*2 HINCKS, HAND, Before CHASE and Judges.
Judge. HINCKS, Circuit by appeals These are judgments Judge Galston, dis- from
missing
complaints
in two actions to
damages
recover treble
under the Sher-
1-7,
Act,
man
15 U.S.C.A.
15 note.
§§
only question presented
is whether
by
the actions were barred
the Statute
connection,
of Limitations.
In that
question
proper
crucial
is this:
itWas
for the
instead
to decide
whether
defendant could
have been
sued
the Southern
District
Califor-
July 20,
July 20,
nia between.
1935 and
1938? This is critical because
depends
the ac-
tions were barred
Lim-
Statute of
itations when
were commenced in
the Eastern District of New York on
September
1951;
why
this is true
appears
following
from the
facts.
Act,
The Sherman
even after
Clayton
amendment
Act in
deals with the Statute of Limitations
only
Act,
5 of the second
15 U.S.
§
provides
period
C.A.
that the
equity, brought
which a
suit
States,
pending
the United
shall be
running
shall toll
the statute as
* *
“every
private
of action
* * *
based
matter com
plained
Concededly
of in said suit.”
pending
July 20, 1938,
suit was
September
when these ac
begun. Except
were
tions
this controlled,
of New York
law
and 48(2)
Civil Practice
Act
that state
years
fixes six
as the
of limitation
an action “to recover
a.liability
only
instant
actions remains whether
tbis the
Were
created
statute.”
statute bars the
That
suits.
section,
of Gumbiner
relevant
Co.,
merely
damages
not to be treated as
one of
alleged
venue.
in which
*3
A
determination of
defense has
would
Dec.
before
all suffered
finality
inhering
reach and a
the
not
of
spite
5
of §
barred in
have been
as
decision
if
Bertha
to venue. For
the defense
Clayton Act,
of
but the
statutory
sustained,
of the
bar
dam
is
Building Corporation
in which
resulting judgment
operates
July
of dismissal
ages
end
not
before
did
adjudication
a final
of
of
of the merits
13§
been.
have
would not
controversy:
venue,
pro
a decision as
Act
Practice
Civil
however,
рlaintiff
of course leaves the
outside
“arises
when a claim
vides that
brought
adjudication
free thereafter to
on
seek an
be
cannot
an action
of this
the merits of
it
his claim. Fed.Rules Civ.
enforce”
of this state to
in a court
41(b),
Proc. rule
28
limited”
U.S.C.A.
expiration of the time
“after the
by
claim
of the
the law
state
Inherent
that
is
issue
the resolu-
arose
at bar
arose,
claims
since the
disputed
questions
of
of fact
in-
con
California,
volving
of that state
the law
credibility
decision as to the
of
Code
that,
e.,
351 of the
trols:
i.
weigh
§
witnesses and the
need
provides
This
of Civil Procedure.
evidencе National to
effect
that it
obligor
liability
is “out
doing
if
was
Dis-
Southern
***
State” when
“accrues
California,
trict
advantage
now that it
to its
is
part of the
is
absence
not
time of his
position, against
to take such a
commencement
limited for
repeated allegations
time
contrary
posi
It is the defendant’s
prior
the action.”
brought against
suits
it when it
State”
it was not “out of the
tion that
advantage
was to its
to take a stand
(the
during
years
three
diametrically opposed to what
is now
July 20,
California),
limitation
before
attempting
prove.
And it should not
during
all
time
forgotten
that
because
that decision must be made
in the
sued it
light
could have
findings
in the
many
of fact
as to
If this
California.
District of
Southern
peculiarly
knowledge
matters
within the
judge,
properly
tried to
charge
was an issue
of those in
of the affairs of Na-
agree
jury,
that
to a
we all
instead of
period;
the critical
amand
“clear
were not
many
Galston’s
may
occurrences which
seem to
long
erroneous,”
ly
last
so that at
have chameleonic attributes when inter-
to the
turns
the answer
preted,
explained.
outcome
or
opening
posed
question
crucial
is,
The burden
course,
on
opinion.
paragraph of this
National to establish its affirmative de
were one whether
If the issue
fense of the limitation statute. Pieczon
each,
either, of the instant
venue in
Co.,
v.
Cir.,
ka
Pullman
2
ficial until all evidence is in. a Reversed remanded for Admittedly, hard to see how a trial issue raised defend- finding transаct- that National plea. ant’s ing (without in California finding escape plaintiffs cannot a HAND, (dissenting). statute) square can defense finding part If these sued the defend- National was July 20, injury within the to the ant conspiracy caused July 20, 1938, (without the defendant had which no in California actions, complaint). recovery moved to dismiss the as it did on can be had occasions, move several apparent on other conflict between might perhaps who heard motion can be solved those ascertaining fact, all have himself decided issues of he numerous al- which of the proven have free in leged co-conspirators been his discretion to are jury, relationship either any, refer them to trial such, alone, case. the defendant if the tried whole case had been or of the of that issue jury, Rayfiel’s 12(b) ato error is imma- Rules of Civil the Federal Rule among short, I provides de- terial. In think that the defend- Procedure may proved beyond dispute ant raise it had fenses that a defendant “transacting venue,” “improper been and Rule in Califor- business” motion is throughout provides period. nia 43(e) motion the on critical It affidavits, necessary preliminary will be as a to deal hear the matter court “may plaintiffs’ agreement that, heard with or matter be re- direct that the gardless testimony dep- wholly partly or on oral the defendant “transacting ; business,” no doubt that fact been ositions” and there can be provision In denials that is constitutional. it had been in least at ten brought against depending upon party’s resi- actions case dence, it in both state “ ** “judicial Court said: federal courts constituted a against estoppel” present submitted while the court contradic- tory position. jury, it was not bound It is of course true that *5 having so; upon parties any do adduced the the triаl in the actions bar at testimony, pro con, their privilege it the statements pleadings made in its the defendant fit, court, the if it to dis- saw in affidavits other actions pose testimony competent of the issue the were plaintiffs; in evidence favor of the fully which was heard I can sub- but find warrant for ject.” theory David, 561, they “judicial Gilbert v. 235 U.S. created a 568, 166, 164, estoppel,” suggestions except 35 59 360. S.Ct. L.Ed. one or in Rymer, Earlier v. 169 U.S. Moreover, Wetmore two law reviews. since such 121, 293, 115, 296, 682, plainly contrary 18 42 L.Ed. S.Ct. doctrine is jurisdiction depended upon underlying basis of the whole doctrine “ * * controversy, estoppel judgment amount in plainly it said: it appear Judgment by it would to have been the inten- without foundation. es- Congress designed toppel tion of to leave the mode is not as a moral sanc- raising trying against inconsistency: such issues to the it does not judge.” penalties upon discretion of the trial See also visit those who take one Lehigh Valley Washko, position today deny tomorrow; Coal 2 Co. v. it 42, although However, designed 231 only prevent F. party who has, not, the period prevailed upon in an action the critical or has an issue dispense would have jury, an been free to earlier action to vex thе same an- tagonist say with a I dispute do not see how can with the same in a later so, and, that he Houghton have would done one. The since cite v. proof Thomas, App.Div. 415, defendant burden of 220 on 221 N.Y.S. 630, limitations, contrary, issue of the Mack, party but prove against failed estoppel pre- whom “transacting vailed, party defendant was busi- not a to the earli- action, ness” in attorney California would er had have been been the of one of judge. agree, parties, therefore, tried I with which the court held to be my Judge Rayfiel’s equivalent brothers that very order doubtful ex- —itself wrong. that, tension of the Hence follows doctrine. Judge Galston, the evidence before only issue therefore is whether brought in an action in California the evidence before Galston was might have found that the defendant enough plaintiffs, conflict to entitle the “transacted business” in that by jury. a trial That makes it neces at bar were entitled to a sary to decide what 12 of the Anti verdict. by “transacting Trust Act means busi However, it seems to me that as on ness.” 15 Section U.S.C.A. 15 note evidence here at brought bar Galston allowed an action to be any been bound to direct a district in which the verdict “defendant place aft activities as took described in the case found” and' resides or is organization corporation, in er the an “often corporations this became “Agency”: findings speak any remedy. East which superable obstacle” wholly subsidiary —a offi Ma whose owned Photo Co. v. Southern man Kodak cers were “in main” the defendant’s S.Ct. Co., 273 U.S. terials 400, 403, following rely upon I lan officers. guage Congress Scophony Cor United States v. 12§ there held that in Court business,” pages poration, supra, at clause, 333 U.S. page 865, “transacts added the which seems S.Ct. at enforcement assist the in order to “Agency’s” ridding rе to me to make web of actions act “business defendant: transacted” been woven' that had fined decisions no at “The created controls in Sco made contracts “found.” It the word about tempt, general phony, however, the American interests terms to state in conjunction “transacting well, business” taken what constituted continuing (273 page stock exer beyond saying controls called for at U.S. supervision corporation cise of page 403), did intervention that a over at S.Ct. fact, Scophony’s or American affairs. We any “if in district so whether, sense, dinary need not decide in viеw of ‘transacts busi usual agreements’ continuing persuasive char therein ness’ effects, suf could be considered as the Court discussed acter.” ficing Scophony length make themselves to United States the issue at *6 807, 795, Corporation, ‘found’ within the New York district. Scophony 333 U.S. not, they pattern Whether so or 1091. In set the S.Ct. regular continuing foreign program defendant, for a patent exploitation cor and that case the poration, had, here, requiring, as we “transacted busi said, Scophony’s subsidiary corpora supervision and constant ness” means intervention.” conduct it reserved the whose rеgulate. supervise It and true to why language I see cannot does that made was whether that apply literally, almost mutwtis “found” within the district defendant mutandis, to the contract of December sued, but since the Court where it was “Agen- 1935, between the and defendant did, fortiori, it a rul was held that ing along cy” with which the defendant as- had “trans defendant been that the signed “Agency” to contract acting Therefore, there. business” of June Skouras Brothers 13. Of course can, we seems to me that and indeed might jury true that a not have be- must, said as an author take what was testimony lieved the offered de- gloss upon 12. The Court dе itative fendant as to what done under these was “prac clared that tical, everyday statute meant the contracts, they put did not or commercial business any Moreover, to evidence contradict it. doing carrying concept business difficulty, there had ”; any character’ and that ‘of “Agency” no been evidence that ever had “practi had the amendment cal, substituted under acted the contract. that conceptions” place of “the business assert, legal hair-splitting previous technicali ground would cut the from under the ‘pres encrusted ties ‘found’— complaints, whiсh are based acts ‘carrying-on-business’ sequence.” ent’— of the defendant after the had contracts Hence, made. very been if the disbe- made detailed find Judge Galston testimony long ings lieved many, defendant’s are too and that too they they done, append witnesses as to what had quote, I but numbers and persons that succinctly must assume other com- these state becjause wrongs charged controlling. appear in the com- mitted olaints, to me to be facts they yet did not do so in pldintiffs object improp that these “Agen- performance of the contract with erly imputed such оr to the defendant effect, cy,” contract, corporation a ganized or- Delaware was for that if once super- up “program” com- The name of this of “constant set pany changed intervention”; made Theatres National vision and Surely Co., Inc., Amusement and it was referred defendant business.” “transact treating re- serious- to at the trial both It is names. are not warranted in ‘Agency.’ ly fantasy. ferred to in a web of dialectical Agency organized render certain only evidence perform services certain activities produced repeated was the defendant’s organi- prior National, any business assertions that it did not do Agency zation of performed by rendered been agents California, there. and had no Agency quali- National. Although, said, I these were in- as have fied do in Feb- against it, they deed amounted admissible August, ruary, 1936, and in legal to no more than statements were, 1942. The same individuals result of whatever the defendant main, officers of National and done, as to the raised no issue Agency. occupied companies The two authority Broth- vested in the Skouras premises. the same 13, 1935, ers the contract of June Agency “Agency” Any “11. entered into a cоntract conduct thereafter. performance with National un- of those on December California in Agency agreed ipso perform der which ex- defendant contracts made the facto tensive services for National and sub- “transact in that business” sidaries. matter how Under that contract often the defendant chose agreed legal keep fully deny ef- informed that had been the relating of all matters fect of what was I not there- to the affairs done. need subsidiaries, argument parties fore business National and answer the that all agents including, respect conspiracy operating are not mutual subsidiaries, daily the sense that what one them results theatre operations, profits losses, posi- does is a cash business” “transaction *7 tion, properties all nature of owned rest. changes general corpo- therein In me conclusion seems to worth set-up rate all of such subsidiaries. that, although while to observe the result agreed Agency to maintain National’s my reasoning brothers’ will indeed books account furnish ac- other require the defendant defend on the counting preparation such services as arising merits actions under Anti- information, stаtistical tax returns Acts, Trust which toward agreed pay similar matters. National Court, especially par- late, has shown Agency $3,000 per week for the services favor, expense ticular it does so at the Throughout rendered for to and it. all greatest precedent of the value to of the from the date the con- large doing corporations a wide inter- tract in 1935 until institution why, state business. I cannot see if 1951, Agency performed these actions in deciding right, corpora- what we are services for National and subsidiaries its doing by through its local business provided in that contract. Such serv- subsidiary сorporations over whom it performed ices were California and supervisory control, retains will not com- New York and elsewhere. may damage pel whom it those sue “found,” some district it can The “12. contract of June as distinct from one in which it between the Skouras brothers and Na- so, If business.” “transacts whole assigned Agency tional was on De- purpose of the amendment assignment 12 will pro- cember be defeated. National, however, vided that rfetained APPENDIX rights all under its contract with Managers. assignment Agency cohtained Corporation, “10. National following provision: subsidiary wholly-owned National, “ preju- specify that his without that notwith- order be Tt is understood dice, Judge qualify assignment you, standing Galston did not so such rights privi- his order dismissal. we all retain our leges including, contract, under said think, however, We that National right limitation, ter- right urges failed when it now same, minate the and that impact New York to consider the assignment you only the receive statute limitations on the Gumbiner rights Mana- to the services cause of cause of The Bertha action. gers above referred and the within action arose in was performance to enforce thereof years six action. the Paramount any way with our not inconsistent Pictures, United States Paramount ** rights such connection D.C., F.Supp. to Bertha 881. Thus as employment “Under contracts statute, six-year Civil brothers, paid Skouras possibly Act, 48(2), Practice could not their formed. salaries until was question have run and the crucial organization Agency, After three-year stat- whether the California company paid fixed salaries pursuant were run, correctly ute had as we stated assignment Na- original opening paragraph of the opinion. our Agency, portion their tional but the Gumbiner compensation was based equally case cruciаl, was another profits paid by Na- of National was viz., York stat- whether the New by Agency payments tional. The made For the ute of limitations had run. agent Na- made it as the for cause of action accrued Gumbiner purposes here all were the Thus if the New December though directly by same made Na- by National’s was not tolled York statute tional.” absence, the barred Gumbiner December, 13 of here in 1937. Section Rehearing On Petition Practice Act1 is al- York Civil the New PER CURIAM. operation: statute ternative rehearing By petition the de- or New has run either fendant, National, ampli- persuades us to is barred here. York the suit original fy modify opinion our decision. argues New York that the Gumbiner fact petitioner’s law determine should are We unmoved wrong From this has been tolled. *8 in assert contention that we ing law, premise state asserts that under that a dismissal based a defense may have been amena- adju National is of an of the statute limitations York, process in New statute Buf ble dication on the merits. Warner v. during peri- tolled Drydock Co., 540, was nevertheless 2 67 F.2d falo argument derives an support This od. analogy of that conten which is cited tion, distinguishable. debtor who has individual to an we think is And part оf the in an obscure moreover, superseded out has hidden been a 41(b) an name. If under assumed Rule of Fed of state mandate clear him, Procedure, find such a debtor is can of 28 U.S. creditor Rules Civil eral process: directly but while he last sentence amenable C.A. hiding holding statute of limitations is of the Warner thus contradicts Although prop concludes that Gumbiner thus the rule in a under tolled. case. process Judge may was amenable if National the District even situation er part pertinent laws limited ei- of the time reads as 13 1. Section. of state state or or of this ther follows: arose, country оf the cause action of action out- a cause arises “Where bringing state, an action the cause an cannot be for this action side * * * brought en- of action court this state to expira- cause of action after such force
841 “open requirement open to a York, presence notorious” in New foreign corporation amenable otherwise on that account notorious and statutory throughout peri- during process relevant tolled Mendels, Indeed, Mack od. period. A.L.R. N.Y. 164 N.E. determine York does Even if New law Judge the courts admonishes Lehman tolling (a рroposition not decide we need construing it as P. A. read C. § argument case), fallacious. this this Legislature imply it and not wrote 19) (C.P.A. tolling statute For requirements. further sub had a the relevant declared, urges (2), “Nor does Gumbiner further division that National foreign apply process cor was not section while a amenable to in New this poration one or York has or shall have under stand- either federal or state disagree. whom a ards. more officers in the state on We A careful review may corporation Judge be summons evidence before Galston on record in case that On the this New served.” York applicable: that, did statute was section was tolled has convinced us jury, Gumbiner have officers in the state. the facts had been heard requirement required read in further Galston would have been open plaintiff’s But all of and notorious conduct. to set aside a verdict on this though support New York cited in cases issue. Even proposition every are with indi concerned disbelieved wit- one defendant’s defendants, nesses, documentary most of whom have vidual evidence recit- just just entered state or have re ed in Galston’s was over- applies whelming.3 Regardless Not оne turned it. case an of which stand- pres- paragraph Agency, 2. The main of 19 in its agent, “33. National’s main- June, 1936, ent form reads: an tained office from “If, when cause of accrues begun action the date these actions were at 444 against person, Street, space N.Y., he without the West 56th rent- commenced, the action Century-Fox. within the ed from Twentieth All therefor, coming Agency time limited after his in- officers of had their at that offices If, Agency to or return cause of the state. after a a address from that time until against opened Angeles August, accrued an office Los person, departs from Agency he state and 1942. The Board of Directors ’ continuously weekly remains absent therefrom met in New York. space more, for the or four months or organiza- “34. From the date of its if, per- knowledge without the tion to the actions, date institution action, son entitled maintain he re- Agency performed name, sides within the state under a false agency and continuous services Na- the time of his absence of such resi- National’s subsidiaries New dence within the state under such false payroll York. maintained the part name is the time limited employees, kept its own and National’s for thе commencement of the action.” per- National’s books account and super- formed extensive *9 following findings Galston 3. advisory, operating visory, and man- solely stipulation were based on a and on agerial activities services for Nation- by documentary evidence corroborated evidence. agreed al its subsidiaries which it had perform under its contract of Decem- 2, “32. National’s Board 1935, of Directors ber with National. meetings held all of continuously its in New York and “37. National maintained transacted its business there from 1930 a bank account accounts in New York June, June, 1936, thrоughout period From 1936. to Jan- from 1930 here in- uary, 1944, Jersey Board met in volved. Its main account was with The City, Jersey. January, 1944, New City After National Bank Ohase of New corporate meetings again prin- were held in York and that bank was National’s meetings New cipal York. All of National’s banker. National also had accounts Executive Committee in were held New with the Commercial National Bank and during York Company, the existence of such Com- Trust The Marine Midland mittee, i.e., from Company Guaranty December Trust Trust January 3, Company 1936. of New York. majority applied court ad- ard is that Na irrefutable holding ques- рrocess heres to its that since the tional was New amenable tolling presents sub- period. York Unit the relevant questions case Scophony Corp., stantial fact Bertha ed 333 U.S. States v. trial 1091; must be 795, 855, reversed remanded Pom S.Ct. by jury question. eroy Hocking Valley Co., N. the limitations R. Chap 504; see, also, Y. 113 N.E. granted previous de- Petition and our Selznick, 529, 58 lin v. 293 N.Y. N.E.2d provide cision is modified to 719. affirmed; case, As to the Gumbiner case, re- As to reversed the Bertha therefore, hold, We now manded. action, York New since the Gumbiner again votes to ab HAND National’s statute was not tolled unpub judgments the reasons its affirm both senсe from New York or York, opinion activity and with- is barred in his earlier licized stated New passing opinion now rendered dismissal out on the the District Court’s appeal. action must be affirmed. the Gumbiner money throughout from Prom 1930 National borrowed “41. “38. Nation- from New York dividends which in New York here involved the time to time ' from its subsidiaries were National borrowed a al received banks. In 1930 $19,350,000 divi- Na- York and the from The Chase it New total of received paid paid by in New In 1931 it National were Bank in three dends tional borrowed loans. $15,000,000 The Chase assets. from National York. utility paid National ar- In 1932 “42. National itself Bank. National company. any utility charges directly ranged Cali- loans for its for substantial paid regular however, charge, Na- Chase from The It fornia subsidiaries unconditionally guaran- Century-Pox parent Pilm Twentieth Bank and tional utilities, Corporation payment loans. National for services such as of these teed ¡hypothecated space the bank in Prom and after assets with and the like. office n orderto money. June, 1936, payments a result of for these facilities borrow As by Agency. was Na- Bank loans The Chase were made those November, largest did not creditor “43. National itself tional’s acquired рer telephone listing prior cent the summer of when exchange for the Thereafter it was listed of National the stock directory telephone National “Na- owed to Manhattan ’indebtedness Corporation, see National subsidiaries. Theatres National’s National, October, Corporation.” In Prior facilities Theatres “39. telephone York, in the issued debentures had used the 1935 it of Twentieth listing
New
Corpo-
Century-Pox
$5,270,000
Pilm
to Pox
amount
through
ration,
March
and all
came in
dated as of
calls
Century-Pox
to Pox
indebtedness
switchboard.
National’s
Twentieth
reflect
Empire
Corporation.
Charges
telephone
Trust
the use of
Pilm
n Company
regular
un-
York was trustee
of New
were included in the
facilities
amounts
paid by
Those de-
indenture.
National to Twentieth
trust
der
exchanged
Century
for stock
Pox.”
bentures
reorganization
addition,
of Nov-
In
several contracts are
National
St.,
which list