Smith v. American Asiatic Underwriters

• Court: U.S. Court of Appeals — Ninth Circuit
• Writing for the Court: DENMAN, MATHEWS, and STEPHENS, Circuit
• Citation: Smith v. American Asiatic Underwriters, 134 F.2d 233 (9th Cir. 1943)
• Decision Date: 02 March 1943
• Docket Number: No. 9642.,9642.
• Parties: SMITH, Registrar, v. AMERICAN ASIATIC UNDERWRITERS, FEDERAL, INC., U. S. A.

134 F.2d 233 (1943)

SMITH, Registrar, v. AMERICAN ASIATIC UNDERWRITERS, FEDERAL, INC., U. S. A.

No. 9642.

Circuit Court of Appeals, Ninth Circuit.

March 2, 1943.

COPYRIGHT MATERIAL OMITTED

Leighton Shields, Dist. Atty., U. S. Court for China, of Washington, D.C., Frank J. Hennessy, U. S. Atty., and Robert B. McMillan, Asst. U. S. Atty., both of San Francisco, Cal., for appellant A. Viola Smith.

Herbert W. Clark and Garrett H. Elmore, both of San Francisco, Cal., and George F. Richardson, of New York City, for appellee.

Francis M. Shea, Asst. Atty. Gen., Sidney J. Kaplan, Sp. Asst. to Atty. Gen., and J. Frank Staley, Atty. Dept. of Justice, of Washington, D. C., for Jesse H. Jones, Secretary of Commerce.

Before DENMAN, MATHEWS, and STEPHENS, Circuit Judges.

MATHEWS, Circuit Judge.

Following our decision (9 Cir., 127 F.2d 754), appellant and appellee filed petitions for rehearing, and the Secretary of Commerce filed a motion for leave to file an appearance in this court. A rehearing was granted and has been had, and the Secretary's motion has been submitted. Appellant and appellee have consented to and joined in the motion, each expressing the view that, if the motion were granted, the controversy between appellee and the Secretary could be determined on this appeal. Recognizing as we do that such a determination should be had if possible, we now consider whether it is possible, or would be possible if the motion were granted.

In our former decision, we left the controversy between appellee and the Secretary undetermined because the Secretary was not a party to this suit or to the judgment therein or to this appeal. The Secretary does not claim to have been a party to this suit. Instead, he states in his motion that he waived joinder of himself as a party, thus emphasizing the fact that he was not a party and never sought to be made a party. It appears from the motion that the Secretary consented that the controversy between appellee and himself be determined in this suit. His consent, however, could not and did not enable the court below — the United States Court for China, hereafter called the China court — to determine that controversy in this suit; for, as said before, he was not a party to this suit.

The Secretary's motion is for leave to file an appearance "as a party defendant-appellant." He apparently assumes that we could, by granting his motion, make him a defendant in the suit and an appellant from the judgment therein. The assumption is unwarranted. The Secretary was not made a defendant by appellee or by the China court. No one else could, or can, make him a defendant. And even if he were a defendant, we could not make him an appellant. To become an appellant, he would have to appeal. He has not appealed and could not now do so, the time for appeal having long since expired.¹

Even if the Secretary were an appellant, we could not, on this appeal, determine the controversy between him and appellee, for that controversy has not yet been determined by any court of original jurisdiction. We have no original jurisdiction in cases of this character. Our jurisdiction in such cases is appellate only.² It follows that to grant the Secretary's motion would be a futile gesture.

We have not been asked to bring the Secretary in as a party appellee by issuing notice to him, as of course we could do if he were a proper party appellee. Miller v. Hatfield, 309 U.S. 1, 60 S.Ct. 374, 84 L.Ed. 535; In re Knox-Powell-Stockton Co., 9 Cir., 97 F.2d 61; Browning v. Boswell, 4 Cir., 209 F. 788. See, also, Stepp v. McAdams, 9 Cir., 88 F.2d 925. In the case at bar, such a request, if made, would be denied; for, not being a party to the suit or to the judgment, the Secretary is not a proper party to the appeal, either as appellee or as appellant.

The Secretary's motion is not a motion for leave to intervene in this court. If it were, it would be denied upon the authority of United States v. Patterson, 15 How. 10, 12, 14 L.Ed. 578; Thomson Houston Electric Co. v. Western Electric Co., 2 Cir., 158 F. 813; Wenborne-Karpen Dryer Co. v. Cutler Dry Kiln Co., 2 Cir., 292 F. 861; Morin v. Stuart, 5 Cir., 112 F.2d 585. We have not been asked to remand the case with directions to the China court to permit the Secretary to intervene there (cf. Veitia v. Fortuna Estates, 1 Cir., 240 F. 256) and thus obtain a determination of his controversy with appellee. Such a request, if made, would be denied for the following reasons:

The China court is not now functioning. The District Court of the United States for the District of Columbia is functioning. In the District of Columbia appellee (a China Trade Act corporation) has its principal office and an agent upon whom process may be served;³ and the Secretary has his office there. There he and appellee can, if they choose, obtain a prompt determination of their controversy.⁴ They cannot obtain it in China.

This was not a suit by or against the United States. Since neither the Secretary nor the United States was a party to the suit, neither of them appeared therein, by attorney or otherwise. The district attorney of the China court⁵ appeared for and represented appellant, but he did not appear for or represent the Secretary or the United States. No question as to the attorney's authority has been raised. Therefore such cases as Western Pacific R. Co. v. United States, 107 U.S. 526, 108 U. S. 510, 2 S.Ct. 802, 27 L.Ed. 806; Mullan v. United States, 118 U.S. 271, 6 S.Ct. 1041, 30 L.Ed. 170; and Causey v. United States, 240 U.S. 399, 36 S.Ct. 365, 60 L.Ed. 711, have no relevancy here.

In the case at bar, two pleadings were filed — appellee's complaint and appellant's answer. Each prayed for a declaratory judgment. In this court it has been suggested that appellant's prayer made this a case of actual controversy within the meaning of § 274d of the Judicial Code, 28 U.S.C.A. § 400. There is no merit in the suggestion. The two prayers (appellee's and appellant's) related to a single controversy. That controversy, we have held, and correctly held, was not a controversy between appellee and appellant, but was one between appellee and the Secretary. Appellant's prayer did not transform that controversy into one between appellee and appellant and hence did not make this a case of actual controversy.

Motion denied, judgment reversed and case remanded for dismissal.

STEPHENS, Circuit Judge (concurring).

I concur.

I desire to add a comment in regard to a theory that has been advanced but has not been specifically treated in the main opinion. It is argued that even conceding the correctness of the points covered in the main opinion that the Registrar, in herself praying for declaratory relief, in effect appeared in court as a litigant in her own right. That is to say, since she has the right to institute proceedings for the revocation of petitioner's charter and a different opinion exists between her and petitioner as to whether or not certain facts are valid ground for revocation, she has the right under the declaratory relief statute to go into court and have that difference adjudicated prior to suing for revocation.

I think we need not affirm or deny this contention because the pleadings do not support the premise. It appears from the pleadings that petitioner has applied to the Secretary to be allowed to amend its certificate of incorporation, but that the Secretary has refused to give his consent to amending the certificate until the controversy between him and petitioner has been adjudicated. This suit is brought in order that this impasse shall be overcome. Thus it appears to a certainty that the controversy is not one to assist the subordinate Registrar at all but to settle a long standing controversy between the petitioner and the Secretary of Commerce. In these circumstances the indefinite prayer of the Registrar will not be tortured into a meaning that her pleading constitutes an affirmative application for relief to herself.

We have not been furnished authentic information regarding the recently reported new American and Chinese treaty, which, if unauthorized reports are borne out, has or will abolish American extraterritoriality in China and carry with it the extinguishment of the United States Court for China. In the circumstances we are unable to consider any possible effect this treaty may have upon pending appeals from that court.

DENMAN, Circuit Judge (dissenting).

A. The holding of the majority has decided a federal question in conflict with the decision of the Supreme Court in Morgan v. United States, 298 U.S. 468, 475, 56 S.Ct. 906, 80 L.Ed. 1288. That case holds that when a function is created in a federal officer, there of adjudication in the Secretary of Agriculture, as here in the Registrar resident in China, of litigating in his own name an actual controversy with the corporation in the United States Court for China, the whole function must be exercised by the officer in whom it is vested.

Such conflict of decisions transcends any mere interpretation of the China Trade Act. It concerns the power of all federal officers to whom Congress has delegated the performance of specific functions.

The majority holds that, although the Congress has specifically created the Registrar the litigating agent of the government in China, first to determine that "he is satisfied" there is a justification for litigating, and then to sue the China Trade corporation to revoke its corporate license, the corporation has no "actual controversy" with the Registrar. To me it seems obvious that Congress makes the controversy between these two Congressionally created litigants an "actual" one.

How acute as well as actual the controversy between the Registrar and the corporation, appears from the facts alleged in the complaint that unless the corporation divested itself of insurance company shares which the Registrar claimed were held in violation of the Act, she declared that she...