Reich v. Van Dyke

Decision Date13 November 1939
Docket NumberNo. 7135.,7135.
Citation107 F.2d 682
PartiesREICH v. VAN DYKE
CourtU.S. Court of Appeals — Third Circuit

Irving L. Epstein and Henry S. Sahm, both of Scranton, for appellant.

Harry Needle, Joseph S. Needle, and Ralph P. Needle, all of Scranton, Pa., for appellee.

Before BIGGS, MARIS, and CLARK, Circuit Judges.

CLARK, Circuit Judge.

Statutes of limitation generally suffer from that simplification which leads to complexity. A writer in the Pennsylvania Law Review puts that feeling into these words:

"* * * The statute of limitations, while theoretically definite and clear in its language, provides numerous difficulties in its application to the most ordinary commercial problems. * * * As a fundamental principle, it may be said that the statute of limitations does not begin to run until a cause of action has accrued. But just when the cause of action has accrued is usually the subject of dispute, for upon the answer to this question is suspended practically every case concerning the statute of limitations. * * *" 76 University of Pennsylvania Law Review 87, 87-88.

The one here applicable, McClaine v. Rankin, 197 U.S. 154, 25 S.Ct. 410, 49 L. Ed. 702, 3 Ann.Cas. 500, that of Pennsylvania, is no exception. In fact it carries its simplification to an unusual length. It was adopted in 1713 and is in the archaic language of an even earlier statute, that of 21 Jac. 1c. 16, 1623, and reads:

"actions of debt * * * shall be commenced * * * within six years next after the cause of such actions". 12 Purdon's Pa.Stat.Ann. § 31.

The Pennsylvania courts have been constrained to expand this extreme simplicity and give the word "cause" the same meaning that is explicit in the analogous enactments of most other states, cf. for instance, 1 Revised Statutes of New Jersey (1937) 2:24-1, N.J.S.A. 2:24-1. So they call it the point of time when the action "accrues" or "arises", i. e., when "there is an existing right to sue forthwith", N. Y. & Pa. R. Co. v. N. Y. C. R. Co., 300 Pa. 242, 246, 150 A. 480; accord, 1 Wood, Limitation of Actions, sec. 122(a) 684, 685; 30 Harvard Law Review 767 (note). California, by way of contrast, avoids complexity by its more detailed classification and has a statute (sec. 359 of its Code of Civil Procedure) which prescribes for actions in "statutory liability" and dates the running from "three years after the * * * liability was created", Johnson v. Greene, 9 Cir., 88 F.2d 683; Coulter Dry Goods Co. v. Westerworth, 171 Cal. 500, 153 P. 939.

The same tendency to oversimplify may be thought to appear in the decisions applying this or a similarly worded statute to the exact facts presented by the case at bar. The only reported Federal cases are those of the learned District Court below, Van Dyke v. Reich, 27 F.Supp. 436, and of the United States Court of Appeals for the District of Columbia, Strasburger v. Schram, 68 App.D.C. 87, 93 F.2d 246. Besides these, there seems to be only one other decision, the case of White v. Liskovsky, 3 A.2d 123, 17 N.J.Misc. 8, in the Supreme Court (Circuit Judge) of New Jersey, also reported in note 3 under Limitation of Actions, 2 New Jersey Statutes Annotated 2:24-1, p. 7. For some reason, appellee does not cite this case, but cites a later Supreme Court (Circuit Judge) of New Jersey case, Howell v. Fogg, 7 A.2d 282, 17 N.J.Misc. 200, wherein the holding is dictum.

The circumstances presented are those which have been all too common in the past decade. The laws of the United States, 12 U.S.C.A. § 63 and § 64, enacted in an economically similar decade (1864) provide for the double liability of stockholders in national banks. This attempt to ensure good management has now been replaced by government insurance, 12 U.S. C.A. § 264. On December 15, 1932, the Comptroller of the Currency proceeded under the provisions of such law and notified the defendant-appellant of his obligation to pay "on or before January 23, 1933" the amount of the par value of his 5 shares of stock in the Liberty National Bank (of Dickson City, Pennsylvania), namely, the sum of $500. The tolerance of the Comptroller, acting through his arm, the bank's receiver, extended further than merely the giving of a grace period for original compliance. He permitted those who showed a willing spirit to pay in quarterly instalments up to and until April 23, 1933, Record, p. 7. To requite this kindness and in exploitation of the receiver's failure to sue until January 16, 1939, defendant-appellant pleaded the statute of limitations.

We feel a faint stirring of surprise at two things about all this. First, the receiver passed the Christmas holidays in creating a subject matter for our decision instead of in collecting the money to pay his depositors. Second, appellant's counsel must have a nice scientific interest in the law, otherwise he would not spend more than the amount of any possible judgment against his client in insisting on our resolution of the said subject matter.

The quite, as we think, easy answer to the question presented has been confused by a more difficult and yet cognate problem. The spirit of and the reason for statutes of limitation is plain and has been often stated:

"It is for the public benefit that claims be litigated while witnesses are available and memories fresh so that perjury and fraud may be reduced to a minimum. It is also desirable to put an end to possible litigation". 30 Columbia Law Review 383, 384.

Where the original acts are at one time and the final one at an indefinite later time, legal consistency may have to yield to legal expediency, 6 Williston on Contracts, sec. 2040. A cause of action which does not technically "arise" may still stem from facts long since forgotten.

A notable instance of such a dilemma occurs in the law of promissory notes payable on demand. Obviously the cause does not arise until the demand. Yet in the interest of expedient operation of a vague statute, the courts now start the statute from the date of making on the theory that suit and therefore demand could have been brought (made) then, 6 Williston on Contracts sec. 2040, above cited, In re Stevens' Est., 164 Pa. 216, 30 A. 245; Valiant Co. v. Pleasonton & Pa. Co., 108 Pa.Super. 197, 164 A. 143. As the writer of the law review article quoted at the commencement of this opinion observes: "This reasoning, while based upon a fictitious presumption, finds forceful justification in the fact that business expediency demands that negotiable instruments be retired as soon as possible", 76 University of Pennsylvania Law Review 87, 88.

The official responsible for an insolvent bank under a double liability statute can act contemporaneously with the insolvency, or, on the other hand, he can take his time and so facilitate the disappearance of the evidence. Some courts say that the limitation period commences with the appointment of the receiver, Shearer v. Christy, 136 Minn. 111, 161 N.W. 498, whereas others declare for the assessment date, Bernheimer v. Converse, 206 U.S. 516, 27 S.Ct. 755, 51 L.Ed. 1163; Goss v. Carter, 5 Cir., 156 F. 746; Hale v. Cushman, 96 Me. 148, 51 A. 874; Mister v. Thomas, 122 Md. 445, 89 A. 844; Shipman v....

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  • Baldonado v. Navajo Freight Lines, Inc.
    • United States
    • Court of Appeals of New Mexico
    • January 18, 1977
    ...Am.Jur.2d Actions § 1 (1962). A cause of action accrues or arises when 'there is an existing right to sue Forthwith'. Reich v. Van Dyke, 107 F.2d 682, 683 (3rd Cir. 1939). 'Thus a cause of action arises when it springs up, originates, comes into being, becomes operative, presents itself.' B......
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    • November 15, 1945
    ...of the assessment. Although the order of assessment removes the contingency, it does not give rise to a cause of action. Reich v. Van Dyke, 3 Cir., 107 F. 2d 682; Strasburger v. Schram, 68 App. D.C. 87, 93 F.2d 246. The receiver cannot bring an action to recover the assessment until the dat......
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    ...accrues when one has the right to institute suit. See also Van Dyke v. Reich, 27 F.Supp. 436 (M. D.Pa.1939), affirmed Reich v. Van Dyke, 107 F.2d 682 (3d Cir. 1939); Antonioli v. Lehigh Coal and Navigation Company, 451 F.2d 1171 (3d Cir. 1971); Falsetti v. Local Union No. 2026, United Mine ......
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    ...F.2d 695. Because of a conflict of decisions we granted certiorari. See Strasburger v. Schram, 68 App.D.C. 87, 93 F.2d 246; Reich v. Van Dyke, 3 Cir., 107 F.2d 682; Haight v. First Trust & Deposit Co., 2 Cir., 112 F.2d 572; MacPherson v. Schram, 5 Cir., 112 F.2d The state statute of limitat......
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