Sutherland v. International Ins. Co. of New York

• Decision Date: 28 July 1930
• Docket Number: No. 362.,362.
• Citation: 43 F.2d 969
• Parties: SUTHERLAND, Allen Property Custodian, v. INTERNATIONAL INS. CO. OF NEW YORK.
• Court: U.S. Court of Appeals — Second Circuit

43 F.2d 969 (1930)

SUTHERLAND, Allen Property Custodian, v. INTERNATIONAL INS. CO. OF NEW YORK.

No. 362.

Circuit Court of Appeals, Second Circuit.

July 28, 1930.

Charles J. Schuck, of Wheeling, W. Va. (Nathan Ottinger, of New York City, of counsel), for appellant.

Rumsey & Morgan, of New York City (David Rumsey and Henry N. Arnold, both of New York City, and Louis A. Johnson, of Clarksburg, W. Va., of counsel), for appellee.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

L. HAND, Circuit Judge.

The sole question involved in this appeal is whether the Alien Property Custodian may appear by a solicitor of his own selection, or whether a district attorney or the Attorney General must represent him. It is therefore not necessary to set out the bill at large except to say that it was based upon the rights of German enemies which the Custodian had seized, for certain sums alleged to be due by contract from a domestic insurance company to the Germans. The Custodian authorized the suit, appearing by a private solicitor. The defendant authorized and filed a counterclaim to which the plaintiff replied. The case being in this posture, the defendant moved to dismiss the bill for the reason stated above, and the judge granted the motion.

Section 485 of title 28 of the U. S. Code (28 USCA § 485), which had its origin in the Act of September 24, 1789, provides that "it shall be the duty of every district attorney to prosecute, in his district * * * all civil actions in which the United States are concerned." This was enlarged in 1906 (title 5, U. S. Code, § 310 5 USCA § 310), to include the Attorney General, "any officer of the Department of Justice," or attorney specially designated by the Attorney General, who must be duly commissioned and take an oath of office (title 5, U. S. Code, § 315 5 USCA § 315). While this statute does not in terms forbid any officer of the United States to appear by a private attorney in a civil action, we understand the practice of the departments to have been uniform, or nearly so, not to do so, and the courts have several times said or decided that this was its intent. The Confiscation Cases, 7 Wall. 454, 19 L. Ed. 196, indeed involved only the question whether the Attorney General might, against the wishes of an informer, dismiss an appeal in a suit to confiscate confederate property under the Act of August 6, 1861 (12 Stat. 319), in which the informer had a half interest. However, the opinion announced obiter (page 457 of 7 Wall.) that it was the settled rule of United States courts to recognize no suits prosecuted in the name and for the benefit of the United States unless it was represented by a district attorney. While this is perhaps not conclusive, as it was not in any sense made the basis of the decision, it cannot be disregarded, even though the citations given as authority, except a dictum of Judge Betts in U. S. v. McAvoy, 4 Blatch. 418, Fed. Cas. No. 15,654, do not bear out the text. Moreover, Justice Livingstone so ruled in U. S. v. Morris, 1 Paine, 209, Fed. Cas. No. 15,816, and so did Justice Blatchford in U. S. ex rel. West v. Doughty, 7 Blatch, 424, Fed. Cas. No. 14,986. So far as we can find these are the only cases which have dealt with the question, for although U. S. v. Morris was affirmed in 10 Wheat. 246, 6 L. Ed. 314, the point was not discussed. In U. S. v. Griswold, 5 Sawy. 25, Fed. Cas. No. 15266, Judge Deady held that the section here in question did not apply to an action brought under section 232 of title 31 of the U. S. Code (31 USCA § 232). This was a qui tam action, well known in England, whence we imported it, which, though prosecuted in the name of the United States, was within the control of the informer. It was sued at his charge and he was subject to costs, his share in the recovery being deemed a sufficient inducement. It would have been inconsistent with this that he should have the service of the public prosecutor, and moreover the very language of the section makes it plain that he was not to have it, since otherwise there would be no meaning in the provision that he could not discontinue without the consent of the district attorney. The Alien Property Custodian is a public officer having no interest in the suit at bar; his position has no resemblance to that of a qui tam plaintiff.

While the authority is thus somewhat meagre, and the Supreme Court has never actually ruled upon it, the reasons are strong to take such a view. The government has provided legal officers, presumably competent, charged with the duty of protecting its rights in its courts. It has specifically authorized these to act, exacting from them compliance with the formalities required of a public officer, even when appointed by the Attorney General. Their authority extends to such proceedings as this (U. S. v. Smith, 158 U. S. 346, 352, 15 S. Ct. 846, 39 L. Ed. 1011; 8 Op. Attys. Gen. 399); the United States was "concerned" in this suit, even after Congress had returned eighty per cent. of the collection to the enemies. Had it been possible for the enemies to intervene under a statute giving them the standing of qui tam plaintiffs, they might indeed be entitled to their own attorney, but even then it would not affect the question as to whom the Alien Property Custodian must retain, if he appeared. Congress, having so provided for the prosecution of civil suits, can scarcely be supposed to have contemplated a possible duplication in legal personnel. The cost of this is one consideration, but far more important is the centering of responsibility for the conduct of public litigation. The Attorney General has powers of "general superintendence and direction" over district attorneys (title 5, U. S. Code, § 317 5 USCA § 317), and may directly intervene to "conduct and argue any case in any court of the United States" (title 5, U. S. Code, § 309 5 USCA § 309), including even proceedings before magistrates (title 5, U. S. Code, § 310 5 USCA § 310). Thus he may displace district attorneys in their own suits, dismiss or compromise them, institute those which they decline to press. No such system is capable of operation unless his powers are exclusive, or if the Departments may institute suits which he cannot control. His powers must be coextensive with his duties. And so, quite aside from the respectable authority that confirms our view, we should have had no doubt that no suit can be brought except the Attorney General, his subordinate, or a district attorney under his "superintendence and direction," appears for the United States.

Against this the plaintiff urges that the statutes appointing the Alien Property Custodian have given him enlarged powers. We should in any case have to be well satisfied that Congress had intended to make an exception to the policy so indicated, but there is no color for doubt. Section 12 of the Trading with the Enemy Act (50 USCA Appendix, § 12) gives the Custodian the powers of a common law trustee, to which the President may add such others as he will. Perhaps the President could authorize him to appear by attorneys of his own selection, though that itself is doubtful. Be that as it may, President Wilson did the opposite in his order of May 31, 1918, in which he provided by executive order that "all litigation in which the United States or any Department * * * are engaged, shall be conducted under the supervision and control of the head of the Department of Justice." This order indeed ended six months after the termination of the war, but it serves to construe the executive orders especially regulating the Custodian on which the plaintiff relies (Executive Orders of July 16, 1918, and November 12, 1918), and which authorized him to "file and maintain * * * suits of all kinds, in or before any court" (section 1). Without this it is doubtful whether he would not have been obliged to sue in the name of the United States, but, regardless of this, the language must be read with the general order just quoted, which was to "concentrate the Government" (Act of May 20, 1918, 40 Stat. 556). "Supervision and control" must mean more than the power of...