Court Opinion

ID: 9445871
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:39:38.27731+00
Date Added: 2024-06-11T17:30:25.842702
License: Public Domain

On Petition for Rehearing
PER CURIAM.
By its petition for rehearing the defendant, National, persuades us to amplify and modify our original opinion and decision.
We are unmoved by the petitioner’s contention that we were wrong in asserting that a dismissal based upon a defense of the statute of limitations is an adjudication on the merits. Warner v. Buffalo Drydock Co., 2 Cir., 67 F.2d 540, which is cited in support of that contention, we think is distinguishable. And moreover, it has been superseded by the clear mandate of Rule 41(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A. which in its last sentence directly contradicts the holding of the Warner case. Although under the rule in a proper situation the District Judge may specify that his order be without prejudice, Judge Galston did not so qualify his order of dismissal.
We think, however, that National is right when it now urges that we failed to consider the impact of the New York statute of limitations on the Gumbiner cause of action. The Bertha cause of action arose in 1935 which was within six years of the Paramount action. United States v. Paramount Pictures, D.C., 85 F.Supp. 881. Thus as to Bertha the six-year New York statute, Civil Practice Act, § 48(2), could not possibly have run and the crucial question was whether the three-year California statute had run, as we correctly stated in the opening paragraph of our original opinion. However, in the Gumbiner case there was another question equally crucial, viz., whether the New York statute of limitations had run. For the Gumbiner cause of action accrued on December 8, 1931. Thus if the New York statute was not tolled by National’s absence, the Gumbiner action was barred here in December, 1937. Section 13 of the New York Civil Practice Act1 is alternative in operation: if the statute has run either in California or in New York the suit is barred here.
Gumbiner argues that the New York law should determine whether in fact the statute has been tolled. From this premise it asserts that under state law, although National may have been amenable to process in New York, the statute was nevertheless tolled during that period. This argument derives from an analogy to an individual debtor who has hidden out in an obscure part of the state under an assumed name. If a creditor can find him, such a debtor is amenable to process: but while he is thus hiding the statute of limitations is tolled. Gumbiner thus concludes that even if National was amenable to process *841in New York, its presence was not open and notorious and on that account the statute was tolled during the relevant period.
Even if New York law does determine tolling (a proposition we need not decide in this case), this argument is fallacious. For the tolling statute (C.P.A. § 19) 2 during the relevant period had a subdivision (2), which declared, “Nor does this section apply while a foreign corporation has had or shall have one or more officers in the state on whom a summons for such corporation may be served.” On the record in this case that section was applicable: National did have officers in the state. Gumbiner would read in a further requirement of open and notorious conduct. But all of the New York cases cited in support of this proposition are concerned with individual defendants, most of whom have just entered the state or have just returned to it. Not one case applies an “open and notorious” requirement to a foreign corporation otherwise amenable to process throughout the statutory period. Indeed, in Mack v. Mendels, 249 N.Y. 356, 164 N.E. 248, 61 A.L.R. 386, Judge Lehman admonishes the courts construing C. P. A. § 19 to read it as the Legislature wrote it and not to imply further requirements.
Gumbiner further urges that National was not amenable to process in New York under either federal or state standards. We disagree. A careful review of the evidence before Judge Galston on the question of whether the New York statute was tolled has convinced us that, if the facts had been heard by a jury, Judge Galston would have been required to set aside a plaintiff’s verdict on this issue. Even though the jury might have disbelieved every one of defendant’s witnesses, the documentary evidence recited in Judge Galston’s findings was overwhelming.3 Regardless of which stand*842ard is applied it is irrefutable that National was amenable to process in New York during the relevant period. United States v. Scophony Corp., 333 U.S. 795, 68 S.Ct. 855, 92 L.Ed. 1091; Pomeroy v. Hocking Valley R. Co., 218 N.Y. 530, 113 N.E. 504; see, also, Chaplin v. Selznick, 293 N.Y. 529, 58 N.E.2d 719.
 We now hold, therefore, that the Gumbiner action, since the New York statute was not tolled by National’s absence from New York or by its unpublicized activity in New York, is barred and that the District Court’s dismissal of that action must be affirmed.
However, the majority of the court adheres to its holding that since the question of tolling in California presents substantial fact questions the Bertha case must be reversed and remanded for trial by jury on the limitations question.
Petition granted and our previous decision is modified to provide
As to the Gumbiner case, affirmed;
As to the Bertha case, reversed and remanded.
Circuit Judge HAND again votes to affirm both judgments for the reasons stated in his earlier opinion and without passing on the opinion now rendered in the Gumbiner appeal.

. Section. 13 in pertinent part reads as follows:
“Where a cause of action arises outside of this state, an action cannot be brought in a court of this state to enforce such cause of action after expiration of the time limited by the laws either of this state or of the state or country where the cause of action arose, for bringing an action upon the cause of action * * *

. The main paragraph of § 19 in its present form reads:
“If, when the cause of action accrues against a person, he is without the state, the action may be commenced, within the time limited therefor, after his coming into or return to the state. If, after a cause of action has accrued against a person, he departs from the state and remains continuously absent therefrom for the space of four months or more, or if, without the knowledge of the person entitled to maintain the action, he resides within the state under a false name, the time of his absence or of such residence within the state under such false name is not a part of the time limited for the commencement of the action.”

. The following findings of Judge Galston were based solely on a stipulation and on evidence corroborated by documentary evidence.
“32. National’s Board of Directors held all of its meetings in New York and transacted its business there from 1930 to June, 1936. From June, 1936, to January, 1944, the Board met in Jersey City, New Jersey. After January, 1944, corporate meetings were again held in New York. All meetings of National’s Executive Committee were held in New York during the existence of such Committee, i.e., from December 5, 1934, to January 3, 1936.
“33. National’s agent, Agency, maintained an office from June, 1936, until the date these actions were begun at 444 West 56th Street, N.Y., in space rented from Twentieth Century-Fox. All officers of Agency had their offices at that address from that time until Agency opened an office in Los Angeles in August, 1942. The Board of Directors of Agency met weekly in New York. ’
“34. From the date of its organization to the date of the institution of these actions, Agency performed substantial and continuous agency services for National and National’s subsidiaries in New York. Agency maintained the payroll for its own and National’s employees, kept National’s books of account and performed in New York extensive supervisory, advisory, operating and managerial activities and services for National and its subsidiaries which it had agreed to perform under its contract of December 2, 1935, with National.
“37. National continuously maintained a bank account or accounts in New York from 1930 throughout the period here involved. Its main account was with The Ohase National Bank of the City of New York and that bank was National’s principal banker. National also had accounts with the Commercial National Bank and Trust Company, The Marine Midland Trust Company and the Guaranty Trust Company of New York.
*842“38. National borrowed money from time to time in New York from New York banks. ' In 1930 National borrowed a total of $19,350,000 from The Chase National Bank in three loans. In 1931 it borrowed $15,000,000 from The Chase National Bank. In 1932 National arranged for substantial loans for its California subsidiaries from The Chase National Bank and unconditionally guaranteed payment of these loans. National ¡hypothecated its assets with the bank in ■order to borrow money. As a result of those loans The Chase Bank was National’s largest creditor until November, 1934, when it acquired 58 per cent of the stock of National in exchange for the ’indebtedness owed to it by National and National’s subsidiaries.
“39. In October, 1934, National, in New York, issued debentures in the amount of $5,270,000 to Pox Pilm Corporation, dated as of March 4, 1933, to reflect National’s indebtedness to Pox Pilm Corporation. The Empire Trust ■Company of New York was trustee under the trust indenture. Those debentures were exchanged for stock of National in the reorganization of November 14, 1934.
“40. In 1935 a line of credit in the .amount of $750,000 was established with the Commercial National Bank & Trust Company of New York. Loans from that bank were negotiated in 1935 and 1937.
“41. Prom 1930 throughout the period here involved the dividends which National received from its subsidiaries were received by it in New York and the dividends paid by National were paid in New York. National had substantial assets.
“42. National itself paid no utility charges directly to any utility company. It paid a regular charge, however, to its parent Twentieth Century-Pox Pilm Corporation for services such as utilities, office space and the like. Prom and after June, 1936, payments for these facilities were made by Agency.
“43. National itself did not have a telephone listing prior to the summer of 1935. Thereafter it was listed in the Manhattan telephone directory as “National Theatres Corporation, see National Theatres Agency Corporation.” Prior to 1935 it had used the telephone facilities of Twentieth Century-Pox without a listing and all calls came in through the Twentieth Century-Pox switchboard. Charges for the use of these telephone facilities were included in the regular amounts paid by National to Twentieth Century Pox.”
In addition, several contracts are in the record which list 444 W. 56 St., New York City, as National’s office address and the address to which notices may be sent. In a “Consent of Guarantor” defendant is stated to have an office and place of business in New York City.