Court Opinion

ID: 6835539
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:04:14.398113+00
Date Added: 2024-06-11T16:04:40.984317
License: Public Domain

WADDILL, Circuit Judge
(dissenting).
I regret exceedingly my inability to concur with my brethren in their views expressed in the majority opinion, and because of the unusual importance of the case venture to give my reasons for not so doing. Special consideration must be given to the character of the ease in order to arrive at the correct conclusion of the question involved. Its importance will be readily seen, as it involves the right of the federal government to maintain a suit in its own courts to enforce a liability in its behalf arising in a corporation chartered and owned by it.
Since the decision of Osborn v. Bank, 9 Wheat. 738, 6 L. Ed. 204, there has been no doubt that rights in such corporations arise under the laws of the United States, and hence jurisdiction to maintain suits by or against such corporations exists by reason of the federal power incident to their creation. A long line of decisions follows Osborn v. Bank, supra, 9 Wheat. 738, 6 L. Ed. 204; Petri v. Commercial National Bank, 142 U. S. 648, 12 S. Ct. 325, 35 L. Ed. 1144; Bankers’ Trust Co. v. T. & P. R. Co., 241 U. S. 295, 36 S. Ct. 569, 60 L. Ed. 1010; American Bank & Trust Co. v. Fed. Reserve Bank, 256 U. S. 365, 367, 41 S. Ct. 499, 65 L. Ed. 983; Sowell v. Fed. Reserve Bank, 268 U. S. 453, 456, 45 S. Ct. 528, 69 L. Ed. 1041; Rose, Fed. Jur. & Pro. (3d Ed.) p. 235, § 238; Simkins, Fed. Prae. (Rev. Ed.) p. 401.
This would seem doubly true where a corporation thus deriving its existence from the federal government is also owned by it; and hence, in the absence of some specific legislation on the subject, limiting and prescribing the federal jurisdiction, there can be no doubt of its existence, and that the federal courts had jurisdiction of suits thus arising under the federal law — this because of the federal question involved and the ownership by the government, and not because of mere citizenship of the parties.
A limitation was placed upon this right to maintain suits in the federal courts in eases by or against national banks. (Act 1882, 22 Stat. 162, 163), and subsequently by a further act of 1888 (25 Stat. 436), which are now embodied in section 24, par. 16. Judicial Code 1911 (4 Fed. Stat. Ann. 1054; U. S. Comp. Stat. 1916, § 991). By section 5 of the Act of January 28, 1915 (38 Stat. L. 804, U. S. Comp. Stat. 1916, § 1233a), jurisdiction is denied to the courts of the United States over suits by or against railroads, upon the ground alone that such companies were incorporated by act of Congress.
By Act of March 4,1923 (42 Stat. 1454) § 201c, creating the Federal Intermediate Credit Bank, which was an amendment to the Federal Farm Law passed July 17, 1916 (39 Stat. 360), it was prescribed that for the purpose of jurisdiction such banks should be deemed to be citizens of the state where located. By section 12 of the Act of February 13, 1925 (43 Stat. 941; Fed. Stat. Ann. 1925, p. 91; U- S. Comp. Stat. 1925 Supp., § 991d, the United States courts were denied jurisdiction of any action or suit by or against any corporation on the ground that it was incorporated by or under any act of Congress, unless such corporation is one wherein the government of the United States is the owner of more than one-half of its capital stock.
A careful consideration of these several provisions of the law it seems to me clearly demonstrates the existence of 'the jurisdiction of the United States courts in the instant ease. The Federal Intermediate Credit Bank is a federal corporation created by an act of Congress; and hence suits by or against it, like those arising under the National Bank Acts, existed in the federal court prior to the legislation hereinbefore recited, and likewise in the. case of railroads prior to the *55Act of January 28, 1915. After the passage of these acts, jurisdiction of the federal courts in such cases, arising by reason of the federal charter, was specifically withdrawn; and the terms of the several acts above mentioned, denying jurisdiction, while not in the same language, were substantially alike in that the right to sue and be sued because of their respective existence under acts of Congress should not authorize such suits to be brought in the federal courts; and this legislation so remained as to the corporations mentioned, as respects their right to sue and be sued, until Congress saw fit to place them in substantially the same category as similar corporations chartered under state laws.
In the passage of the Act of February 13, 1925, a different and more extended policy was adopted. Congress then determined that no federal court should have jurisdiction of any action or suit by or against any corporation upon the ground that it was incorporated under an act of Congress. This was a sweeping and clear provision, and placed all federal corporations upon the same basis as respects the jurisdiction of the federal courts, predicated alone upon the existence of the federal question. Congress, in thus limiting the jurisdiction of all suits as to all corporations created by federal charter, passed section 12 of the Act of February 13,1925, with a proviso as to federally owned corporations, as follows i
“See. 12. District Courts — Jurisdiction of Actions against Federal Corporations. That no District Court shall have jurisdiction of any action or suit by or against any corporation upon the ground that it was incorporated by or under an act of Congress: Provided, that this section shall not apply to any suit, action, or proceeding brought by or against a corporation incorporated by or under an act of Congress wherein the Government of the United States is the owner of more than one-half of its capital stock.” (Italics mine.)
Upon thus denying jurisdiction as to all corporations, because off the existence of the federal question, Congress saw fit to exempt from the operation of the amendment those in which the government owned more than one-half of the capital • stock. In other words, the section, in a few clear and simple words denied to the District Courts of the United States jurisdiction of all suits by or against corporations, merely because the’ same were created by act of Congress, but with a proviso, equally far-reaching and clear, that, where the government of the United States owned more than one-half of the capital stock of the corporations, the limitation should not apply, and that, as to them, such courts were not deprived of jurisdiction because of their federal character.
This would seem to be a reasonable and wise enactment, in view of the curtailment of jurisdiction of all corporations because of such federal question, as well as of the small number of such corporations covered by the specific acts hereinbefore recited. No question of the repeal of the previous acts, either by implication or otherwise is necessarily involved, although the provisions of the Act of February 13, 1925, § 12, covering the same general subject, respecting jurisdiction of the federal courts because of federal charters, are broad enough to effect such repeal. The new act places no limitation upon the jurisdiction arising from the existence of a federal question, its language being substantially the same as that covered by the prior separate acts, save and except it was made applicable to all such corporations, with a general proviso' that the limitation should not apply to any corporation of which the government of the United States is the owner of more than one-half of its capital stock.
It would seem that the Congress had the undoubted right to place a limit upon the jurisdiction of its courts in. eases arising under charters granted by the federal government. Manifestly, instead of several special acts withdrawing the jurisdiction to sue or bo sued because of the federal question, Congress might by simple enactment have embraced all such corporations; and it might have done so, and excepted from the operation government owned corporations, either in part or as a whole. That is exactly what was done by the far-reaching provisions of the Act of February 13, 1925, which so radically altered and affected generally the jurisdiction of the federal courts. Instead of attempting to follow or change all of the existing legislation affecting the right of corporations to sue and be sued because of the existence of the federal question, a sweeping provision eliminating entirely all corporations save those in which the government owned more than one-half of the capital stock was made; and to avoid any possible confusion on the subject, section 13 of the Act of February 13, 1925, provided for the repeal of all other acts, as follows:
“See. 13. That the following statutes and parts of statutes be, and they are, repealed: * * * All other acts and parts of acts in so far as they are embraced within and superseded by this act or are inconsistent therewith.” 43 Stat. 941.
*56It is tiras made clear that Congress excepted from the provisions of the act denying jurisdiction to the federal courts of suits because of their federal character those in which the government was the owner of more than one-half of the capital stock of the corporation in suit. This is what was done. The enactment was enlarged, making the same applicable, not to a few, but to all corporations chartered by the government; the proviso simply excepting from the provisions thereof corporations in which the government owned more than one-half of the capital stock, and as to such suits, the instant case being within -that class, jurisdiction remained in the federal courts by reason of the existence of the federal question involved.
A careful analysis of the views taken by those maintaining the contrary position will make clear that no effect is given to the meaning of the proviso respecting the right of the government to maintain suits of this class within its own courts. This of itself would be a sufficient answer and objection to the interpretation contended for, as the act manifestly should be so construed as to give effect and meaning to all of its provisions, and not to a part only. While the courts have nothing to do with the reasons actuating Congress‘in what it did or should have done, and are bound by what it did, still the justice and reasonableness and right of the proviso in question must commend itself to all giving serious consideration to the subject. It should not be assumed that the Congress of the United States would pass an act the effect of which was to place billions of •the public money in,the hands of banking institutions created by it and scattered throughout the country, without at the same time taking the precaution to retain jurisdiction of such moneys in its courts, if it saw proper to do so. Such course would be almost unthinkable.
All sorts of conditions might, and most probably would, arise incident to the handling arid safe-keeping of the vast amounts involved, in at least some of the places where the institutions are located, that should at once suggest the great undesirability of the adoption of the course contemplated.
Special reliance is placed upon the case of Herrmann v. Edwards, 238 U. S. 107, 118, 35 S. Ct. 839, 59 L. Ed. 1224, by those seeking.to establish the appellee’s contention. It will be observed that this decision long antedated the two acts under consideration here, viz. the act creating the Federal Intermediate Credit Bank, and the limitation placed upon the jurisdiction of the federal courts by reason of a federal question generally, and I cannot see that the ease is of controlling interest here.
From my view, the District Court was clothed with jurisdiction, and the decree denying the same and dismissing the bill should be reversed.