Wallace v. United States

• Decision Date: 17 February 1944
• Docket Number: No. 219.,219.
• Parties: WALLACE v. UNITED STATES.
• Court: U.S. Court of Appeals — Second Circuit

142 F.2d 240 (1944)

WALLACE v. UNITED STATES.

No. 219.

Circuit Court of Appeals, Second Circuit.

February 17, 1944.

William B. Mahoney, of Buffalo, N. Y., for plaintiff-respondent.

Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key, J. Louis Monarch, and Paul R. Russell, Sp. Assts. to the Atty. Gen. (George L. Grobe, U. S. Atty., and R. Norman Kirchgraber, Asst. U. S. Atty., both of Buffalo, N. Y., of counsel), for defendant-appellant.

Before L. HAND, AUGUSTUS N. HAND, and FRANK, Circuit Judges.

In 1933 the plaintiff, Wallace, a citizen of the United States, brought this suit in the District Court to recover $4,419.35 which he alleged had been paid by him to the United States under duress, pursuant to an illegal overassessment of income tax for the year 1929.

His counsel noticed the case for trial from 1934 to November 1937. On the call of the trial calendar on November 9, 1937, his counsel did not appear, and the trial court granted a motion made by the defendant, the United States, dismissing the suit for want of prosecution; no formal order to that effect, however, was entered until May 19, 1938. On November 4, 1940, Wallace's counsel moved for an order restoring the case to the trial calendar, supporting that motion by his affidavit which stated that the dismissal had occurred due to his inadvertence because of the press of his duties as a State Senator. On February 14, 1941, pursuant to that motion, the trial court entered an order, reciting the opposition of government counsel, which vacated and set aside the order of May 19, 1938. On August 5, 1941, the government's counsel moved to vacate the February 14, 1941 order on the ground that it had been entered in violation of Federal Rules of Civil Procedure, rule 60(b), 28 U.S.C.A. following section 723c. In opposition, Wallace's counsel filed an affidavit, stating that the government's counsel had consented to the entry of the February 14, 1941 order on condition that Wallace would stipulate the facts so that the case could soon be tried on the merits, and that, in April 1941, such a stipulation had been made. On September 22, 1941, the trial court entered an order denying the government's motion. When the case came on for trial on December 16, 1942, the government moved for dismissal, on the ground that the trial court lacked jurisdiction, because its order of February 14, 1941 (vacating its earlier dismissal order) had been invalid. The trial court denied this motion, stating, inter alia, in an opinion that the government's counsel had consented to the order of February 14, 1941; that that order recited the opposition of the government's counsel; but that the recital had been made because the stipulations of facts (the condition of the consent) had not yet been finally agreed upon; and that that stipulation had been agreed upon and made in March 1941.

The case was then tried, on the merits, without a jury. It terminated in a judgment against the United States for $4,419.35, which the trial court found had not been lawfully due from Wallace and which he had paid under duress pursuant to an erroneous assessment. The case is here on the government's appeal. The government does not here assert that, on the merits, Wallace was not entitled to be repaid the amount of the judgment, but bases its appeal solely on the ground of the trial court's alleged lack of power to enter any judgment because of the alleged invalidity of the order of February 14, 1941, vacating the earlier dismissal order. On the oral agrument here, Wallace conceded that, unless the February 1941 order was valid, his claim against the United States was barred by the statute of limitations.

FRANK, Circuit Judge.

This suit, as begun, was within the jurisdiction of the trial court for the United States, by the Tucker Act, 28 U.S.C.A. § 41(20), has given its consent to be sued in the district court for such a refund of taxes in an amount not to exceed $10,000. The United States in effect concedes that it owed Wallace the amount of the judgment for moneys it had obtained from him by duress, and that it would be obliged to repay him that sum but for the dismissal of his suit, through the excusable neglect of his lawyer, after the statute of limitations had run against his claim.

There seems to be no dispute that (for reasons we need not discuss) the dismissal order was improper under the local rules of the trial court. Even so, that order was not void and, if not validly vacated, it terminated the action so that the claim could no longer be asserted. The issue, then, is as to the validity of the order of February 14, 1941 reinstating the suit.

1. We are satisfied that the record shows that the trial court entered that order on the consent of government's counsel. If the defendant were a private person, that consent would conclude the matter and Wallace's judgment would be unassailable. But, assuming for the moment that, absent such consent by defendant's counsel, the trial court could not properly enter the vacating order (an issue we shall consider later), the question arises whether a government counsel has implied authority (there being no express authority) by such a consent to eliminate the defense of the statute of limitations. We are constrained to answer in the negative. The Supreme Court has held inapplicable to suits against the United States the well-established rule that a defendant, either expressly or by failure to assert it, may waive that defense. Finn v. United States, 123 U.S. 227, 8 S.Ct. 82, 31 L.Ed. 128; Munro v. United States, 303 U.S. 36, 41, 58 S.Ct. 421, 82 L.Ed. 633.¹ The rationale of those cases — that statutes by which the United States yields its immunity from suit must be literally and narrowly construed — has frequently, and recently, been reiterated.²

Our own recent experience in a somewhat similar case, Hammond-Knowlton v. United States, 2 Cir., 121 F.2d 192, serves to warn us that the Supreme Court has no inclination to adopt a more generous attitude.³ We there suggested that, although taxes notoriously induce grumbling, the reflective citizen pays then cheerfully enough, when they have been lawfully assessed, because he recognizes such exactions as part of the necessary cost of maintaining a social organization without which he could not exist, but that, when the government improperly collects a sum under the guise of a tax and its repayment is concededly a matter both of justice and legal right, then to block that repayment by a statutory construction of an unusually strict character is to provoke criticisms of our government that are neither desirable nor easy to answer. Our opinion in that case expressed our distaste for the basic doctrine that a citizen of the United States cannot assert a claim in any court against his government, without its permission, for acts on its part injurious to him and for which, if done by a private person, the courts would award damages. Referring to the history of the immunity of foreign sovereigns from suits to which they do not consent,⁴ we agreed with the statement of Mr. Justice Wilson in Chisholm v. Georgia, 2 Dall. 419, 471, 472, 1 L.Ed. 440, that such an immunity is repugnant to the fundamental conception of a democracy,⁵ and we said that we thought that a democratic government ought not to be able to maintain that it has the attributes and prerogatives of a king who "can do no wrong." 121 F.2d 205. We said further that we felt that, certainly when once the United States has, by statute, given its consent to be sued, that consent should not, through refined distinctions, be so stingily interpreted as to bar a citizen's just claim.⁶ We cited Supreme Court decisions, however, that precluded our deciding the case then before us in favor of the affected citizen, cases which we, as an inferior court, could not disregard. And the Supreme Court denied review of our decision.⁷

Consequently we must here, once more, follow the niggardly rule and deny to a citizen a right to recover money which his government wrongfully obtained from him and which unjustly enriches it.⁸

2. Since, for the reasons noted, we are obliged to hold that the consent of the government's counsel to the vacating order was inefficacious, that order cannot be supported unless it was authorized by Federal Rules of Civil Procedure, rule 60 (b).⁹ However, that rule (except as provided in its last sentence, which we shall discuss later) does not justify the entry of such an order, unless it be based upon a motion made within six months after the entry of the order which the motion seeks to have the court vacate; and here Wallace's motion of November 4, 1940, was made more than two years after the dismissal order. Wallace argues that Rule 6(b) permits the court, for cause shown, to extend that six months' period;¹⁰ he urges that, as that Rule explicitly excepts from its scope only Rule 59 and the period for taking an appeal, it must apply to motions made pursuant to Rule 60(b). We cannot agree. Interpretative devices such as expressio unius exclusio alterius have diminished importance today; they must yield to more obvious indications of intention.¹¹ The terms of Rule 60(b) — "but in no case exceeding six months" — are so emphatic as to preclude the importation of an exception via Rule 6(b). We reach the same conclusion as to the...