Case Name: Ouida J. WEISSINGER a/k/a Ouida Boyd and Mrs. George Boyd, Appellants, v. UNITED STATES of America, Appellee
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1968-10-09
Citations: 423 F.2d 782
Docket Number: No. 24639
Parties: Ouida J. WEISSINGER a/k/a Ouida Boyd and Mrs. George Boyd, Appellants, v. UNITED STATES of America, Appellee.
Judges: Before RIVES and GODBOLD, Circuit Judges, and HUGHES, District Judge.
Reporter: Federal Reporter 2d Series
Volume: 423
Pages: 782–795

Head Matter:
Ouida J. WEISSINGER a/k/a Ouida Boyd and Mrs. George Boyd, Appellants, v. UNITED STATES of America, Appellee.
No. 24639.
United States Court of Appeals Fifth Circuit.
Oct. 9, 1968.
T. Paine Kelly, Jr., Charles W. Pittman, Macfarlane, Ferguson, Allison & Kelly, Tampa, Fla., for appellants.
John C. Eldridge, Jack H. Weiner, Stephen R. Felson, Attys., Dept, of Justice, Washington, D. C., Carl Eardley, Acting Asst. Atty. Gen., Edward F. Boardman, U. S. Atty., for appellee.
Before RIVES and GODBOLD, Circuit Judges, and HUGHES, District Judge.

Opinion:
RIVES, Circuit Judge:
This appeal is from a summary judgment for the balance due on guarantees of two Reconstruction Finance Corporation (R.F.C.) loans. On appeal the contentions are that the district court erred in holding: (1) that the R.F.C. and its successor, the S.B.A. (Small Business Administration), are not subject to state statutes of limitations; (2) that the words "any extension" mean "all extensions"; (3) that appellant had waited too long to disaffirm her guaranty of the first loan executed when she was 20 years of age; (4) that a prior judgment was not a bar. The main contention of error is based on the contention which we have listed last. The first three contentions may be readily answered.
1. State statutes of limitation do not apply to the federal government. In an R.F.C. case the Seventh Circuit has apparently indicated to the contrary. However, our Fifth Circuit has held that the R.F.C. is not subject to a state statute of limitations. The Second Circuit is in accord with the Fifth. We adhere to our holding that in the absence of a waiver state statutes of limitation do not apply to the federal government, regardless of whether the government operation is characterized as "sovereign" or "proprietary."
2. In certain contexts, some courts have held that "any extension" of time is limited to a single extension. The waiver of notice contained in the guaranties sued on does not permit of such a construction:
"The undersigned hereby grants to Reconstruction Finance Corporation full power, in its uncontrolled discretion and without notice to the undersigned, to deal in any manner with the Liabilities and the collateral, including, but without limiting the generality of the foregoing, the following powers:
"(a) To modify or otherwise change any terms of all or any part of the Liabilities , to grant any extension or renewal thereof and any other indulgence with respect thereto .
"(b) To enter into any agreement of forbearance with respect to all or any part of the Liabilities , and to change the terms of any such agreement." (Emphasis added.)
Without belaboring all of the parts of that general and unconditional waiver, we find it impossible to distinguish between granting a "renewal" of an extension and granting a second extension.
3. The guaranty of the first loan was signed about six months before the appellant reached her majority and the guaranty of the second loan about six months after her twenty-first birthday. She waited almost twelve years after reaching her majority before attempting to disaffirm. The appellant was a limited partner in the enterprise which received the R.F.C. loan. She claims that Georgia law applies to this question. Conceding that arguendo, the Georgia courts hold as to the defense of infancy that one cannot disaffirm a contract seven years after becoming of age. Clearly, the appellant waited too long before attempting to disaffirm.
4. We come then to appellant's main defense, viz.: that a judgment rendered by the same court some ten months before this complaint was filed bars the present action. On its surface that appears to be a perfect defense. The actions were between the same parties on the same contracts of guaranty. The former action was tried on its merits, and resulted in a judgment in the following form:
"THE COURT having this day entered its findings of fact and conclusions of law in this cause and being fully advised in the premises, it is, upon consideration,
"ORDERED, ADJUDGED and DECREED:
"That the complaint and cause of action of the plaintiff be, and the same is hereby, dismissed with prejudice; and it is further
"ORDERED, ADJUDGED and DECREED :
"That judgment be, and it is hereby, entered in favor of the defendant, Ouida J. Boyd, and against the plaintiff, United States of America, and that said defendant go hence without day (Emphasis added.)
Of course, however, the effect of the judgment as res judicata must be determined not from the judgment alone but by the aid of the entire record. In Great Lakes Dredge & Dock Co. v. Huffman, 1943, 319 U.S. 293, 295, 63 S.Ct. 1070, 1071, 87 L.Ed. 1407, the Supreme Court cited several decisions in support of its statement that "The formal judgment ordered dismissal of the suit, but it is to be interpreted in the light of the court's opinion, findings and conclusions of law."
When we examine the findings of fact and conclusions of law upon which that judgment was based, we find that the defendant in her answer claimed many legal defenses, including the three already described in the present opinion. The district court entered full findings of fact and conclusions of law as to the various claimed defenses and ruled against the defendant as to each of them, except the eleventh and last as listed in defendant's answer. On that defense the district court concluded as follows:
"That it further appears to the Court, in regard to the eleventh defense, that the guaranty agreements upon which this action is based expressly provide that a written demand be made upon the guarantors by the Reconstruction Finance Corporation as a condition precedent to payment of any amount due under the agreements. The latter (sic) mailed by the Small Business Administration to the defendant at Tiger, Georgia, was not delivered to the defendant and cannot be construed as a demand upon her within the meaning of the agreements. There was not (sic) other notice attempted to be served upon this defendant. Further, the service of the complaint was not a written demand within the meaning of the foregoing provision. Therefore, the Small Business Administration has failed to comply with the provision requiring a written demand upon the defendant; and the action should be dismissed.
"Judgment in accordance with the foregoing is being entered by the Court."
Pursuant to the findings and conclusion on this eleventh defense, the judgment was entered in which the action was "dismissed with prejudice." When the record shows that the action was dismissed for a reason which does not touch the merits, the addition of the quoted phrase cannot change the facts and preclude the plaintiff.
The government sent another demand letter to appellant which was delivered in due course. The government then filed a new complaint substantially identical to the old one, except that the new demand was specifically alleged. Appellant's answer was substantially the same as her answer in the first action, except that an additional defense was interposed, that of res judicata. Each side moved for summary judgment. The district court held that the judgment in the first action was not res judicata in the second action. That judgment appears clearly correct.
In order for a prior judgment to bar a subsequent action, the first judgment must, of course, be "on the merits." As said in section 49 of the Restatement, Judgments: "Where a valid and final personal judgment not on the merits is rendered in favor of the defendant, the plaintiff is not thereby precluded from thereafter maintaining an action on the original cause of action and the judgment is conclusive only as to what is actually decided."
It is perfectly clear from the record that the district court in the first action decided only two issues against the government: (1) that a written demand was a condition precedent to the bringing of an action on the guaranty agreements, and (2) that such a demand had not been made. The prior judgment is .conclusive against the government only as to those two issues.
Appellant relies upon that part of Rule 41(b), Fed.R.Civ.P., which provides : "Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction operates as an adjudication upon the merits." The order for dismissal construed in the light of the findings of fact and conclusions of law "otherwise specifies." Further, the Supreme Court has held that dismissals "for lack of jurisdiction" as that phrase is used in Rule 41(b) include "those dismissals which are based on a plaintiff's failure to comply with a precondition requisite to the Court's going forward to determine the merits of his substantive claim." Costello v. United States, 1961, 365 U.S. 265, 285, 81 S.Ct. 534, 545, 5 L.Ed.2d 551.
There is no merit to any of the appellant's four contentions. The judgment is therefore
Affirmed.
. United States v. Summerlin, 1940, 310 U.S. 414, 417, 60 S.Ct. 1019, 84 L.Ed. 1283 (Federal Housing Administrator).
. Dorsey v. Reconstruction Finance Corp., N.D.Ill.1951, 101 F.Supp. 197, 199, aff'd 7 Cir. 1952, 197 F.2d 468.
. United States v. Borin, 5 Cir. 1954, 209 F.2d 145, 148, 149; Alger v. United States, 5 Cir. 1958, 252 F.2d 519, 520; see other cases collected in Key Numbered Digests under Limitation of Actions, § 11 (1) ; accord, Nabors v. NLRB, 5 Cir. 1963, 323 F.2d 686, 688.
. United States v. 93 Court Corporation, 2 Cir. 1965, 350 F.2d 386, 389.
. Tuten v. Bowden, 1934, 173 S.C. 256, 175 S.E. 510, 513, 94 A.L.R. 1443; Matchett v. Anderson Foundry & Machine Works, 1902, 29 Ind.App. 207, 64 N.E. 229, 230; Annot., 94 A.L.R. 1447.
. Holbrook v. Montgomery, 1928, 165 Ga. 514, 141 S.E. 408, 409; McGarrity v. Cook, 1922, 154 Ga. 311, 114 S.E. 213, 215; Nathans v. Arkwright, 66 Ga. 179, 188.
. 30A Am.Jur. Judgments, § 457, p. 501; 50 C.J.S. Judgments, § 842, p. 409.
. Lawlor v. National Screen Service Corp., 1955, 349 U.S. 322, 326, 75 S.Ct. 865, 99 L.Ed. 1122; Cromwell v. County of Sac., 1876, 94 U.S. 351, 352, 24 L.Ed. 195.
. Chirelstein v. Chirelstein, 12 N.J.Super. 468, 79 A.2d 884, 888.