Court Opinion

ID: 8595823
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:03:00.720725+00
Date Added: 2024-06-11T16:54:55.062930
License: Public Domain

Nichols, Judge,
dissenting:
Upon comparing the en bane court’s opinion with the one written for the panel by Judge Kunzig, and now vacated, I *373continue to think the latter was correct and should have been reaffirmed.
There is no disagreement that, after plaintiff paid Franklin off to avert Trilon’s being thrown into bankruptcy and the further performance of its later contracts thus frustrated, plaintiff had equitable rights. While this court has no jurisdiction to entertain bills in equity, it may apply equitable doctrines in the adjudication of lawsuits, in the manner usual with American courts. We have the authority of Judge Madden that this includes suits by assignees under the Assignment of Claims Act to obtain contract payments free of set-off. Chelsea Factors Inc. v. United States, 149 Ct. Cl. 202, 181 F. Supp. 685 (1960). After being paid off in full, Franklin had no further enforceable rights as assignee. Beaconwear Clothing Co. v. United States, 174 Ct. Cl. 40, 355 F. 2d 583 (1966). I think First National City Bank could have gone into a Federal or state court, having equity jurisdiction, and obtained an order requiring Franklin to execute a reassignment in proper form. This is what I understood Judge Kunzig to imply in holding that First National was a “beneficiary,” a term also used by Judge Madden. Though this was not actually done, we are not precluded from correcting the record to show it was done, because it should have been. 28 U.S.C. § 1491, as amended by Pub. L. 92-415, 86 Stat. 652. The effect of such a correction would have been that First National was a duly ordained re-assignee, a status fully recognized by the statute and the ASPK provision. It is not apparent to me in what way such a correction would frustrate the Assignment of Claims Act policy or violate any express provision thereof.
As to one not thus recognizable as an equitable ire-assignee, the court’s subrogation theory would be in my view somewhat of a misguided missile, opening up this court to a variety of possible claimants not within the Congressional policy. For example, a subrogee would not have to be a financial institution. One who is an equitable re-assignee does not need the subrogation theory to prevail.
If the same bank had been the assignee throughout, it could have invoked the no set-off provision with respect to *374contract payments, although the funds advanced for performance of that contract has been repaid already. Continental Bank & Trust Co. v. United States, 189 Ct. Cl. 99, 416 F. 2d 1296 (1969). Thus the bank could maintain a continuing revolving credit financing device which did not attempt to link particular advances of money to contracts. I take it, the court ought to concede, if First National City Bank had become a proper formal re-assignee, it would have enjoyed all the rights of the original assignee. Thus, if the contract contained appropriate language, permitting reassignment, it would not be necessary for the re-assignee, rather than the original assignee, to ¡have advanced the funds used for performance of that contract, to recover the contract payments with offset protection. Nor would it matter if the contract was completely performed before the re-assignment took effect. The court uses some language about this which may be to the contrary. I am not sure whether the discussion of these matters is pointed solely at the situation the court has already found existed, that First National City Bank was not a proper re-assignee, or whether it is saying that even if it had been, it is still cut off a second time, at another pass. If this is the view the court means to take, I protest.
It seems obvious that re-assignment is sometimes going to be necessary. As happened here, banks may be in trouble and be obliged to reduce their commitments. They may reorganize, or merge. If occurrence of a re-assignment, no matter how formally perfect, frustrates the revolving credit arrangements we approved and protected in Continental Bank & Trust Co., supra, the liberal intentions of the Congress, so often referred to in our opinions, are frustrated. The statute leaves the possibility of a re-assignment open, and the ASPB. provides for it. It is not apparent how a reassignment opens any floodgates or in anyway jeopardizes the restrictions Congress enacted to limit assignments as such. I do not see why we should take such a hostile position. If, however, we limit our holding to the actual situation of an incomplete or imperfect re-assignment, we leave it in the power of parties in the future to protect themselves by full performance of the formalities we deem so important. I think the imperfections here were correctible in equity, but *375if the court thinks otherwise, and stops there, that is error but nowhere near so serious as the present opinion in its totality.