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Republic of China v. American Express Co.

UNITED STATES COURT OF APPEALS SECOND CIRCUIT.


decided.: June 12, 1951.

REPUBLIC OF CHINA ET AL.
v.
AMERICAN EXPRESS CO., INC., ET AL.

Author: Frank

Before LEARNED HAND, CHASE and FRANK, Circuit Judges.

FRANK, Circuit Judge.

1. Plaintiffs brought suit against but one defendant, the Express Company. The order, from which plaintiffs appeal, discharged that sole defendant "from any and all liability" to the plaintiffs. Thus there ended the plaintiffs' action against the only person they had sued. As the district judge said in his opinion, the effect of the order is that, "for all practical purposes," the Express Company has become "merely an indifferent bystander."*fn1 [95 F.Supp. 744.] Such an order clearly seems, on its face, final and appealable. But the Express Company argues that it is not so, on this account: The order was entered on the Express Company's counterclaim which brought in new defendants, claiming to be entitled to the money owing by the Express Company, and the suit will now go forward between plaintiffs and those new defendants.

Aside from Rule 54(b), Fed.Rules Civ.Proc. 28 U.S.C.A., which we shall discuss later, support for that argument must be found in the doctrine of Hohorst v. Hamburg-American Packet Co., 148 U.S. 262, 13 S. Ct. 590, 37 L. Ed. 443. But we think the Hohorst doctrine inapposite here. It applies where the dismissal is of a party or parties jointly charged, or jointly claiming, with other parties who are not dismissed;*fn2 but there is no doctrine that finality is lacking in an order simply and solely because it dismisses less than all the parties. Where "jointness," in some form,*fn3 is absent, the test in multiple party cases is whether the order terminates the suit "as a severable matter," or a "distinct matter," with respect to the party dismissed. See, e.g., Gibbons v. Equitable Life Assur. Soc., 2 Cir., 173 F.2d 337, 339; Zarati S.S. Co. v. Park Bridge Corp., 2 Cir., 154 F.2d 377, 379; Withenbury v. U.S., 5 Wall. 819, 18 L. Ed. 613; Savannah v. Jesup, 106 U.S. 563, 565, 1 S. Ct. 512, 27 L. Ed. 276; Williams v. Morgan, 111 U.S. 684, 689, 4 S. Ct. 638, 28 L. Ed. 559; Hill v. Chicago & E. Railroad Company, 140 U.S. 52, 54, 11 S. Ct. 690, 35 L. Ed. 331; U.S. v River Rouge Co., 269 U.S. 411, 413-414, 46 S. Ct. 144, 70 L. Ed. 339; Clark v. Williard, 292 U.S. 112, 118, 54 S. Ct. 615, 78 L. Ed. 1160; Radio Station WOW v. Johnson, 326 U.S. 120, 126, 65 S. Ct. 1475, 89 L. Ed. 2092; Standley v. Roberts, 8 Cir., 59 F. 836; Rust v. United Waterworks Co., 8 Cir., 70 F. 129, 132; Bankers Trust Co. v. Missouri, K. & T. Ry. Co., 8 Cir., 251 F. 789, 797; Curtis v. Connly, 1 Cir., 264 F. 650, 651, affirmed 257 U.S. 260, 42 S. Ct. 100, 66 L. Ed. 222; Rector v. U.S., 8 Cir., 20 F.2d 845, 860-861; Thompson v. Murphy, 8 Cir., 93 F.2d 38, 40; Siegmund v. General Commodities Corp., 9 Cir., 175 F.2d 952, 953; Crutcher v. Joyce, 10 Cir., 134 F.2d 809, 813; Kasishke v. Baker, 10 Cir., 144 F.2d 384; cf. Reeves v. Beardall, 316 U.S. 283, 285, 62 S. Ct. 1085, 86 L. Ed. 1478; U.S. for use of Arnold v. Guimarin & Co., 263 U.S. 427, 434, 44 S. Ct. 144, 68 L. Ed. 371; 15 Un. of Chi.L.Rev. (1948) 960, 964.

As Judge Sanborn put it in Standley v. Roberts, 8 Cir., 59 F. 836, 839, where the court held appealable an order denying interpleader: "A case cannot be brought to this court piecemeal. An order, judgment, or decree which leaves the rights of the parties to the suit affected by it undetermined - one which does not substantially and completely determine the rights of the parties affected by it in that suit - is not reviewable here until a final decision is rendered, nor is an order retaining or dismissing parties defendant, who are charged to be jointly liable to the complainant in the suit, appealable. U.S. v. Girault, 11 How. 22, 32, [13 L. Ed. 587]; Hohorst v. Packet Co., 148 U.S. 262, 263, 13 S. Ct. 590 [37 L. Ed. 443]. But a final decision which completely determines the rights, in the suit in which it is rendered, of some of the parties who are not claimed to be jointly liable with those against whom the suit is retained, and a final decision which completely determines a collateral matter distinct from the general subject of litigation, and finally settles that controversy, is subject to review in this court by appeal or writ of error. In Withenbury v. U.S., 5 Wall. 819, [18 L. Ed. 613], several libels were filed for the condemnation, as prize of war, of large quantities of cotton and other property. These libels were consolidated, and various claims were interposed in the consolidated suit for portions of the property, and among them the claim of Withenbury & Doyle. An order was made dismissing this claim, with costs, while the suit remained pending and the cotton and its proceeds undisposed of.The supreme court held that this order was appealable, because it completely determined the whole matter in controversy between these claimants and the United States, and was final as to all the parties to that severable controversy."

The following kinds of orders have thus been held appealable: (a) An order dismissing claims of some only of several plaintiffs in a trust accounting action, where the divers claims are not joint.*fn4 (b) An order dismissing a claim of a creditor in a receivership proceeding, although the several claims of other creditors remain undetermined.*fn5 (c) An order denying the title of but one of several claimants in a condemnation suit, the claims not being joint.*fn6 (d) An order denying intervention when it is a matter of right.*fn7

In Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, at pages 513-516, 70 S. Ct. 322, at page 325, 94 L. Ed. 299, the Supreme Court (reversing this court, at this court's invitation)*fn8 said: "When its claims were dismissed by the decree of April 1947, any grievance that Petroleum Conversion Corporation had was fully matured. At that point Petroleum was out of the case. The decree was not tentative, informal nor incomplete as to it; and the case was concluded and closed as to its counterclaims. The court's reservation of jurisdiction to supervise the distribution of the shares of stock and the provision for further proceedings to determine the individual shares in the aggregate recovery allowed did not in any manner affect Petroleum's rights. What the court reserved was essentially supervisory jurisdiction over the distribution among the class of the recovery awarded the intervenors as the class' representatives. The only questions were, so to speak, internal to the intervening interest. Petroleum no longer had any concern with these questions and, however they were resolved, Petroleum could not possible have been affected. The court obviously selected with deliberation the issues it would close by the decree and those it would reserve for future decision. If it had any purpose to leave open any issue concerning Petroleum's contentions, or affecting its interests, half a line in the decree would have done so. But that half-line was not written."

The precise question of the appealability of an order discharging an interpleading "stakeholder" is new in this Circuit. The Third and Eighth Circuits have held such an order appealable. See Bank of Taiwan v. Gorgas-Pierie Mfg. Co., 3 Cir., 273 F. 660; Huxley v. Pennsylvania Warehousing Co., 3 Cir., 184 F. 705; Liberty Oil Co. v. Condon National Bank, 8 Cir., 271 F. 928, 930.*fn9 Professor Moore, citing those cases, maintains that such an order is appealable. He says:*fn10 "Since such interpleader action 'involves two successive litigations: one between the plaintiff and the defendants as to whether the defendants shall interplead; the other between the different defendants on the conflicting claims'*fn11 - the order granting or denying interpleader should be considered a final order." With this statement we agree.

Opposed to our conclusion is Credit Bureau of San Diego v. Petrasich, 9 Cir., 97 F.2d 65, where the court cited and relied upon Huxley v. Pennsylvania Warehousing & Safe Deposit Co., 170 F. 587, but neglected to note that there the stakeholder had not been discharged and that in a later stage of the Huxley Case, 3 Cir., 184 F. 705, the Circuit Court entertained an appeal from the discharge order. Other cases cited by the Express Company are not in point.*fn12

As above noted, Standley v. Roberts, 8 Cir., 59 F. 836, held that an appeal will lie from an order denying interpleader.*fn13 The Express Company argues that, although such an order is final, it is unlike that here, because "it disposes of all the rights of the interpleading party against all the claimants, and refuses him an equitable remedy of long standing." But the order here, discharging the interpleading party, "disposes of all the rights" of the plaintiffs against that party.*fn14

2. However, thinks to Rule 54(b) as amended in 1948, the order is not final and appealable because here there are multiple claims, and because the trial judge did not "direct the entry of a final judgment * * * upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." We interpret the Rule as meaning no more than this: Before the Rule, an order of the kind described therein, even if it would otherwise have been final, was nevertheless interlocutory when the trial judge stated that he was reserving the power to alter it, for then it was but a provisional or tentative order. As, by his explicit reservation, he left the order revocable, he kept it in suspense, and therefore truly interlocutory, hence not appealable.*fn15 The only effect of Rule 54(b) is that it requires us to treat the trial judge's silence concerning an order covered by that Rule as the equivalent of such an explicit reservation; in failing to utter a "determination," he is deemed to have made his order subject to his own recall at any time before the end of the entire litigation;*fn16 so interpreted, there is no question of the Rule's validity, as there might be if it diminished the statutory jurisdiction of the upper courts under 28 U.S.C. ยง 1291.*fn17

Our experience indicates that at least some trial judges are not aware that orders within Rule 54(b), although they would otherwise be final, are not appealable without such "determinations," so that at times the withholding of the requisite formula has apparently been inadvertent; in several cases, in each of which we said we would entertain an appeal if the trial judge supplied the "determination," he has done so.*fn18 In the instant case, it is difficult to believe that the trial judge, by his silence, intended to render his discharge order not final. for pretty obviously he intended that, if the plaintiffs elsewhere sued the Express Company, or if the impleaded defendants sued that Company, his discharge order would be available to the Express Company by way of res judicata. Yet, as that order, absent a "determination," is not now final, it can have no res judicata effect.*fn19

In all probability, the Express Company will deplore that result and will therefore join the plaintiffs in a request to the trial judge to enter a "determination," and in all likelihood he will comply with that request. Accordingly, we need not consider whether, in any circumstances, mandamus will issue,*fn20 and whether, if so, this would be a proper case for the use of that writ.

Following our previous decisions,*fn21 we hold as follows: If the plaintiffs procure from the trial judge the prescribed action, they may file a new appeal; and if all parties file a consent to such a course, we will decide the questions raised upon the present appeal record as thus supplemented.

Appeal dismissed.


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