Appeal from the District Court of the United States for the Southern District of New York.
Before MANTON, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
AUGUSTUS N. HAND, Circuit Judge.
This suit was dismissed upon a general call of a calendar made up of all pending equity causes begun since June 1, 1907, which had not been disposed of and in which no action had been taken within one year. The order of dismissal was made pursuant to General Rule XXXIII of the United States District Court for the Southern District of New York which, so far as is material, is as follows:
"Dismissal for Want of Prosecution. Causes which have been pending in this Court for more than one year without proceedings having been taken therein during such year may be dismissed as of course, for want of prosecution, by the Court on its own motion, at a general call of such causes as the Court may, from time to time, direct to be included in a general call, notice of which call shall have been published in the New York Law Journal or otherwise given as the Court may direct. * * * Notices of dismissal by the Court on its own motion shall be given by mail by the Clerk to the attorneys of record for all parties who have appeared in the causes. For the purpose of a motion to vacate such a dismissal of the Court of its own motion, the term of Court at which the cause is dismissed is extended until thirty days from the date of such mailing of notices by the Clerk."
The present suit was originally brought on the law side of the court to recover from the defendant Commercial Trust Company of New York freight moneys earned by the sailing vessels Arapahoe and Tonawanda, which were received by George W. Sterling as trustee, and thereafter paid by him to the trust company, which claimed the moneys as collateral for loans which it had made. The cause was transferred to the equity docket, and an amended complaint was filed seeking to have an equitable lien declared upon the fund in favor of complainant. The court granted an interlocutory decree that the complainant, United States, recover out of the fund the amount of such disbursements as it had made in order to complete the voyages of the vessels (thus causing the freight moneys to be earned) and appointed a special master to report the amount which the government was entitled to be repaid out of the freight moneys that had been turned over by Sterling to the trust company. The interlocutory decree adjudging the rights of the parties and appointing the special master to report as to the amount of complainant's lien was entered February 7, 1928.The trial of the reference proceeded before the master, and the testimony was closed; all briefs were filed, and the matter was finally submitted for his decision on or before October 19, 1930. There was long delay in the preparation of the master's report. After various inquiries of the master as to when his report would be filed, counsel for complainant telephoned the attorney for the Commercial Trust Company on July 10, 1933, and asked him to join in an urgent request to the master to file his report. Thereupon counsel learned for the first time from the attorney for the trust company that an order had been made in June, 1932, dismissing the suit for lack of prosecution under Rule XXXIII of the District Court.
This cause, with others on the equity side of the District Court, was published in the New York Law Journal in accordance with the rule for five successive days. No party appeared on the call of the calendar on June 16, 1932, and the suit was accordingly dismissed on the court's own motion. The publication in the Law Journal was not noticed by counsel for the government because of a neglect to note in the office docket the transfer from the law to the equity side of the court.
A notice of dismissal of the cause seems to have been mailed by the clerk to the United States attorney addressed to the office of the latter in the post office building which was the address appearing in the original summons.But the complaint and subsequent legal papers gave the address as "45 Broadway, Borough of Manhattan, New York City," which was the office of the counsel for the Shipping Board who had general charge of this litigation and were special assistants to the Attorney General for that purpose.
On learning of the dismissal of the suit, by order of June 20, 1932, the attorney for the complainant made a motion in July, 1933, to vacate the order dismissing the cause under Rule XXXIII. The District Judge denied the motion on the ground that the court was without power to vacate a final decree after the expiration of the term in which it had been rendered, unless proceedings for that purpose were initiated during the term.
The claim for which the United States sought to prove its lien amounted to $90,985.05, and it is stated in the government's brief, and was reiterated upon the argument of the appeal, that, after the motion to vacate the order of dismissal was made, the master's report was filed.
The complainant has based its appeal upon the following grounds: (1) The original order of dismissal was invalid because it was made on account of the delay of a court officer; (2) the clerk had not complied with the provisions of the rule as to notice to the attorney for the complainant; (3) the dismissal was due to a mistake of the clerk, whose error could be corrected after the expiration of the term; (4) a court of equity possessed jurisdiction to afford a remedy where the injustice was so manifest.
It is the general rule that final decrees or other final orders cannot be disturbed after the term at which they are rendered. United States v. Mayer, 235 U.S. 55, 35 S. Ct. 16, 59 L. Ed. 129; Wetmore v. Karrick, 205 U.S. 141, 27 S. Ct. 434, 51 L. Ed. 745; Phillips v. Negley, 117 U.S. 665, 6 S. Ct. 901, 29 L. Ed. 1013; Bronson v. Schulten, 104 U.S. 410, 26 L. Ed. 797; Brooks v. Railroad, 102 U.S. 107, 26 L. Ed. 91. The order dismissing the present cause was a final decree for the purpose of any action which had to be taken within the term at which it was entered and could not be vacated except under special circumstances. One of the things which has long been recognized as a ground for the annulment of a final decree is the mistake or misprision of the Clerk. United States v. Mayer, 235 U.S. 55, 67, 35 S. Ct. 16, 59 L. Ed. 129. We think that there was such a mistake in the present case. While the special call calendar here was made up pursuant to the order of a District Judge and in a literal sense the cause might be said to be in the class of "Causes which have been pending * * * for more than one year without proceedings having been taken therein during such year," we cannot regard the general rule limiting the control of a court over its decree to the term at which the decree is rendered as applying to a cause on trial or awaiting decision by a judge or master. Certainly, if a suit has been finally submitted to a judge, and he has neglected to render his decision for more than a year, it seems most unjust to visit any penalty for the delay upon a plaintiff whose cause of action may thus become barred by the statute of limitations. The only difference between a proceeding before a master and a proceeding before a court is that in the latter case a party, under General Equity Rule 60 (28 USCA § 723), is at liberty to apply to the court for an order directing the master to make his report. This rule is a substitute for what in New York was the practice of attaching the person of a referee who neglected to report promptly. Thompson v. Parker, 3 Johns. 260; Stafford v. Hesketh, 1 Wend. 71.
We think that Equity Rule 60 (28 USCA § 723) provides the proper remedy for expediting the report of a master and that, as a matter of reasonable construction, particularly in view of Rule 60, Local Rule XXXIII of the District Court cannot be regarded as justifying the clerk in placing the present cause upon the call calendar of cases noticed for dismissal. Judge Knox has so interpreted Local Rule XXXIII in "Bern-Exbrook" (Murray Transportation Co. v. Steam Tug Bern and Perth Amboy No. 1 and Steamer Exbrook) -- F.Supp. --, 1934 A.M.C. 396 (D.C.). In Wetmore v. Karrick, 205 U.S. 141, 153, 27 S. Ct. 434, 51 L. Ed. 745, in quoting from Marsh v. Nichols, Shepherd & Co., 128 U.S. at page 615, 9 S. Ct. 168, 171, 32 L. Ed. 538, the court said:
"A clerical error, as its designation imports, is an error of a clerk or a subordinate officer in transcribing or entering an ...