United States v. Dollar, 30407.

• Decision Date: 03 October 1951
• Docket Number: No. 30407.,30407.
• Citation: 100 F. Supp. 881
• Parties: UNITED STATES v. DOLLAR et al.
• Court: U.S. District Court — Northern District of California

100 F. Supp. 881

UNITED STATES v. DOLLAR et al.

No. 30407.

United States District Court N. D. California, S. D.

October 3, 1951.

COPYRIGHT MATERIAL OMITTED

Donald B. MacGuineas and Philip H. Angell, Special Assts. to the Atty. Gen., for plaintiff.

Gregory Harrison and Moses Lasky of Brobeck, Phleger & Harrison, San Francisco, Cal., for defendants.

MURPHY, District Judge.

This is an action to quiet title to certain shares of stock. On April 11, 1951, this Court, 97 F.Supp. 50, Harris, D. J., entered a preliminary injunction restraining the defendants, now in possession of the stock certificates pursuant to a decree of the District Court, District of Columbia, Dollar et al. v. Land et al., 82 F.Supp. 919, from exercising "effective possession". An appeal has been taken from the granting of that injunction. The Dollar defendants now move to dismiss the complaint, for judgment on the pleadings, and for summary judgment.

The complaint alleges that the United States is the owner of the stock having acquired absolute title pursuant to a written agreement dated August 15, 1938 entered into between defendants, and the United States Maritime Commission (then an agency of the United States Government). It further alleges that pursuant to that agreement the Dollar defendants endorsed in blank the stock certificates and delivered them to a representative of the United States Maritime Commission and that the true intent and legal result of the transfer of the certificates was to vest absolute title to the stock in the United States. The complaint refers to litigation in the District of Columbia courts in the action entitled Dollar v. Land (supra) and alleges that the United States is not bound by any proceedings or judgment in that action since it was not a party thereto.

The answer denies the Government's claims of ownership and sets up several affirmative defenses, principal among which are the claims that the transfer in issue constituted a pledge, that the Commission was without legal authority to acquire ownership of the stock, and that the findings in Dollar v. Land bind the plaintiff in this proceeding.

Some history of the controversy giving rise to this action may be found in the decision on the Government's motion for preliminary injunction, 97 F.Supp. 50, Harris, D. J. A chronological résumé of the preceding five and a half years of litigation which dealt with this same subject matter may be found in the appendix to that opinion. There has been a thorough review of the facts in numerous prior opinions. See Dollar v. Land, 81 U.S.App.D.C. 28, 154 F.2d 307; Id., 330 U.S. 731, 67 S.Ct. 1009, 91 L.Ed. 1209; Id., D.C., 82 F. Supp. 919; Id., D.C.Cir., 184 F.2d 245; Id., D.C.Cir., 188 F.2d 629; Id., D.C.Cir., 190 F.2d 366; Id., D.C.Cir., 190 F.2d 623. We see no reason to repeat them here.

I. Has This Court Jurisdiction?

We have been met at the threshhold of this hearing with the Government's objection that we cannot hear the motions during the pendency of the appeal from the preliminary injunction. The reason given is as follows: Prior to 1891 Federal law permitted appeals only from final decrees. By statute of that year appeals from certain interlocutory orders were allowed. This statute (old Title 28 U.S.C., Sec. 227) also contained a priviso that the proceedings in other respects should not be stayed. Upon revision of Title 28 in 1948 this section became Section 1292 and the proviso was dropped. Plaintiff argues that by reason of the deletion an opposite rule was established. Neither reason nor authority is evoked in support of this peculiar construction. It is suggested by the plaintiff that the provision may have been eliminated "perhaps by inadvertence, perhaps out of policy reasons not fully set out in the legislative history * * *." We cannot agree with the Government. In the light of sound and settled appellate theory the proviso in old Section 227 was mere surplusage. Judge Holtzoff, Special Consultant to the Revision Staff, states in 8 F.R.D. 343 at page 344: "The new Judicial Code is a masterpiece of legislative draftsmanship. The phraseology of practically every provision of the old Code has been drastically modified and revised in the direction of brevity, succinctness and simplicity. Redundant and repetitious provisions were deleted."

The proviso added nothing to what would otherwise be law, and it was dropped in the revision for that reason.

The injunction pendente lite is a remedy collateral or incidental to trial on the merits. Whereas a final decree disposes of the whole case, and an appeal from it carries the whole case to the appellate court, an appeal from an interlocutory decree, where allowed by law, goes forward on its own record divorced from the merits. The trial court retains power to proceed to a final hearing as to all matters not directly involved in the incidental appeal. We cannot believe that if Congress intended the drastic modification urged by the Government some comment would not have been noted in the Reviser's Notes. But there is none, see Title 28 U.S.C. § 1292.

William W. Barron, Chief Reviser, states, 8 F.R.D. 439 at page 445:

"The usual rules of statutory construction, with one exception, apply to a statutory revision. That exception is important and its reasons should be readily recognized.

"Because of the necessity of consolidating, simplifying and clarifying numerous component statutory enactments no changes of law or policy will be presumed from changes of language in revision unless an intent to make such changes is clearly expressed.

"Mere changes of phraseology indicate no intent to work a change of meaning but merely an effort to state in clear and simpler terms the original meaning of the statute revised.

"Congress recognized this rule by including in its reports the complete Reviser's Notes to each section in which are noted all instances where change is intended and the reasons therefor."

Should we proceed in this instance, the Government further argues, we shall be placed in the position of considering issues now pending before the Appellate court, with resultant disorder and confusion. We disagree. The restraining order issued because, in Judge Harris' opinion, grave and irreparable injury would result in its absence. That was a narrow determination sounding largely in discretion. The equally narrow question before the Court of Appeals is whether discretion was abused. Certain matters, such as the standing of the Government to sue, were implicitly dealt with in that preliminary proceeding, but only in so far as was necessary to that determination. No decision of the Appellate Court as to the power of the trial court to issue the injunction or its propriety will impinge upon the questions before us.

II. Can This Case Be Decided on Motion For Judgment?

The Dollar defendants have moved to dismiss the complaint, for judgment on the pleadings and for summary judgment. Since, however, they rely upon matters dehors the pleadings we shall treat the trebleheaded motion as one for summary judgment alone. Rule 12(b, c) F.R.C.P., 28 U.S.C.A.; Suckow Borax Mines Consol. v. Borax Consolidated, 9 Cir., 185 F.2d 196, 205.

While it is true that every simile limps, the motion for summary judgment is not unlike the unveiling of a statue. The motion requires the opposition to remove the shielding cloak of formal allegations and demonstrate a genuine issue as to a material fact. In effect it argues that as a matter of law upon admitted or established facts the moving party is entitled to prevail or the adversary has no valid claim for relief (3 Barron and Holtzoff Sec. 1231). Should the adversary establish a substantial issue of fact, the court cannot try it on this motion. But where the only conflict is as to what legal conclusions should be drawn from the undisputed facts, or whether some rule of law precludes litigation, a summary judgment generally lies.

In this case defendants, by affidavit, have established that in the suit of Dollar v. Land both nominal parties, as well as the court, were constantly reminded of the fact that the suit was being defended by the Government as real party in interest. Second, the decisions and record of Dollar v. Land in the Court of Appeals for the District of Columbia circuit have been brought to our judicial notice. This, we believe, is proper, for if the motion for summary judgment is based upon the ground that the issues have been determined in another action, the court should be free to consider the record in the other action. See United States v. Sinclair Refining Co., 10 Cir., 126 F.2d 827. Third, in a request for admissions defendants have annexed the stipulation of fact which was entered into between defendants and representatives of the Attorney General who controlled the defense in the prior case, and which, in substance, was the foundation for the former judgment. In the aforementioned affidavit, Mr. Lasky, a counsel for the Dollars in both proceedings asserts that in compiling the stipulation he and representatives of the Department of Justice exhaustively sifted every existing shred of evidence and that no additional fact of any substance could possibly be presented in this action.

In response to this showing the Government has done nothing. It has presented no opposing affidavits, no depositions, or counter admissions. Although in oral argument it hinted at some "other evidence", it failed to produce it in response to the motion. Obviously, the whole purpose of the summary judgment procedure would be defeated if a case could be forced to trial by merely contending that an issue exists, without any showing of evidence. Last, the Government has sought to evade the defendants' attempt to bring the Dollar v. Land stipulation before us as a part of defendants' request for admissions. We are of the persuasion that the stipulation is properly before us by judicial notice. However that may be, the excuse is made...