Brick v. Cohn-Hall-Marx Co., 283 N.Y. 92 (1940)
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A prior dismissal of a complaint is not a bar to a new action if the new complaint remedies the defects of the prior complaint, and a party may adopt the seal of another party to a contract without independently affixing a seal.
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Summary
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This case concerns whether a prior dismissal of a contract claim barred a subsequent action based on the same contract but alleging it was under seal, thus subject to a longer statute of limitations. The Court of Appeals held that the prior dismissal, which was not on the merits, did not bar the new action because the new complaint remedied the deficiencies of the old. The court also clarified that a party can adopt the seal of another party to a contract, making it a sealed instrument even without independently affixing a seal.
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Facts
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Plaintiffs and defendant entered into a written agreement regarding patent litigation, where defendant would pay royalties for each package sold. Plaintiffs alleged defendant used more packages than reported, providing false statements to induce reliance and prevent suit until the six-year statute of limitations for breach of contract had run. After discovering the fraud, plaintiffs sued for breach of contract. The initial complaint was dismissed because the statute of limitations had expired for simple contracts. Plaintiffs then filed a second complaint asserting the contract was under seal, based on the defendant’s president adopting the plaintiff’s seal, seeking to apply a longer statute of limitations applicable to sealed instruments.
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Procedural History
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The Special Term dismissed the second complaint. The Appellate Division affirmed. The Court of Appeals granted leave to appeal to review the question of law.
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Issue(s)
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1. Whether the complaint states a cause of action based on a contract under seal when the defendant adopted the plaintiff’s seal.r
2. Whether the previous dismissal of the complaint based on the statute of limitations for simple contracts bars a subsequent action alleging the contract was under seal.r
3. Whether the plaintiff’s prior assertion that the six-year statute of limitations barred the claim constitutes an admission that prevents a later claim based on a sealed contract.
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Holding
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1. Yes, because one party to a contract may adopt the seal of the other party to the contract without independently affixing any seal whatsoever.r
2. No, because the prior dismissal was not on the merits and the new complaint remedies the defects of the prior complaint by alleging the contract was under seal.r
3. No, because the prior assertion was an erroneous legal conclusion and does not constitute an admission that prevents the later claim.
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Court’s Reasoning
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The Court reasoned that a party can adopt another’s seal, citing Cammack v. Slattery & Bro., Inc., 241 N.Y. 39. The court stated, “The original contract recited that it was under seal and while only the seal of the defendant as a matter of fact was attached, it is well settled that under such circumstances the party whose seal is not attached is to be regarded as having adopted the seal which has been affixed.” The court also noted that the prior dismissal was not on the merits, and therefore, under Section 482 of the Civil Practice Act, it did not bar a new action for the same cause if the new complaint remedied the defects of the first. Regarding the