Court Opinion

ID: 6899328
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:53:20.128827+00
Date Added: 2024-06-11T16:06:07.058606
License: Public Domain

HEALY, Circuit Judge
(dissenting).
The majority it seems to me have reached an unconscionable result on the basis of insubstantial and purely technical considerations. The statute does not justify, much less compel, the result. It has been arrived at by treating as an insuperable jurisdictional obstacle what ought, at most, be regarded as a procedural omission of no substantial prejudice to any party.
The pending controversy was initiated by motion of appellants Lawrence Warehouse Company and Capitol Chevrolet to vacate our affirmance of the judgment against them, Lawrence Warehouse Co. et al. v. Defense Supplies Corp., 9 Cir., 164 F.2d 773, and to remand the cause to the district court with instructions to dismiss, the ground of their motion being that when the judgment was entered against them in the district court that court was without jurisdiction to render it. Since the merits of the motion can not intelligibly be considered unless one has in mind the sequence of events leading up to the entry of the judgment, I summarize these happenings in the order of their occurrence.
In February of 1944 Defense Supplies Corporation began this suit, which was for damages for the allegedly negligent destruction by fire of a quantity of tires stored in appellants’ warehouse. On February 13, 14, and 15, 1945, the case was tried to the court sitting without a jury. On January 9, 1946, the court announced a decision in favor of Defense Supplies holding it entitled to damages of approximately $42,000. On April 15, 1946, final judgment to this effect was entered. In the interim between the trial of the case and its decision Congress passed the Joint Resolution of June 30, 1945, Public Law 109, 59 Stat. 310, effective July 1, 1945, 15 U.S.C.A. § 601 note, dissolving certain governmental corporations, including Defense Supplies, and transferring their assets and liabilities to the Reconstruction Finance Corporation by which they had been set up in the first instance. The Resolution in its entirety is as follows:
“Notwithstanding any other provision of law, all functions, powers, duties, and authority of the corporations hereinafter designated, are hereby transferred, together with all their documents, books of account, records, assets, and liabilities of every kind and nature, to Reconstruction Finance Corporation and shall be performed, exercised, and administered by that Corporation in the same manner and to the same extent and effect as if originally vested in Reconstruction Finance Corporation, and the designated corporations are hereby dissolved: Defense Plant Corporation, Metals Reserve Company, Rubber Reserve Company, and Defense Supplies Corporation, created by Reconstruction Finance Corporation pursuant to the Act of June 25, 1940 (54 Stat. 572), and Disaster Loan Corporation, created by the Act of February 11, 1937 (50 Stat. 19 [15 U.S.C.A. § 605k — 1]), are hereby designated as the corporations to which this joint resolution applies.
“Sec. 2. The Reconstruction Finance Corporation shall assume and be subject to all liabilities, whether arising out of contract or otherwise, of the corporations dissolved by this joint resolution. No suit, action, or other proceeding lawfully commenced by or against any of such corporations shall abate by reason of the enactment of this joint resolution, but the court, on motion or supplemental petition filed at any time within twelve months after the date of such enactment, showing a necessity for the survival of such suit, action, or other proceeding to obtain a determination of the questions involved, may allow the same to be maintained by or against the Reconstruction Finance Corporation.
“Sec. 3. This joint resolution shall take effect on July 1, 1945.”
We have here a suit which had been completely tried prior to the resolution’s enactment, and it remained only for the court to reach a decision. Assuming that *209the point has importance, it is to be noted that as of the date of the entry of the judgment the twelve months’ period prescribed in § 2 had not expired. It was thus undoubtedly within the authority of the court, preliminary to judgment, to order the substitution of the Reconstruction Finance Corporation. So much is conceded by counsel for appellants and possibly by my colleagues, although the latters’ view of the matter is not clearly determinable. But the provisions of § 1 of the statute, transferring to Reconstruction Finance all assets of the dissolved corporations, requires us to go further and hold that as of the time of the judgment Reconstruction Finance, had it or the Defense Supplies Corporation so moved, was entitled to be substituted unconditionally as a matter of right.
With the latter proposition my associates are in obvious disagreement. They stress the language of § 2 providing that at any time within twelve months the court, on a showing of necessity for the survival of the suit or other proceeding “to obtain a determination of the questions involved,” may allow it to be maintained by or against Reconstruction Finance Corporation. They say or imply that a showing of necessity for survival was imperative, that it was not made, and that if it had been the court possessed discretionary power to grant or deny substitution. For reasons already given and others now to be stated I regard the view as untenable on all counts.
It will be apparent on a moment’s reflection that the provision stressed by my associates can not rationally be applied to a case like this and was not intended to be. The questions involved in the suit were the familiar ones arising in all cases of like character. They were whether negligence on the part of the defendants had caused or contributed to the property loss sustained by the government, and if so, the amount in money of the recoverable loss. This being an ordinary tort action where the plaintiff’s right to damages had vested, the continuing necessity for the determination of the questions at issue would seem to be apparent on the face of the pleading. And, if this were not so, the necessity for their determination had already been amply demonstrated in the course of the trial. No additional showing of necessity was possible, and no reason existed for attempting to make one unless, indeed, it were permissible to think that the government no longer needed to be compensated for its loss.
It is an accepted canon of construction that a statute is not to be construed as requiring a vain thing. I may add that the clause under consideration, while not germane to the situation before us, doubtless has its uses. It appears to have been lifted from the existing statute having to do with the survival of suits against public officers in relation to the discharge of their official duties. In incorporating it into the resolution Congress would seem to have had in mind the possible existence of special circumstances where a change in conditions, such as the lapse of emergency legislation or the like, might have made decision of the points at issue of no more than academic interest, or rendered futile or inappropriate the grant of the relief sought. Compare Fleming v. Mohawk Wrecking & Lumber Co., 331 U.S. 111, 119, 67 S.Ct. 1129. The corporations dissolved, it is to be noted, had all been set up under emergency conditions.
The exposure of the inapplicability of this clause largely strips the jurisdictional holding of its plausibility, assuming that it had any to begin with, for we then have a case where the final step — the entry of judgment — was in no sense conditioned by the statute. But my associates’ jurisdictional argument has other frailties. As I understand it, the premise on which they hold the judgment void is that there was before the court no party plaintiff in whose favor judgment could be rendered, Defense Supplies having for all purposes ceased to exist. The holding fails to give effect to another clause embraced in the section, namely the provision that no suit lawfully commenced by or against any of the dissolved corporations “shall abate by reason of the enactment of this joint resolution.” Since pending actions were not to abate it would appear to have been the intent of Congress to extend the life of the dissolved corporation at least for the limited purpose of preserving its status as a party, *210thus keeping the suit intact. . Hence, in any view of the statute, there was no lack of a party plaintiff.1
The view I have expressed is in harmony with the interpretation given an analogous statute in Oklahoma Natural Gas Co. v. Oklahoma, 273 U.S. 257, 47 S. Ct. 391, 71 L.Ed. 634, in a carefully considered opinion written by Chief Justice Taft. That case had to do with a motion for substitution of a successor corporation for one that had been dissolved. The Court observed that, as the death of a natural person abates all pending litigation to which such person is a party, dissolution of a corporation, at common law, abates all litigation in which the corporation is appearing either as plaintiff or defendant. The Court went on to say that if the life of the corporation is to continue for litigating purposes there should be some statutory authority for its prolongation. Such authority was found in a local [Oklahoma] statute which made the directors of a dissolved corporation trustees of the creditors and stockholders, with frill power to settle the corporate affairs. The statute concluded by providing that for such purposes the directors “may maintain or defend actions in their own names by the style of the trustees of such corporation dissolved, naming it; and no action whereto any such corporation is a party shall abate by reason of such dissolution.” The Court said that “the language of the section would seem to indicate that as there is to be no abatement the Oklahoma Natural Gas Company [the dissolved corporation] for litigating purposes is still in being and continues to be a party before this court.” [273 U.S. 257, 47 S.Ct. 392.] The motion for substitution was denied in light of this statutory provision, apparently in the belief that there was no necessity for substitution.2
The Oklahoma Natural Gas Company case has immediate bearing on the" legal and factual situation before us, and if its holding is to be accepted it vitiates entirely the jurisdictional argument. None of the cases cited by appellants or relied on by the majority presents a situation at all comparable with the present. One need not question either the soundness or the authority of those cases; they are simply not in point.
It is important to remember that the United States was at all times the real party in interest in this suit, that is to say, it was the real owner of the cause of action and its fruits. Southern Pac. Co. v. Reconstruction Finance Corporation, 9 Cir., 161 F.2d 56. Compare Fleming v. Goodwin, 8 Cir., 165 F.2d 334. This would, of course, be true whether judgment were rendered in favor of one or the other of the two corporations, since both Defense Supplies and Reconstruction Finance were mere creatures of the government.3 The failure to substitute one for the other in no sense prejudiced appellants. The latter were, moreover, charged with knowledge of the joint resolution, and their sins of omission must be measured on the assumption of their knowledge, not of their ignorance, of its provisions. They interposed no objection to the entry of judgment in favor of the dissolved corporation, and must, I am satisfied, be held to have waived *211the error, if error there was, in failing to order substitution.
The validity of the judgment is necessarily to be gauged as of the time of its entry. If valid then it would not be rendered void by lapse of time or in consequence of infirmities, if any, in the appellate proceedings which ensued. That Defense Supplies, for example, itself appealed —unsuccessfully, as it happened — from a phase of the judgment exonerating an individual defendant can be of no moment. The majority’s emphasis of its conduct in this respect is on a parity with its emphasis of the inconsequential fact that counsel for Defense Supplies, who had conducted the trial, furnished their final brief in the trial court the day after the resolution’s passage. Palpable red herrings both, I resign these circumstances and others like them to their peculiar office.
Appellants’ motion should be denied. The motion of Reconstruction Finance Corporation for the amendment of the judgment by substituting its name as plaintiff in lieu of Defense Supplies was interposed as an alternative to its primary contention, namely, that the error, if any, in respect of the judgment was procedural only, and was waived by appellants’ failure to object. For reasons already stated, I regard such an amendment as unnecessary. However we can and probably should grant the motion in the interest of ending further controversy. Compare Anderson v. Yungkau, 329 U.S. 482, 67 S.Ct. 428.

 The Eighth Circuit, in Gaynor v. Metals Reserve Company, 166 F.2d 1011, decided March 25, 1948, reached a similar conclusion in a much more extreme situation than ours. Metals Reserve Company is one of the corporations dissolved by the resolution. It was a defendant in that case, having been sued in 1945 for sums claimed to be owing on contract and as damages. The cause was not brought on for trial prior to the enactment of the joint resolution, but was continued to the June 1947 term, at which time it was dismissed on motion of Metals Reserve on the basis of the joint resolution.
The Circuit Court reversed on the basis of the provision of the resolution to the effect that no pending suit against the dissolved corporations should abate.

 The reasoning of the opinion in the Oklahoma Natural Gas Co. case was followed in Chicago Title and Trust Co. v. Forty-One Thirty-Six Wilcox Building Corp., 302 U.S. 120, 58 S.Ct. 125, 82 L. Ed. 147.

 Consult 28 U.S.C.A. § 780a, enacted in 1933. This statute relates to actions to recover damages, brought by the United States or on its behalf. It shows a congressional policy requiring the survival of such actions in situations where they would ordinarily abate. This statute is of significance here.