Court Opinion

ID: 6917598
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:48:22.713531+00
Date Added: 2024-06-11T16:06:42.742364
License: Public Domain

CLARK, Chief Judge
(dissenting).
Despite many years on the bench I have still to find an acceptable formula for appellate disposition of a case where the adjudication below gives concern, but falls short of clearly demonstrable error. Of this at least I do feel sure, that a court of review should not attempt to relieve itself of responsibility — get itself off the hook — by merely remanding, i. e., passing the buck back, to the trial court. It should remand only when it has a clear concept of what the trial judge can do to advance the case to final adjudication and precisely states that for his benefit and the benefit of the litigants thus subjected to tantalizing delay.
These basic requirements seem to me quite unfulfilled in the decision herewith. The mandate is merely for remand “for further proceedings in accordance with this opinion.” The opinion proper has some further vague suggestions or directions for the “framing” of issues — apparently many of them — and for the taking of testimony — evidently extensive and unlimited — as to each. But the opinion itself demonstrates by the controlling force it gives to Clause 13 of the charters that there is really but a single issue, namely, the interpretation of a written instrument. And on this the record is already complete and the case ripe for final ruling. More precisely stated the issue is whether Clause 13 can be interpreted to control and set aside the normal rule — - relied on in our earlier rulings on the issue1 — that on a quasi-contractual claim for refund of payments asserted to have been erroneously made the right of action accrues and the period of limitation begins to run from the time of the payments. Indeed, the whole tenor of the decision seems to be that, since limitation restrictions are harsh, we must search assiduously — and ask for trial court help thereto — for means to interpret a contract of seemingly different purport to achieve that end. In taking this rather unusual course my brothers give short shrift to the views of many district judges and of two different panels oí this court, whose adjudications the Supreme Court refused to disturb. I think the explanation proffered is inadequate for its task.
To understand what is happening we must consider the state of the existing record before remand. What we are dealing with is a “built-in” statute of limitation forming a very direct boundary to the grant of remedy against the sovereign. 46 U.S.C. § 745. This is important in several ways. It shows the strong legislative policy against stale claims against the government. It clearly places the burden of proof upon the claimants to show that they properly come within an unrestricted class. And since it thus vitally delimits the court’s jurisdiction, it makes appropriate and normal the usual processes for the testing of issues of federal jurisdiction, as actually had here, namely, motion and affidavit.2 In short it was incumbent upon *150the libelants to demonstrate by their affidavits that their libels were timely or, as applied to the issue here, that the negotiations for and background of the charters showed the correct interpretation of Clause 13 to be one for extending the time of suit. And this they attempted with at least a wealth of material, however pertinent it may be thought to be.
It is, indeed, a reflection upon able and shrewd counsel to believe that, faced with the legal requirement and practical necessity of disclosure, they should have held back relevant and convincing material. One of the more confusing aspects of the decision is that it is not clear how far it is intended to repudiate the normal procedure for testing issues of federal jurisdiction as shown by the cases cited in my footnote 2 supra. In any event we cannot expect miracles of counsel; anything more they bring to a new trial will be only cumulative to what is already before us. Obviously were there oral evidence of direct statements of intent on the part of the negotiators now presently remembered (none has been suggested), such evidence could not be used to control or vary the written document. All the material useful for decision is actually at hand; I do not see why my brothers do not employ it for final adjudication that jurisdiction exists if such is the way they feel they must go. The obstacles will not be any the less after two or three more years of protracted litigation.
That this is their direction is, I think, to be fairly deduced from the opinion, even though the discussion therein is limited. Not only does it accept the text of Clause 13 as “an adequate, prima facie, showing of jurisdiction,” but it takes the highly drastic and quite confusing course of overruling out of hand our two previous rulings to the contrary cited in my note 1 supra. What reason is there for overruling Sword Line and American Eastern if eventually they may be held correctly decided? Indeed, in the present state of division in the court, what reason or effect is there to this declaration in any event?3
Let us look more closely at this “prima facie” ruling. In interpreting the writing we must start with the congressional policy disfavoring stale claims. I see no reason here for exceptional treatment. The contracts were made, the services performed, and the payments made a decade or more ago. And what is more, the ships were actually returned to the government, thus entirely closing the transactions, almost a decade ago. It is especially strange, if these were live issues where the government was expected to make vast refunds, that some of the rental payments were actually made after the ships were returned.4 One can understand belated payments by the charterers if they thought the hire was actually due, but hardly if they were preparing to claim that there had already been gross overpayment. If ever stale claims against the government are to be viewed with a jaundiced eye, these would seem to be the occasion.
Turning now to Clause 13 itself— quoted in full in the opinion — it should be noticed that it is not a provision for claim adjustment; nor does it in any way suggest that it was meant to deal with the processing of claims for refund. Clearly it is what it is labeled as being, namely, a provision for “Additional Char*151ter Hire.” It follows naturally after Clause 12, covering “Basic Charter Hire,” and in its main section provides a scale for such additional hire based on cumulative net voyage profits of the charter in any calendar year. The emphasis on yearly accountings is obvious. The particular provisions here in issue come at the end and deal with preliminary and final payments of such additional charter hire, based on the scale stated. So a method is provided whereby the government can ask and receive preliminary payments as the money is earned, and the “final audits” clearly refer to the yearly settlements thus made necessary. Quite simply they are necessary because the progressive rate of additional hire depends on the amount of cumulative profits for the year. They just do not fit the concept of an ultimate and probably long delayed settlement of all disputes which might conceivably arise under any of the manifold provisions of these extensive charters. Significantly a much later charter provision does look to such possibility, thereby affording a persuasive contrast. For Clause 28 deals with “Accounting, Report and Supervision” and requires the keeping of books, the filing of financial statements, and the like, covering all transactions, while it also authorizes the auditing of all books and the maintenance of checks and controls of expenditures and revenues in connection with the operation of any of the chartered vessels.
In the final paragraph of Clause 13 the preliminary statements therein referred to are correlated with the final audit. This places a well-nigh insuperable obstacle in the way of the interpretation claimed by libelants. For the “adjustment” visualized is to be had “either at the time of the rendition of preliminary statements or upon the completion of each final audit by the Owner”; the idea is carried further thus, “at which times such payments will be made to the Owner as such preliminary statements or final audit may show to be due, or such over-payments refunded to the Charterer as may be required.” Each final audit therefore serves a function of settling the payments due on each calendar year’s profits. Thus it fits properly with the rest of the clause. It cannot be made to mean some final settlement of all and sundry differences a decade or more hence when at length both parties are prepared to have a balance struck. Thus the government’s brief is correct in saying: “Thus the charterers’ right to file a claim for adjustment and refund of an overpayment of additional hire and to bring immediate suit if refund was not made is precisely the same at the time of a charterer’s rendition of its preliminary accountings and at the time of the owner’s final audit.”
This natural construction is supported by various Maritime Administration regulations which (1) require the charterer at the end of each calendar month to pay 90 per cent of the additional charter hire then indicated to be due, 46 CFR 299.31 (k) (1); (2) provide that such payments are preliminary and subject to adjustment upon completion of audit by the government covering the period involved (the calendar year), id.; (3) provide that tender of the monthly payments and their acceptance do not prejudice rights under the charter or otherwise, id.; (4) require remittance of monthly payments to be accompanied by a preliminary statement, 46 CFR 299.31 (k) (2); (5) provide that if this statement indicates that 90 per cent of the cumulative total for the expired portions of the periods involved (calendar year) is less than the total of payments theretofore made for the period, the charterer may apply for a refund, 46 CFR 299.31(k) (5); and (6) require each charterer to submit a separate final accounting of additional charter hire for each annual or over-all accounting period [which under 46 CFR 299.-37-l(h) and (i) is defined as a calendar year or a period less than a calendar year, 46 CFR 299.37-2(b)]. Hence, simply put, Clause 13, read with the regulations, provides that the charterers must make monthly payments on account of the additional charter hire which are preliminary because only upon the rendí*152tion of preliminary statements or upon final audit for the year will the parties know whether or not the amounts of the monthly payments were correct.
Neither in wording nor in practical operability, however, is the Clause appropriate for the adjustment of the type of “overpayment” here involved. For the charterers knew that as they read the law the sums here claimed were not correct even when remitted. So there is no suggestion anywhere in the contract that the earlier language in Clause 13 bears on these “overpayments” in any way. Nor is there any suggestion in Clause 13 or in the regulations that the preliminary payments are tentative because the charterers believed the Clause to be illegal or that the parties agreed to put off a judicial determination of the legality of the rates. It is a strange contract which would preclude suit by the charterers to reform the contract or to recover the specific monthly “overpayments” if actually illegal. But, as the opinion herewith makes clear, libelants to succeed must rely on such an interpretation, viz., that the phrase “each final audit” can mean only some type of closing-out accounting which ultimately and finally terminates all relations between the charterers and the United States. I submit with all deference that the mere statement of the argument betrays its weakness; without fairly conclusive support somewhere for such a reading there is no “prima facie showing of jurisdiction.” Surely the parties did not intend an agreement to require the deposits of huge sums of money for an indefinite time pending determination of the legality of the contract rates. For quite clearly the period of limitation can start only when the parties agree and are content that they have eventually obtained an ultimate closing-out accounting. Ironically enough, since even late deposits are to be included, there is nothing to prevent the charterers from continuing to make the government a good and safe depositary, paying better than market rates of interest, for their excess funds. Hence for my part I cannot accept this as permissible interpretation against respondent’s persuasive showing (wholly consistent with both the charters and the .regulations) that “each final audit” means an audit of the charterers’ yearly profits.
It is true that the libelants ably and ingeniously develop various arguments from the background material in an endeavor to combat this analysis. Doubtless they will fashion others if allowed to prolong the proceedings. But the very ingenuity exercised, viewed against the results achieved, suggests how pressing is their need for an argumentative support which they still find lacking. It hardly seems worth while now to discuss these arguments at length beyond a general suggestion of their weakness. They deal either with supposed inconsistencies with the government’s present position, such as segregation of accounts or the like, or with claimed admissions by the Maritime officials. The principle against waiver of public rights by government officers would make these dubious in any event; but even more important is the fact that the inconsistencies or waivers are apparent only to those predisposed to see them. They obviously did not occur to the officials at the time. Unconscious waiver of public rights is not a legal principle to be pressed far.
The opinion states that the government for a considerable time concealed its present and ultimate contention. That charge, if important, does not seem to me to be sustained on the record. Appellants have vacillated in the theories they would rely upon, and seemingly have come to a choice of Clause 13 only recently. As the case developed there was not early occasion for the government to be more specific in its opposition (which has always been steady and continuous) than it has been. And its position has been reasonably well known, as was apparent in the earlier cases before us. So Judge Walsh, ably analyzing these points in the trial court in the American Eastern case, D.C. S.D.N.Y., 133 F.Supp. 11, 16 (cited in note 1 supra), well concludes;
“The labyrinthine aspects of the charter and regulations which libel-*153ant has seen fit to exaggerate are really only superficial. They are to be expected in any administrative attempt to deal with a complex subject matter on a mass scale. Care must be taken not to permit their seeming complexity to confuse the elementary simplicity of the dealings between the parties.”
In any event the point cannot be of controlling importance, since we have now come quite completely to the point where we enforce justice and the law, notwithstanding possible deficiencies in presentation by the lawyers.5
Consequently I must conclude that the procedure here does not require, but indeed makes anomalous, any further trial or delay in adjudication. The case is ripe for final settlement, which should now be had, of the jurisdiction issue. And any termination which does not follow the simple course stated in Sword Line and applied in American Eastern runs into serious difficulties, as resting upon a strained interpretation of a written instrument. Here some note should be taken of our procedure. These cases were originally argued on January 15, 1957. The process of decision, particularly the rehearing in banc, has delayed action now for a year and a half, and the end is of course not yet in sight. I fear nothing has been achieved by the delay but the accentuation of our differences, with no progress toward their adjustment. Had the case been terminated by February 1957 by decision of the original panel, with a concise statement of our disagreement — a matter of interest, which the public is entitled to know — but without attempting the supposed, though illusory, reconciliation of views to be obtained by a hearing in banc, everyone, it seems, would have profited.
Hence I would affirm the decisions reached below by able district judges in accordance with views heretofore expressed by this court. I should add that of course I do not object to the dispositions made of certain libels not presenting the main issue. But as to this issue, since there would seem a distinct possibility of its going higher — in view of its great importance involving, inter alia, the premature and undefined overruling of previously settled precedents — I do feel an obligation to mention the further question here definitely presented as to the effect of a vote by a judge retired from regular active service under 28 U.S. G. § 371(b) upon an appeal which has been ordered heard in banc. The question arises because the governing statute 28 U.S.C. § 46(c) says: “A court in banc shall consist of all active circuit judges of the circuit”; and Judge Medina, whose vote is here decisive, took advantage of the retirement provisions of 28 U.S.C. § 371(b) on March 1 last. I do not like to raise the question (which obviously can be settled only by the Supreme Court or by corrective legislation) because I have been active in inducing retired colleagues to sit and because I regard their continued participation in cases committed to their consideration desirable and beneficial all around. And I think this conclusion also applies to retired District Judge Leibell, who sat on the original panel herein which voted for affirmance. But the matter has caused doubt and uncertainty in other cases we have had, and a definitive answer is urgently desirable.
On Petition of Appellee for Further Rehearing en Banc
HINCKS, Circuit Judge.
The United States, as appellee, attacks the decision carried in our opinion of *154July 28, 1958, on the ground, inter alia, that Judge Medina, who concurred therein, by virtue of his retirement on March 1, 1958 was disqualified under 28 U.S. C.A. § 46(c) from participating. We disagree.
It was on December 19, 1957 that we granted rehearing of our earlier decision before the court in banc. The court in banc comprised Chief Judge Clark, Judges Medina, Hincks, Waterman and Moore, all then active circuit judges. Judge Lumbard declined to sit with the court on the ground that he was disqualified by reason of earlier contacts with the cases below when serving as United States Attorney. The court in banc when thus constituted conformed in all respects to 28 U.S.C.A. § 46 (c) which provides: “A court in banc shall consist of all active judges of the circuit.” Since Judge Medina was a member of the court in banc which was duly constituted to hear and determine the issues raised by the petition for rehearing, we think his subsequent retirement did not affect his competence to participate in the decision thereafter reached. Nothing in the Code requires that the court of appeals when once constituted according to law, whether in banc or by assignment as an authorized division, shall suspend its judicial task and reconstitute itself either to exclude an active member of the court thereafter retiring or to include an active member of the court thereafter appointed. As the Reviser’s note indicates, § 46 was included in the Code of 1948 to preserve the interpretation established by Textile Mills Securities Corporation v. Commissioner of Internal Revenue, 314 U.S. 326, 62 S.Ct. 272, 86 L.Ed. 249, that notwithstanding the three-judge provision of § 212 of Title 28 U.S.C., 1940 Ed., a court of appeals might lawfully consist of a greater number of judges sitting in banc. Nothing in Textile Mills nor the Code provisions which preserve its interpretation suggests that retirement under 28 U.S.C.A. § 371 operates to terminate the power of the retiring judge as a member of the court in banc to participate in the decision of a case formerly assigned to the-court but as yet undecided. We have-found no reported case which so holds.. We think the case of Commercial National Bank in Shreveport v. Connolly,. 5 Cir., 177 F.2d 514, supports our conclusion that the competence of a judge who is once duly constituted a member of a court in banc, may survive his retirement. There Judge Sibley who as am active member of the Fifth Circuit Court of Appeals had participated in the decision of a case heard in banc, thereafter-retired (on October 1, 1949) and subsequently cast the decisive vote for an order (filed November 16, 1949) denying' a petition for rehearing which had been made to the court in banc.
Moreover, § 43(b) of the Code of 1948 provides: “Each court of appeals shall consist of the circuit judges of the circuit in active service. The circuit justice and justices or judges designated or assigned shall also be competent to sit as judges of the court.” This provision is not stated to be exclusive of the “judges designated or assigned” to hear and determine a case as members of a court in banc. The provision is as applicable to such judges as it is to judges designated and assigned to the divisions of' the court provided for in § 46(b) and to-judges designated and assigned under §§' 294 and 296. The provision thus lends further support to our conclusion that Judge Medina, who under § 46(c) was designated and assigned as a member of the court in banc was competent even-after his retirement to sit under §§ 43'. (b), 294(b) and 296.
The other claims of error raised in the-petition we think unfounded. They involve matters already carefully considered by us. And the requested' clarifications we think unnecessary and inappropriate. We have reversed and' remanded for a determination of jurisdiction and, if jurisdiction be sustained, of the merits. We have made it plain-that these determinations should be made-without constraint by Sword Line, Inc. v. United States, 2 Cir., 228 F.2d 344, *155and American Eastern Corp. v. United States, 2 Cir., 231 F.2d 664, and of course in conformity with our opinion of July 28, 1958. The questions now put to us are questions for answer by the parties and the trial court.
Petition denied.
Separate Statement of CLARK, Chief Judge, and WATERMAN, Circuit Judge.
Judge HINCKS’ opinion herewith demonstrates both the difficulty and the impracticability of interpreting the governing statute, 28 U.S.C. § 46(c), otherwise than by giving the word “determined” its normal meaning of “decided,” and the word “active” its natural force of “non-retired.” This view is underlined by the contrast drawn between judges “in active service” and “retired” judges, even though designated to sit, in the several statutes such as 28 U.S.C. §§ 294(b) and (d), 295, 296, and 371(b). It appears to be the general conclusion of other circuits. In re Sawyer, 9 Cir., 260 F.2d 189, 203, note 17, certiorari granted 358 U.S. 892, 79 S.Ct. 153, 3 L.Ed.2d 119; G. H. Miller & Co. v. United States, 7 Cir., 260 F.2d 286, 305; United States v. Gordon, 7 Cir., 253 F.2d 177, 185, 191, 194; see also United States v. Sentinel Fire Ins. Co., 5 Cir., 178 F.2d 217, 239, and Commercial Nat. Bank in Shreveport v. Connolly, 5 Cir., 177 F.2d 514, interpreted in the light of Fifth Circuit Rule 29, 28 U.S.C.A. stating the vote required for a rehearing. And it has been the uniform practice of our own elder colleagues. Reardon v. California Tanker Co., 2 Cir., 260 F.2d 369, 375, 376, certiorari denied California Tanker Co. v. Reardon, 79 S.Ct. 609; United States v. Silverman, 2 Cir., 248 F.2d 671, 696, certiorari denied 355 U.S. 942, 78 S.Ct. 427, 2 L.Ed.2d 422; Harmar Drive-In Theatre, Inc. v. Warner Bros. Pictures, 2 Cir., 241 F.2d 937, certiorari denied 355 U.S. 824, 78 S.Ct. 31, 2 L.Ed.2d 38. Moreover, it is necessary if the obviously indicated policy that the active circuit judges shall determine the major doctrinal trends of the future for their court is not to be flouted by the freezing in of a particular grouping of judges for months (as here) or even for years. And so notwithstanding some personal regret and even doubt as to the ultimate wisdom of the policy, it must be held that the decision of July 28, 1958, purporting to reverse the decrees below is ineffective and void for lack of a valid majority vote and those decrees under consideration here must stand affirmed by an equally divided court. People v. Bork, 96 N.Y. 188, 199; Watson v. Payne, 94 Vt. 299, 111 A. 462.

. Sword Line, Inc., v. United States, 2 Cir., 228 F.2d 344, affirmed on rehearing 230 F.2d 75, affirmed 351 U.S. 976, 76 S.Ct. 1047, 100 L.Ed. 1493; American Eastern Corp. v. United States, D.C.S.D.N.Y., 133 F.Supp. 11, affirmed 2 Cir., 231 F.2d 664, certiorari denied 351 U.S. 983, 76 S.Ct. 1050, 100 L.Ed. 1497.

. Land v. Dollar, 330 U.S. 731, 735, 67 S.Ct. 1009, 91 L.Ed. 1209; KVOS, Ine., v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 397, 83 L.Ed. 183; Central Mexico Light & Power Co. v. Munch, 2 Cir., 116 F.2d 85; Williams v. Minnesota Mining & Mfg. Co., D.C.S.D.Cal., 14 F.R.D. 1; Ramirez & Feraud Ohili Co. v. Las *150Palmas Food Co., D.C.S.D.Cal., 146 F. Supp. 594, 597, affirmed Las Palmas Food Co. v. Ramirez & Feraud Chili Co., 9 Cir., 245 F.2d 874, certiorari denied 355 U.S. 927, 78 S.Ct. 384, 2 L.Ed.2d 357; and see full discussion in 6 Moore’s Federal Practice ¶56.03, pp. 2027, 2028 (2d Ed. 1953), also 5 id. ¶38.36, pp. 290-292 (2d Ed. 1951), 2 id. ¶12.09, pp. 2248-2250, 2256, ¶12.14 (2d Ed. 1948).

. It is made by a minority only of the active judges, against the expressed view of other judges who may ultimately prevail. An overruling so deficiently based can only mislead the unwary.

. Some of the payments were actually made within the two-year limitation; while these are not separately noted in the opinion, they seem barred as voluntary payments.

. See, e. g., United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135; Trop v. Dulles, 356 U.S. 86, 78 S.Ct. 590, 2 L.Ed.2d 630, reversing 2 Cir., 239 F.2d 527; Vibra Brush Corp. v. Schaffer, 2 Cir., 256 F.2d 681; Columbia Research Corp. v. Schaffer, 2 Cir., 256 F.2d 677; Joint Council Dining Car Employees Local 370, Hotel and Restaurant Employees International Alliance v. Delaware, L. & W. R. Co., 2 Cir., 157 F.2d 417, 420; Massachusetts Bonding & Ins. Co. v. State of New York, 2 Cir., 259 F.2d 33.