Roth v. Northern Assur. Co.

• Decision Date: 24 November 1964
• Docket Number: No. 38537,38537
• Citation: 32 Ill.2d 40,203 N.E.2d 415,16 A.L.R.3d 442
• Parties: , 16 A.L.R.3d 442 Larry ROTH d/b/a Larry's Barbeque, Appellant, v. NORTHERN ASSURANCE COMPANY Ltd. et al., Appellees.
• Court: Illinois Supreme Court

Page 415

203 N.E.2d 415

32 Ill.2d 40, 16 A.L.R.3d 442

Larry ROTH d/b/a Larry's Barbeque, Appellant, v. NORTHERN ASSURANCE COMPANY Ltd. et al., Appellees.

No. 38537.

Supreme Court of Illinois.

Nov. 24, 1964.

Rehearing Denied Jan. 19, 1965.

Dan Brusslan, Chicago, for appellant.

Clausen, Hirsh, Miller & Gorman, Chicago (Fredric H. Stafford, Chicago, of counsel), for appellees.

SCHAEFER, Justice.

This case involves the construction and application of section 24 of the Limitations Act which provides that 'if the plaintiff be nonsuited,' and the time limited for bringing the action has run during the pendency of the action in which the nonsuit was entered, the plaintiff may commence a new action within one year. (Ill.Rev.Stat.1963, chap. 83, par. 24a.) The circuit court of Cook County held that section 24 does not apply to a new action to recover upon fire insurance policies, commenced within one year after the original action, brought in a federal district court, had been dismissed for want of the requisite jurisdictional amount. The appellate court affirmed, (46 Ill.App.2d 253, 196 N.E.2d 389) and we granted leave to appeal to review an asserted conflict in appellate court decisions. See, Swiontek v. Greenstein, 33 Ill.App.2d 355, 179 N.E.2d 427; Lundstrom v. Winnebago Newspapers, Inc., 32 Ill.App.2d 266, 177 N.E.2d 643 (abst. op.).

The plaintiff's building was damaged by fire on September 1, 1953. He instituted an action in the federal district court to recover his alleged loss. Each of the five insurance companies which had issued a policy insuring the premises against fire was joined as a defendant. While the total amount of all of the policies was $10,000, each individual policy was for an amount less than the jurisdictional amount of $3,000. The federal district court sustained the motion of the defendants to dismiss the case for want of jurisdiction on the ground that the claims against the defendants could not be aggregated to make up the requisite jurisdictional amount. Notice of the entry of the order dismissing the case was served on the plaintiff on January 31, 1955. On February 1, 1955, he filed the present action against the same defendants, based upon the same occurrence and the same insurance policies. Each of the policies contained a limitation which required that an action brought upon it be commenced within 12 months from the date of the loss. The original action in the federal court was commenced within the 12 month period, but the present action was not.

We consider first the defendants' contention that the statutory reference to a 'nonsuit' does not include the dismissal of an action for want of jurisdiction. In 1942 this same contention was considered and rejected by the Circuit Court of Appeals for the Seventh Circuit in Sachs v. Ohio National Life Insurance Co. (7th cir.) 131 F.2d 134. After carefully reviewing the authorities, the court said, 'The act is remedial, reflecting a legislative intent to protect the party who brings the action in good faith from complete loss of relief on the merits merely because of procedural defect. Such remedial statutes should be liberally construed, so as to prevent destruction of the purpose of the legislation. * * * In both common law nonsuit and dismissal for want of jurisdiction the order is due to some defect in the procedure or proof which prevents a trial on the merits. The obvious purpose of the statute was to give a plaintiff an opportunity to try the merits and it is illogical to assume that the legislature meant to prevent hardship in the case of a nonsuit, but not in that of dismissal for want of jurisdiction. The contrary is clearly intimated in the only pertinent decisions; and by them we are bound. It follows that, as plaintiffs had commenced their new action within a year after the first one had been dismissed for want of jurisdiction, they were not barred.' 131 F.2d at 137.

This construction of the statute has been followed. In Lundstrom v. Winnebago Newspapers, Inc., 32 Ill.App.2d 266, 177 N.E.2d 643, section 24 was held to eliminate the bar of limitations as applied to a new action instituted in the circuit court of Winnebago County within one year after an earlier action in a federal district court had been dismissed for want of diversity of citizenship. And in Swiontek v. Greenstein, 33 Ill.App.2d 355, 179 N.E.2d 427, section 24 was again applied against the asserted bar of the Statute of Limitations when a new suit was instituted in the state court within a year after an action based upon the same occurrence had been dismissed for want of diversity jurisdiction by a federal court. In our opinion these decisions correctly construe the statute. The cases involving voluntary nonsuits which are relied upon by the defendants, (Holmes v. Chicago and Alton Railroad Co., 94 Ill. 439; Boyce v. Snow, 187 Ill. 181, 58 N.E. 403; Herring v. Poritz, 6 Ill.App. 208,) are clearly distinguishable, and they were distinguished by the Circuit Court of Appeals in the Sachs case.

Although the defendants have argued this issue, the appellate court in its opinion did not question the construction of the statute adopted in the Sachs case. Rather the appellate court held that the first action, 'filed in the United States District Court, which lacked jurisdiction, did not constitute a commencement of a suit or action within the period of limitation set forth in the policies of insurance.' (46 Ill.App.2d at 263, 196 N.E.2d at 394.) The appellate court felt that this conclusion was required by the opinions of this court in Herb v. Pitcairn, 384 Ill. 237, 51 N.E.2d 277; 392 Ill. 151, 64 N.E.2d 318; 392 Ill. 138, 64 N.E.2d 519. It therefore disregarded the Sachs case, which preceded this court's first opinion in the Herb case, and it also disregarded the Lundstrom and Swiontek cases which neither cited nor discussed the Herb case.

Herb v. Pitcairn was an action under the Federal Employers' Liability Act which was instituted in the city court of Granite City to recover for injuries alleged to have been sustained in the city of Decatur. The case was tried in the city court, its judgment was reversed by the appellate court and the judgment of the appellate court was affirmed by this court. (377 Ill. 405, 36 N.E.2d 555.) The case was then remanded to the city court, and before it was retried this court decided, in Werner v. Illinois Central Railroad Co., 379 Ill. 559, 42 N.E.2d 82, that city courts were without jurisdiction to hear causes of action that arose outside the territorial limits of the city. The act of 1891, as amended in 1935, relating to venue, then provided that an action commenced in the wrong court or county could be transferred to the proper court by change of venue. (Ill.Rev.Stat.1941, chap. 146, par. 36; see Ill.Rev.Stat.1963, chap. 110, pars. 8, 9 and 10.) On the plaintiff's motion, the Herb case was transferred to a circuit court. In that court the defendant moved to dismiss the case on the ground that the city court was totally without jurisdiction, and that the action was therefore not commenced within two years from the date of the plaintiff's injury, as required by the Federal Employers' Liability Act. The motion to dismiss was allowed. This court affirmed the judgment dismissing the action. (384 Ill. 237, 51 N.E.2d 277.) It is not necessary to pursue in detail the subsequent vicissitudes of the case in the Supreme Court of the United States and in this court. See 324 U.S. 177, 65 S.Ct 459, 89 L.Ed. 789; 325 U.S. 77, 65 S.Ct. 954, 89 L.Ed. 1483; 392 Ill. 151, 64 N.E.2d 318; 392 Ill. 138, 64 N.E.2d 519.

In the case before us the appellate court read the opinions of this court in Herb v. Pitcairn, as requiring it to hold that for the purposes of section 24 of the Limitations Act an action was not commenced unless instituted in a court of competent jurisdiction. It relied particularly upon this court's statement that 'under Illinois law, commencing an action means starting it in a court that has the power to decide the matter involved, to issue process, to bring the parties to the particular cause before it and to render and enforce a judgment on the merits of said cause.' 392 Ill. at 152, 64 N.E.2d at 319.

The basic position taken by this court in the Herb case was that any judgment rendered by the city court would have been an absolute nullity, vulnerable to collateral attack, and that the process of that court and its subsequent proceedings must therefore be completely disregarded. 'The question involved', the court said, 'relates to the effect of the proceedings had in a court wholly incompetent to render a valid judgment, because if the judgment to be rendered would be void it necessarily follows the preliminary proceedings of the court, necessary to rendition of judgment, must likewise be void. If the court has no jurisdiction of the subject matter for judgment there can be no jurisdiction giving effect to process or pleadings. If judgment had been entered in the city court it would have been absolutely void.' 384 Ill. at 241, 51 N.E.2d at 279.

The jurisdiction of the federal district court in which the first action in the case before us was instituted stands upon a very different footing than that of the city court which was involved in Herb v. Pitcairn. If the question of jurisdiction had not been raised in the federal court, and the case had been disposed of on the merits by that court, its judgment would not have been subject to collateral attack. 'The lower federal courts are all courts of limited jurisdiction, that is, with only the jurisdiction which Congress has prescribed. But none the less they are courts with authority, when parties are brought before them in accordance with the requirements of due process, to determine whether or not they have jurisdiction to entertain the cause and for this purpose to construe and apply the statute under which they are asked to act. Their determinations of such...