Scarborough v. Atlantic Coast Line R. Co.

Decision Date03 December 1949
Docket NumberNo. 5965.,5965.
Citation178 F.2d 253
CourtU.S. Court of Appeals — Fourth Circuit

George E. Allen, Richmond, Va. (L. Cutler May, Richmond, Va., on brief), for appellant.

Collins Denny, Jr., Richmond, Va. (J. M. Townsend, Petersburg, Va., and Howard

C. Vick, Richmond, Va., on brief), for appellee.

Before PARKER, SOPER and DOBIE, Circuit Judges.

DOBIE, Circuit Judge.

Alton Scarborough, Jr., plaintiff-appellant, on March 17, 1949, filed a civil action in the District Court of the United States for the Eastern District of Virginia under the Federal Employers' Liability Act, 45 U.S.C.A. § 56, hereinafter called the Act, against the Atlantic Coast Line Railroad Company, defendant-appellee, to recover damages for personal injuries alleged to have been sustained on September 24, 1944, by plaintiff (who was then only seventeen years old) while in the employ of the defendant. Plaintiff, in his complaint, set out facts which he claimed would estop the defendant from pleading the three-year statute of limitations prescribed by the Act as a bar to his action. This provision reads:

"No action shall be maintained under this chapter unless commenced within three years from the day the cause of action accrued."

The defendant filed a motion to dismiss "on the ground that the complaint shows on its face that this action was not commenced within three years from the day the cause of action accrued." The District Court sustained the motion and dismissed the action upon the theory that, while the principles of estoppel would apply if the ordinary remedial type of statute of limitations was involved, these principals could not be applied where (as here) the statute is of substantive type. Plaintiff has duly appealed to us.

The motion to dismiss admitted pro hac vice the allegations of the complaint. Those relevant allegations were:

"(7) That immediately following the aforesaid collision in which the plaintiff was injured, the defendant, through its duly authorized claim agent, Edwin C. Smith, proceeded to investigate said accident; and upon finding as a fact, the existence of liability on the part of the said defendant, reported the same to the plaintiff and then proceeded to negotiate with the plaintiff and his father, Alton Joseph Scarborough, Sr., for a settlement.

"(8) That the plaintiff's injuries were of such a nature that prolonged hospitalization became necessary and in order that the damages sustained by him as a result of his injuries might be more readily determined, the defendant, through its claim agent, requested the plaintiff to defer making his claim for damages and filing suit thereon until after he reached the age of twenty-one (21) years, when the extent of his injuries could be determined and the damages resulting from such injuries ascertained.

"(9) That as an inducement to the plaintiff to defer the making of his claim and the institution of suit thereon against the defendant until after he became twenty-one (21) years of age, the defendant, in consideration of such forbearance, promised the plaintiff that it would pay his claim as soon after he reached his majority as the extent of his injuries and the amount of his damages could be determined, and if, after reaching the age of twenty-one (21) years, they could not agree on a reasonable settlement of his claim the plaintiff could then go into a court of competent jurisdiction and ask the court and jury to fix his compensation — the defendant, through its said claim agent, all the while assuring the plaintiff and his father that by waiting he would lose none of his rights under the Federal Employers' Liability Act 45 U.S.C.A. § 51 et seq., since he had three (3) years after reaching the age of twenty-one (21) years within which to bring an action against the defendant.

"(10) That from time to time, for a period of several years following the date of said accident, the defendant, through its said claim agent, reiterated to the plaintiff and his father that it stood willing to pay his claim, but requested that he continue to wait until after he reached the age of twenty-one (21) years, when the extent of his injuries and the amount of his damages could be more reasonably determined — all the while continuing to assure the plaintiff that he would lose none of his rights under the Act thereby, since he would have three (3) years after he attained the age of twenty-one (21) years within which to bring suit upon his claim for damages.

"(11) That the plaintiff's injuries were such that prolonged hospitalization and medical treatment were necessary; such hospitalization and treatment continuing for a period of several years following his said accident, during all of which time the defendant, through its said claim agent, was assuring plaintiff from time to time that he need not file any suit against the defendant, because his claim would be paid within a reasonable time after he became twenty-one (21) years of age, at which time it could tell with reasonable certainty, the extent of his injuries and the amount of his damages.

"(12) That the plaintiff reached his majority on December 28, 1947. Not hearing from the defendant within a reasonable time thereafter, he engaged counsel for the purpose of negotiating with the defendant for a settlement of his claim; that his counsel accordingly took the matter up with the defendant and were advised that the defendant denied all liability in the premises, and thereafter plaintiff's counsel so advised plaintiff. Plaintiff further avers that he is now advised that the defendant will plead the Statute of Limitations.

"(13) Plaintiff avers that he was lulled into a false sense of security by the promises, representation and assurances of the defendant, as aforesaid, that his claim would be paid as soon after he reached the age of twenty-one (21) years as the extent of his injuries and the amount of damages could be determined, and that it was not necessary for him to file suit to secure his damages, and that in the event the settlement figure arrived at by the defendant was refused, that he would still have three (3) years after reaching his majority within which to prosecute his action; that he relied upon such representations and assurances and forebore to sue, and that now to permit the defendant to deny liability solely on the ground that his action was not instituted within the three-year period of limitations would operate as a fraud upon him.

"(14) Plaintiff further avers that the aforesaid conduct of the defendant, by and through its said agent, acting within the scope of his authority, obstructed the prosecution of plaintiff's action against the defendant and that the time that such obstruction continued cannot be computed as any part within which his right of action ought to have been prosecuted, and, therefore, he now has a right to prosecute this action."

We are thus faced with the important question whether the time limitation of the Act is tolled by the deliberate fraud of the defendant, practiced on an infant, which induced the plaintiff to delay the filing of his action beyond the time limitation set out in the Act. We think the District Court erred by answering this question in the negative.

The distinctions between the two classes of statutes of limitations, the remedial and the substantive, have been frequently discussed. Thus, in 34 Am.Jur. 16, it is stated:

"A statute of limitations should be differentiated from conditions which are annexed to a right of action created by statute. A statute which in itself creates a new liability, gives an action to enforce it unknown to the common law, and fixes the time within which that action may be commenced, is not a statute of limitations. It is a statute of creation, and the commencement of the action within the time it fixes is an indispensable condition of the liability and of the action which it permits. The time element is an inherent element of the right so created, and the limitation of the remedy is a limitation of the right." (Italics ours.)

See, also, 53 C.J.S., Limitations of Actions, § 1, p. 904; Osbourne v. United States, 2 Cir., 164 F.2d 767, 768; Damiano v. Pennsylvania Railroad Co., 3 Cir., 161 F.2d 534, 535, certiorari denied 332 U.S. 762, 68 S.Ct. 65, 92 L.Ed. 348; United States v. McCord, 233 U.S. 157, 34 S. Ct. 550, 58 L.Ed. 893; Winfree v. Northern Pacific Railway Co., 227 U.S. 296, 33 S.Ct. 273, 57 L.Ed. 518; Pollard v. Bailey, 20 Wall. 520, 22 L.Ed. 376; American Railroad Co. v. Coronas, 1 Cir., 230 F. 545, L.R.A.1916E., 1095; Partee v. St. Louis & San Francisco Railroad Co., 8 Cir., 204 F. 970, 51 L.R.A.,N.S., 721; Burks Pleading and Practice (3d Ed.) 348, 349.

Probably the case most favorable to plaintiff, in spite of a dictum in the opinion that fraud does not toll the running of the limitation period, is Osbourne v. United States, supra. There it was squarely held that the limitation period in a substantive statute of limitations was extended for the period during which plaintiff was interned by Japan during World War II. Therein, Circuit Judge Frank, 164 F.2d at pages 768, 769, said:

"Appellant does not deny the force of these holdings. But he maintains that they are not applicable to his case because of the extraordinary circumstance that throughout the period when he ought to have brought suit, the courts were unavailable to him as a prisoner in the hands of the enemy. The leading case on which he relies is Hanger v. Abbott 6 Wall 532, 73 U.S. 532, 18 L.Ed. 939. There a resident of New Hampshire brought suit against a resident of Arkansas in the federal courts in Arkansas shortly after the civil war. The debt sued upon had been contracted before the war; the defendant pleaded the statute of limitations. The Supreme Court held that during the war both plaintiff's rights and remedies had been suspended, as the courts had not...

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