Court Opinion

ID: 9642041
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:46:43.67067+00
Date Added: 2024-06-11T18:10:42.444997
License: Public Domain

STEPHENS, Associate Justice.
I dissent. Assuming the correctness of the ruling of the majority that the suit is properly brought in equity and is properly a class suit, still I think there can be no recovery by the appellants for the following reasons:
1. The suit, in my opinion, is against the United States, and the United States not having consented to be sued, it must for that reason fail. Against whom a suit is brought “is to be determined, not by the fact of the party named as defendant on the record, but by the result of the judgment or decree which may be entered . . . ” in the case. Minnesota v. Hitchcock, 185 U.S. 373, 387, 22 S.Ct. 650, 46 L.Ed. 954. The *487result of the decree which will be entered if the appellants prevail in the instant case will be to compel the payment to the appellants by the Treasurer of the United States of moneys now in his custody in the United States Treasury, moneys which reached his custody by virtue of an act of Congress and regulations promulgated thereunder having the force of law, moneys which under such act and regulations are to be disbursed to those who deposited certificates in the pool.
I am unable to agree with the distinctions taken by the majority in respect of Haskins Bros. & Co. v. Morgenthau, 66 App.D.C. 178, 85 F.(2d) 677, certiorari denied 299 U.S. 588, 57 S.Ct. 118, 81 L.Ed. 433. On the contrary, I think that case clearly determines that a suit brought against the Treasurer of the United States to compel him to pay out money in the United States Treasury in a manner contrary to that directed by Congress is a suit against the United States. In the Haskins Case the appellants sought to recover moneys paid under an allegedly unconstitutional revenue act applicable to the first domestic processing of Philippine coconut oil. There the suit was against the Secretary of the Treasury, the Treasurer and the Comptroller General of the Unlited States. The moneys in question had reached the hands of the Secretary of the Treasury and the Treasurer as a result of the act of Congress, and as a further result of the act had been earmarked in a separate fund for the benefit of, and to be paid over to, the Philippine Islands. The United States claimed no interest in the fund, except upon a contingency which had not arisen. We held in the Haskins Case that the suit must fail. We said:
“First. We think the suit is in effect one against the United States. Jt is brought against the Secretary of the Treasury, the Treasurer, and the Comptroller General in their official capacities. It seeks to compel the payment of money now deposited in the United States Treasury. In this view the United States are necessary parties and, since they have not consented to be sued, the suit against the officers of the United States cannot be maintained. We know of no power in this or any other court to compel the Secretary of the Treasury or the 'Treasurer of the United States, in a suit brought against them in their official capacities, to pay out money in the treasury in a manner contrary to that directed by Congress. We hold these general principles to be axiomatic:
“First, that an act of Congress is necessary for the withdrawal of money from the public treasury;
“Second, that no suit can be brought to enforce the making of an appropriation;
“Third, that the Secretary of the Treasury and the Treasurer are officers of the United States holding offices established by law; that their duties are to receive and preserve the public money and not to disburse it except conformably to law; that as officers of the United States they have no right or estate in the public money or any other money in the treasury, whether earmarked as a special fund or as part of the general fund of the United States; that they are in effect mandataries of a limited and defined commission;
“Fourth, that where an obligation is cast upon a principal and not upon his agent, a court cannot enforce it against the agent as long as he is acting wholly as agent.
“In the instant case it is therefore of no consequence whether the act under which the tax was collected be constitutional or unconstitutional. The fact that the tax has been collected and deposited in the treasury by the collecting officials of the government renders the custodian of the fund impotent to withdraw the money and disburse it unless and until directed to do so by an act of Congress or until the United States shall submit to be sued to determine its disposition.
"It is equally of no consequence that the bill alleges that the fund belongs to appellant and others similarly situated. It is not in the hands of the officers but in the treasury, and though earmarked as a special or trust fund, has been mingled with the moneys of the United States. The purpose of the bill, therefore, is to coerce the United States, through their officers, to pay out money in the treasury.as to which Congress has limited the power of withdrawal to the payment to the Philippine government. To permit this, would be to usurp the legislative function of appropriation, to substitute a court for the executive officers of the government, and to supplant by an order of court the duty and obligations imposed upon them by their oaths of office. It is therefore of no moment whether the United States have the use of this money as they do the órditiary revenues of the government or whether the money represents a trust fund created by Congress and earmarked for a specific purpose. In either case it is money in the Treasury of the United States as to *488which the United States had and have the power of control and disposition.
“It is incorrect, therefore, to say that the authority and duty of the United States depend alone upon their pecuniary interest." [Italics supplied] 66 App.D.C. 178, 85 F.(2d) 677, at pages 680-681.
The instant case is, I think, on all fours with the Haskins Case. Just as in the Has-kins Case the moneys reached the custody of the Secretary of the Treasury and the Treasurer as a result of an act of Congress, so in the instant case the proceeds of the pool are in the custody of the Treasurer as the result of an act of Congress and of regulations having the effect of law promulgated’ thereunder. Just as in the Haskins Case the fund was earmarked to be paid over to the Philippine Islands, so in the instant case it is earmarked to be paid over to the depositors in the pool. Just as in the Haskins Case the United States had no interest in the fund, so they have none here. Just as in the Has-kins Case the moneys were to be paid to the Philippines by virtue of an act of Congress, so in the instant case the fund was to be paid to the depositors in the pool as a result of the Bankhead Act and the regulations promulgated thereunder. Just as in the Haskins Case the appellants asserted a right to recover the moneys because of the unconstitutionality of the revenue act, so in the instant case the claim of the appellants is based upon the asserted unconstitutionality of the Bankhead Act. As we ruled there, so I think we must rule here, that: “We know of no power in this or any other court to compel the Secretary of the Treasury or the Treasurer of the United States [in the instant case the Treasurer, the Secretary of Agriculture and the pool manager], in a suit brought against them in their official capacities, to pay out money in the treasury in a manner contrary to that directed by Congress.”
I cannot agree that Mellon v. Orinoco Iron Co., 266 U.S. 121, 45 S.Ct. 53, 69 L.Ed. 199, and Houston v. Ormes, 252 U.S. 469, 40 S.Ct. 369, 64 L.Ed. 667,1 are contrary to the views I express. The real basis of the holding of those cases is not, as I read them, that because the United States claim no interest in a fund which is in the United States Treasury, the Treasurer may be compelled by a court to pay it out in a manner contrary to that directed by Congress. If that were the real basis of those cases, then the Has-kins Case should be overruled. In Mellon v. Orinoco Iron Co. and Houston v. Ormes funds in the possession of the Secretary of the Treasury and the Treasurer of the United States were, by virtue of an Act of Congress, to be paid to certain persons. In the Orinoco Case the fund had been furnished by Venezuela; in the other, by Congress; in both cases the United States claimed no interest in the fund. The suits were in equity to subject the fund, as against the person designated by the act to receive it, to an equitable claim, and the essential theory under which the Supreme Court of the United States allowed recovery is, as I understand the decisions, that the payment of a fund to the person designated by an act of Congress to receive it is a ministerial duty the performance of which can be compelled by mandamus, and that from this It is a necessary corollary that one who has an equitable right in the fund, as against the person designated, may have relief against the Treasury through a mandatory writ of injunction or receivership, making the person designated a party so as to bind that person, and so that the decree may afford a proper acquittance to the Government. It is too well settled to require the citation of authority that a suit to compel an officer of the United States to perform a ministerial duty is not a suit against the United States requiring their consent to be sued. As I understand the two cases they do no more than recognize that a public officer may be compelled to an equitable, as well as to a strictly legal, performance of a ministerial duty. In the two cases in question the claim asserted was one asserted through the right of the person designated in the act to receive the money; in the instant case the claim of appellants is asserted in derogation of the right of those designated in the act and regulations to receive the money.
I am further not able to agree with the view of the majority that the suit is not a suit against the United States because the appellees admit in their return to the rule to show cause that the amounts paid into the pool through the appellee Deal as trustee of the fund were not paid to any collector of internal revenue and were not paid to the United States. At this point in the return factual differentiation of the' payments from taxes as such was being made, and it was thus being denied that the amounts paid into the pool constituted exac-tions, and being' asserted that they were not *489being paid to any collector of internal revenue or to the United States, i. e., as taxes. If the contents of the return were intended to mean that the moneys in question have not been paid to the Treasurer and are not now in the Treasury of the United States, then I think they must be disregarded because the case is before us on motion to dismiss the petition of the appellants and this motion admits the well pleaded allegations of the petition, and in paragraph 22 of the petition it is alleged that the manager of the pool, to whom the moneys in question in the suit were paid by the appellants and other producers of cotton in like situation, “has deposited same with the defendant Treasurer under a special symbol number, . . . ” I think also that the admissions of counsel for the appellees in their brief that the suit is not one against the United States cannot bind the court. Whether a suit is or is not one against the United States is a jurisdictional question, and if it is such a suit here, then the United States have not consented to be sued and there is an absence of necessary parties without the presence of which the court has no power to proceed. In paragraph 4 of the petition it is stated that the defendant [appellee] Julian “is the Treasurer of the United States, and is sued individually and in his capacity as such Treasurer.” [Italics supplied] The prayer of the petition seeks “a direction to the defendants or to the receiver of this court to pay over to plaintiffs. . . . ” In view of this and of the admission by the motion to dismiss of the assertion that the moneys are deposited with the Treasurer I see no escape, under the Haskins Case, from the conclusion that the instant suit is one against the United States. It is of interest to note that in their motion to dismiss the petition, appellees asserted, among other grounds of the motion, that the suit as against the Treasurer, the Secretary of Agriculture, the Comptroller of the Agricultural Adjustment Administration, and the Administrator of the Agricultural Adjustment Administration “is essentially one against the United States, which may not be sued without its consent, and has not consented to be sued herein."
2. Even if the view of the majority that the suit is not one against the United States be taken as correct, still I think the appellants cannot recover. If the suit is not one against the United States, then it must be one against the depositors, through their agents, for the ultimate effect of the decree will be to withhold from the depositors the moneys in question and pay them over to the appellants. The suit is founded upon duress. On the topic of duress I understand the majority to reason thus: Under United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914, and Union Pacific R. R. Co. v. Public Service Comm. of Missouri, 248 U.S. 67, 39 S.Ct. 24, 63 L.Ed. 131, the Bankhead Act and the regulations .promulgated thereunder constitute an unconstitutional legislative plan of economic coercion to control agricultural production; the purchase of- certificates from the pool by the appellants was involuntary, compelled as the choice of the least of several evils. The duress thus found by the majority is clearly, in my view, a duress imposed by the Government, not by the depositors of certificates in the pool. This was the theory of the appellants in their petition, and in their briefs. In paragraph 26 of the petition they state that “in paying their money into said Pool they did so because of the coercion and duress imposed upon them by the said Bank-head Act, the said regulations issued thereunder and actions of said defendants taken in pursuance thereof. . . . ” The reference to the defendants [appellees] is I think obviously a reference to the defendants as officers of the United States acting as such in pursuánce of the Bankhead Act and the regulations. In their brief appellants say: “The compulsion flowed from the Bankhead Act and from the regulations promulgated by the Secretary of Agriculture under the authority of the act, which were a part of the act itself. The Pools were creatures of the regulations, and being such, tVere creatures of the act. They were, in legal effect, created by the act and were a part of the machinery of the act. The Bankhead Act, the regulations of the Secretary of Agriculture under the act, and the Pools created by the regulations were all part of one and the same plan. The compulsion flowed from the Act and the agencies created under the Act.” The appellants’ petition, as I read it, does not charge that the duress was imposed by the depositors of the certificates, or by their agents acting in private capacity, nor does it charge as I read it, that the depositors, or their agents acting in private capacity, were participators in the duress of the statute and the regulations, or sharers in any unconscionable sense, as compared with the appellants, in the fruits of the duress. On the contrary I think it appears, under the facts as pleaded in the petition, that those who deposited certificates in the *490pool were as much the subject of the economic pressures of the Bankhead Act — as the Act and its pressures are characterized in United States v. Butler, supra — as were those who purchased certificates from the pool. Section 6 of the Bankhead Act provided that no certificate of exemption should be issued and no allotment made to any producer unless he agreed to comply with the conditions and limitations on production prescribed by the Secretary of Agriculture.2 Both the depositors of the certificates in the pool and the purchasers of certificates from the pool were seeking to realize, out of the legal-economic situation held in United States v. Butler, supra, to. have been created by the Agricultural Adjustment Act and the Bankhead Act, on what they possessed. The certificate depositors were seeking to realize on certificates, for which they had no cotton; the certificate purchasers were seeking to realize on cotton, for which they had no certificates. Neither were, in any realistic sense, parties-to the duress. The depositors of the certificates had as much or as little knowledge of the unconstitutionality of the Act as the purchasers. The theory of the Supreme Court in the Butler Case is, I think, that of a duress directed at all cotton producers, and hence as much at those who deposited certificates in. the pool as at the ones who purchased certificates from the pool.3
The appellants themselves apparently recognize that the suit, to be well founded, must be against those who imposed the duress found in United States v. Butler, supra, to have been imposed, for they say in their brief, after asserting the unconstitutionality of the Bankhead Act under the Butler Case: “It therefore follows that if the penalties paid by appellants were made under duress and that such duress flowed from the one from whom recovery is sought, such penalties can be recovered.” [Italics supplied] For this they cite Union Pacific R. R. Co. v. Public Service Comm. of Missouri, supra, wherein the duress was that of the statute of Missouri and of the Public Service Commission of Missouri acting un*491der the statute, and wherein the recovery was had against the latter — there being apparently no impediment in Missouri to the suit against the State through its agency, the Commission. If the depositors of certificates did not impose the duress, and did not participate in its imposition, then the only basis upon which recovery against them could be allowed would be that they shared in the fruits of the duress-in such manner as to make it unconscionable for them to prevail, as against the appellants. And in respect of this, if my analysis above set forth is correct — that they were as much the subject of the economic pressures as the appellants — then the equitable situation of the depositors and the purchasers is the same. In such a situation those having the prior legal right should, under familiar doctrines of equity, prevail. And if this suit is against the depositors, or their agents in private capacity, then the legal right is in them because the moneys are in their possession — that is, the possession of the agents in private capacity.
Characterizing in somewhat more general' terms what seem to me to be the essential errors in the views of the majority: On the facts, in reasoning to the infliction of a substantive wrong upon' the appellants, the majority have, I think, looked upon the wrong as one inflicted by the Government, but in reasoning to the existence of a remedy, the majority seem to me to have looked upon the wrong as one which the depositors inflicted or participated in inflicting, or as one of which the depositors in some inequitable manner received the fruits. And on the law I think that the majority have carried beyond its proper application the maxim “equity will not suffer a wrong to be without a remedy.” It is so well settled as not to require the citation of more than general authority that “the maxims, that ‘every right has a remedy,’ ánd that ‘where the law does not give redress equity will afford relief,’ however just in theory, are subordinate to positive institutions, and cannot be applied either to subvert established rules of law, or to give the courts a jurisdiction hitherto unknown.” 10 R.C.L., Equity, § 129, p. 379. And the maxim “equity will not suffer a wrong to be without a remedy” is not safely to be followed in respect of a wrong asserted to have been imposed by the Government The United States have consented, by virtue of Rev.Stat. §§ 3220, 3226, as amended (26 U.S.C.A. §§ 1670, 1672-1673, 1676), to submit to suits for the refund of taxes erroneously collected, but they have not consented, by any statute to which we are referred or of which I am aware, to submit to suits for the refund of moneys paid for such certificates as are involved in the instant case. The majority reason that: a substantive wrong was inflicted upon the appellants through the economic pressures of the Bank-head Act; had the appellants chosen to pay the tax imposed by the Act instead of purchasing certificates, they could have recovered the tax under the statute referred to; payment for the certificates was in the nature of a penalty; therefore, by a parity of reasoning, and under the maxim “equity will not suffer a wrong to be without a remedy” the appellants may recover the payments for certificates.
Conceivably if under the Bankhead Act the Government inflicted a wrong, it should have created a remedy, by submitting itself to suit in respect of certificate payments, as it has concerning erroneous collection of taxes. But to create such a remedy is for the Congress, not for the courts; and the sin of omission of the Congress, if there be such, ought not be visited upon the depositors of certificates. The Congress not having seen fit to provide a remedy in respect of certificate payments, I think the courts should, as between the depositors of certificates and the appellant purchasers thereof, both of which groups were in my view equally subject to the asserted duress and equally innocent thereof, leave the loss where it has fallen and the moneys where they are.

 Not cited in the majority opinion.

 In terms Section 6 provided:
“A producer of cotton desiring to secure a tax-exemption certificate may file an application therefor with the agent designated by the Secretary of Agriculture, accompanied by a statement under oath showing the' approximate quantity of cotton produced on the lands presently owned, rented, share-cropped, or controlled by the applicant during a representative period fixed by the Secretary of Agriculture, and also the number of acres of land in said lands in actual cultivation for the three preceding years, and the quantity of cotton, in the best judgment of the applicant, said lands would have produced if all the cultivated land had been planted to cotton. Said application shall staté any other facts which may be required by the Secretary of Agriculture. No certificate of exemption shall be issued and no allotment shall be made to any producer unless he agrees to comply. with such conditions and limitations on the production of agricultural commodities by him as the Secretary of Agriculture may, from time to time, prescribe to assure the cooperation of such producer in the reduction programs of the Agricultural Adjustment Administration and to prevent expansion on lands leased by the Government of competitive production by such producer of agricultural commodities other than cotton and the allotment of and certificates of exemption issued to any producer shall be subject to revocation on violation by him of such conditions and limitations, and no criminal penalties shall apply to the violation of this provision.” 48 Stat. 601 (7 U.S.C.A. § 706).

 See United States v. Butler, 297 U.S. 1, 70-71, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914:
“The regulation is not in fact voluntary. The farmer, of course, may refuse to comply, but the price of such refusal is the loss of benefits. The amount offered is intended to be sufficient to exert pressure on him to agree to the proposed regulation. The power to confer or withhold unlimited benefits is the power to coerce or destroy. If the cotton grower elects not to accept the benefits, he will receive less for his crops; those who receive payments will be able to undersell him. The result may well be financial ruin. The coercive purpose and intent of the statute is not obscured by the fact that it has not been'perfectly successful. It is pointed out that, because there still remained a minority whom the rental and benefit payments were insufficient to induce to surrender their independence of action, the Congress has gone further and, in the Bankhead Cotton Act, used the taxing power in a more directly minatory fashion to compel submission. This progression only serves more fully to expose the coercive purpose of the so-called tax imposed by the prepent act. It is clear that the Department of Agriculture has properly described the plan as one to keep a non-cooperating minority in line. This is coeroion by economic pressure. The asserted power of choice is illusory.”