Court Opinion

ID: 6886380
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:29:24.298303+00
Date Added: 2024-06-11T16:05:43.515107
License: Public Domain

DENMAN, Circuit Judge
(dissenting).
A. The holding of the majority has decided a federal question in conflict with the decision of the Supreme Court in Morgan v. United States, 298 U.S. 468, 475, 56 S.Ct. 906, 80 L.Ed. 1288. That case holds that when a function is created in a federal officer, there of adjudication in the Secretary of Agriculture, as here in the Registrar resident in China, of litigating in his own name an actual controversy with the corporation in the United States Court for China, the whole function must be exercised by the officer in whom it is vested.
Such conflict of decisions transcends any mere interpretation of the China Trade Act. It concerns the power of all federal officers to whom Congress has delegated the performance of specific functions.
The majority holds that, although the Congress has specifically created the Registrar the litigating agent of the government in China, first to determine that “he is satisfied” there is a justification for litigating, and then to sue the China Trade corporation to revoke its corporate license, the corporation has no “actual controversy” with the Registrar. To me it seems obvious that Congress makes the controversy between these two Congressionally created litigants an “actual” one.
How acute as well as actual the controversy between the Registrar and the corporation, appears from the facts alleged in the complaint that unless the corporation divested itself of insurance company shares which the Registrar claimed were field in violation of the Act, she declared that she would institute proceedings to revoke the certificate of incorporation. The Secretary made it a condition precedent to his consideration of a proposed amendment to the corporation’s certificate, that this controversy between the Registrar and the corporation must first be adjudicated.
I do not agree with the concurring opinion’s view of this situation. To the contrary, it seems clear that the pleading shows the disjunction between two controversies with different officials performing different functions. One is with the Secretary, in his administrative function with respect to approving amendments to the certificate under section 9(c) of the Act, 15 U.S.C.A. § 150(c). The other, a controversy with the Registrar concerning her function as a Congressionally created litigant to determine the need for a revocartion of the certificate and to litigate, if the necessity is so determined, under section 20. It is entirely possible that, if the Registrar maintain her contention that the corporation has violated the law, the Secretary will refuse the amendment and the certificate be revoked.
Equally obvious seems the Congressional intent not to have destroyed the investment of the shareholders of the corporations it sought to have created to increase our commercial intercourse, subsidized by the remission of a part of the taxes on other commercial corporations1 without first, the administrative decision of the Registrar, a responsible federal officer, resident in China, over 8,000 miles from the Secretary’s office in Washington, that “he [the registrar] is satisfied”2 the corporation should be destroyed; and, second, that as litigant he has persuaded the “United States Court for China” that its destruction is necessary.
Incidentally, I dissent from the majority dictum that the Registrar could have sued to revoke the corporation’s certificate in any court other than the former United States Court for China. Section 14 oí the China Trade Act, specifically providing that court for the suit by the Registrar, overrides the general provisions of section 20 for suits by or against the corporation *238upon its contracts, torts or other causes of action. To hold otherwise makes ihane the specific provision for the particular court in China. Congress intended that a tribunal, readily accessible to witnesses and in the local atmosphere of the China trade, should determine whether the stockholders’ enterprise, encouraged by such Congressional aid, should be destroyed.
The high responsibility of the functions of the Registrar with regard to entering into an actual controversy with the corporation concerning its destruction, is apparent from the Act which groups them under the title “Revocation of Certificate of Incorporation,” covering sections 14,- 15 and 16. 42 Stat. 853.
In section 15, to enable the Registrar to determine whether he is satisfied to proceed, he is empowered (a) to administer oaths and issue subpoenas for the production of documents and attendance of and examination of witnesses whether within or without China; (b) to initiate contempt proceedings for contumacy of witnesses, etc., (c) to compel incriminating testimony with the protection of exemptions from prosecution, and (d) to obtain access to any book, account, record, paper, or correspondence for himself or person authorized “by him” and to take copies thereof.
The specific vesting by Congress of such powers in a federal officer in distant China, to enable him to come to a conclusion to “hi's” satisfaction as to the need of litigating in his own name with the corporation, ís not the creation of a mere deputy to the Secretary.
Nothing could make the situation clearer than a pleading by the Registrar in the suit in his name that “I am not satisfied that the ‘affairs of the corporation are [or have been] conducted’ in violation of any provision of the Act; nevertheless, and solely at the request of the Secretary of Commerce, the following allegations are made by me.” Clearly no cause of action would be stated.
The general supervisory powers of the Secretary conferred by section 3 of the Act cannot mean the power of performing for the Registrar his specifically delegated function of section 14 of determining, to the latter’s satisfaction, that the Act has been violated. No doubt the Secretary could remove the Registrar, but his supervisory power no more entitles him to decide for the Registrar a question delegated by Congress for the latter’s decision, than can an appellate court, invoked to exercise its supervisory powers in mandamus, determine how the court below shall decide any question. Interstate Commerce Commission v. United States, 289 U.S. 385, 393, 53 S.Ct. 607, 77 L.Ed. 1273.
With such broad powers in a federal officer, a suit by him in his name against the corporation, involved an actual controversy between him and his defending opponent. Hence the China Trade Act corporation is as much entitled to its declaratory judgment3 in a suit against the Regis*239trar to determine whether the Registrar was entitled to initiate litigation against it, as were the tobacco warehousemen in Currin v. Wallace, 306 U.S. 1, 5, 59 S.Ct. 379, 83 L.Ed. 441.
B. Alternatively, the holding decides a federal question in conflict with the decision of the Supreme Court in Causey v. United States, 240 U.S. 399, 401, 36 S.Ct. 365, 60 L.Ed. 711, and cases there cited, if it be assumed that the Registrar, whom Congress requires to sue in his own name upon his satisfaction, after his investigation of the need to litigate, is a mere subordinate litigating agent of the Secretary of Commerce. The Registrar by Congressional act litigates in his own name for the Secretary’s actual controversy with the China Trade Act corporation, just as the local district attorney litigates in the name of the United States the latter’s controversies in the above cases. The Secretary may show in this court his authorization to bring the suit on his behalf in the Registrar’s name, just as the Attorney General showed on the argument in the Supreme Court in Causey v. United States, supra, that he, as the Attorney General, the alter ego of the United States for that purpose, authorized his subordinate to bring the suit on behalf of the United States.
C. The majority decision is also in conflict on an important federal question with the decision of the Circuit Court of Appeals for the Eighth Circuit in Elder v. Western Mining Co., 280 F. 569, 578, assuming that the Secretary is an interested party to the suit brought by his litigating agent on the claim that the “actual dispute” with the corporation is the Secretary’s. There the Eighth Circuit held that an interested party, not appearing below, is entitled to intervene in the appellate court if, as with the Secretary of Commerce here, the intervenor is controlled by the same issues and facts and the same legal interests as one of the appealing parties.
Jurisdiction exists to decide constitutional and other important questions in suits against subordinate departmental officials without joining the Secretaries, under whose general supervision these subordinates performed their official functions. Here the Registrar is sued by the party against which only the Registrar can bring suit.
In State of Colorado v. Toll, 268 U.S. 228, 45 S.Ct. 505, 69 L.Ed. 927, the court enjoined an unwarranted interference with the sovereign rights of the State of Colorado in a suit against a park superintendent, to which the superior officer was not a party. In the earlier case of State of Missouri v. Holland, 252 U.S. 416, 40 S.Ct. 382, 64 L.Ed. 641, 11 A.L.R. 984, the constitutionality of the Migratory Bird Treaty Act, 16 U.S.C.A. § 703 et seq., was adjudicated in a suit brought by the State of Missouri against a game warden of the United States. In Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446, the Supreme Court passed upon the constitutionality of regulations promulgated by the Secretary of the Interior under authority derived from the National Industrial Recovery Act, 48 Stat. 195, in a suit brought against subordinate federal officials in a federal district court in Texas, to which the Secretary of the Interior was not a party. The Supreme Court’s opinion in the case last cited did not refer to the nonjoinder of the Secretary of the Interior, although the point had been raised in the circuit court of appeals and decided adversely to the government’s contention. Ryan v. Amazon Petroleum Corp., 5 Cir., 71 F.2d 1, 8. These cases, as well as various lower federal court decisions,4 show there is not an absolute lack of jurisdiction when the superior officer is not joined.
The Secretary’s petition for a joinder here, with his submission to our decision *240on the merits on the contentions of the appellant Registrar and on the record should be granted. The case should not be ordered dismissed and should be heard on its merits.

 Revenue Act 1921, § 264, as added by Act Sept. 19, 1922, § 21, 42 Stat. 855, Int. Rev.Code, 26 U.S.C.A. § 262(a) and all Acts between 1923 and 1942.

 “The registrar may, in order to ascertain if the affairs of a China Trade Act ■corporation are conducted contrary to any provision of this chapter, or any other law, or any treaty of the United States, •or the articles of incorporation or bylaws of the corporation, investigate the affairs of the corporation. The registrar, whenever he is satisfied that the affairs of any China Trade Act corporation are or have been so conducted, may institute in the United States Court for China proceedings for the revocation of the certificate of incorporation of the corporation. * * *” 42 Stat. 853, 15 U.S. C.A. § 154.

 All the "parties are agreed that the United States Court for China is one of the “courts of the United States” of the Declaratory Judgment Act, Section 274d of the Judicial Code, 28 U.S.C.A. § 400. The majority so assumes in its exercise of jurisdiction to determine that the Secretary is a necessary party. It certainly is not a court of any "other country.
However that may be, section 4086 of the Revised Statutes, 22 U.S.C.A. § 145, provides for consular courts: “System of laws to be applied. Jurisdiction in both criminal and civil matters shall, in all cases, be exercised and enforced in conformity with the laws of the United States, which are hereby, so far as is necessary to execute such treaties, respectively, and so far as they are suitable to carry the same into effect, extended over all citizens of the United States in those countries, * * (Emphasis 'supplied.) And Section 4 of the Act of June 20, 1906, 22 U.S.C.A. § 195, for the United States Court for China, provides: “Law applicable to determination of cases. Jurisdiction of the United States Court for China, both original and on appeal, in civil and criminal matters, :s * * ghaii jn aii cases .be exercised in conformity with the * * * laws of the United States now in force in reference to the American consular courts in China,. * * (Emphasis supplied.)
The laws of the United States to be applied in the “civil matters” which “citizens of the United States” may litigate, as provided above, I take to mean the laws existing and controlling the respective civil matters at the time the litigating parties engage in them. That is to say, the laws referred to are not confined to those existing in 1860 when Section 145, supra, was first enacted, but include the laws of 1934 giving litigants, citizens, and others, the right to seek a declaratory judgment.
Further, the Declaratory Judgment Act is procedural in character. Ætna Life Ins. Co. v. Haworth, 300 U.S. 227, 240, *23957 S.Ct. 461, 81 L.Ed. 617, 108 A.L.R. 1000. Congress has specifically delegated to the United States Court for China the power to make its rules of procedure. 22 U.S.C.A, § 196. It has exercised that power in the following rule: “Declaratory Judgments. The procedure for obtaining declaratory judgment pursuant to Section 274d of the Judicial Code, as amended, U.S.C.A. Title 28, Sec. 400, shall be in accordance with these rules. The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. The court may order a speedy hearing of an action for declaratory judgment and may advance it on the calendar.”
Rule 57, China Federal Rules of Civil Procedure.

 Berdie v. Kurtz, 9 Cir., 75 F.2d 898; Darger v. Hill, 9 Cir., 76 F.2d 198; Rood v. Goodman, 5 Cir., 83 F.2d 28; Yarnell v. Hillsborough Packing Co., 5 Cir., 70 F.2d 435, 92 A.L.R. 1475; See State of Washington v. United States, 9 Cir., 87 F.2d 421, 427.