Pang-Tsu Mow v. Republic of China

• Citation: 201 F.2d 195,91 US App. DC 324
• Decision Date: 20 November 1952
• Docket Number: 11392.,No. 11265,11265
• Parties: PANG-TSU MOW et al. v. REPUBLIC OF CHINA (two cases).
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

91 US App. DC 324, 201 F.2d 195 (1952)

PANG-TSU MOW et al. v. REPUBLIC OF CHINA (two cases).

Nos. 11265, 11392.

United States Court of Appeals District of Columbia Circuit.

Argued October 7, 1952.

Decided November 20, 1952.

Writ of Certiorari Denied April 6, 1953.

Mr. William A. Roberts, Washington, D. C., with whom Messrs. Warren Woods, Edward G. Villalon and Mrs. Irene Kennedy, Washington, D. C., were on the brief, for appellants.

Mr. William E. Leahy, Washington, D. C., with whom Mr. William J. Hughes, Jr., Washington, D. C., was on the brief, for appellee.

Before PRETTYMAN, PROCTOR and FAHY, Circuit Judges.

Writ of Certiorari Denied April 6, 1953. See 73 S.Ct. 784.

FAHY, Circuit Judge.

These appeals, consolidated for hearing, are from orders of the District Court entered in a single suit brought by the Republic of China, plaintiff and appellee, against Mow and Hsiang, defendants and appellants. Defendants are alleged to be citizens of the Republic of China temporarily residing in the District and to have been agents of plaintiff in the direction of the "Chinese Air Force Office in U.S.A." The complaint alleges that defendants in the management of the Office shared control over considerable funds entrusted by plaintiff to Mow for purchases for the Chinese Air Force, for the development of the aeronautical industry in the Republic of China, and as a revolving fund for administrative and other authorized payments. The funds are stated to have aggregated some $49,000,000. The complaint sets forth that it was defendants' duty to expend plaintiff's property for purposes it authorized, the balance to be returned on demand, to make periodic accounts, and to keep proper books. Defendants are alleged to have violated these duties by presenting purported accounts covering some $24,000,000 unsupported by vouchers and inadequate in other respects. It is said further that defendants were notified the Office had been abolished and were ordered to pay over and transfer to a new governmental agency the Office funds and records, which they refused to do, and that Mow was also ordered to turn over all government funds under his control and all relevant records to the Chinese Ambassador to the United States and another named official, which he also refused to do. Finally it is alleged that the unexpended portion of the funds remaining in the possession and under the control of either or both defendants, stated to amount to more than $7,000,000, has been and is being concealed and withheld from plaintiff by defendants and used by them for unauthorized expenses. To avoid irreparable and immediate injury plaintiff prayed injunctive relief to protect, in various stated manners, its funds, properties and records and to require delivery of its moneys and properties to plaintiff. An accounting and final decree for surrender to plaintiff of said moneys, properties, books and papers were also prayed. The complaint was sworn to by the Vice-Minister of Justice of the Republic of China, who also made a detailed affidavit in aid of the motion for preliminary injunction.

The appeal in No. 11265 is from an order of the District Court of December 10, 1951, which overruled defendants' motion to dismiss the complaint, granted a preliminary injunction, and continued in effect, subject to future modifications, an order designating a disinterested person to take possession of the premises of the Air Force Office.

I. The order overruling the motion to dismiss is not final and so is not appealable under 28 U.S.C. § 1291 (Supp. V, 1952).¹ Toomey v. Toomey, 1945, 80 U.S. App.D.C. 77, 149 F.2d 19. Nor is the order continuing the appointment of a custodian final within that provision. We therefore do not have jurisdiction of these orders unless they fall within 28 U.S.C. § 1292 (Supp. V, 1952).² Clearly they are not among the type of interlocutory or other orders enumerated in that section. Furthermore, the District Court has not made the direction and determination required by Rule 54(b), Fed.R.Civ.P.³, as a prerequisite to appealability in a multiple claim case such as this when less than all claims have gone to judgment at the time of appeal. See David v. District of Columbia, 1950, 88 U.S.App. D.C. 92, 187 F.2d 204. Therefore, insofar as the appeal is from the overruling of defendants' motion to dismiss the complaint and continuing in effect the order appointing a custodian, it must be dismissed.

II. The appeal from the interlocutory order granting a preliminary injunction D. D.C., 1951, 101 F.Supp. 646, however, is within our jurisdiction under 28 U.S.C. § 1292, n. 2, supra. This statute explicitly authorizes an appeal from such an interlocutory order, and we do not think a determination and direction under Rule 54(b) is a condition thereto even though the suit involves multiple claims. The Rule is designed to preclude appeal until there is finality. The statutory provision for appeal from an interlocutory order involving an injunction is an exception to the necessity for finality. Reconciliation of the Rule with the statute requires that the former be not construed so as to supplant the exception. Furthermore, in Sibbach v. Wilson & Co., 1941, 312 U.S. 1, 10, 61 S.Ct. 422, 85 L.Ed. 479, rehearing denied, 312 U.S. 655, 61 S.Ct. 422, 85 L.Ed. 479, the Court, citing and construing 48 Stat. 1064 (1934), 28 U.S.C. § 723b (1946) now § 2072, which empowered it to promulgate procedural rules for the district courts, said that the Court was unable "by rule, to extend or restrict the jurisdiction conferred by a statute." 312 U.S. 1, 61 S.Ct. 425. See, also, United States v. Sherwood, 1941, 312 U.S. 584, 589-590, 61 S.Ct. 767, 85 L.Ed. 1058; Cutting Room Appliances Corp. v. Empire Cutting M. Co., 2 Cir., 1951, 186 F.2d 997; Raylite Electric Corp. v. Noma Electric Corp., 2 Cir., 1948, 170 F.2d 914, which makes no mention of Rule 54(b). Contra: Packard Motor Car Co. v. Gem Mfg. Co., 7 Cir., 1950, 187 F.2d 65, certiorari granted, 1951, 341 U.S. 930, 71 S.Ct. 803, 95 L.Ed. 1360, dismissed by stipulation, 342 U.S. 802, 72 S.Ct. 92.

In reviewing this preliminary injunction we may, see Deckert v. Independence Corp., 1940, 311 U.S. 282, 61 S.Ct. 229, 85 L.Ed. 189, inquire as to both the jurisdiction of the District Court and the adequacy of the complaint, for no preliminary injunction may stand if the complaint itself cannot stand. But such inquiry is made on review under 28 U.S.C. § 1292 of the order granting the preliminary injunction and not of the order denying the motion to dismiss which, as we have seen, is not itself now within our jurisdiction.

(a) Defendants contend the District Court was without jurisdiction to give relief by preliminary injunction or otherwise because Article III, Section 2, Clause 1, of the Constitution, in its definition of the judicial power of the United States, does not include a suit between aliens. This provision relates to the scope of Federal judicial power in a general sense without special reference to the District of Columbia. The considerable judicial residuum not granted to the United States remains with the several states and, since there is no state jurisdiction in the District of Columbia, appellant argues that a sort of judicial vacuum exists here with respect to actions and parties not covered by the power granted to the Federal judiciary under Article III. But we think it clear the founders avoided this result by the terms of Article I, Section 8, Clause 17, of the Constitution, which provides that Congress shall have power "To exercise exclusive Legislation in all Cases whatsoever, over such District of Columbia * * *." This provision is to be harmonized with Article III, Section 2, Clause 1. National Mutual Ins. Co. of Dist. of Columbia v. Tidewater Transfer Co., 1949, 337 U.S. 582, 69 S.Ct. 1173, 93 L.Ed. 1556. The harmonizing process leads inevitably to the conclusion that when parts of Maryland and Virginia became originally incorporated within the District of Columbia the authority of Congress over this ceded area, resting upon Article I, was sufficient to enable it to clothe the courts here with jurisdiction like that left behind in Maryland and Virginia. Congress has done this by the enactment of what is now § 11-306, D.C.Code (1951), granting to the United States District Court for the District of Columbia cognizance "of all cases in law and equity between parties, both or either of which shall be resident or be found within said district * * *." See National Mutual Ins. Co. of Dist. of Columbia v. Tidewater Transfer Co., supra; O'Donoghue v. United States, 1933, 289 U.S. 516, 53 S.Ct. 740, 77 L.Ed. 1356; Keller v. Potomac Elec. Co., 1923, 261 U. S. 428, 43 S.Ct. 445, 67 L.Ed. 731; Fehlhaber Pile Co. v. Tennessee Valley Authority, 1946, 81 U.S.App.D.C. 124, 155 F.2d 864; King v. Wall & Beaver Street Corp., 1944, 79 U.S.App.D.C. 234, 145 F.2d 377; Pitts v. Peak, 1931, 60 App.D.C. 195, 50 F. 2d 485.

(b) When we add to the foregoing that plaintiff sued in the District Court and that defendants submitted to its process, it is clear jurisdiction over the parties became complete. The Republic of China is a sovereignty and has standing to sue unaffected by its character as the government of a foreign nation.⁴ It is under no disability by statute or otherwise which might in time of war, for example, bar our courts to the governments of unfriendly nations. See Ex parte Colonna, 1942, 314 U.S. 510, 62 S.Ct. 373, 86 L.Ed. 379. The defendants on their part, though aliens, are individuals who may be sued here under § 11-306, D.C.Code (1951).

(c) The subject matter of the suit, as shown by the complaint, is also within the jurisdiction of the District Court. The suit is equitable in nature, designed to protect property asserted to belong to plaintiff, to prevent misuse of its funds by those alleged to have been its agents, and to secure an accounting from them. Clearly relief by preliminary injunction...