Opinion ID: 1494321
Heading Depth: 1
Heading Rank: 4

Heading: Was the Action at Bar Timely Brought?

Text: In disposing of the question under this heading we state again that the appellant procured her judgment against the assured in the District Court of the United States for the Southern District of New York upon May 4, 1929. She brought her suit against the appellee in the Supreme Court of New Jersey upon November 13, 1930, that is to say within the two years provided by Condition G of the policies which states that no action shall lie against the appellee unless brought within two years after the amount of the loss is made certain by judgment against the assured or otherwise ascertained. Upon November 25, 1932, a judgment of nonsuit was entered by the Supreme Court of New Jersey against the appellant. The order of the Supreme Court of New Jersey granting the nonsuit is a part of the record in the case at bar and it is agreed by the parties that an appeal was taken therefrom by the appellant to the Court of Errors and Appeals. This nonsuit was involuntary. It was not of such a character as would adjudicate the appellant's cause of action. Snowhill v. Hillyer, 9 N.J.L. 38; Beckett v. Stone, 60 N.J.L. 23, 36 A. 880. On October 11, 1934, the Court of Errors and Appeals affirmed the judgment of the Supreme Court but without opinion. Upon March 14, 1935, the suit at bar was filed. From the foregoing it appears that the suit filed by the appellant in the Supreme Court of New Jersey was filed within the limitation of time imposed by Condition G of the policies; it is equally apparent that if the two year period of limitation be applicable, the suit at bar was filed out of time. The general statute of limitations of New Jersey [1] relating to actions of contract without specialty provides a period of six years in which suit must be brought. In the absence of limitation imposed by contract between the parties, the law of the forum supplies the period of limitations. And it is also true that generally in the absence of any applicable federal statute a federal court will apply the statute of limitations of that state in which it sits. Bluefields S. S. Co. v. United Fruit Co., 3 Cir., 243 F. 1; Stanley v. United States, D.C., 23 F.2d 870; United States v. Sligh, 9 Cir., 24 F.2d 636, judgment vacated because Act of May 29, 1928, 45 Stat. 964, 38 U.S.C.A. § 445, had become effective and applied, Sligh v. United States, 277 U.S. 582, 48 S.Ct. 600, 72 L.Ed. 998; Weems v. Carter, 4 Cir., 30 F.2d 202; United States v. Preece, 10 Cir., 85 F.2d 952. But Condition I of the policies provides, as the appellant points out, that if the limit of time set by the policies for the commencement of any legal proceedings against the insurer is at variance with any specific statutory provision in relation thereto in force in the state in which the assured is carrying on business such specific statutory provision shall supersede any condition in the policies inconsistent therewith. It therefore is necessary to ascertain if the limitation of time for suit imposed by Condition G is inconsistent with specific statutory limitations imposed upon such actions by the statute law of New York. We state that Section 48 of the Civil Practice Act, General Statute of Limitations of New York, provides that actions under contracts, such as those at bar, must be commenced within six years after the accrual of the cause of action. What is the meaning of the phrase of the policies, specific statutory provision used in Condition I in connection with a period for limitation of actions? It is apparent that the policies in the case at bar were made up for use by the appellee throughout the United States wherever the appellee conducted its business. In several states specific statutory provisions of insurance law prevent the parties to an insurance contract from prescribing a shorter period for bringing action upon a contract of insurance than that prescribed by the law of the state. See Hilker v. Western Automobile Insurance Co., 204 Wis. 1, 231 N.W. 257, affirmed 204 Wis. 12, 235 N.W. 413. In the cited case a one year period of limitation for the commencement of actions against an insurance company for a loss was deemed invalid in view of a statute of Wisconsin (St. 1929 of Wisconsin, Sec. 201. 19a) specifically providing that, No policy or contract of insurance shall be made, issued or delivered in this state containing any provision    limiting the time for beginning an action on the policy or contract to a time less than that prescribed by the statutes of limitations of this state or specifically authorized by law. The general law of Wisconsin provided for a six year statute of limitations upon actions of contract. See, also, Brucker v. Georgia Casualty Co., 326 Mo. 856, 32 S.W.2d 1088. We think that it was the intention of the appellee to provide by the provisions of Condition I that the two year period of limitations prescribed by Condition G should be superseded by and fall before any specific statutory provision of the law of New York relating to the time for commencement of actions upon insurance policies. Upon the point now under consideration, even if Section 48 of the New York Civil Practice Act, which constitutes the general statute of limitations of New York, be construed as a specific statutory provision, a conclusion we believe to be untenable (see Bass v. Standard Accident Insurance Co., 4 Cir., 70 F.2d 86, 88, and Matelsky v. Globe Indemnity Co., 162 Misc. 326, 294 N.Y.S. 588), none the less it is obvious that the provisions of Section 48 are not inconsistent with the period of limitation prescribed by Condition G since the former may stand literally with the latter. Moreover, Section 10 of the New York Civil Practice Act, which provides that The provisions of this article apply and constitute the only rules of limitation applicable to a civil action   , except    where a definite limitation is specially prescribed by law or a shorter limitation is prescribed by the written contract of the parties, wipes out even any apparent inconsistency. If therefore our consideration of provisions for the limitation of actions, whether statutory or contractual, ceased at this point, it would be necessary to hold that the provisions of limitation of Condition G were carried over by the contracts of the assured and the appellee into the law of the forum, that is to say, into the law of New Jersey, with the result that the suit at bar would not have been timely brought. Other and more difficult questions of statutory construction present themselves, however. The New York Civil Practice Act, Section 23, provides, that if an action is commenced    within the time limited therefor    and    is terminated in any other manner than by voluntary discontinuance    the plaintiff    may commence a new action for the same cause    within one year after such a reversal or termination.    The appellant contends that this provision of the statute law of New York must be read into the provisions of Condition G by virtue of the provisions of Condition I. The appellee denies this but contends that if it be so, then the provisions of Section 482 of the New York Civil Practice Act, which provide that A dismissal of a complaint   at the close of the plaintiff's or defendant's evidence, as the case may be    is a final determination of the merits of the cause of action and bars a new action between the same parties    unless the court shall dismiss without prejudice   , must also be read into the provisions of Condition I and bar the appellant's suit. The appellee further contends that the two acts last referred to relate solely to details of practice, simply to the procedure in the courts of New York and therefore can have no force or effect outside of the State of New York. At the least it must be said that the assured and the appellee entered into the contracts of insurance in the light of the statute law of New York, and, therefore, setting aside the application of the provisions of Section 482 of the New York Practice Act for the time being, we conclude that if the appellant's suit, first commenced against the appellee in the Supreme Court of New Jersey, had been filed by her in the Supreme Court of New York and the suit at bar had been commenced in New York instead of in the court below, the provisions of Section 23 of the New York Practice Act would apply and the appellant's suit would have been timely brought since it was commenced within one year of the time of the termination of the earlier suit against the appellee. Titus v. Poole, 145 N.Y. 414, 422, 40 N.E. 228; Comey v. United Surety Co., 217 N.Y. 268, 111 N.E 832, 833, Ann.Cas. 1917E, 424; Littrell v. Allemania Fire Ins. Co., 224 App.Div. 523, 231 N.Y.S. 520, 521, reversed on other grounds in 250 N.Y. 628, 166 N.E. 350; Bellinger v. German Insurance Co. of Freeport, 51 Misc. 463, 100 N.Y.S. 424, 426; Id., 113 App.Div. 917, 100 N.Y.S. 424, affirmed 189 N.Y. 533, 82 N.E. 1124. But the appellant insists that Condition G of the policies, read in the light of Condition I, must be deemed to include by supersession the provisions of Section 23 of the New York Practice Act. The appellant contends therefore that although the assured and the appellee by the contracts of insurance contracted for a two year period of limitations for the commencement of actions, they also agreed that, if an action timely commenced within the two year period was disposed of otherwise than by voluntary discontinuance, there should be an additional period of a year in which another suit might be brought, whether in the courts of New York or elsewhere. We think that it is apparent in view of the printed forms on which the contracts of insurance are written and in view of the well established practice of insurance companies generally in insisting upon the preparation of their own policies of insurance, a fact of which we may take judicial notice, that the terms of the insurance policies must be construed more favorably to the assured and to the appellant than to the appellee. Phoenix Mut. Life Ins. Co. v. Raddin, 120 U.S. 183, 7 S.Ct. 500, 30 L.Ed. 644; Dilleber v. Home Life Ins. Co., 69 N.Y. 256, 25 Am.Rep. 182; Burleigh v. Gebhard Fire Ins. Co., 90 N.Y. 220. So construing them, we think that the provisions of Section 23 of the New York Civil Practice Act are specific provisions relating to the time for the commencement of actions, and as such are precisely within the purview of Condition I of the policies if they are inconsistent with the limitation of time of actions imposed by Condition G. We recognize that in all probability the appellee in using the phrase specific statutory provision meant to refer to and designate only those statutes prohibiting the creation by contract of the parties of a period of limitation for the commencement of actions against the appellee shorter than that prescribed by statute, but the appellee has not expressed such a precise limitation and for us to give that effect to the phrase used would in our opinion constitute a judicial amendment to the policies of insurance. It is true that the provisions of Section 23 of the New York Civil Practice Act apply to all cases where an action is commenced within the time limited therefor and are terminated in the manner indicated by the statute. But Section 23 is not part of the general statute of limitations of New York; nor is it a statute which relates generally to the bringing of actions; it applies only to a certain category of cases, i. e., those designated by the statute under the circumstances therein provided. It is a statute relating to the bringing of actions under specific and peculiar circumstances and is therefore a specific statutory provision. But does inconsistency exist between the provisions of Section 23 of the New York Civil Practice Act and the provisions of Condition G? In our opinion the provisions of Section 23 are inconsistent and cannot stand with the provisions for limitations of actions prescribed by Condition G and therefore the latter must fall and be superseded by the former. We are confirmed in this opinion by the decision of the Supreme Court of New York at Special Term in Bellinger v. German Insurance Co. of Freeport, 51 Misc. 463, 100 N.Y.S. 424, affirmed per curiam by the Appellate Division, Second Department, reported 100 N.Y.S. 424. The Supreme Court construing Section 405 of the Code of Civil Procedure, which became by codification Section 23 of the New York Civil Practice Act, stated at page 464, 100 N.Y.S. at page 425: These actions are brought for the `same cause' as the previous actions by the plaintiff against the same defendants, within the meaning of the provisions of the statute. Code Civ. Proc. § 405. The transaction which is at the foundation of both actions is the same, namely, a contract of insurance between the parties and damage to the plaintiff, for which the defendants are liable within the terms of the contract. Titus v. Poole, 145 N.Y. 414, 423, 40 N.E. 228. The present actions are properly brought under the provisions of the section above referred to.    The manifest purpose of the section in question was to permit a party who, through technical error or a mistake in the form of the remedy employed, had been unable to present the real merits of the controversy in the first actions to pursue his real right under a more appropriate form of action. Titus v. Poole, supra.