Tillman v. National City Bank of New York

• Decision Date: 04 April 1941
• Docket Number: No. 132.,132.
• Citation: 118 F.2d 631
• Parties: TILLMAN v. NATIONAL CITY BANK OF NEW YORK.
• Court: U.S. Court of Appeals — Second Circuit

118 F.2d 631 (1941)

TILLMAN v. NATIONAL CITY BANK OF NEW YORK.

No. 132.

Circuit Court of Appeals, Second Circuit.

April 4, 1941.

Borris M. Komar, of New York City (David L. Sprung, Borris M. Komar, and Archer Eisenstat, all of New York City, of counsel), for plaintiff-appellant.

Shearman & Sterling, of New York City (Joseph M. Proskauer, J. Alvin Van Bergh, and Eugene Eisenmann, all of New York City, of counsel), for defendant-appellee.

Before L. HAND, AUGUSTUS N. HAND and CHASE, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

One Sewell, plaintiff's ultimate assignor, on June 23, 1917, deposited 150,000 roubles at the branch banking office of the defendant National City Bank of New York, in Petrograd, Russia, which the defendant promised to repay at such times and in such amounts as Sewell might demand, with interest thereon at 3% per annum. On June 14, 1932, Sewell assigned his interest in the account, as well as all claims against the defendant, to G. Frank Dougherty. On October 19, 1936, Dougherty assigned his interest in the account and all claims arising therefrom to the plaintiff James A. Tillman. On July 1, 1937, Tillman brought this action against the City Bank to recover the balance of the account in United States currency. The complaint alleged a demand made by Sewell on the defendant at its home office in New York City on December 8, 1931.

Defendant's answer set up a discharge of its obligation to the plaintiff (1) because of the terms of its Russian charter, (2) because of confiscatory decrees of the Soviet Republic, (3) because the roubles credited to Sewell's account had no value at the time payment was demanded, (4) because plaintiff's causes of action were barred by the statute of limitations.

The action was tried before Judge Goddard and a jury. At the close of the trial the judge sustained the defenses set forth in the answer, dismissed the complaint on the merits and directed a verdict for the defendant. From the judgment entered for the defendant the plaintiff has appealed. The defendant-appellee not only relies on the grounds adopted by the District Court in dismissing the complaint, but also argues that the adjudication of the New York Supreme Court in Dougherty v. National City Bank, 157 Misc. 849, 285 N.Y.S. 491, where Dougherty sought to recover upon four claims similar to the one before us here, constituted an estoppel by judgment which bars plaintiff's recovery.

We think the judgment for the defendant was right and should be affirmed. Irrespective of other considerations this must be held because of the estoppel arising from the judgments of the New York Supreme Court dismissing the complaints in certain actions by Dougherty against The National City Bank. The findings of the referee, Harrison Tweed, Esq., upon which the judgment we shall especially mention was based, established that one of Dougherty's assignors, the Countess Maria Apraxin, deposited 100,000 roubles in the Petrograd branch of The National City Bank which the latter became obliged to pay at that branch on demand with 3% interest. At the time when that action was tried and the judgment therein was entered, on June 12, 1936, Dougherty held by assignment under date of June 14, 1932, the claim which he assigned to Tillman on October 19, 1936, on which the present action was brought.

The issues in Dougherty's former action were substantially identical with those here. The findings by the referee especially pertinent to the action before us are set forth below.¹

It appears from these findings and the conclusions of law held to follow from them that the deposits in defendant's branches were not converted into continuing deposits payable in New York on account of the closing of the Russian branches which were found both in the New York actions and in the case at bar to close on September 1, 1918. Accordingly, the New York statute of limitations, Civil Practice Act N.Y. § 48, barred claims sued upon more than six years after the closing.

It likewise appears that the rouble in which the deposits were made was worthless and the depositors and their assignees and sub-assignees were not entitled to be paid in an entirely different form of currency, circulating by the name of rouble under laws of the Soviet Republic enacted after the defendant's branches were closed; at least this is so where no demand for payment was made prior to closing and the obligations had been discharged by governmental acts.

There can be no doubt that by the judgment entered on the report of Referee Tweed, Dougherty would have been barred from relitigating the issues determined in that action in a new suit for recovery of the claim assigned to him by Sewell. He held that claim during the entire course of the former litigation and his situation closely resembles that of the owner of one of a series of bonds who has sued to recover upon it after having had his claim dismissed in an action upon another bond of the same series in which the facts relied on are equivalent. Under such circumstances he would be met by the estoppel of the first judgment. The so-called estoppel is no mere technicality but a reasonable measure calculated to save individuals and courts from the waste and burden of relitigating old issues. Eissing Chemical Co. v. People's Nat. Bank of Brooklyn, 205 App.Div. 89, 91, 199 N.Y.S. 342, affirmed 237 N.Y. 532, 143 N.E. 731; Sargent & Co. v. New Haven Steamboat Co., 65 Conn. 116, 126, 31 A. 543; Bennett v. Commissioner, 5 Cir., 113 F.2d 837, 839, 130 A.L.R. 369. Tillman, to whom Dougherty assigned the claim in suit, stands in the same situation as Dougherty himself.

It may be argued that if Dougherty had brought the present action he would not have been precluded by the former judgment because the claims would have been derived from different assignors. But all the claims, however derived, were for payment of roubles deposited with the same bank during the same period, the parties would have been the same and the issues on which their rights depended would have been identical. No good purpose could be served by relitigating such issues.

The plaintiff's counsel cites Nathan v. Uhlmann, 101 App.Div. 388, 92 N.Y.S. 13, as showing that the judgment upon the report of Referee Tweed in Dougherty v. National City Bank, 157 Misc. 849, 285 N. Y.S. 491, cannot be used as an estoppel because the claims on which Dougherty there sued and the claim upon which the present action is brought were derived from different original assignors. In Nathan v. Uhlmann, supra, it appeared that one, Cassidy, as assignee of various depositors, had recovered a judgment against directors of a bank for receiving money on deposit when they knew the bank was insolvent. Cassidy v. Uhlmann, 170 N.Y. 505, 63 N.E. 554. The court excluded this judgment at the trial in the Nathan action where Cassidy's administrator sought to enforce the claim of a creditor which Cassidy had acquired by assignment prior to the original suit. In Nathan v. Uhlmann, supra, Justice O'Brien remarked at page 390 of 101 App.Div., at page 15 of 92 N.Y. S., that the court had not been referred to any authority indicating "that a judgment obtained by a depositor in one action is competent evidence against the same defendant in another action, brought by another and different depositor". In saying this he was only stating a settled rule of law, but he went farther and said that an assignee who had succeeded in recovering upon certain claims in one action could not avail himself of the judgment by way of estoppel in another action in respect to identical issues, where the several claims were derived from different original assignees. What the court stated regarding estoppel by judgment was dictum, for though the prior judgment was said to have been properly excluded as evidence the verdict in favor of the defendant was set aside and a new trial was granted for errors having no relation to the exclusion of the judgment. The defendant took an appeal and gave the necessary stipulation for judgment absolute in favor of the plaintiff in the event of affirmance. The New York Court of Appeals affirmed the order of reversal without opinion and ordered judgment absolute against the defendant on the stipulation. 184 N.Y. 606, 77 N.E. 1192. It is apparent from the foregoing not only that Justice O'Brien's remarks about the effect of the prior judgment were not necessary to the result reached but also that the decision of the Court of Appeals in no sense determined its effect. Indeed on the record that court might have regarded the exclusion of the judgment as error, for it was in favor of the plaintiff, and the final decision entered on the stipulation was to the same effect.

The Kansas Supreme Court in Porter v. Bagby, 50 Kan. 412, 31 P. 1058, held a judgment admissible by way of estoppel in a case like the present. In Bonney v. Von Novelly, 164 N.Y.S. 42, the same result was reached under similar circumstances by the Appellate Term of the Supreme Court.

There is no merit in defendant's contention that the prior judgment cannot be used as an estoppel because certain facts on which it rested were stipulated. The stipulation was that "the Russian branches of the National City Bank were officially closed, and under orders of the...