Morris Plan Indus. Bank Of N.Y. v. Richards.

• Decision Date: 08 March 1945
• Court: Connecticut Supreme Court
• Parties: MORRIS PLAN INDUSTRIAL BANK OF NEW YORK v. RICHARDS.

131 Conn. 671

42 A.2d 147

MORRIS PLAN INDUSTRIAL BANK OF NEW YORK

v.RICHARDS.

Supreme Court of Errors of Connecticut.

March 8, 1945.

Appeal from Court of Common Pleas, Fairfield County; Cullinan, Judge.

Action by the Morris Plan Industrial Bank of New York against David E. Richards to recover damages for fraudulent representations alleged to have been made by the defendant to induce the plaintiff to make a loan, tried to the court. From a judgment for the defendant, plaintiff appeals.

Error, and new trial ordered.

Robert J. Woodruff, of New Haven (Arthur Klein, of New Haven, on the brief), for appellant.

Lee B. Brooks, of Bridgeport, for appellee.

Before MALTBIE, C. J., and BROWN, JENNINGS, ELLS, and DICKENSON, JJ.

BROWN, Judge.

In this action for damages for fraudulent representations, claimed to have been made by the defendant, which induced the plaintiff to make him a loan, the following material facts found are undisputed. Pursuant to the written application of the defendant, which contained the statement that there were no judgments outstanding against him, the plaintiff, relying upon the truth of this representation, on March 23, 1931, loaned him $720, as evidenced by his promissory note. The defendant's statement was untrue, as there were in fact judgments aggregating over $2,900 outstanding against him, and it constituted a deliberate and admitted fraud, having been made for the purpose of inducing the plaintiff to grant the loan. December 22, 1931, the plaintiff obtained a judgment in New York against the defendant for the balance of $600 due upon the note, plus $39.50 costs. Seventy dollars only has been paid on this judgment. From March 6, 1931, the date of the defendant's application for the loan, until May, 1942, when he removed to Connecticut, he lived continuously in the state of New York. The present action was instituted May 18, 1943.

Subsection 5 of § 48 of the New York Civil Practice Act provides: ‘An action to procure a judgment on the ground of fraud [must be commenced within six years after the cause of action has accrued]. The cause of action in such a case is not deemed to have accrued until the discovery by the plaintiff, or the person under whom he claims, of the facts constituting the fraud.’ Section 1677c of the Cumulative Supplement, Connecticut General Statutes, provides: ‘No action founded upon a tort * * * shall be brought but within three years from the date of the act or omission complained of.’ The court concluded that the action was barred by the New York statute and that therefore consideration of the applicability of the Connecticut statute was unnecessary. The vital question raised by the plaintiff's appeal is whether the court erred in this conclusion. The record therefore presents two questions for determination: (1) Assuming the six years had run under the New York statute, did that put an end to any right of action in the plaintiff? (2) If it did not, was the plaintiff's right of recovery barred by the running of the Connecticut three-year statute?

In urging his claim that the running of the New statute had put an end to the plaintiff's cause of action, the defendant concedes that under the general rule applicable in the usual case the law of the forum applies since statutes of limitations relate to the remedy as distinguished from the right. His contention is, however, that this case falls within the exception to this rule, which, he states in his brief, citing 17 R.C.L. 701, § 52, arises ‘when the cause of action is created by a foreign statute which also fixes a limitation for its assertion.’ ‘The limitation is then consdered to be a condition of the right, so that no recovery is allowed where recovery would be barred by the law which gives the right.’ This principle, which is supported by ample authority, has been stated in a...