184 F2d 1021 Producers Releasing Corporation De Cuba v. Pathe Industries

184 F.2d 1021

PRODUCERS RELEASING CORPORATION DE CUBA
v.
PATHE INDUSTRIES, Inc.

No. 35.

Docket 21719.

United States Court of Appeals Second Circuit.

Argued October 11, 1950.

Decided November 6, 1950.

In 1946, plaintiff brought suit against PRC Pictures, Inc. The district court entered judgment dismissing this action on the merits, cf. 8 F.R.D. 254. On appeal, this judgment was affirmed but modified to provide for dismissal but not upon the merits, 2 Cir., 1949, 176 F.2d 93, 96. The suit was dismissed, in accordance with this court's mandate, on July 26, 1949. Meanwhile, PRC had been dissolved, and Pathe Industries, Inc., had acquired all its assets, including those which were the subject matter of the dismissed suit. The instant action was begun on July 28, 1949. The complaint names Pathe as defendant and sets forth the dissolution of PRC and the acquisition of its assets by Pathe; otherwise the complaint is substantially the same as that in the suit against PRC.

The contracts between plaintiff and PRC on which the complaint relies, contain this provision: "No action or proceeding shall be commenced, prosecuted or maintained until the expiration of ninety (90) days from the date of the act, event or default upon which the claim is based, and no such action or proceeding shall be maintained on such claim unless commenced within nine (9) months after the date of such act, event or default."

On Pathe's motion, the district court entered a summary judgment dismissing the first three causes of action (for specific performance and damages) on the ground that the action was not begun within the nine months prescribed by the provision of the contract referred to above. The fourth cause of action, for reformation, was not dismissed. The district judge stated: "In accordance with Rule 54(b), Fed.R.Civ.P. [28 U.S.C.A.] it is hereby determined that there is no just reason for delay and the entry of judgment accordingly is directed." The opinion of the district court will be found in 10 F.R.D. 29, 32.

Section 23 of the New York Civil Practice Act reads: "Effect of reversal of judgment or termination of action. If an action is commenced within the time limited therefor, and a judgment therein is reversed on appeal without awarding a new trial, or the action is terminated in any other manner than by a voluntary discontinuance, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if he dies and the cause of action survives, his representative, may commence a new action for the same cause after the expiration of the time so limited and within one year after such a reversal or termination."

Budner & Budner, New York City (Sidney S. Bobbe, New York City, of counsel), for appellant.

Robert L. Augenblick, New York City, for appellee.

Before AUGUSTUS N. HAND, CHASE and FRANK, Circuit Judges.

FRANK, Circuit Judge.

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1

1. Considering our opinion in connection with the dismissal of the former suit, 2 Cir., 176 F.2d 93 and the New York decisions interpreting § 23 of the New York Civil Practice Act, we think that the dismissal of the complaint in that suit was not for "neglect to prosecute", and that therefore the present suit was timely brought within the meaning of § 23. In Gaines v. City of New York, 215 N.Y. 533, 539, 109 N.E. 594, 596, it was said: "The statute is designed to insure to the diligent suitor the right to a hearing in court till he reaches a judgment on the merits. Its broad and liberal purpose is not to be frittered away by any narrow construction. The important consideration is that, by invoking judicial aid, a litigant gives timely notice to his adversary of a present purpose to maintain his rights before the courts."

2

In London v. Hessberg, 147 Misc. 719, 265 N.Y.S. 829, 832, affirmed without opinion 264 N.Y. 435, 191 N.E. 501, the fact that the defendant was not prejudiced by plaintiff's delay was held to be an important factor.

3

2. Defendant argues that, because it was not a party to the earlier suit, Section 23 does not apply. We do not agree. Where the parties to the second action are identical in interest with the parties to the first, Section 23 applies; thus a trustee in bankruptcy may be joined as co-plaintiff with the bankrupt in the second action, Van der Stegen v. Neuss, Hesslein & Co., 243 App.Div. 122, 276 N.Y.S. 624, affirmed 270 N.Y. 55, 200 N.E. 577; and see Gibbons v. City of New York, 196 Misc. 89, 66 N.Y.S.2d 34. Here plaintiff, in the first suit, could have substituted defendant for PRC.1

4

Streeter v. Graham & Norton Co., 263 N.Y. 39, 188 N.E. 150, is not apposite; there the court held § 23 inapplicable because, in the second suit, a new plaintiff, in part representing different interests, sought to assert new rights. But here the same plaintiff sues, on the same causes of action, a defendant which represents all the interests of the defendant in the first action. All the assets, rights and duties of PRC have devolved on defendant: the fact that defendant represents other interests in addition to those derived from PRC cannot free it of the duties undertaken by PRC whose assets defendant now enjoys.

5

We think we are not required to follow Breen v. State, 179 Misc. 42, 37 N.Y.S.2d 371, a decision by the New York Court of Claims, even assuming that that court has a sufficient status to make its decisions authoritative within the doctrine of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188.2 For the court in the Breen case did not consider the earlier conflicting decision of a higher court, Van der Stegen v. Neuss, Hesslein & Co., 243 App.Div. 122, 276 N.Y.S. 624, affirmed 270 N.Y. 55, 200 N.E. 577; and Breen seems also at odds with Gaines v. City of New York, 215 N.Y. 533, 539, 109 N.E. 594, 596, where the court (per Cardozo, J.) said: "The important consideration is that, by invoking judicial aid, a litigant gives timely notice to his adversary of a present purpose to maintain his rights before the courts. When that has been done, a mistaken belief that the court has jurisdiction [essentially the situation in the Breen case] stands on the same plane as any other mistake of law."

6

Reversed.

Notes:

1

See N. Y. Civil Practice Act, § 83; Trotter v. Lisman, 209 N.Y. 174, 102 N.E. 575; Atlantic Dredging Co. v. William Beard, 145 App.Div. 342, 130 N.Y.S. 4, affirmed 203 N.Y. 584, 585, 96 N.E. 415

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2

Cf. State of California v. Fred S. Renauld Co., 9 Cir., 179 F.2d 605