Case ID: mass-app-div_7/html/0014-01.html
Source: Caselaw Access Project
Author: {"author": "Pettingell, J.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JOHN E. DONAHUE, RECEIVER OF ESSEX NATIONAL BANK vs. L. MARLON TAYLOR, ET AL.
    
    Essex, ss. Northern District Central District Court of Northern Essex
    Argued December 8, 1941
    Opinion filed January 12, 1942.
    Present: Jones, P. J., Pettingell & Sullivan, JJ.
    
    Abatement, Of Action, Revivor By Agreement Where Officer of the United States a Party, U. S. Comp. Stat. C. 17, §1594A.
    A receiver of a national bank is an officer of the United States within the meaning of United States Compiled Statutes, c. 17, §1594A, which provides that where such officer is a party to an action, pending which he resigns or dies, the court may permit the action to be continued by or against his successor, if within six months, the court is shown satisfactorily that there is substantial need for so continuing the action; and after the expiration of the six-months’ period the action abates and cannot be revived by the agreement of counsel substituting the new receiver as a party.
    
      P. J. McSweeney, J. B. Ooding, for the Plaintiff.
    
      B. E. Taylor, M. Shyavits, for the Defendant.
   Pettingell, J.

The original action was brought by John E. Donahue as Receiver of the Essex National Bank of Haverhill; the two defendants are the maker and indorser of a note held by the bank. The writ was dated, May 31, 1939. July 31,1939, Donahue resigned as Receiver and on the same day, Frederick S. Deitrick was appointed Receiver in his stead.

March 22, 1941, the action was discontinued as to the defendant Henry L. Taylor. Nothing was done against L. Marlon Taylor, the other defendant, until March 26, 1941, when, by agreement of counsel for Donahue in the original action and counsel who had appeared for the defendants when the action was begun, the name of Frederick S. Deitrick was substituted in the papers for the name of John E. Donahue wherever the latter’s name appeared.

May 5, 1941, counsel for L. Marlon Taylor, the remaining defendant, filed a motion to dismiss the action, and on May 8, 1941, filed a “plea” setting forth that the action had abated prior to March 26, 1941. The motion to dismiss and the “plea” were argued May 23, 1941, and were denied. The case was then heard on its merits and the defendant filed twenty-three requests for rulings of law all of which were denied. There was a finding for the plaintiff.

In the briefs, and at the oral arguments before the Appellate Division, much matter was discussed at length which is immaterial and of no value in view of the plaintiff’s admission at the argument, that all question of the applicability to the case of the Federal statute to be referred to is waived by him, and his concession that Donahue, as Receiver, was an officer of the United States within the meaning of that statute.

The sole issue was then stated by counsel for the plaintiff to be whether the agreement of counsel, dated March 26, 1941, revived the original action abated by force of the statute. The gist of his argument on that point is that the agreement reviving the action was within the scope of the authority of the attorney for the defendant in the absence of proof that he had no such authority.

The statute in question, Act of February 13,1925, Chapter 299, Paragraph 11, to be found in United States Compiled Statutes, Chapter 17, Section 1594A, is as follows:

“Where during the pendency of an action, suit or other proceeding brought by or against any officer of the United States . . . and relating to the present or future'discharge of his official duties, such officer dies, resigns or otherwise ceases to hold such office it shall be competent for the court wherein such action, suit or proceeding is pending, whether the court is one of first instance or an appellate tribunal, to permit the cause to be continued and maintained by or against the successor in office of such officer, if within six months after his death or separation from the office it be satisfactorily shown to the court that there is substantial need for so continuing and maintaining the cause and obtaining an adjudication of the questions involved.”

Accepting the position of defendant’s counsel, which in our opinion is correct, that John E. Donahue, as Receiver, was an officer of the United States within the scope of the statute just cited, and that in consequence of that statute, Donahue’s action against this defendant abated six months after his resignation as Receiver, we cannot agree with counsel in his further statement that the only issue before us is that of the authority of counsel for the defendant, as an attorney at law, to revive the abated action by the agreement entered into to that effect and filed in this case. The issue is broader than that and goes deeper into the fundamentals of the situation. In essence, it is the question whether such an agreement, made at that time, could revive the action.

Abatement of an action originally was entirely a matter of common law. Abatement was important usually when one party or the other died while the action was pending. In that event, until amending statutes provided otherwise, the action absolutely abated, even though the cause of action survived. If the cause of action survived, it might be the basis of a new action by the legal representative of the deceased party. Mellen v. Baldwin, 4 Mass. 480, at 481. Putnam v. Putnam, 4 Pick. 139, at 141. Wilbur v. Gilmore, 21 Pick. 250, at 252. Putnam v. Savage, 244 Mass. 83, at 85. E. S. Parks Shellac Co. v. Jones, 265 Mass. 108, at 113. Treasurer & Receiver General v. Sheehan, 288 Mass. 465, at 470. Ruling Case Law, Abatement and Revival, Section 22.

The difficulties of this situation of the law were somewhat ameliorated by the procedure of revivor by which in equity, through a bill of revivor, a court upon application, in cases where the cause of action survived, could permit the action to be continued by or against the representative, or the successor in office or interest of the one deceased. At law, by statute, a similar procedure grew up. In both situations, at law and in equity, a distinctive feature marked the procedure, an application to a court with a consequent decision of that body allowing the continuance. Mellen v. Baldwin, 4 Mass. 480, at 481. Bank of Brighton v. Russell, 13 Allen 221, at 223. Beal v. Lynch, 242 Mass. 65, at 68, 69. E. S. Parks Shellac Co. v. Jones, 265 Mass. 108, at 111, 113.

In every early case of a revival of an abated action it was an essential step in the procedure that the party properly to be charged should be brought into court by appropriate action. It was also essential that the court should pass upon the question of the propriety of revivor. Putnam v. Putnam, 4 Pick. 139, at 141, 142. Bank of Brighton v. Russell, 13 Allen 221, at 223. Beal v. Lynch, 242 Mass. 65, at 68, 69. E. S. Parks Shellac Co. v. Jones, 265 Mass. 108, at 111, 113. Mulligan v. Hilton, 305 Mass. 5, at 7. C. J. S. Abatement and Revival, Section 110d.

When,- in the course of the development of the law, receivers became parties to litigation it was early held that an action against a receiver was not based upon personal liability, but was “brought against the receivership” and that an action did not survive, as against the receiver’s legal representatives or Ms successor after he had ceased to hold an official relation to the fund out of which alone payment could be secured. Archambeau, v. Platt, 173 Mass. 249, at 251. Tobin v. Central Vermont Railway, 185 Mass. 337, at 339. Wood v. Comins, 303 Mass. 367, at 369. Truesdale v. St. Louis Public Service Co. (Missouri, 1937, 107 Southwestern Reporter, 2d 778), 112 A. L. R. 135, at 138.

In the case at bar we are dealing with the effect upon this action of the resignation from office of the United States officer who was the original plaintiff. The United States statute already quoted provides that, in the event of such a resignation, the court in which the action is pending, may permit the action to be continued and maintained, against his successor in office if, within six months after the resignation, it is satisfactorily shown to the court that there is substantial need for so continuing and maintaining the cause, and the court so permits the cause to be continued.

TMs statute must be construed against the background created by history, that an action against a receiver cannot be maintained against the receiver after he is separated from the receivership, it sets up a way of correcting the common law situation by providing a method of transferring the action to a new defendant, his successor. With the historical background in mind, the statute says plainly, by implication, that if there is no transfer to the new defendant in the manner provided by the statute, or if the court when applied to does not find that there is substantial need of continuing the action, the action abates at the end of the period allowed by the statute for the operation of the procedure to keep it alive It follows the principle of the old bill of revivor and recognizes the necessary function of the court in reviving or continuing the action.

Within, the six months nominated in the statute, the new receiver must apply to the court and convince it of the substantial need of continuing the action. The decision is then up to the court. The right of the continuance of the action depends upon compliance with the statute which necessarily involves a decision of the court.

The principle is not new or strange. It has been held by the Supreme Judicial Court that where a statute which creates a right, prescribes also a remedy, other provisions of the common law, including such ás are remedial in nature, are suspended. School Committee of Lowell v. Mayor, 265 Mass. 353, at 357. O’Connor v. Boyden, 268 Mass. 111, at 114, 115. Salisbury v. Salisbury Water Supply Co., 279 Mass. 204, at 206, 208. Knowlton v. Swampscott, 280 Mass. 69, at 71, 72. Commissioner of Banks v. Highland Trust Co., 283 Mass. 71, at 72. The case we are considering goes farther. There was no common law remedy, nor any statutory procedure, which could be substituted for the provisions of the statute quoted.

The history of the change from the absolute abatement of an action to a statutory continuance, and the relation thereto of the particular federal statute which has been set out herein, is to be found in Fix v. Philadelphia Barge Co., 290 U. S. 530; 78 Legl. Ed. 481. The United States Supreme Court there pointed out that the 1899 Statute, which was the immediate predecessor of the 1925 statute, material here, was passed by Congress, at the suggestion of the Supreme Court in an earlier case, to provide relief in those cases in which a United States officer resigned his office, for in such cases, actions which had been begun by the official immediately abated and terminated upon his resignation. Out of this comment by the court came the 1899 statute, and then the 1925 statute, in question here, which allowed the parties six months within which to take the case into court for a decision whether or not there was need of a continuance in the name of the succeeding official.

In Fix v. Philadelphia Barge Co., 290 U. S. 530; 78 Legl. Ed. 481, it appeared that the statute had not been complied with. The court held that the action brought by the officer, who had resigned, had abated, but that the statute being remedial in nature, although the action had abated, the cause of action survived.

This immediately raises the question of what the succeeding officer could do to enforce the cause of action. Undoubtedly he could bring a new writ thus commencing another action. This would require a new service and a new answer. It would not be a revival of the original action but a different action with a different plaintiff.

In the case at bar, counsel did not bring a new action. They attempted, after the expiration of the six months set by the statute, to bring to life an action, which, according to the Supreme Court of the United States, was dead. Whether or not the agreement, if filed during the time allowed by the statute, would have had any effect, is not the question. It was not filed until the specified time had elapsed.

The plaintiff does not argue that what counsel did was the commencement of a new action. Actions are not initiated by agreement. The basis of such a beginning is a precept of court; a writ at law, in equity, a bill or petition addressed to the court with an answering order by the court. Nothing of that sort appears here.

By filing the agreement in question, counsel undertook to usurp a prerogative of the court. Instead of following the statute and presenting their cause and their agreement to the court and obtaining the decision called for by the statute, they attempted to decide the matter for themselves, thus avoiding all the requirements of the statute. This in itself is enough to defeat the attempt. The survival of the action is a creation of the statute and the statute must be complied with. Ruling Case Law, Abatement and Revival, Section 16.

There was prejudicial error in the rulings of the trial judge that a receiver of a national bank is not an officer of the United States within the scope of the statute in question, and that the succeeding receiver’s participation in a bill in equity concerning the same parties in another court affected his status in this case; also in the denial of the first, second, third, fourth, fifth, sixth, seventh, eighth, ninth, tenth, twelfth, thirteenth, fifteenth, and eighteenth rulings requested by the defendant, all of which relate to the effect of the statute upon the abatement of the action.

The finding for the plaintiff is to be vacated and judgment is to be entered for the defendant.