Court Opinion

ID: 6884704
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:25:08.806442+00
Date Added: 2024-06-11T16:05:41.016377
License: Public Domain

DENMAN, Circuit Judge
(dissenting).
I cannot agree with the majority opinion that there is no dispute or controversy between appellee and the registrar. Appellee was engaged in owning stock in insurance companies. The registrar was claiming that such activity is illegal and was threatening to bring proceedings to revoke appellee’s certificate of incorporation, which she was authorized to do by the statute when she was satisfied that the law was being violated.1
Since the registrar was .entitled to litigate this question against the appellee, and the Secretary of Commerce had made his administrative determination that she could do so by his consent to engage in litigation to determine her right so to do, if that be necessary, and since she was threatening so to do, it is my opinion that appellee was entitled to institute a suit against her to have a declaratory judgment as to her right so to proceed. Certainly the purposes and objectives of the declaratory judgment act would be served by procuring a declaratory judgment prior to such threatened action. However it is not necessary to determine this question because the registrar, though she moved to dismiss the complaint brought by the appellee, did not press her motion but answered and filed a counterclaim asking for the same declaratory relief.
A counterclaim results in shifting the parties so that the person counterclaiming becomes the plaintiff in the suit on the counterclaim and the original plainfiff becomes the defendant.2 Thus, the counterclaim results in a suit by the registrar against appellee. It is my opinion that she was entitled so to act in any event, but particularly by the provision, cited in the footnote supra, requiring her to investigate the affairs of the appellee. There is no more appropriate *758method of investigating the affairs of appellee, which necessarily involve their legal character, than by a suit to have the law declared with reference thereto.
Regarding the counterclaim as a suit instituted by the registrar, it is apparent that the Secretary of Commerce is not a necessary party. As seen, the registrar is entitled to sue on her own determination of her right to sue. If preliminarily to this the Secretary must authorize her to sue, which in my opinion is not necessary, the authorization is pleaded.
It is true that counterclaims seeking the same declaratory relief as that of the complaint have been dismissed as redundant.3 However, if the complaint itself states no cause of action it is a nullity and there is no redundancy in the counterclaim.
It is my opinion that the United States District Court for China should not be required to dismiss the action; that it properly proceeded to decide the merits of the case, and that the merits are before us on this appeal, which, I agree with the majority opinion, was properly taken.
Even were the Secretary regarded a necessary party, it appears from the brief of' his agent, the registrar, that he regards himself as appearing by his agent’s brief and as consenting to the continuance of the proceeding. I agree that this is an ineffective method of appearing, but believe justice-would be served by advising the United States Assistant Attorneys General appearing as counsel for the registrar that they may appear here for the Secretary and make effective the important litigation brought to a final judgment after the trial below.
I quite agree that we should inquire strictly into the jurisdiction of this court as to the subject matter of any proceeding. Without it nothing may be adjudicated. Jurisdiction in personam is a different thing. Having jurisdiction of the subject matter, affected parties later may appear and make valid proceedings from which they have theretofore been absent. It is apparent from the statements of counsel of the respective parties that both are seeking the determination of the merits and that appellee’s counsel would offer no objection to the Secretary joining in the litigation here to the end that its merits may be considered.

 “§ 144. Incorporation; articles; business prohibited; subscription to stock ******
“(d) * * * If any such corporation transacts business in violation of this subdivision of this section * * * the registrar shall institute, proceedings under section 154 of this chapter for the revocation of the certificate. Sept. 19, 1922, c. 346, § 4, 42 Stat. 850; Feb. 26, 1925, c. 345, §§ 1-5, 43 Stat. 995; June 25, 1938, c. 696, § 1, 52 Stat. 1195.” (Emphasis supplied).
“§ 154. Investigations by ■ registrar; revocation of certificate of incorporation
“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 by-laws 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. * * (Emphasis supplied).
China Trade Act, 15 U.S.C.A. c. 4, § 141 et seq.

 Roberts Min. & Mill. Co. v. Schrader, 9 Cir., 95 F.2d 522.

 Scruggs v. Casco Corp., D.C., 32 F. Supp. 625; Cheney Co. v. Cunningham, D.C., 29 F.Supp. 847; Cf. Dominion Electrical Mfg. Co. v. Edwin L. Wieg- and Co., 6 Cir., March 2, 1942, 126 F.2d 172; Leach v. Ross Heater & Mfg. Co., 2 Cir., 104 F.2d 88.