Flegenheimer v. General Mills, 294

• Decision Date: 03 August 1951
• Docket Number: No. 294,Docket 22031.,294
• Citation: 191 F.2d 237
• Parties: FLEGENHEIMER v. GENERAL MILLS, Inc.
• Court: U.S. Court of Appeals — Second Circuit

191 F.2d 237 (1951)

FLEGENHEIMER v. GENERAL MILLS, Inc.

No. 294, Docket 22031.

United States Court of Appeals Second Circuit.

Argued June 13, 1951.

Decided August 3, 1951.

Guy M. Page, Burlington, Vt., for claimant-appellant.

Bailey & Bailey, and A. Pearley Feen, Burlington, Vt., for plaintiff-appellee.

McNamara & Larrow and Austin & Edmunds, Burlington, Vt., for defendant.

Horace H. Powers, St. Albans, Vt., for Central Vermont Railway, Inc., trustee.

Hubert S. Pierce, Newport, Vt., for Canadian Pac. Ry. Co., trustee.

Before SWAN, Chief Judge, and AUGUSTUS N. HAND and L. HAND, Circuit Judges.

L. HAND, Circuit Judge.

This is an appeal from an order, dismissing a claim by an intervening party — General Mills, Inc. — to property which the plaintiff had attached in the state court, in an action in contract brought against the Manitoba Sugar Company, Ltd., a Canadian corporation. In the state court the plaintiff attached several parcels of "beet pulp" which, as he asserted, were the property of the Manitoba Company, and that company removed the cause to the district court on the 29th of January, 1945. On the 8th of May, the appellant, General Mills, was granted leave to intervene and it set up a claim of ownership to the goods attached, based upon the following facts. The Manitoba Company had entered into a contract with General Mills for the sale of the "beet pulp," had delivered the goods to a carrier on "straight" bills of lading, and the principal question was whether the title had failed to pass because the carrier had not received notice of the transfer in season. The district court after a trial dismissed the claim of General Mills on December 15, 1948; and it is from this order, somewhat amended, that General Mills appealed on January 30, 1951. The appellee has not moved to dismiss, but since it is our duty to decide any question involving our jurisdiction whether or not the parties raise it, we must pass upon our jurisdiction over this appeal.¹

The appealability of the order of course depends upon federal law: specifically, upon whether the dismissal of the claim to the attached goods was a "final" order. That in turn depends upon whether after the dismissal the intervener had any power to dispute the plaintiff's claim against the defendant, as security for which the pulp was attached. That would seem to be a question of state law, and arguendo we shall so assume: i. e., that the dismissal of the intervener's claim should have the same effect upon any further privileges he may have in the district court that it would have had, had the action remained in the state court. Nevertheless by way of caveat it is to be noticed that, although the Judiciary Law² declares that goods of the defendant attached in a state court shall respond to any judgment the plaintiff may recover "in the same manner" that they would have responded to a judgment of the state court, this applies only to "the goods or estate of the defendant", and it does not inevitably follow that an intervener, whose claim to the attached goods has been dismissed, is foreclosed from disputing on the merits the plaintiff's right to any judgment whatever, just as the defendant himself may dispute it when goods concededly his own have been attached.

Whether the state or the federal law governs, on principle it is clear that, certainly when as here the defendant has not been served personally and cannot be, an intervener ought to have the privilege of contesting the plaintiff's claim against the defendant on the merits. The best argument to the contrary is that, if the intervener appeals and secures a reversal of the dismissal and an award of the property to him, the case is over as between the plaintiff and himself; as indeed it also is, if the dismissal is affirmed. However, in the case at bar an affirmance of the dismissal would not be conclusive as between the intervener and the Manitoba Company. The Manitoba Company, if it has not been paid, will be free to sue the intervener for the price; and if it has been paid, it will be free to resist any effort of the intervener to recover the price. Our affirmance will not estop the Manitoba Company in either case, for as we have said it has not been served and cannot be. The intervener will have to accept the hazard of an action on the merits in which the passage of title to the goods may be differently decided. Its predicament could indeed be obviated, if the Manitoba Company had been served personally, or if it were possible to serve it; but it has not been so served, and presumably it cannot be because it is a Canadian corporation. Therefore the only relief open to the intervener is the privilege of contesting the claim of the plaintiff against the Manitoba Company. That, it is true, is not complete relief, for a judgment on the plaintiff's claim against the Manitoba Company will not conclude that company; but at least the intervener has an interest to protect even if the order is affirmed. It should be allowed to protect that interest against a claim that may be unwarranted. For this reason the order should not be regarded as ending all controversy between the plaintiff and the intervener; and ought not therefore to be treated as "final" for appellate purposes.

There are indeed some jurisdictions which have held that an intervener may not dispute the attaching creditor's action against the defendant; but it is not clear that in these the defendant was not served, or at least that the intervener could not have brought him into the suit and thereby made the judgment conclusive as between them. In any event it has never been decided in Vermont that in a situation like this the intervener is precluded from challenging the plaintiff's right. The nearest case that we have found is Sanborn v. Kittredge & Morrill, 20 Vt. 632, in which the facts, not unduly simplified, were as follows. The plaintiff attached goods which he alleged belonged to one, Goodell, against whom he had a claim, and who, he said, got his title from another person, who, like the plaintiff, was named Sanborn. Morrill attached the same goods on a claim he had against this second Sanborn, claiming that title had never passed to Goodell. The court found that the title had passed to Goodell, and in the course of the opinion said 20 Vt. at page 640, that Morrill might not challenge the regularity, and therefore the validity, of the plaintiff's attachment as Morrill had tried to do. The suit was in equity and it did not appear that Goodell could not have been joined as a party so that the decision would bind him as against Morrill. Certainly there is nothing either in the decision or the opinion to lead us to suppose that in a situation such as that at bar Morrill would have been denied the privilege of contesting the claim of the plaintiff against Goodell.

On the other hand Cushing v. Laird, 107 U.S. 69, 2 S.Ct. 196, 27 L.Ed. 391, seems to us squarely to decide that such an order is not "final." Cushing sued Laird in the admiralty for the loss of his vessel, "The Sonora." He could not serve Laird personally, but — proceeding by "foreign attachment" under the Admiralty Rules — he attached a fund of about $31,000 in the hands of Foster & Thompson, attorneys for both Laird and another person, Prioleau. This sum was the proceeds of the sale of another ship, "The Wren," which had been sold pending the termination of a libel to condemn her as prize. In that suit the district court had not only held that she was lawful prize, but had awarded the proceeds to the United States. The Supreme Court reversed that decree,³ and awarded the proceeds to Laird, who had appeared in the suit by "The Wren's" master, although he had not done so otherwise. The proceeds were therefore paid to Laird's attorneys, in whose hands they were, as we have said, when Cushing attached them. These attorneys, being also attorneys for Prioleau, put in a claim on behalf of Prioleau in Cushing v. Laird, alleging that Laird had sold "The Wren" to Prioleau before her capture, and that the proceeds therefore belonged to Prioleau. Since Prioleau had not intervened in the prize suit, the decree in that suit necessarily did not, and could not, bind him as against Laird, even if Laird had personally appeared. Judge Blatchford, when Cushing v. Laird came on for trial before him⁴ in the district court, first dismissed the claim of Prioleau, the intervener, and some months later rendered a decree in favor of Cushing against Laird, to the payment of which he directed the proceeds to be applied. The ground of his decision was that the decree in a prize suit bound everyone, and that...