United States v. Mulcahy, No. 264

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtSWAN, CLARK, and FRANK, Circuit
Citation169 F.2d 94
PartiesUNITED STATES ex rel. SUTTON v. MULCAHY et al. (MENASHE, Impleaded — Appellee).
Docket NumberNo. 264,Docket 20975.
Decision Date30 June 1948

169 F.2d 94 (1948)

MULCAHY et al. (MENASHE, Impleaded — Appellee).

No. 264, Docket 20975.

Circuit Court of Appeals, Second Circuit.

June 30, 1948.

169 F.2d 95

Hartman, Sheridan, Tekulsky & Donoghue, of New York City (Peter J. Donoghue, Lewis H. Ullman, and Irwin Nussbaum, all of New York City, of counsel), for appellant.

George A. Ferris, of New York City (Albert Adams, of New York City, of counsel), for respondent-impleaded-appellee.

Before SWAN, CLARK, and FRANK, Circuit Judges.

SWAN, Circuit Judge.

By writ of habeas corpus the relator sought release from imprisonment under an order which adjudged him in civil contempt of court, imposed a fine of $22,000, and committed him to jail until the fine should be paid or he should be discharged according to law. The contempt was committed in a suit brought by Jack Menashe against the relator and others to obtain the appointment of an ancillary receiver in aid of a suit for partnership accounting which was pending in the circuit court of the First Judicial Circuit in the Territory of Hawaii. In the habeas corpus proceeding Menashe was impleaded as a respondent, and he is the appellee who actively opposes the relator's appeal from the order discharging the writ. The appellant's contention is that the court which adjudged him in contempt lacked jurisdiction.

Although the record on appeal makes a wholly inadequate disclosure of the proceedings in what we shall for convenience call the "ancillary suit," it has been possible to piece together what is believed to be an accurate statement. The complaint in the ancillary suit alleged that Menashe resided in New York and Sutton in the Territory of Hawaii,1 referred to the suit for a partnership accounting brought by Menashe in Hawaii, the appointment of a receiver therein who was still acting as such, and the existence of partnership assets within the city of New York; it prayed for the appointment of an ancillary receiver of all partnership assets and for an injunction restraining the defendants from interference with such ancillary receiver. On January 10, 1947 Judge Rifkind appointed a temporary ancillary receiver. Sutton then moved to vacate the appointment and to dismiss the complaint for lack of jurisdiction. Judge Hulbert overruled this motion on February 5, 1947 with an opinion reported in Menashe v. Sutton, D.C., 71 F.Supp. 103. Thereafter Sutton filed his answer asserting that he is a resident of the state of New York, but later withdrew it and filed a paper entitled "Consent to Judgment." In July 1947, over the plaintiff's objection, a judgment was signed by Judge Holtzoff, sitting in the southern district by assignment, which "granted judgment against the defendants * * * for the relief demanded in the complaint," made permanent the appointment of the temporary ancillary receiver and directed that partnership assets be delivered to him. On September 11, 1947 Judge Medina made an order appointing a special master to take testimony for the purpose of discovering assets of the partnership, and directing Sutton to appear before the special master to give testimony. A temporary stay of that order was granted to enable the defendants to apply for a stay pending appeal but we denied the stay on the

169 F.2d 96
ground that the order of September 11th was not appealable. After hearings before the special master, Menashe brought on a motion to punish Sutton for a civil contempt in wilfully disobeying Judge Medina's order of September 11th by refusing to answer questions and by answering evasively and without candor or good faith. This motion was heard by Judge Coxe who entered an order on November 21, 1947 adjudging Sutton guilty of a civil contempt, fining him $22,000 and directing him to pay the fine to the permanent ancillary receiver, ordering that in default of payment he be taken into custody by the United States Marshal and confined in a federal jail, and granting Sutton an opportunity to purge himself of his contempt by testifying fully and not evasively before the special master. On December 11, 1947 Sutton appeared before the special master but refused on advice of counsel to answer any questions propounded by the attorney for Menashe. On December 15, 1947 Judge Coxe signed the commitment order. Sutton thereupon sued out the writ of habeas corpus to which the respondents made return setting out the commitment of December 15th and the fact that the fine had not been paid. After hearing the writ was dismissed by Judge Clancy

What Sutton has attempted to do is to use the writ of habeas corpus to attack collaterally the district court's decisions that it had jurisdiction to appoint the temporary ancillary receiver, 71 F. Supp. 103, and to make permanent his appointment by the judgment of July 21, 1947. Those orders were appealable. See 28 U.S.C.A. § 227; Pacific Northwest Packing Co. v. Allen, 9 Cir., 109 F. 515; Sutton did not see fit to appeal from them but sought to attack them collaterally. Where the question of jurisdiction has been litigated, that issue is ordinarily immune from collateral attack. United States v. Jaeger, 2 Cir., 117 F.2d 483, 487 and cases there cited. In Sunal v. Large, 332 U.S. 174 at 179, 67 S.Ct. 1588 at 1591, 91 L.Ed. 1982, the court said that "the situations in which habeas corpus has done service for an appeal are the exceptions," adding "Thus where the jurisdiction of the federal court which tried the case is challenged or where the constitutionality of the federal statute under which conviction was had is attacked habeas corpus is increasingly denied in case an appellate procedure was available for correction of the error." Although the writ may still be availed of, despite neglect to appeal, in exceptional cases,2 we do not think the present is such a case. Accordingly the judgment is affirmed.

CLARK, Circuit Judge (concurring).

With not a few doubts about this tangled case, unfortunately not clarified by the record, I have finally come to the conclusion that Judge Swan states the proper result now to be reached on the authorities by an intermediate court and that further exposition of the law, if necessary, must come from the Supreme Court. My doubts center about the fact that if the 1940 amendment to 28 U.S.C.A. § 41(1) is invalid,1 there would appear to be a lack of subject matter jurisdiction over the original action leading to the relator's imprisonment until the heavy fine imposed is paid. For the ground taken below, Menashe v. Sutton, D.C.S.D.N.Y., 71 F.Supp. 103, to the effect that appointment of an "ancillary" receiver needed no separate basis of federal jurisdiction, seems unsound. Raphael v. Trask, 194 U.S. 272, 278, 24 S.Ct. 647, 48 L.Ed. 973; Kelley v. Queeney, D.C.W.D. N.Y., 41 F.Supp. 1015, 1018.2 My law-school teachings were that a judgment showing on its face lack of jurisdiction of the subject matter was void for all purposes.

169 F.2d 97
See cases discussed by Justice Rutledge, dissenting, in United States v. United Mine Workers of America, 330 U.S. 258, 351-363, 67 S.Ct. 677, 91 L.Ed. 884. But I guess Judge Swan does more nearly state the current view. And it must be conceded that relator did have plenty of opportunity to continue upon appeal the issue he had already raised below, just as he had opportunity later — at the time of entry of the order of commitment — to show an inability to pay the fine, if such there was, under the principles of Maggio v. Zeitz, 333 U.S. 56, 68 S.Ct. 401

FRANK, Circuit Judge (dissenting).

1. Both my colleagues assume (I think correctly) that the district court had no jurisdiction of the ancillary receivership suit.1 Yet they conclude that Sutton can have no relief whatever from the commitment order of December 15, 1947 (entered in that suit) which sent him to jail.

A casual reader of my colleagues' opinions may not comprehend their full import. He may believe that they rely on the fact that Sutton "carried the key to his prison in his own pocket," i.e., that, by testifying (although belatedly) in accord with the order of September 11, 1947, he could have purged himself of his contempt and thus avoided jailing pursuant to the December 15, 1947 order; but this Sutton could not do, for that commitment order omitted the purging provision of the previous November 11 order (which Judge Swan describes) and thus gave Sutton but two alternatives — to pay a $22,000 fine to the marshal or go to jail.2 To be sure, if he had possessed $22,000, by paying it to the marshal he could have avoided being jailed. But, for all we know, he did not have that much money; and, since the fine was imposed for contempt in refusing to testify, and not to compel payment of funds wrongfully withheld by Sutton,3 I gravely doubt whether the idea suggested in Maggio v. Zeitz, 333 U.S. 56, 68 S.Ct. 401 (cited by Judge Clark) applies, i.e., I doubt whether the district court (questions of jurisdiction aside) would have been obliged not to jail him if he had proved his inability to pay the fine. Moreover, if he paid it, then, if my colleagues' position (as explained in the next paragraph)

169 F.2d 98
were correct, he would never be able to recover it on a showing of the court's lack of jurisdiction

A casual reader of my colleagues' opinions may also suppose that they decide merely this: When the December 15 commitment order was made, Sutton chose the wrong remedy, i.e., he should then, on jurisdictional grounds, have attacked that order directly by an appeal therefrom instead of attacking it collaterally (as he did) via habeas corpus. But again such a reader would err, for my colleagues go much further: Although they assume that the district court lacked jurisdiction, they hold that, on December 15, when the court made the commitment order, it was impossible for Sutton to attack that order, on jurisdictional grounds, either by an appeal or by habeas corpus. My colleagues reason that Sutton was barred from such...

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