Mack v. Mendels

• Decision Date: 20 November 1928
• Parties: MACK v. MENDELS.
• Court: New York Court of Appeals Court of Appeals

249 N.Y. 356

164 N.E. 248

MACK

v.MENDELS.

Court of Appeals of New York.

Nov. 20, 1928.

Action by Maurice A. Mack against Walter A. B. Mendels. Judgment of the Trial Term, wherein a jury was waived, in favor of defendant, was affirmed by the Appellate Division (223 App. Div. 713, 227 N. Y. S. 845), and plaintiff appeals.

Affirmed.

Appeal from Supreme Court, Appellate Division, First department.

Max L. Arnstein and Boardman Wright, both of New York City, for appellant.

Allen McCarty and Donald B. Riker, both of New York City, for respondent.

LEHMAN, J.

On the 29th day of May, 1918, the defendant made, executed, and delivered a note for the sum of $5,000 payable to the order of Clarence C. Perpall at 50 Broad street, New York City. At that time the defendant was a ‘curb broker,’ having an office at 50 Broad street, New York City, where the note was made payable, but resided in New Jersey. The note was delivered as additional margin to Clarence C. Perpall & Co., a firm of brokers who were members of the Consolidated Exchange, and with whom the defendant was then doing business. Clarence C. Perpall & Co. became bankrupt. The defendant made some payments to the receiver in bankruptcy. No demand was made upon the defendant for payment of the note he had given. It was not included in the schedule of the bankrupt's assets. Four years after the note was made, the plaintiff's assignor purchased the outstanding accounts and unadministered assets of the bankrupt, including this note, for the sum of $25. More than seven years after the note was made the plaintiff began this action.

It is said that the payments to the receiver in bankruptcy constituted payment of the defendant's entire indebtedness for which the note was dollateral security to the bankrupt. The evidence upon this point is not very satisfactory, and we do not pass upon the question of whether the defense of payment was conclusively established.The courts below have held that, in any event, the defense that the cause of action is barred by the statute of limitations was established, and we agree with their conclusion. The defendant has resided continuously in New Jersey from 1915. He has done business as a curb broker in New York City continuously since May, 1918. He has during all that time maintained an office in the city of New York, either at 50 Broadway or 29 Broadway, and he has come to his office regularly on every business day to attend to his business. The statutory period during which an action may be brought upon the note against the defendant has now expired.

An action upon a note must be brought in this state within six years after the cause of action accrued. Section 48 of the Civil Practice Act. The state of New Jersey, in which the defendant at all times resided, has a similar limitation. ‘The Legislature * * * never intended to drive residents of this State into other States for the purpose of preserving and enforcing their claims as against a Statute of Limitations.’ National Surety Co. v. Ruffin, 242 N. Y. 413, 152 N. E. 246. Absence of a defendant from the state at the time the cause of action accrued prevents the running of the statute until the defendant returns to the state. Departure from the state and continuous absence for the space of one year or more interrupts the running of the statute. Civil Practice Act, § 19, formerly Code of Civil Procedure, § 401. The question here presented is whether nonresidence constitutes absence from the state within the meaning of the statute, when the nonresident maintains an office in the state for the transaction of his business and visits his office regularly on each business day.

Doubtless the general object of the statute was ‘to save the remedy of the creditor in all cases where he was prevented from prosecuting the debtor in our courts, in consequence of the absence of the latter from the State.’ Olcott v. Tioga R. Co., 20 N. Y. 210, 75 Am, Dec. 393. The Legislature determines under what circumstances the time limited by statute for commencing an action shall be suspended. The courts construe provisions made by the Legislature creating exceptions or interruptions to the running of the time limited by statute in which an action may be begun. They may not themselves create such exceptions. Ruggles v. Keeler, 3 Johns. 265, 3 Am. Dec. 482. General language in judicial opinions must be regarded as merely a gloss on the text of the statute under consideration, not as the formulation by judicial authority of a general rule.

It is significant that in the statute which we must construe, the Legislature has not expressly stated that nonresidence of a debtor at the time the cause of action accrued, or departure from the state thereafter, coupled with nonresidence, shall postpone or interrupt the running of the statutory limitation.

Similar language, in analogous statutes of this and other states, has received the construction that the period of limitation runs whenever a debtor is physically present in the state, though he may be resident elsewhere. ‘The question is not one of domicile, but of personal presence.’ Hoggett v. Emerson, 8 Kan. 262, per Brewer, J. True, there are casual expressions in some judicial opinions that might suggest that physical absence and nonresidence are merely varying forms of the same concept. Such expressions have little, if any, significance. ‘When one becomes a nonresident, he does not, as a rule, remain in the State. Hence in most cases, so long as absence and nonresidence were concurrent, the court, not having its attention directed to the matter, might use one word or the other indifferently.’ Webster v. Citizens' Bank of Omaha, 2 Neb. (Unof.) 353, 96 N. W. 118, per Roscoe Pound, C.

The first clause of the statute that, ‘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 return into the State,’ is of ancient origin and has been frequently construed by the courts. ‘The statute (4 Anne, ch. 16, § 19), provides, in nearly the same language as our act, that if the person against whom a cause of action shall accrue shall at the time be beyond the seas, the action may be brought within the time limited after his return.’ Olcott v. Tioga R. Co., supra. “Beyond sea,' and ‘out of the state,’ are analogous expressions, and are not to have the same construction.' Faw v. Roberdeau, 3 Cranch, 174, 2 L. Ed. 402, per Marshall, C. J. Within the meaning of the statute of England and the statutes of the states of this country which use similar language, a person is ‘beyond the seas' or ‘out of the state’ when physically absent, regardless of residence or domicile, and he ‘returns' at the moment when he comes openly into the state or country though he does not take up his residence therein. See Faw v. Roberdeau, supra; Little v. Blunt, 16 Pick. (Mass.) 359;Gibson v. Simmons, 77 Kan. 461, 94 P. 1013; Strithorst v. Graeme, 3 Wils. 145; Lafond v. Ruddock, 13 C. B. 813.

In this state the first clause of the statute stood alone until 1830. It had received the judicial construction that physical presence and not residence was the test. In Fowler v. Hunt, 10 Johns. 464, the court rejected the contention that the limitation of the period in which an action might be commenced against a party, who resided abroad, began to run only from the time when the party returns with intent to reside within the state. The court held that it was sufficient if the coming from abroad was not ‘clandestine, and with an intent to defraud the creditor by setting the statute in operation and then departing. It must be so public, and under such circumstances, as to give the creditor an opportunity, by the use of ordinary diligence and due means, of arresting the debtor.’

In 1830 a new clause was added to the Revised Statute. It provided that if after the cause shall have accrued the debtor ‘shall depart from and reside out of this State, the time of his absence shall not be deemed or taken as...