Levin v. Ruby Trading Corporation

• Decision Date: 09 June 1964
• Docket Number: Docket 28786.,No. 458,458
• Citation: 333 F.2d 592
• Parties: George C. LEVIN and James V. Hallisey, as Trustees in Reorganization of the Estates of Swan-Finch Oil Corporation, Keta Gas and Oil Company and Swan Finch Petro Chemical Corporation, Plaintiffs-Respondents. v. RUBY TRADING CORPORATION, Lowell M. Birrell, Herbert A. Birrell, Harry Casper and Lois B. Morrill, Defendants, Peter Jakobson Corporation, Peter Jakobson, Applicants for Intervention-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

333 F.2d 592 (1964)

George C. LEVIN and James V. Hallisey, as Trustees in Reorganization of the Estates of Swan-Finch Oil Corporation, Keta Gas and Oil Company and Swan Finch Petro Chemical Corporation, Plaintiffs-Respondents. v. RUBY TRADING CORPORATION, Lowell M. Birrell, Herbert A. Birrell, Harry Casper and Lois B. Morrill, Defendants, Peter Jakobson Corporation, Peter Jakobson, Applicants for Intervention-Appellants.

No. 458, Docket 28786.

United States Court of Appeals Second Circuit.

Argued May 5, 1964.

Decided June 9, 1964.

William M. Kahn, New York City (David W. Kahn and William M. Kahn, New York City) (Emil & Kobrin, New York City) (Lawrence A. Kobrin and Loren A. Wittner, New York City, of counsel), for appellants.

James V. Hallisey, New York City (George C. Levin, James V. Hallisey, New York City), for respondents.

Before WATERMAN, FRIENDLY and SMITH, Circuit Judges.

FRIENDLY, Circuit Judge.

This action was brought in the District Court for the Southern District of New York in August, 1962, by the Trustees in Reorganization of Swan-Finch Oil Corporation, Keta Gas and Oil Company, and Swan Finch Petro Chemical Corporation. The complaint alleged that various frauds on these companies had been perpetrated by Lowell Birrell commencing in May, 1954; that he controlled Ruby Trading Corporation, which in 1944 had acquired an apartment house at 1050 Park Avenue, New York City; that in 1951 Ruby Trading deeded the property to Lowell's brother, Herbert; that in March, 1962, Herbert executed a five-year lease to Peter Jakobson; and that the deed to Herbert and the lease to Jakobson were in fraud of creditors. Jakobson was served, but Herbert Birrell, who was in Canada, was not. The court made an order appointing a receiver, 213 F.Supp. 638 (S.D.N.Y.1962), which this court affirmed on the basis that "a reversal of this order might render nugatory and futile further action by Judge Palmieri," 313 F.2d 140, cert. denied, Jakobson v. Levin, 375 U.S. 813, 84 S.Ct. 44, 11 L.Ed.2d 49 (1963); the receiver cancelled Jakobson's lease under a termination clause. Plaintiffs then discontinued the action against Jakobson. They later amended their complaint to add as a defendant Lois B. Morrill, to whom various mortgages on the property had been assigned, allegedly in fraud of creditors; she answered.

Meanwhile, in January, 1963, Herbert Birrell, still in Canada, transferred title to a Nevada corporation, Empire Associates, Inc., wholly owned by him; in February Empire entered into a contract to sell the property to Peter Jakobson Corporation (hereafter the Corporation). The contract provided for a closing "when title to the property is quieted and clear," except for certain mortgages, and any receiver was removed. The Corporation promised to use its best efforts to these ends; Empire undertook to cooperate and Herbert Birrell agreed to appear as a witness. When the attorneys for the Corporation informed the district judge of the contract, he enjoined its recording. Jakobson and the Corporation then sought to intervene, the former in his status as lessee, which he claimed not to have been validly terminated, the latter to protect its position as "contractvendee." Denial of both applications led to this appeal.

We must first consider the question of our jurisdiction despite the failure of the parties to do so. Where the sole ground urged for reversal of an order denying permissive intervention is abuse of the trial judge's discretion, we would be reluctant to permit the fragmentation and delay that would result from allowing such orders to be appealed, at least so long as the applicant has "other adequate means of asserting his rights." See Cresta Blanca Wine Co. v. Eastern Wine Corp., 143 F.2d 1012 (2 Cir. 1944); Ford Motor Co. v. Bisanz Bros., Inc., 249 F.2d 22, 26-27 (8 Cir. 1957). On the other hand, it is settled law that if an applicant is entitled to intervene as of right an order denying intervention is appealable. Brotherhood of Railroad Trainmen v. Baltimore & O. R. R. Co., 331 U.S. 519, 524-525, 67 S.Ct. 1387, 91 L.Ed. 1646 (1947). See also Sutphen Estates, Inc. v. United States, 342 U.S. 19, 72 S.Ct. 14, 96 L.Ed. 19 (1951); Sam Fox Publishing Co. v. United States, 366 U.S. 683, 81 S.Ct. 1309, 6 L.Ed.2d 604 (1961). Since this makes appealability turn on the merits, it is not a very effective or useful limitation of appellate jurisdiction; the propriety of the denial by the district judge must be examined before the appellate court knows whether it has jurisdiction, and the only consequence of the restriction on appealability is that on finding the district judge was right, it will dismiss the appeal rather than affirm. Cf. Cameron v. President and Fellows of Harvard College, 157 F.2d 993, 997 (1 Cir. 1946); contrast Farmland Irrigation Co. v. Dopplmaier, 220 F.2d 247, 248 (9 Cir. 1955), holding that if intervention was sought as a matter of right, denial was appealable even though the court concluded the assertion was unwarranted. Since we decide that the appellants were entitled to intervene as of right, Brotherhood of Railroad Trainmen sustains our jurisdiction to decide this.

The principal ground for denying intervention was the judge's belief that Jakobson and the Corporation were fronting for Herbert Birrell and that to allow them to intervene would further Herbert's plan to remain beyond the reach of the court's processes save in the role of a witness, in which he would enjoy immunity from service to the extent...