United States v. Curtiss Aeroplane Co.
Opinion of the Court
The plaintiff appeals from a summary judgment dismissing its complaint, because it was barred by the Statute of Limitations. The facts are as follows: Between September 25, 1914, and February 25, 1915, the Russian Imperial Government made seven written contracts with a corporation known as the Curtiss Aeroplane Company, for the manufacture and delivery of forty-eight “K boats,” and two transatlantic “flying boats.” (The other defendants have succeeded to the liabilities
“1. Russia shall not commence an action against the Company and the Company shall not present a claim against Russia until after the expiration of two (2) years after the Government of Russia recognizes and accords full honor in Russia to passports issued by the Government of the United States to American citizens desiring to travel in Russia in connection with ordinary commercial enterprises. ******
“2. In the event that after the expiration of such two year period Russia shall commence an action against the Company or the Company shall present a claim against Russia, the defending party to such action or claim shall not plead or set up as a defense as a part of any statute or limitations the period of time intervening between March 15, 1922 and the end of a period of five years following the expiration of such two year period.”
The Soviet Government, as successor to all rights of the Imperial, and of the Provisional, JGovernments, assigned all seven causes of action to the United States as of November 16, 1933, and the United States commenced this action on April 9, 1941. The defendants answered on September 15, pleading the Statute of Limitations; and on October 5, 1942, they moved for a summary judgment dismissing the complaint, as barred by section 48 of the New York Civil Practice Act. Both sides agree that, after November 16, 1933, the Soviet Government recognized and accorded “full honor in Russia to passports issued by the * * * United States to American citizens desiring to travel in Russia in connection with ordinary commercial .enterprises.” We understand that the defendants also agree that after November 16, 1933, no time ran against the plaintiff; in any event, there is no doubt about it, and the only question open on this appeal is whether on that day the statute was a bar to an action by the Provisional Government in this country.
The meaning of the contract of March 15, 1922, is plain; the promise not to plead the statute was supported by the buyer’s promise to forbear, which it performed. The defendants answer, however, that the seller’s promise was irivalid because the law of New York — which everyone agrees to be controlling — does not allow a promisor to promise not to plead the Statute of Limitations: it is the “public policy” of that state that actions shall be brought within the periods prescribed; promisors are not to be allowed to expose themselves to the hazards which longer delays will entail. When such a stipulation is made a part of the very contract out of which the obligation arises, there are indeed decisions in New York — as there are in other jurisdictions — which support that position. Crocker v. Ireland, 235 App.Div. 760, 256 N.Y.S. 638; Pine v. Okoniewski, 256 App.Div. 519, 11 N.Y.S.2d 3; Mutual Life Insurance Co. v. United States Hotel Co., 82 Misc. 632, 144 N.Y.S. 476. Moreover, although the foregoing are the only actual decisions upon the point that we have found, in Watertown National Bank v. Bagley, 134 App.Div. 831, 119 N.Y.S. 592; St. Andrews Parish v. Gallagher, 121 Misc. 167, 169, 200 N.Y.S. 590; Anglo California Nat. Bank v. Klein, 162
There is nothing in the “public policy” of the statute, or in the New York decisions, to support the notion that such a contract, at least when it is in writing, is invalid. Section 59 of the New York Civil Practice Act enacts the common-law doctrine that a promise to pay a debt or its acknowledgment, whether or not it is already barred, creates an actionable obligation, although it adds the condition that it must be in writing. We can think of no reason why a promisor should be permitted so to extend the period of limitation against himself, and even to revive a barred debt, which does not apply with equal force to validate an agreement not to plead the statute. Indeed, if a conditional acknowledgment were enough, there would be no difference at all; and, although, as we have just said, probably it is not enough, there is some question even as to that. In Van Schaick v. Metz, 244 App.Div. 719, 279 N.Y.S. 988, for example, the court held an acknowledgment to be valid under section 59, though it was nothing more than a promise not to plead the statute. The court below relied upon Woods v. Board of Supervisors of Madison County, 136 N.Y. 403, 32 N.E. 1011, and it was true there also that the acknowledgment was not unconditional — at least in amount. The defendants insist, and the judge agreed, that these cases are contrary to the general doctrine in New York, and perhaps they are right. Connecticut Trust & S. D. Co. v. Wead, 172 N.Y. 497, 65 N.E. 261, 92 Am.St.Rep. 756; Zinn v. Stamm, 152 App.Div. 76, 136 N.Y.S. 737; Lincoln-Alliance Bank & Tr. Co. v. Fisher, 247 App.Div. 465, 286 N.Y.S. 722; In re Povill, 2 Cir., 105 F.2d 157 (construing § 59). Even so, and assuming that the acknowledgment must be unconditional, to distinguish between it and a contract not to plead the statute adds nothing to the promisor’s protection. If he can abandon all
In Shapley v. Abbott, 42 N.Y. 443, 1 Am. Rep. 548, Shapley held a note of Abbott which had been due for nearly six years, but he owed a firm of lawyers, of which Abbott was a member, for a bill of costs. The balance of these costs he offered to pay, if Abbott would let him set off the note. Abbott refused, because the costs belonged not to him but to his firm; and Shapley then replied that the note would “outlaw soon, and something must be done about it.” To this Abbott answered: “if the note did outlaw he would not plead the statute of limitations on it,” and in reliance upon this promise Shapley let the statutory period expire. The Court of Appeals by Earl, C. J., upheld Abbott’s plea of the statute. First, the Chief Judge said that, although Abbott’s promise was a good “acknowledgment” of the debt and would have tolled the statute before the then recent amendment, yet, since it had been oral, it was invalid. Second, he said that, although Shapley had acted upon the faith of the promise, there had been no consideration, for Shapley “did not agree with the defendant that he would wait and permit the note to outlaw. Neither could hé rely upon what then took place as a waiver by the defendant of the statute of limitations, because there was no consideration to uphold the waiver. The -defendant did not then have the right to plead the statute, and this was at most a mere promise to waive it.” 42 N.Y. at page 447, 1 Am.Rep. 548. That statement was in accord with the law of consideration seventy-five years ago; Shapley had not promised to forbear, nor. was Abbott’s promise not to plead the statute made in exchange for Shapley’s forbearance. Our theories of consideration have now changed, and we should today regard Shapley’s reliance upon Abbott’s promise as good consideration by “promissory estoppel” (Restatement of Contracts § 90), but we must not read this back to 1870.
The Chief Judge could therefore find nothing on which to support Shapley but the possibility of an “estoppel,” and the rest of his opinion — by far the greater part — was a discussion of that question. “Estoppel” he defined in the classic sense: i.e., the statement of existing fact on which the other party relied. After accounting for the specific performance of contracts for the sale of land as cases of “fraud,” and mentioning the power of a promisor of his own accord not to plead usury, or the Statute of Frauds, or the Statute of Limitations, or an exemption from execution, he concluded: “but no case has occurred to me in which a party can, in advance, make a valid promise that a statute founded in public policy shall be inoperative.” 42 N.Y. at page 452, 1 Am.Rep. 548. The phrase, “in advance,” is a little obscure; but, if it includes a promise made at any time before the claim is barred, and if the language is broken from its setting, possibly it gives color to the defendants’ position; though it would still be a gratuitous statement having no bearing on the actual decision. But even as dictum, the discussion of the authorities which followed shows that it should not be so read. The Chief Judge first considered two Maine decisions: Warren v. Walker, 23 Me. 453, and Hodgdon v. Chase, 29 Me. 47; Id., 32 Me. 169. In the first of these, on the eve of the expiration of the promisee’s time to sue, the promisor had in writing declared: “I hereby waive all defence * * * under and by virtue of any statute of limitation.” The court thought this insufficient as a new promise or acknowledgment, but a good answer to the bar of the statute, because it was an implied promise not to plead it, supported by a consideration. The ground on which the Chief Judge distinguished the case, which was on all fours with the case at bar, was particularly significant. “Unlike the case we are considering,” the promisor was held to have been bound, because “there was a consideration proved for this agreement.” (Italics in the original.) In the second and third decisions the agreement had been oral, and that was the ground of the decision. The Chief Judge discussed these decisions, not, so far as appears, to disapprove them, but
We have examined the decision in Shapley v. Abbott, supra, 42 N.Y. 443, 1 Am. Rep. 548, at length, because it is the sheet anchor of the defense in the case at bar. It appears from what we have said that it does not support them, certainly not in decision, and not in dictum when properly understood. It left untouched the validity of a later written contract, founded upon good consideration, in which the promisor promised not to plead the statute for a limited time. Several times since then New York courts have upheld such agreements upon the discredited theory of “estoppel”; curiously enough, none of them mention Shapley v. Abbott, supra, 43 N.Y. 447, 1 Am.Rep. 548. In Hobart v. Verrault, 74 App.Div. 444, 77 N.Y.S. 483, the promisor had written that a note should not be good till after her death; a majority held that this “estopped” her executor. The intent seems, however, to have been that it was the payment that was to be suspended, not any action upon the promise after it became due. The decision is in any event difficult to understand. In Andrews v. Cosmopolitan Bank, 183 App.Div. 787, 171 N. Y.S. 875, a mere resolution of the promisor’s board of directors “waived” the statute; no reason was given; no authorities cited. In re Sanford, 95 Misc. 3, 160 N.Y.S. 209, and In re Williams’ Estate, 121 Misc. 54, 200 N.Y.S. 222, both went on “estoppel.” In spite of the especial deference which we must give to any decision of the state courts upon state law, we should hardly suppose that we ought to prefer this body of authority to Shapley v. Abbott, supra, 42 N.Y. 447, 1 Am.Rep. 548, so far as it is in conflict with it. We are not forced to depend upon them, however, for Watertown National Bank v. Bagley, supra, 134 App.Div. 831, 119 N.Y.S. 592, and Gorowitz v. Blumenstcin, supra - Misc. -, 53 N.Y.S.2d 179, both flatly decided that such contracts are valid. In the second, Shientag, J., analyzed all the authorities and left little, if anything, more to be said. The defendants seek to distinguish his deci
Nor is there any merit in the point that any suits on the contracts for the “K boats” had been already barred before March 15, 1922. In the first place upon a motion for summary judgment we cannot tell when the five rights of action accrued. But it would probably make no difference, though it appeared that they had accrued before March 15, 1916. While it will at times be true that after an action has in fact become barred, the promisee’s forbearance will not be consideration for the promisor’s promise not to plead the statute, that is not the case when there remains, as there usually does, an honest controversy as to whether the right of action was barred when the later contract was made. If there was such a controversy in the case at bar— certainly if it had any reasonable basis— forbearance by the promisee was good consideration, regardless of whether the action had been actually barred or not. We will not, however, finally decide the question now; indeed, we should not upon an appeal from a summary judgment. It is perhaps conceivable — though it seems scarcely more —that on March 15, 1922, no one’ could have honestly and reasonably believed that the five actions were not already barred. We leave it open to the defendants to prove so, if they can.
We have not discussed another reply which the plaintiff- makes to the defense. It says that, even though we were to hold that the promise not to plead the statute was invalid, nevertheless, the promise of the Provisional Government to forbear bringing suit tolled the statute while it was in force. The time so taken out not being counted, the action was not-barred on November 16, 1933, if it had not been already barred on March 15, 1922. Since the considerations which control with respect to that defense are essentially the same as those we have already discussed, no separate discussion is necessary.
Judgment reversed; cause remanded for trial on the merits.
070rehearing
On Petition for Rehearing.
We did not mean to pass upon whether the claims upon the contracts for the “K boats” were, or were not, already barred on March 15, 1922; or to pass upon whether the contract of that day revived them, if they were already barred. All we decided was that if they were barred and that if the contract intended to revive them, there was good consideration. Upon the trial we leave it open whether these claims were barred, and what effect, if any, the contract of March 15, 1922, had upon them, if they were. We agree with the District Judge that those issues involve questions of fact which should not be decided upon motion for summary judgment.
Petition denied.
Reference
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- UNITED STATES v. CURTISS AEROPLANE CO. Et Al.
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