 77 N.J.Eq. 188, 194, 75 A. 909; Coddington v. Bispham, 36 N.J.Eq. 224; Harris v. White, 5 N.J.Law, 422; Continental National Bank v. Heilman, 86 F. 514, 516, 30 C.C.A. 232.

The defendant moved to dismiss the bill on the ground that in bringing suit thirty-three years after the debt had become due and fourteen years after the defendant had succeeded to the estate of the debtor, the plaintiff is guilty of laches and is without right to maintain this action in equity. To this the plaintiff pleaded the non-residence of the debtor and of the defendant and the protection of a saving clause of the statute of limitations of the State of New Jersey, which suspends the operation of the statute against non-resident debtors and saves the right of action so long as non-residence continues. The plaintiff rests his case on the one contention that the New Jersey statute limiting actions at law applies by analogy to this action in equity, and that the exception of the statute, therefore, is available to him and constitutes a valid excuse for a delay in bringing the suit, which, otherwise, he concedes, would be laches.

The discussion in the court below and in this court on appeal was addressed exclusively to the applicability of the cited statute and to the plaintiff's right to sit passively under its protection and await the appearance of the defendant in New Jersey-- the plaintiff's jurisdiction-- without first resorting to an action on the note against the debtor or against the distributee of his estate in Missouri-- the jurisdiction of the debtor and of the distributee. But as we view the case it involves other considerations, and turns, we think, firstly, upon the question, not whether the cited statute of limitations should be applied to this case, but whether that statute embraces an action which so resembles this action that the statute can be applied to it by analogy; and it turns, secondly, upon the broad equitable defence of laches, with respect to which the statute of limitations relied upon, even if applicable by terms or analogy, is a minor consideration.

The nature of this action and the particular party defendant have important bearings on the question involved. It is pertinent to note that the action is not against the debtor or against his personal representative and that it is not on the note to recover the debt-- for obviously the law adequately affords the plaintiff such a remedy-- but the action is against one who has succeeded to the debtor's personal estate, and is brought in equity to impress a trust upon a portion of the estate (specifically described as stock of the Mississippi Glass Company) and to hold the defendant as trustee in respect thereto under duty to assign and transfer the same to the plaintiff to the amount of the debtor's promissory note with interest.

On the plaintiff's own showing, the action is purely one in equity, brought to enforce an obligation purely equitable in character against one who owes the plaintiff no legal duty. The plaintiff's right to bring such an action did not arise, of course, until the equitable duty arose; and the equitable duty did not arise before the happening of the event that imposed it. The event was not the creation of the debt by the defendant's ancestor, but was the distribution of the debtor's estate to the defendant many years after. Therefore, the debt of the ancestor is not the cause of action (though upon it the cause of action is predicated and proof of it is necessary), and the statute of limitations (with its saving clause) applicable to an action on the debt against the debtor, is not in any way applicable to this cause of action against one who is not the debtor. Therefore, our first inquiry, as we have said, is-- Whether there is in New Jersey a statute of...