Court Opinion

ID: 9443391
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:19:14.680844+00
Date Added: 2024-06-11T17:29:28.528836
License: Public Domain

CLARK, Circuit Judge
(dissenting).
I dissent from the holding that the New York Statute of Limitations is a bar on substantially the grounds so ably developed below, 103 F.Supp. 64, 110-117. Summarily stated, they are that the Erie-Tompkins doctrine does not control bankruptcy law, and that under that law, and in accordance *703with the usual law in this country, concealment of a cause of action prevents the running of the statute. As well stated in a note in 38 Virginia Law Review 680 (quoted in 128 N.Y.L.J. 198, August 5, 1952) in approving the holding below: “But the question arises as to why Congress conferred jurisdiction on the federal courts to hear suits by trustees if such courts are merely to be ‘ventriloquists’ dummies’ for the state courts. The theory behind diversity jurisdiction, that prejudice exists against nonresidents, certainly does not apply here. On the contrary, as the court in the instant case correctly pointed out, the purpose of the Bankruptcy Act in conferring jurisdiction on the federal courts was to establish uniformity where the trustee is suing multiple defendants in the same cause of action. It is submitted that the Erie rule should be limited to cases such as those based on diversity in which there is no need for nationwide uniformity.”
It should be stressed that this decision breaks new ground — that nothing in the exposition of the Erie doctrine to date compels it, while the various intimations limiting that doctrine to diversity cases point the other way. The nub of the decision here appears to rest on the contention that the peculiar New York doctrine had already barred the action before the reorganization proceedings were commenced. This seems to me an inadmissible premise. What we are dealing with is an asset of a Virginia corporation now in the bosom of a Virginia federal court. The asset is an equitable right of accounting, based on ancient chancery principles, against a defaulting fiduciary. It is no more a New York created right than it is a Virginia- or some other state created right. The action is transitory and would follow Williams wherever he went. To consider that a man of his large interests never left New York, was never suable elsewhere, seems absurd. How then could he obtain this absolute immunity from suit which is now made the basis for this radical extension of the Erie doctrine? Compare Chase Securities Corp. v. Donaldson, 325 U.S. 304, 65 S.Ct. 1137, 89 L.Ed. 1628.