Court Opinion

ID: 9651336
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:15:02.117493+00
Date Added: 2024-06-11T18:12:32.269810
License: Public Domain

L. HAND, Circuit Judge
(concurring).
The phrase, “issue joined,” in Rule 4 of the Local Equity Rules of the Southern District of New York does not, I think, include a motion to dismiss the bill made under Equity Rule 29. The local rule was drawn after the Equity Rules were in force, and as Equity Rule 31 enacts that “the cause shall be deemed at issue upon the filing of the answer,” “issue joined” in the local rule must refer to the “issue” so defined.
Perhaps the other basis of the majority opinion is enough to dispose of the case; that is, that the defendant got an affirmance by this court of its right to remove, and an injunction against any further proceedings in the state court, but I am not thoroughly persuaded that it is, and it seems to me safer to rest the decision upon a narrower ground. The whole immediate controversy really turns' on the defendant’s right to plead the plaintiff’s laches, and this depends upon its power to remove the suit to the federal court and keep it here. The plaintiffs drew the bill at bar in such a way that, as they supposed, it would resist removal. They have been disappointed, and frankly avow that they hope to contrive another which will succeed if they can get rid of this.
The importance of all this lies in the fact that the defendant has never designated any one on whom process can be served in New York, and, being a foreign corporation, may not therefore plead the statute of limitations in that state. Comey v. United Surety Co., 217 N. Y. 268, 111 N. E. 832, Ann. Cas. 1917E, 424. If this were a ease where the remedy sought were discretionary, laches would nevertheless be a defense (Groesbeck v. Morgan, 206 N. Y. 385, 99 N. E. 1046), but the cause of suit is a constructive trust, a creature of equity, for which only equitable remedies are available, and those not discretionary. It is at best extremely doubtful whether in such a situation there is any doctrine of laches independent of the statute. Galway v. Metropolitan Ry., 128 N. Y. 132, 28 N. E. 479,13 L. R. A. 788; Cox v. Stokes, 156 N. Y. 511, 51 N. E. 316; Treadwell v. Clark, 190 N. Y. 51, 82 N. E. 505; Derby v. Yale, 13 Hun, 273; Cardwell v. Clark, 94 Misc. Rep. 433, 158 N. Y. S. 300. Pollitz v. Wabash Ry., 207 N. Y. 113, 100 N. E. 721, involved a legal right, and is perhaps beside the point, but at least it does not serve to lay the doubt. On the other hand, as this is a suit in equity, the District Court is not bound by the state statute of limitations, Benedict v. City of N. Y., 250 U. S. 321, 327, 39 S. Ct. 476, 63 L. Ed. 1005, and laches if proved would be a good bar.
Ordinarily the mere fact that a plaintiff prefers the state courts ought not to prevent his discontinuing his suit (Harding v. Corn Products Refining Co., 168 F. 658 [C. C. A. 7]); one court is as good as another. But the situation changes when there is substantial doubt whether the courts will not apply different rules, and when the plaintiff’s purpose is so to maneuver the litigation that the defendant will lose his existing advantage. The loss of the federal forum then becomes a grave prejudice, quite as much as, and indeed more than, the expense and delay in trying the suit up to decree, or even the failure of a cross-bill.