De Luca v. Atlantic Refining Co.

• Decision Date: 18 July 1949
• Docket Number: Docket 20998.,No. 19,19
• Citation: 176 F.2d 421
• Parties: DE LUCA v. ATLANTIC REFINING CO.
• Court: U.S. Court of Appeals — Second Circuit

176 F.2d 421 (1949)

DE LUCA v. ATLANTIC REFINING CO.

No. 19, Docket 20998.

United States Court of Appeals Second Circuit.

Argued June 6, 1949.

Decided July 18, 1949.

Geo. K. Hourwich, New York City, for appellant.

Chadbourne, Wallace, Parke & Whiteside, New York City, Leonard P. Moore, New York City (Edward R. Neaher, New York City, of counsel), for appellee.

Before L. HAND, Chief Judge, and CLARK and FRANK, Circuit Judges

L. HAND, Chief Judge.

The plaintiff appeals (1) from a judgment summarily dismissing his complaint in an action to recover damages for injuries done by the defendant to his real estate in the State of Pennsylvania; and (2) from an order denying him leave to amend the complaint. The plaintiff is a citizen of New York, the defendant is a Pennsylvania corporation, and the jurisdiction of the district court depends upon diverse citizenship. The litigation has had a long history, and, as the defence is the Statute of Limitations, it will be necessary to state the earlier proceedings in a little detail. The plaintiff owned a plot of land in Pittsburgh which abutted upon land which the defendant owned and used as a gasoline station and for storage tanks. Beginning in January, 1936, the occupants of the plaintiff's land, which he asserts was worth $39,000, began to suffer from the leakage and smell from the storage tanks. There was a mortgage of $10,000 on the land, which fell due in the spring of 1937; the mortgagee threatened foreclosure, and under the coercion of this threat the plaintiff was forced to convey on July 7, 1937, to a buyer named by the mortgagee at the price of $14,000, the smallness of which was caused by the defendant's tort. The plaintiff sued the defendant for this loss in January, 1938, in the Court of Common Pleas at Pittsburgh, and the action came to trial in September, 1941, but the plaintiff's attorney consented to a voluntary non-suit upon the defendant's promise that the case would be "settled." It was not settled, and the plaintiff through other attorneys in December, 1941, brought a second action on the same claim in the federal District Court for the Western District of Pennsylvania. That action came on for trial in May, 1942, resulted in a disagreement, and was set down for retrial; but it was dismissed for lack of prosecution in November, 1944, and the plaintiff never attempted to reopen the judgment. The action at bar was commenced on November 13, 1945, less than a year after the dismissal of the Pennsylvania federal action; and in October, 1946, the defendant answered, pleading the Statute of Limitations. The plaintiff asked leave in the same month to amend his complaint, which was granted; and on November 18th he moved to amend once more, this time setting up two new articles (20 and 21), which we quote in the margin. See 176 F.2d 425. The defendant countered by a motion for judgment summarily dismissing the complaint, which the judge granted, at the same time denying the plaintiff's motion for the second amendment.

The first question is as to the dismissal of the complaint. The claim, being for a negligent injury to real property, was prima facie barred by § 49(6) of the New York Civil Practice Act which sets three years as the limitation for such an action, for the action was begun on November 13, 1945, and upon any theory the injury ended on July 7, 1937, when the plaintiff sold the property. In the district court the plaintiff attempted to toll the bar of § 49(6) by recourse to § 23. His theory was that, since the Pennsylvania federal action had been brought in time under Pennsylvania law, and since he had brought the action at bar within a year after it had been dismissed, the section protected him, by substituting the date of the Pennsylvania action as the date of the action at bar. There are two answers to this argument. First, § 23 does not cover a case when the first action was dismissed "for neglect to prosecute"; and, second, if it ever covers a case where the first action is in the court of another state, it does so only if that action has been brought within the time limited for such an action by the law of New York.¹ Since the Pennsylvania federal action was dismissed for neglect to prosecute it, § 23 could not possibly protect it; and since the Pennsylvania federal action was brought more than three years after July 7, 1937, it was not brought "within the time limited therefor," which means the time limited by the law of New York.

The plaintiff has apparently now abandoned § 23 and relies upon § 19, which he did not invoke at all in the district court. As a preliminary he must, however, avoid § 13, which provides that, if a claim arises in another state whose statute has barred it when the action is begun in New York, it is also barred in New York. In the case at bar that section would be conclusive save for its concluding phrase: "except where the cause of action originally accrued in favor of a resident of this state." The plaintiff argues that this means no more than that the plaintiff must be a resident of New York when he sues; but we need not decide whether that is right, because, even though we should read § 13 in a contrary sense: i. e., to mean that the plaintiff must be a resident of New York when the claim "accrues," on this record the section would not be a bar. The plaintiff in his affidavit alleges that he was a resident of New York when the claim arose and that he has always been so; and that is not an issue of which we could dispose without a trial. Therefore, arguendo, we will assume that § 13 does not bar the action.

There remains the question whether § 19 tolls the bar of § 49(6), because the defendant is a foreign corporation. We recognize of course that the statute is an affirmative defence, and that in the district court the defendant did not prove that it had been continuously subject to process in this state for three years before November 13, 1945, when the action at bar was begun. If the plaintiff had raised that question below, it would be too late to make the necessary proof upon appeal. Nevertheless, the defendant does proffer us documentary evidence that it has been subject to process in New York since October, 1936: i. e., (1) A copy, certified in such form as to be admissible in the district court, of the defendant's "designation" of October 28, 1936, of the Secretary of State of New York as a person on whom process might be served, and (2) a certificate of the custodian of the Secretary of State's records, that the defendant has never "surrendered the authority" to do business in New York, of which the "designation" was a necessary part. The plaintiff does not suggest that he is prepared to reply to these documents. True, it may be too strong to say that it is impossible to conjure up any conceivable answer to them. The original may have been forged; the authentication may be false; there may be a "surrender of authority" on file which the custodian failed to find. But if a motion for summary judgment is to have any office whatever, it is to put an end to such frivolous possibilities when they are the only answer. Nor are we troubled by the fact that the documents were not offered in the district court, for the plaintiff is in no position to raise that objection. An appellate court will not as matter of course reverse a judgment upon a point not raised below, entirely disregarding any opportunities which have been open to the appellee to raise it, and the length of time that has passed.² The plaintiff did not suggest at any time in the district court that § 19 tolled the statute because the defendant was not subject to process; his brief contained not a syllable to that purport; on the contrary, he assumed that § 49(6) barred the action save for § 23. We will assume, however, that, since he is a layman, his ignorance of his rights should be accepted as an adequate excuse, but it can be so accepted only upon conditions just to the defendant. Naturally enough, the defendant did not put the documents in evidence to prove that it had been subject to process, because the plaintiff did not raise that issue. If he is to raise it now, the defendant must be allowed to show that it would have been a futile issue to raise. It does show that it would have been a futile issue, unless the documents proffered are forgeries, or the certificate is erroneous, and as we have said, the plaintiff does not suggest that either is true, as he would have been obliged to do on motion for summary judgment. For these reasons we hold that § 19 did not toll § 49(6).

The plaintiff, both in the district court and here, also asserts that the defendant was "estopped" to plead the statute, because it had secured the discontinuance of the Pennsylvania state action upon the defendant's promise that the claim would be "settled out of court." There is not a shred of corroborative testimony of any such agreement except for a statement attributed to the Pennsylvania state judge in a petition of the plaintiff to "remove" the Pennsylvania federal action to New York, that "this case will be settled out of court, as it ought to be." However, we need not rest upon the insufficiency of the evidence; because, even if there were such an agreement, it did not "estop" the defendant, for the plaintiff did not rely upon it. The Pennsylvania state action was dismissed in September, 1941, and he began the Pennsylvania federal action in December, 1941, which concededly was amply in season under the Pennsylvania statute, whether the alleged agreement constituted a new claim, on which to base an alternative recovery, we reserve for the moment; but, as a means of tolling the bar of § 49 (6), plainly it must fail. We hold that the dismissal of the amended complaint was right.

We come therefore to the judge's denial of leave to file the second amended complaint of November 18, 1946, which introduced two new claims into the action, set forth in Articles 20...