# Opposition Brief — Johnson v. Manhattan R. Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0371%3A06 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1933 - **Citation:** 289 U.S. 479 ## Text pprrsemsawin vasa 609m PEAT BALE # ‘ ‘ . et? ‘sarees pte Why > ee ey mse’ , ie SRS a Pa. i TABLE OF CONTENTS. ; STATEMENT OF Facts..... OP Ee Sata aa eel nite Rapp ony: ek as SUMMARY OF ARGUMENT. ................005: oC Point ONe& [Answering Petitioner Johnson's Point 1, Subdivision (a) |—It was not necessary for the Circuit Court of Appeals to make any determination as to the , validity or effect of the Division of Business Order in order to sustain Judge Manton’s power to appoint Receivers in the Brake Nhoe suit... 2.2... Sabeeves Pont Two-—[ Answering Petitioner Johnson's Point I, Subdivisions (b) and (¢) and Boehm's Point I1]— The tinding in the Order of Designation that public interest required the designation is conclusive upon the Court and litigants........ Saeeeueserss enews Point Turkee [Answering [etitioner Johnson's Point 11 |—Rules t-a and Ll-a were at most directory and the failure to observe the same did not deprive Judge Manton of jurisdiction. ............. vieauae eseeeee If Rules l-a or ll-a be more than directory, they are ets! Mec tchcce, CE ET EEE COC ET TET Pornr Four [Answering Petitioner Johnson's Point 111|—The petitioner could have made all of his ob- jections to the receivership on the return day (Sep- tember 22, 1932) of the order to show cause respect- ing the appointment of temporary Receivers without intervention in the Brake Shoe suit and without the necessity of filing an independent suit such as the Johnson suit........ ry att ji ous te caueeaee hee SEI AIOE PGE SO my Da Ray wnat ~™ PAGE Post Five [Answering Petitioner Johnson's Point IV |—None of the matters presented in Point [V ( Pe- tioner’s Brief, p. 21) were considered before Judge Woolsey or passed upon by him or considered or passed upon by the Circuit Court of Appeals, and they are not involved in this petition. ................... 17 PON + 6 6 Fad deco 0 be ned osebnesadheowsesece, IS POOS AS SWU RI UREN NE Rah Kn hddeoded deeds vabdedades. 19 (A statement of certain actions taken in the Brake Shoe suit since October 18, 1932, which do not ap- pear on the Record. ) TABLES OF AUTHORITIES. CASES CITED. PAGE Christian Vv. Hoe (C. OC. A. 2d, Feb. 20, 1955, not vet I 656 e SAMAR ORROeeRE KOs sr Des ercnecaen ne 16 Ez parte United States, 226 U. ®. 420... 2.2.2.2 cee 13 Sortie ©. Breeteege, Fre 0. BH. DB. 1 wc cccccccsscssce 7 Kingsport Press, Ine. +. Brief English Systems, 64 Fed. ee Ge a A ED i keene ccseneccesscsces 16 Michigan Vv. Michigan Trust Co., 286 U.S. 334........ 7 Mitchell vy. Lay, 48 Fed. (2d) 79 0. C. A. 9th, 1930)... 16 Pacific Northwest Packing Co. vy. Allen, 109 Fed. 515 Ss ae Ms ES SER An cds deedecesacctinsroceanoses 16 1 nited States v. Gill, 292 Fed. 156 (C. C. AL 4th, 1923)..0 11 STATUTES CITED. Inited States Code, Title 28: Section 1:5 (Judicial Code, Sec. 9).............-4-. 13 Section 17 (Judicial Code, Sec. 13)................ 14 Section 18 (Judicial Code, Sec. 14)..... ies seeacas 14 Section 22 (Judicial Code, Sec. 18)...............-. 13 Section 23 (Judicial Code, Sec. 19)................ 13 Section 27 (Judicial Code, Sec. 23)................ 12, 14 Section 731 (Judicial Code, Sec. 25)............... iz FeperaL Eoviry RULES CIrep. ee Ak eee A RRA Ed MO OER ORSh Reda we 15 GR a a Re os Oe Pere oe. RULES oF THE UNITED StratTes District CouRT FOR THE SovuTHERN District oF New York CITED. INR oe io RR aD 4, 7, 11, 12, 13, 14 EST TaN ee OS BP Oe 4,7, 11, 12, 13, 14 ieee.) IN THR Supreme Court of the United States No. 711 AND No. 721. BENJAMIN F. JOHNSON, Petitioner, against MANHATTAN RAILWAY COMPANY et al., Respondents. Tiib AMERICAN BRAKE SHOE AND FOUNDRY COMPANY, Respondent, against INTERBOROUGH RaApPip TRANSIT COMPANY, Respondent. IN THE MATTER OF THE INTERBOROUGH-MANHATTAN RECEIVERSHIP PROCEEDINGS. BRIEF IN OPPOSITION TO PETITION FOR WRIT OF CERTIORARI ON BEHALF OF: VICTOR J. DOWLING AND THOMAS E. MURRAY, JR., RECEIVERS OF INTERBOROUGH RAPID TRANSIT COMPANY. WILLIAM ROBERTS, RECEIVER OF MANHATTAN RAILWAY COMPANY. CHARLES HAYDEN AND OTHERS AS A COMMITTEE FOR THE PROTECTION OF THE HOLDERS OF THE TEN-YEAR SIX PER CENT. GOLD NOTES OF INTERBOR- OUGH RAPID TRANSIT COMPANY. VAN S. MERLE-SMITH AND OTHERS AS THE PROTECTIVE COM- MITTEE FOR MANHATTAN RAILWAY COMPANY CON- SOLIDATED MORTGAGE 4% BONDS. The petition of Benjamin F. Johnson for a writ of certi- orari was served on counsel for the Interborough Receivers on February 20, 1933. On February 27, 1935, a brief in sup- port of the petition of Johnson (entitled, however, “Petition and Brief’) was served on counsel for the Receivers by the intervenor Lillian Boelim. This brief is presented in opposi- tion to both the Johnson petition and the Boehm petition. Statement of Facts. On August 26, 1932, on the bill of complaint of The Ameri- ean Drake Shoe and Foundry Company (RR. 153) and the answer of the Interhorough Rapid Transit Company (R. 171), Honorable Martin T. Manton, Senior Circuit Judge of the United States Circuit Court of Appeals for the Second Cireuit, holding a District Court of the United States pur- suant to designation, appointed Victor J. Dowling and Thomas FE. Murray, Jr., temporary Receivers of the Interbor- ough Rapid Transit Company (R. 180). The order of appointment directed that the parties to the proceeding show cause on the 22nd day of September, 1932, “why the said receivership should not be continued during the pendency of this suit aud upon the hearing thereon any other creditor of the defendant or other party in interest may be heard” (R. 184). On September 6, 1932, the Manhattan Railway Company intervened in the proceeding and on its petition (R. 248) William Roberts was appointed a temporary Receiver of the Manhattan Railway Company (R. 196). The order for his appointment also provided that cause should be shown on the 22nd day of September, 1932, as to why that receivership should not be made permanent (R. 200). Between August 26, 1932, and Septcinber 22, 1932, there were numerous interventions in the Brake Shoe suit by com- mittees of security holders and an intervention by the Trus- tee of the First (Consolidated) Mortgage of the Manhattan Railway Company (R. 2, 3). On September 28, 1932, no objection having been made thereto, the receivership of the Interborough and the receiver- ship of the Manhattan were made permanent pendente lite (R. 225). On that day, The Guaranty Trust Company of Xew York, as Trustee under the First and Refunding Mort- gage of the Interborough Rapid Transit Company securing bonds then outstanding in the hands of the public in a prin- cipal amount in excess of $132,000,000, was made a party defendant (R. 226). The petitioner Johnson did not choose to avail himself of the opportunity given by the order of August 26, 1982, to come in on September 22, 1932, in the Brake Shoe suit and contest the appointment of the Receivers. Instead, on Sep- tember 21, 1932, he filed his bill of complaint in the United States Distriet Court against the Manhattan Railway Com- pany, the Interborough and their respective receivers (R. 7,13). Solely as a stockholder of the Manhattan Railway Company (Which had already intervened in the Brake Shoe snit) (R. 196), Johnson asserted the right to sue in behalf of that company, the interest of that company in the Inter- horough situation being that the Interborough was a lessee of all of the property of the Manhattan and was at the time in default in the payment of certain taxes on the Manhattan property, that being one of the items of rent under the lease. As such stockholder of the Manhattan Railway Company, Johnson attacked the validity of the appointment of tempo- rary Receivers of the Interborough and of Manhattan made by Judge Manton, and asked, inter alia, for the appointment of other receivers (R. 45). The bill of complaint in the Brake Shoe suit and the an- ewer therein disclosed that the Interborough was in default in a substantial manner under its obligations under its afore- said First and Refunding Mortgage securing bonds outstand- ing in the hands of the public in the principal amount of more than $12,000,000, and securing additional bonds in excess of $54,000,000 pledged as security for its Collateral Notes, that it was in default to a substantial degree under the terms of its lease of the elevated railroad of the Manhattan Railway Company, that it was badly in arrears in payment of taxes on its own property, that it had due and owing (or would have due and owing within a few days from the date of the appointment of the Receivers) indebtedness, which it was 4 absolutely unable to pay, for supply bills, rent under the Manhattan lease, principal and interest of funded indebted- ness and past due taxes in an amount in excess of $48,000,000 (R. 164, 165). As was stated by Judge Learned Hand for the Circuit Court of Appeals in the opinion below (R. 1028) : “The controversy does not touch the substantial relief asked by any of the parties; all acknowledge that the two railways are in such financial straits that a court of equity must take over their assets, to pre- vent their dismemberment by execution, attachment and the like. The plaintiffs (referring to Johnson and Bochm), and those who have intervened, ask for re- ceivers, just as do the parties to the American Brake Nhoe Company suit. The dispute touches merely who shall be the receivers, and who the judge to have charge of the receivership. The question at the outset is whether the rules deprive the Circuit Judge of juris- diction to proceed under the order designating him to hold the District Court.” (Italies ours. ) In making the appointment of temporary Receivers and subsequently, on September 28, 1932, making their appoint- ment permanent, Judge Manton acted pursuant to a designa- tion to hold a District Court of the United States for the Southern District of New York, dated August 25, 1932 (R. 177). At that time there was also an outstanding effective designation of Judge Manton to hold a District Court for the Southern District of New York, dated March 20, 1920 (R. 661. fol. 1983). On October 13, 1932, Judge Woolsey, in the Johnson suit, held that by reason of Rules 1l-a* and 1l-a** adopted on * Rule 1-a reads as follows: “1-a. Any judge designated to sit in the District Court for tie Southern District of New York, shall do such work only as may be assigned to him by the senior district judge.” ** Rule 11-a reads as follows: “11-a. All applications for the appointment of receivers in equity causes, in bankruptcy causes and any other causes (except where a receiver in bankruptcy may be appointed by a referee as provided in the Bankruptcy Rules) shall be made to the judge assigned to hold the Bankruptcy and Motion Part of the business of the court and to no other judge.” v ey - June 30, 1932, by the cight regularly appointed District Judges of the United States District Court for the Southern District of New York (but without the concurrence therein of the then sitting designated Judges; and of a majority of the Judges of the Circuit Court of Appeals as required by Federal Equity Rule No. 79 [R. 713, fol. 2139]), Judge Man- ton was entirely without jurisdiction to appoint Receivers, and that his appointment and all orders made by him in the Brake Shoe suit were absolutely null and void (R. 694). On October 18, 1932, Judge Woolsey, solely on his own motion, and for the sole purpose of providing an alleged legal basis for entering an order in another suit (the Brake Shoe suit) over which he had no jurisdiction, entered an order con- solidating the Johnson suit and the Brake Shoe suit into one suit under the title of “In the Matter of the Interborough- Manhattan Receivership Proceedings,” and having made and filed said order of consolidation, he then entered an order in the said consolidated proceeding vacating all of the orders made by Judge Manton in the Brake Shoe suit. Judge Wool- sey stated as his reason for consolidating the two cases (R. 710, fol. 2130) : “There is in my mind a residuum of doubt whether, so long as they remain separate Causes, an order could properly be made in the Johnson case, Equity No. 71-153, which would affect the receivership orders and the other orders made in the American Brake Shoe & Foundry Company case, Equity No. 70-364.” The Circuit Court of Appeals held that the order of con- solidation was erroneous and reversed the same (R. 1034). Neither Johnson nor Boehm in their petitions for a writ of certiorari raise any question as to the propriety of the decision of the Cirenit Court of Appeals on this point. Ac- cordingly, with the Order of Consolidation admittedly erro- neous and out of the way, petitioner Johnson has no status whatsoever in the Brake Shoe suit, but only as a plaintiff in his own suit, and the petitioner Boehm has no status except as an intervenor therein. — Eero: - “ig , ae ,. 6 As stated by the Circuit Court of Appeals in its opinion, the sole question presented to Judge Woolsey and presented to the Cireuit Court of Appeals was the “limited issue whether the rules, assuming that they are valid, go to the jurisdiction of the judge” (R. 1029). Judge Woolsey held that the two rules absolutely deprived Judge Manton of the jurisdiction he otherwise would have had by virtue of his designation to hold a District Court. The Circuit Court of Appeals held that the rules, at most, were merely directory and that the failure to observe the same did not and could not deprive Judge Manton of jurisdiction. On account of the vast interests involved, both publie and private, and of the critical conditions requiring prompt ac- tion for the protection of said interests, appeals from said orders, and from an earlier order granting the petitioner herein leave to file his bill (R. 7), were promptly perfected und brought on for hearing before the Circuit Court of Ap- peals on November 14, 1932.) On December 7, 1932, that Court handed down its opinion reversing all three orders appealed from and formal orders were entered on December 14, 1952 (R. 1086). Due to the delays arising from peti- tioner’s motion to amend the opinion of the Circuit Court of Appeals so as to free him from costs, the final order for man- date was entered on December 29, 1952 (R. L047). However, despite the emergency conditions and the great and complicated interests involved, which the petitioner him- self sets forth in his bill of complaint (R. 22, 23, 26-30, 34-39), his petition for certiorari was not filed in this Court until February 17, 1953, or served on respondents until February 20, 19335. ; It is obvious, of course, that in a receivership of a great property the situation does not remain static. Many things have necessarily occurred in the administration of the re- ceivership (involving the expenditure of millions of dollars) since Judge Woolsey’s order of October 18, 1982, which have materially altered the situation, and make impossible the restoration of the status quo of August 26, 1932, and which. we believe, should be called to the attention of the Court, od ‘ although—while of record in the Brake Shoe suit—they are not in the record before the Supreme Court on this petition. We mention some of the more important in a note at the end of this brief (p. 19, infra). There is no foundation in the record for the statement contained on page 3 of the Petition that “a simple contract creditor, with the consent of Interborough and Manhattan, two railroad corporations, obtained the appointment of friendly receivers for both corporations, in spite of the warn- ing of this Court against such practices” in Harkin Vv. Brun- daye, 276 U.S. 36, and Michigan v. Michigan Trust Co,, 286 U.S. 534. There is absolutely nothing in the record to sustain, or, indeed, any basis of fact to justify, in any aspect thereof, the statement found on page 3 of the Petition that “The New York Bar, and the Judges of the District Court, cannot understand the repeated flouting of the etfective rules govern- ing equity receiverships in this district.” Summary of Argument. 1. It was not necessary for the Circuit Court of Appeals to make any determination as to the validity or effect of the Division of Business Order in order to sustain the validity of the orders appointing receivers made by Judge Manton [Answering Petitioner Johnson’s Point 1 (a)]. 2. The finding in the Order of Designation that the public interest required the designation is conclusive upon the Court and litigants [Answering Petitioner Johnson’s Point I (b) and (c) and Boehm’s Point II]. 3. Rules l-a and 1l-a were at most directory and the failure to observe the same did not deprive Judge Manton of jurisdiction [Answering Petitioner Johnson’s Point II]. 4. The petitioner could have made all of his objections to the receivership on the return day (September 22, 1932) of the order to show cause respecting the appointment of temporary Receivers without intervention in the Brake Shoe | ceteiiaeeeiaiiih aati ae eae g suit and without the necessity of filing an independent suit such as the Johnson suit [Answering Petitioner Johnson’s Point III]. 5. None of the matters presented in Point IV (Petitioner’s Brief, p. 21) were considered before Judge Woolsey or passed upon by him or considered or passed upon by the Circuit Court of Appeals, and they are not involved in this petition [Answering Petitioner Johnson’s Point IV]. POINT ONE. | ANSWERING PETITIONER JOHNSON’S POINT TI, SUBDIVISION (2). ] It was not necessary for the Circuit Court of Appeals to make any determination as to the validity or effect of the Division of Business Order in order to sustain Judge Manton’s power to appoint Receivers in the Brake Shoe suit. The Cireuit Court of Appeals, in reaching the decision sought to be reviewed, did not even advert to the Division of Business Order, and no weight was given to it on behalf of the respondents-appellants in their argument and briefs be- fore the Circuit Court of Appeals. If we assume, for argument’s sake, that the Division of Business Order was absolutely void, such invalidity in no way affected the force and effect of the Designation Orders, and under those orders, we submit, Judge Manton had ample power to appoint receivers. Obviously, the mere fact ad- verted to in petitioner’s brief that somebody bound the Desig- nation Order and the Division of Business Order together for filing purposes, has no bearing on the situation. Neither order in any way was dependent upon or referred to the other. POINT TWO. | ANSWERING PETITIONER JouNSON’s POINT I, SUBDIVISIONS (b) AND (©) AND BoruM’s Point IT] The finding in the Order of Designation that public interest required the designation is conclusive upon the Court and litigants. (a) Judge Woolsey expressly refused to examine into the propriety of the Designation Order (R. 698) and the Circuit Court of Appeals held that it would not examine into the facts affecting the question of public interest (R. 1052). The motion of Boehm expressly requested a determination by Judge Woolsey that the Designation Order and the Divi- sion of Business Order be vacated and set aside (R. 134). Judge Woolsey’s order denied this motion “for want of jurisdiction” (R. 728, 729). No appeal was taken by the petitioners from this order of denial and the time te appeal has expired, and, accordingly, we submit that the propriety of the Order of Designation is not before the Court. (hb) Obviously, if the validity of the designation made by the Chief Justice of the United States or by a Circuit Justice or by the Senior Circuit Judge pursuant to the authority of Section 22, Title 28, of the United States Code could be questioned by litigants, either directly or collaterally, on the ground that the public interest did not, in fact, require the designation, chaos would result in the administration of jus- tice in the Federal Courts. Litigants would go before such a designated Judge at the peril that at any time the whole proceeding might be held to be entirely void, either in the suit itself or in some concurrent or subsequent collateral suit, on the ground that the Judge had been entirely without jurisdiction, either because of lack of public interest at the time he was designated, or because the public interest orig: inally justifying the designation had ceased to exist at the time of the actual proceeding before him. Qype re * 10 Even assuming, for argument’s sake, that the question as to whether, in fact, public interest justified his designation might be raised by a litigant involved in a proceeding being heard before a designated Judge, the question certainly can- not be determined and the whole proceeding before the desig- nated Judge set at naught upon a mere ex parte assertion that no such public interest existed, made in a collateral suit. It is solely on the basis of such ex parte assertions made in the Johnson suit that this Court is asked to de- termine that there was no public interest sustaining the Designation Order. On the merits on the right to question public interest, we need add nothing to what was said by Judge Learned Hand for the Circuit Court of Appeals (R. 1082), as follows: “The vacating decree at bar properly refused to con- sider the validity of the order of designation of August twenty-fifth, but the appellees attack it here. They say that it appears both from the affidavit of Quacken- bush, and from an opinion of the Circuit Judge in the American Brake Shoe Company suit, rendered after the vacating decree, that the only public interest sup- porting it was the fear that a trust company might be appointed receiver; and that this is not the kind of interest contemplated by the statute. Even so, the order conferred the statutory authority upon the designated judge. The power to designate, granted by 28 U.S. C. A. Sec. 22, is plainly administrative, and parties are not subject to the peril that every- thing decided may be upset, unless they can satisfy another court that there was adequate occasion for its exercise. The situation is the same as in People ex rel. Saranae Land & Timber Co. y. Extraordinary Special & Trial Term of Supreme Court, 220 N. Y. 487, 116 N. E. 384, for it does not matter that the condition is the ‘public interest,’ rather than the appointing judge's ‘judgment’ of that interest. Section 22 was indeed originally the same as sections 17, 20 and 21 in this regard (28 U.S. C. A. sees. 17, 20, 21), but the section was recast generally in 1922 (42 Stat. 689 [28 U. 8. (. A. sec. 22]), and the failure to retain the original | phrase was certainly not intended to have such far- reaching consequences. It cannot be that the act of the 11 Chief Justice, for example, or of a Circuit Justice, is to be subjected to a scrutiny when designating a Circuit Judge, to which it is not open in the case of a District Judge. The power can indeed be abused, but the remedy may be worse than the evil; it is not to the courts that the public must look for correction.” See United States v. Gill, 292 Fed. 136 (C.C. A. 4th, 1923). Point Tl made by Boehm in her brief has, we submit, no merit. The public interest involved warranting a designa- tion by the Chief Justice or a Cireuit Justice or the Senior Circuit Judge may obviously attach to a particular case. The making of designations for the trial of a particular case ora class of cases has been a uniform practice (R. 554, 555, 655, 659, 660, 661, 662). The right to do so was approved in United Ntates v. Gill, 292 Fed. 136 (C. C. A. 4th, 1925). POINT THREE. | ANSWERING PETITIONER -JOHNSON’S POINT I1.] Rules l-a and 1l-a were at most directory and the failure to observe the same did not deprive Judge Manton of jurisdiction. So-called Rules 1-a and 11-a were ineffective to deprive a designated Judge of jurisdiction and to render his acts coram non judice. The petitioner Johnson has now apparently abandoned Rule lea, which provided in effect that a designated Judge could do “such work only” as the Senior District Judge permitted. Bochm, in her brief, gives no real support to Rule l-a. Rule 11-a merely directs where applications for the ap- pointment of receivers shall be made, i. e., “to the judge as- signed to hold the Bankruptcy and Motion Part of the busi- ness of the court and to no other judge,” i. e., whether he be a designated Judge or a District Judge. 12 The petitioner claims that the rule was made under the authority of a specific statute, to wit, Section 23 of the Ju- dicial Code (Sec. 27, Title 28 df the United States Code) (Petitioner’s Brief, p. 19). This section provides that, ~In districts having more than one district judge, the judges may agree upon the division of business and the assignment of cases for trial in said district; * * *.” Obviously, this statute has no bearing whatsoever on Rule Il-a. A rule which requires a litigant to make his appliea- tion for a receiver to the Judge sitting in the Motion Part, has no relation whatsoever to the division of business he- tween the individual Judges. An agreement as to the divi- sion of business among the Judges is an arrangement by which they determine from day to day, or week to week, as to what individual Judge shall actually sit on a particular day in the Motion Part, as well as in the other parts of the Court. Obviously, notwithstanding Rule 11-a, disagreements might frequently arise as to who was actually to sit in the Motion Part. If Rules I-a or I 1l-a be more than directory, they are obviously invalid. Section 731, Title 28 of the United States Code is the sole source of power of the District Court to make rules. It provides as follows: “See. 731. Rules of practice in district courts. The district courts may, from time to time, and in any manner not inconsistent with any law of the United States, or with any rule prescribed by the Supreme Court under section 730 of this title, make rules and orders directing the returning of writs and processes, the filing of pleadings, the taking of rules, the enter- ing and making up of judgments by default, and other matters in vacation, and otherwise regulate their own practice as may be necessary or convenient for the advancement of justice and the prevention of delays in proceedings.” Rules ta and Ila are jevalid because, contrary to the provisions of this statute, (#9) they are inconsistent with - 13 many laws of the United States, (b) they are inconsistent with rules prescribed by the Supreme Court, (¢) they are not necessary or convenient for the advancement of justice and the prevention of delays in proceedings, but will have the contrary result, and (d) they are not rules of practice, but alleged rules of jurisdiction. (a) Rules l-a and 11-a are inconsistent with Section 13, Title 28 of the United States Code (See. 9 of the Judicial Code), which provides that District Courts as courts of equity “shall be deemed always open,” and “any district judge may, upon reasonable notice to the parties, make, direct, and award, at chambers or in the clerk’s office, and in vacation as well as in term, all such process, commissions, orders, rules, and other proceedings, whenever the same are not grantable of course, according to the rules and practice of the court.” (Italies ours.) Furthermore, under Section 22 of Title 28 of the United States Code (Sec. 18 of the Judicial Code), a Circuit Judge designated to hold a District Court by the Chief Justice of the United States, the Circuit. Justice of any circuit, or the Senior Circuit Judge thereof, “shall have all the powers and rights and perform all the duties of a judge of the district,” excepting only “the power of appointment to a statutory position or of permanent designation of a newspaper or de- pository of funds,” and by Section 23 of said title (Sec. 19 of the Judicial Code) it is made his duty to discharge all the judicial duties for which he is so appointed; and “all the acts and proceedings in the courts held by him, or by or before him, in pursuance of said provisions, shall have the same effect and validity as if done by or before the district judge of the said district.” With respect to the powers of a Judge so assigned, this Court said, in Ex parte United States (226 U.S 420, 493): “Jt is moreover beyond question that the statutes while contemplating as a general rule the holding of District Courts by district judges and as a general rule for holding Circuit Courts of Appeal by circuit judges, nevertheless expressly directs when the occa- 14 sion requires (Sec. 18) the assignment by the senior judge, or the circuit justice, or the Chief Justice of a cirenit judge to hold a District Court and endows ;¢ judge so assigned with all the authority of a district judge (Sec. 19), giving power in case of such desig- nation to hold separately at the same time a District Court in such district, and to discharge all the judicial duties of the district judge therein (Sec. 14). The statute therefore clearly gives to the circuit judges the rights and powers of judges of the new District Courts, and calls such powers into play when assigned accord- ing to law.” (References in above quotation are to sections of Judicial Code.) There are numerous other laws of the United States with which Rules leaiand Tl-a are also inconsistent, as, e. g., Sections 17, 18 and 23. Title 28. United States Code. (hy Rules leacund ll-a are inconsistent with Rule 6 of the Federal Equity Rules, which provides that “The judge may at any time and place, and on such notice, if any, as he may consider reasonable, make and direct all interlocutory orders, rulings and proceedings, advancement, conduct and hearing of causes.” (Italics ours. ) Furthermore, Rule Il-a in terms purports to regulate the practice “in equity causes,” but it did not receive the concurrence of a majority of the Circuit Judges (R. 713, fol. 2139), as Federal Equity Rule 79 requires. The Circuit Court of Appeals did not find it necessary to pass on the validity of said so-called Rules 1l-a and 11-a, be- cause it held that in any case they did not have the effect of depriving a designated Judge of the jurisdiction vested in him by the statute and that any question as to the violation of said rules could not be raised in the manner the petitioner has attempted to raise it. We deem it unnecessary to add to the cogent reasons of Judge Learned Iland in support of that view (R. LO2S ef seq.). ig 15 POINT FOUR. | ANSWERING PETITIONER JOHNSON’S POINT ITT.] The petitioner could have made all of his objections to the receivership on the return day (September 22, 1932) of the order to show cause respecting the ap- pointment of temporary Receivers without intervention in the Brake Shoe suit and without the necessity of filing an independent suit such as the Johnson suit. The Circuit Court of Appeals did not hold “that petitioner could attack Judge Manton’s orders only by intervention in the Brake Shoe ease,” as is stated in Johnson's brief (p. 20). It held that the petitioner could not collaterally attack said orders. It held that on the return of the rule nisi in the order appointing temporary Receivers, the petitioner could have appeared, as he was expressly invited by the order to do, and could have asked that the cause be transferred to another Judge and that other Receivers be appointed, and that his appeal from the denial of his request would have been enter- tained by the Circuit Court of Appeals (R. 1033). Equity Rule 37 does not purport to prevent, and did not in fact prevent, the petitioner as a creditor from appearing on September 22, 1932, the return day of the temporary order, either specially or generally, and challenging the jurisdiction or opposing the continuance of the receivership. The temporary order appointing Receivers provided— “upon the hearing thereon any other creditor of the defendant or any other party in interest may be heard” (Vol. II, p. 62). Under the practice followed by the Circuit Court of Ap- peals for the Second Circuit, the petitioner could have filed a special appearance, without intervention, for the purpose of moving to vacate the receivership on all the grounds set ry, a | 16 forth in the bill of complaint and motions in the Johnson suit and could have appealed to the Circuit Court of Appeals from a denial of his motion and been heard on the merits. Kingsport Press, Inc. v. Brief English Systems, 54 Fed. (2d) 497. Christian v. Hoe, luc., decided by Circuit Court of Appeals, 2nd Circuit, Feb. 20, 1933, not yet re- ported. Mitchell vy. Lay, 48 Fed. (2d) 79, 84, 85 (C. C. A, 9th). Pacific Northwest Packing Co. vy. Allen, 109 Fed. 515 (C. C. A. 9th). The statement at the bottom of page 16 of Boehm’s brief, that “The complainants (meaning Johnson and Boehm) * * * had no notice of the application”—i. e., the order of August 26, 1932, appointing Interborough Receivers, is, ob- viously, untrue, for the Johnson complaint which was filed on September 21, 1932, sets forth all the facts about the appointment of Interborough Receivers (R. 14). Boehm, counsel for Lillian Boehm, was also of counsel on the John- son complaint (R. 48). In fact, both Mr. Louis Boehm, counsel, and Mr. Charles Franklin appeared before Judge Manton on behalf of their clients on September 6, 1932 (R. 566). FON eg BEE SA Me pe ee oP mere dow OLN I ED 9 this provision of Judge Woolsey’s order no appeal was taken by either of the preseut petitioners. Surely, Judge Manton’s power to make that order im- plies the power to carry it into effect and, therefore, includes the power to make the subsequent orders which petitioners have attempted to have set aside in a collateral proceeding. Chaos would result if the Cireuit Judge sitting under designation of the Senior Cireuit Judge could be declared ‘‘a mere usurper’’ by a District Judge at the instance of a litigant who denied the existence of the ‘‘public interest’’ found and declared by the Senior Cirenit Judge. Cc. Under Sections 22 and 23 designation may be made for the “discharge of all the judicial duties” in a particular suit. Section 22 is not limited in any way to a public interest arising from congestion of calendar, or shortage of judges, or illness, absence, or disqualification of judges, or the nature or quantity of specific business which may be before the Court. Since Congress has expressly imposed these powers and duties upon the judge authorized to designate and upon the judge designated, no authority rests in the District Judges to veto, limit, restrict or question their exercise by the judge designating or the judge designated. Section 23 specifically makes it the duty of a judge so designated “to discharge all the judicial duties for which he is so appointed, during the time for which he is so ap- pointed.’? (Italics ours.) This expressly contemplates that — 009 10 a judge may be designated to discharge specific judicial duties. That the public interest referred to in Section 22 and similar statutes may properly center in a specific case, see; U.S. ex rel. Fehsenfeld vy, Gill, 292 Fed. (C. C. A., 4th, 1923) 136; People ex rel. S. L. & T. Co. v. Supreme Court, 220 N. Y. 487, 491. D. Sections 22 and 23 have been universally interpreted by the judiciary to authorize the designation of a Circuit Judge to take jurisdiction over a particular suit or a particular class of business. The validity of a designation by the Senior Cireuit Judge of himself and of inclusion in such designation of a specific case or subject matter rests, as shown by the in- stances cited in the affidavit of Mr. J. Osgood Nichols (R. 593-572, 655-662), and, as this Court knows from familiar judicial history, upon ample and repeated precedents estab- lished not only by the Senior Circuit Judges of the Second Judicial Cireuit but by the Senios Circuit Judges in nearly every Circuit of the United States. A notable instance is Pennsylvania Steel Co. vs. New York City Ry. Co., 221 Fed. 440, where Senior Circuit Judge Lacombe upheld the valid- ity of the designation which he had made of himself under Sections 22 and 28 ‘‘to hold the district court in all mat- ters pertaining to the above cause.”’ 11 E. “Rules” 1-a and 11-a cannot veto, or subordinate to the judgment of other judges, the exclusive statutory powers conferred by Sections 22 and 23. ‘No rule of court can enlarge or restrict jurisdic- tion. Norean a rule abrogate or modify the substan- tive law.’’ Washington-Southern Co, v. Baltimore Co., 263 U. S. 629, 635. How could the Chief Justice, a Cireuit Justice or a Senior Circuit Judge effectuate his finding of the require- ments of the public interest if, under ‘*Rule’’ 1-a, the Senior District Judge refused to assign the designated circuit judge to any work, or assigned him only to work having no relation to the public interest in furtherance of which he was appointed; or if, under ‘‘Rule’’ 11-a, the designated Cireuit Judge was prohibited from functioning in the very matter with respect to which such publie interest existed? POINT II. Moreover, “Rules” 1-a and 11-a are invalid for all purposes; and, in any event, they were not binding upon Judge Manton as a Circuit Judge designated to hold a District Court. Section 731 of Title 28 of the United States Code pro- vides as follows: ‘¢Ruues or Practice in District Courts. The dis- trict courts may, from time to time, and in any man- ner not inconsistent with any law of the United Bee . Ket 12 States, or with any rule prescribed by the Supreme Court under section 730 of this title, make rules and orders directing the returning of writs and processes, the filing of pleadings, the taking of rules, the enter- ing and making up of judgments by default, and other matters in vacation, and otherwise regulate their own practice as may be necessary or convenient for the advancement of justice and the prevention of 4 delays in proceedings’? (R.S., 6918). Section 730 of Title 28 of the United States Cede, re- ferred to in the foregoing Section 731, provides as to equity and admiralty causes as follows: ‘*ReeuLation or Practice or Disrricr Courts By Supreme Covurr. The Supreme Court shall have power to prescrive, from time to time, and in any manner not incorsistent with any law of the United States, the forms of writs and other process, the modes of framing and filing proceedings and plead- ings, of taking and obtaining evidence, of obtaining discovery, of proceeding to obtain relief, of drawing up, entering, and enrolling decrees, and of proceed- ing before trustees appointed by the court, and qgen- erally to regulate the whole practice, to be used, in suits in equity or admiralty, by the district courts”? (R.S., 6917). (Ttalies ours.) Supreme Court Equity Rule 79 provides as follows: ‘*Rule 79. Apprrionat Rutes sy Districr Covnt. —With the concurrence of a majority of the Cireuit Judges for the cireuit, the District Courts may make any other and further rules and regulations for the practice, proceedings and process, mesne and final, in their respective distrig¢ts, not inconsistent with the rules hereby prescribed, and from time to time alter and amend the same.’’ (Italies ours.) 13 A. “Rules” 1-a and 11-a, if rules at all, are rules governing practice, proceedings and/or process in equity, and are in- valid since they have not been concurred in by a majority of the Circuit Judges in conformity with Supreme Court Equity Rule 79. (1) The official title of this Court’s formulation of rules under Section 730 is ‘* Equity Ruies of Practice’’; and the comprehensive character of this formulation is shown by final Equity Rule 81, which declares: ‘*These Rules shall be in force on and after Feb- ruary 1, 1913 and shall govern all proceedings in cases then pending or thereafter brought.’’ (Italics ours.) (2) It is quite true that the Equity Rules do not spe- cifically set forth a practice for each proceeding in an equity cause. They themselves expressly recognize a residuum of subject matter not covered by the specific rules; and as to that residuum they provide in Rule 79 that, with the con- currence of a majority of the Circuit Judges, the district courts ‘‘may make any other further rules and regulations for the practice, proceedings and process, mesne and final, in their respective districts, not inconsistent with the rules hereby prescribed.’’ (Italies ours.) (3) ‘‘Rule’’ 1-a in so far as it purports to limit the exer- cise of equity jurisdiction by a designated judge, and ‘*Rule’’ 11-a in so far as it purports to tell one seeking the appointment of equity receivers, where and before whom to apply, clearly affect not only the ‘‘practice,’’ but also ‘‘pro- Sere en ee 14 ceedings,’’ in an equity cause and also affect mesne ‘*process’’ in an equity cause. Hence they fall squarely within Equity Rules 79 and 81 and therefore within the requirement that there should be concurrence by a majority of the Circuit Judges. Furthermore, ‘‘Rule’’ 11-a purports to govern a ‘‘mode of proceeding to obtain relief’’ in equity (fo wit, the mode of proceeding to obtain the relief of the appointment of a receiver in equity), and therefore by the very terms of a Section 730 purports to be a rule in equity. (/lorn vy. Pere Marquette R. Co., 151 Fed. 626, 634, 636.) (4) Judge Woolsey makes the astonishing statement a that ‘‘practice in equity in receivership cases only com- mences after the making of the order of appointment”’ (R. 714). An application in equity for the appointment of a receiver is ‘‘interlocutory’’ and ** presupposes a pending ease.” (Horn v. Pere Marquette R. Co., 151 Fed. 626, 634.) “Rules” 1-a and 1l-a are also inconsistent with other provisions of substantive law. (1) They are inconsistent with Section 13, Title 28, of the United States Code (Section 9 of the Judicial Code), which provides that District Courts as courts of equity ‘‘shall be deemed always open’? and ‘‘any district judge may, upon reasonable notice to the parties, make, direct, and award, at chambers or in the clerk’s office, and in vaca- tion as well as in term, all such process, commissions, orders, rules, and other proceedings, whenever the same are not grantable of course, according to the rules and practice of the court.”’ 15 (2) They are inconsistent with Rule 6 of the Equity Rules established by this Court, which provides that the judge may ‘‘at any time or place** *‘make and direct all interlocutory orders,*’ ete. (3) They are inconsistent with Sections 22 and 23 of Title 28 of the United States Code. (See Point I hereof, supra, ) c. If it be contended that “Rules” l-a and 11-a were authorized by Section 27 of Title 28 of the United States Code, they could have no binding effect upon Judge Man- ton who in no way participated in their adoption and who derived his power under Sec*ions 22 and 23. Section 27 of Title 28 of the United States Code (Judi- cial Code Section 23) reads as follows: ** Distr T WITH MORE THAN ONE JUDGE: IMVISION oF BUSINESS. In districts having more than one dis- triet judge, the judges may agree upon the division of business and assignment of cases for trial in said district; but in case they do not so agree, the senior circuit judge of the circuit in which the district lies, shall make all necessary orders for the division of business and the assigument of cases for trial | in said distriet.”’ (1) Petitioners urge that ** Rules’? 1-a and 11-a obtained authority from Seetion 27. Judge Woolsey, however, stated in his opinion, that it Was pursuant to the power vested in the District Court by Section 731 that it had made and promulgated these **Rules*’ (R. 713). 16 He expressly conceded that they ‘‘are not to be sup- ported under that particular Section’? (Section 27) (R. 888-890). They do not represent any temporary or period- ical agreement between particular judges for the division of business among themselves but constitute an attempt to permanently regulate the **practice.”’ (2) Moreover, it is quite obvious that ‘*Rules’’ 1l-a and ll-a cannot, as Judge Woosey thus conceded, be deemed authorized by Section 27. Any such construction would result in the right of the regularly appointed district judges to strip any designated judge, whether appointed by the Chief Justice, the Circuit Justice or the Senior Circuit Judge, of all powers. Certainly Section 2. cannot be so construed as to be inconsistent with Sections 22 and 23 and the prior sections of Title 28 of the United States Code giving powers to judges designated pursuant thereto. B ew 17 POINT III. Judge Woolsey had no power to vacate orders made by Judge Manton in the Brake Shoe suit for the further reasons (1) that Judge Manton’s status in that suit was at least that of a judge de facto and his acts as such could not be reviewed in the Johnson suit or by a judge of coordinate jurisdiction, and (2) that the orders made by Judge Manton in the Brake Shoe suit were not open to collateral attack. “Rules” 1-a and 11-a, if they can have any validity at all, are merely directory. They cannot render Judge Manton a mere “usurper.” We submit that Judge Manton was, for all of the pur- poses of the Brake Shoe suit, a de jure judge; but in any event he was, for the purposes of that suit, at least a de facto judge. (1) In the Brake Shoe suit the status of Judge Manton had back of it the following predicates : (a) A statute authorizing the Senior Cireuit Judge of a Circuit to designate and assign any Cir- cuit Judge of his Circuit to hold a Distriet Court within his Circuit, if the public interest requires, and giving to a Circuit Judge so designated ‘‘all the powers and rights’? of a judge of the district and re- quiring him to perform all the duties of such a judge (Section 22). (b) A judge acting as a Senior Circuit Judge in the Second Judicial Circuit and duly authorized so to act. eT Aes ee | 18 (c) A duly made order of such Senior Circuit Judge containing a finding that the public interest required that Judge Manton be designated and as- signed as a Circuit Judge to hold a District Court within the Second Circuit and designating and as- signing Judge Manton to hold a District Court for the Southern District of New York and particularly to hear and determine all applications and proceed- ings in the Brake Shoe suit (the Designation Order). The application of plaintiffs in the Johnson suit for the vacation of this order was denied by Judge Woolsey himself for want of jurisdiction and that portion of his order was never appealed from by the present petitioners (R. 728-9). (d) A statute which provides that it shall be the duty of any Circuit Judge so designated ‘‘to dis- charge all the judicial duties for which he is so ap- pointed’’ (Section 23). (e) A suit (the Brake Shoe suit) over which, and over the subject matter of which, the District Court for the Southern District of New York had compe- tent jurisdiction by reason of the necessary diversity of citizenship and the amount involved. Judge Woolsey in his opinion found this to be a fact (R. 712). (f) Parties over whom in said suit the District Court for the Southern District of New York had personal jurisdiction. Judge Woolsey found this to be the fact in his opinion (R. 712). (g) A consent by all the parties to said suit to the jurisdiction of Judge Manton in the suit. (h) Judicial action taken by Judge Manton in the Brake Shoe suit pursuant to the provisions of the Designation Order. — P ‘ Rive OTe TE ROLE ae ee ba 19 All the conditions required to constitute Judge Manton at least a de facto judge in the Brake Shoe suit are present, i. e., a duly constituted court, a duly instituted suit, juris- diction in the court over the subject matter and the parties, and the exercise therein by Judge Manton, acting and pur- porting to act as judge of the court, of judicial powers under color of the direction and authority contained in the Desig- nation Order and of Sections 22 and 23 of Title 28 of the United States Code. (2) The status of a de facto judge cannot be attacked collaterally either in the suit in which he is aeting or in any other suit. His right to hold his office can be ques- tioned only in proceedings, regularly instituted for that purpose, to which he is a party, in the form provided by law. Ball vy. United States, 140 U.S. 118 (1891) ; McDowell vy, United States, 159 U.S. 596 (1895) ; State ex rel. Buisson v. Lazarus, 33 La. Ann., 1425; Luhrig Collicries Co. v. Interstate Coal & Dock Co., 287 Fed. 711 (C. C. A., 2nd, 1923) ; 33 Corpus Juris, 933. (3) Case v. United States, 14 Fed. (2d) 510, decided by the Cireuit Court of Appeals for the Eighth Cireuit and cited by Judge Woolsey in his opinion, is readily distin- gnishable. See discussion (R. 1031) in Cireuit Court of Appeals opinion. 20 POINT IV. Judge Woolsey’s lack of power to make any order in the Johnson suit vacating Judge Manton’s orders in the Brake Shoe suit was not affected by the Consolida- tion Order, since even if the Consolidation Order were proper it could not result in merging the two suits into one cause. The independent and separate existence of the two suits could not be affected by consolidation. Moreover, Judge Woolsey could not do by indirec- tion what he could not do by direction. Since he had no power in the Johnson suit to vacate orders in the Brake Shoe suit, he could not clothe himself with such power by forcibly reaching over into Judge Manton’s court and possessing himself of the Brake Shoe suit by the alleged process of consolidation. (1) The consolidation by Judge Woolsey of the Brake Shoe suit and the Johnson suit, even if effective, did not accomplish a merger of the two suits. Since the suits remained separate and independent, an attempt in one of them to attack proceedings in the other is a collateral attack. Toledo, ete.,, RR. Cov. Continental Trust Co., 95) Fed. 497 (C. C. A. Gih, 1899) (certiorari denied 176 U.S. 219); Taylor ve. Logan Trust Company, 289 Fed. 51 (C. C. A. 8th, 1923); Nolte v. Hudson Nav. Co., 11 Fed. (2d) 680 (C. C. A. 2d, 1926) ; 21 Adler v. Seaman, 266 Fed. 828 (C. C. A. 8th, 1920) ; Mutual Life Insurance Co. v. Hillmon, 145 U.S. 285; 1 Corpus Juris, 1137. (2) The orders of Judge Manton were, as we have shown in Point ILI, valid whether or not Judge Manton was a de gure or de facto judge. Their validity as such was no less after than before the attempted consolidation. (3) Furthermore, applying Judge Woolsey’s own rea- soning, his action was a violation of Equity Rule 4 of the Southern District of New York. This Rule provides, among other things: ‘In any suit in which a receiver is appointed the Judge who appoints the receiver shall retain super- vision over the cause, including appointment of solicitors and applications for allowanee.’’ This Rule had been submitted by the district judges to the circuit judges for approval in accordance with Supreme Court Equity Rule 79, and had been approved by the cir- cuit judges. 22 POINT V. In addition, a disregard of a rule of Court merely directory or regulating practice or assigning business as between judges, does not affect the jurisdiction of the Court itself and cannot subject the orders of the Court to collateral attack—especially where the parties to the cause have themselves waived the appli- cation of the rule. (1) A party to a cause may waive even his constitu- tional rights as to practice and procedure in the conduct of a cause. A fortiori, where disregard by both parties of a rule of practice creates at most a mere irregularity, such irregularity does not make null and void the jurisdiction of the court. Abbott v. Brown, 241 U.S. 606 (1916) ; Lively vy. Picton, 218 Fed. 401; Payne v. Garth, 285 Fed. (C. C. A., 8th) 301 (1922) ; People ex rel. Childs v. Extraord. Trial Term, 228 N. Y. 263. (2) The opinion of the Circuit Court of Appeals (R. 1029 et seq.) amply demonstrates that ‘‘Rules’’ 1l-a and 1l-a were (if valid at all) directory and their disregard was at mast no more than error. 23 POINT VI. The question as to whether the complainants would have any means of reviewing the validity or propriety of Judge Manton’s order appointing receivers is really irrelevant; but, even if this were otherwise, the com- plainants were extended by that very order an oppor- tunity to present to him the so-called jurisdictional points which they are now urging. They were thereby furnished a forum, the privileges of which they neg- lected to utilize; and any adverse determination by Judge Manton they could have presented in the Circuit Court of Appeals for review. (1) In the very order by which Judge Manton appointed temporary receivers of Interborough on August 26, 1932, and in his subsequent order on September 6, 1932, appoint- ing a temporary receiver for Manhattan, he designated September 22, 1932, as a date when any creditor of either of these defendants or any ‘‘other party in interest’? might slow cause before him ‘why the receivership should not be continued’’ (R. 184, 200). These orders were known to Johnson and Boehm before September 22, 1932, because the Johnson bill of complaint, which refers to them, and the Boehm intervention were filed prior thereto. This order in no way required the persons who re- sponded thereto on the date fixed to become parties to the action or even to intervene. It expressly empowered and invited them on special or other appearance to present any reason whatever why Judge Manton should terminate or annul the receivership. (2) There is nothing in Equity Rule 37 which would prevent an appeal by a person who so presented himself in 24 response to the invitation tendered in Judge Manton’s aforesaid orders to show cause. Courts of equity frequently permit parties to appear for the special purpose of being heard upon particular questions without becoming parties to the suit or without a general intervention under Hquity Rule 37 which clearly contemplates intervention as a party. Mitchell v. Lay, 48 Fed. (2nd) (C. C. A. 9), 79, 84, 85; Blake v. District Court, 59 Fed. (2nd) (C. C. A. 9) 78, 79; Kingsport Press, Inc. v. Brief English Systems, 54 Fed. (2nd) 497; Wood vy. Oregon Development Co., 55 Fed. 901; Christian vy. Iloe, Inc., decided by the Circuit Court of Appeals, 2nd Cireuit, February 20, 1933, but not yet reported. CONCLUSION. For the foregoing reasons the petitions for writs of certiorari should be denied. Dated New York, N. Y., March 7, 1955. Respectfully submitted, Breep, Ansorr & Morean, Counsel for Respondent, The .Amer- ican Brake Shoe and Foundry Company. Cuaries H. Turrie, Paris S. Russet, W. K. Peticrvue, Of Counsel. FILE COPY IN THE Supreme Court of the Cinited States OctosBeR TERM—1932. py AAA Nos. 711 anp 721. BENJAMIN F. JOHNSON, Petitioner, against MANHATTAN RAILWAY COMPANY, ei al., Respondents. THE AMERICAN BRAKE SHOE AND FOUNDRY COMPANY, | Respondent, against INTERBOROUGH RAPID TRANSIT COMPANY, Respondent, IN THE MATTER of The INTERBOROUGH-MANHATTAN KECEIVERSHIP PROCEEDINGS. BRIEF OF RESPONDENT THE AMERICAN BRAKE SHOE AND FOUNDRY COMPANY. Breep, AppoTtt & MorGAn, Counsel for Respondent The American Brake Shoe and Foundry Company, 15 Broad Street, New York, N. Y. ‘ CHartes H. TUTTLE, ~ Paris S. RussEL, W. K. PETIGRUE, Of Counsel. — . I acter cvmcicunegienecieneenpnkchoernntansionnsnininenites i cepemnceniibcieeni I pecrweeimcnsshontaniinhenem neni I ceric ecenintninicernicannccinnneceanennammarenennnenc Cases Crrep. Abbott v. Brown, 241 U. S. 606 (1916) _-....--..-.. Adler v. Seaman, 266 Fed. 828 (C. C. A., Sih, 1920) Ball v. United States, 140 U. S. 118 (1891)... Blake v. District Court, 59 Fed. (2nd) 78 (C. C. A., RA A eR Case v. United States, 14 Fed. (2nd) 510 (C. C. A., | ee Christian v. Hoe, Inec., 63 Fed. (2nd) 218 (C. C. A., RG in EE EE aR, ER Craig v. Hecht, 263 U. S. 255 (1923)........................... kk. A. Holmes & Co. v. U. S. Fire Insurance Co., 142 Fed. 863 (C. C., W. D. Tenn., 1906)............................ Ex parte Henry Ward, 173 U. S. 452 (1899)... Ex porte Relmar Holding Co., 61 Fed. (2nd) 941 (C. C. A., 2nd, 1932) (cert. den. ........ of the Southern District, can- not change their essential nature as rules or regulations so-called ‘‘General Rules’ affecting practice, proceedings and process in equity. This essential nature is made the more manifest by a glance at the subject-matter of those rules which this Dis- trict Court has itself classified under the heading of ‘‘ Equity Rules’? for which the concurrence of a majority of the Cir- cuit Judges has heretofore been obtained. Eps ores > 38 Thus, in Rule 4 of the Equity Rules of the Southern District of New York there is a provision that a judge who has appointed a receiver in equity shall thereafter hear all subsequent matters in that cause. Why can such a rule be an equity rule, and yet a rule which requires appli- cations for the appointment of receivers to be made before the judge holding the Motion Part, not also be an equity rule? Why is one rule a regulation of equity practice and proceeding, and the other not? So, likewise, Rule 4 of the Equity Rules of the Southern District further prescribes: ‘Petitions for the appointment of a receiver * * * and motions or petitions for orders upon merely administrative or routine matters may, in his (the judge’s) discretion, be heard by him ea parte, and except that motions or petitions as to merely routine matters, if contested, may be heard on notice in the General Motion Part, or, if uncontested, may be heard ex parte, by the judge assigned to bold that part.’’ Surely, this regulation designated by the District Court itself as an equity rule is in no different category than ‘*Rule’’ 1l-a. They both relate expressly to the same sub- ject-mai er, to wit, the identity of the judge and the identity of the p ace where an application in equity for the appoint- ment of a receiver shall be made. Furthermore, Rule 4 of the Equity Rules of the South- ern District provides: “Tf the Judge who appointed the receiver be dis- qualified in a particular matter, or if he be no longer in office or be ill, incapacitated or absent from the District, the Senior District Judge (or if he be ill, 39 incapacitated or absent from the District, the then acting Senior District Judge) shall act or designate another Judge to act in the cause temporarily or during its further progress, as occasion may re- quire.’’ (Italics ours.) By what process of casuistry can such a rule be charac- terized or classified as an equity rule, and yet ‘‘Rules’”’ 1-a and 11l-a be said not to be equity rules? (7) Judge Woolsey states in his opinion that ‘‘Rule’’ 11-a ‘‘simply points to the door of the room where applica- tions for receiverships must be made’’ (R. 714). It is submitted that the entire purpose of Equity Rule 4 of the Southern District is also simply to ‘‘point to the door”? where various applications may be made; and yet the dis- trict judges showed their recognition of it as a true rule in equity by submitting it to the circuit judges for concurrence. (8) Further, Judge Woolsey states that ‘‘Practice in equity in receivership cases only commences after the mak- ing of the order of appointment, which, in consent eases, is analogous to the issuance of process, for then only does an equity receivership based on consent begin.’? (R. 714.) (Italics ours.) We submit that in any such case both the practice and the cause begin with the filing of the bill and the securing of equity process or the voluntary appearance of the defend- ant, and that the appointment of the receiver is a pro- ceeding in the cause after its commencement. Moreover, we submit that a proceeding to obtain the appointment of receivers is a ‘‘mode of proceeding to obtain relief?’ in equity, and, therefore, squarely within the definition and precise subject matter of an equity rule as defined by See- tion 730. 40 Any appointment of receivers in equity presupposes an existing catse, for the appointment itself is merely an inter- locutory proceeding and order in a pending cause. Hence, the practice in such a cause in equity began when the cause began; and the application for receivers therein was part of the interlocutory practice in equity in that cause. In Horn v. Pere Marquette R. Co., 151 Fed. 626, the action was commenced by the filing of a bill asking for the appointment of a receiver. The defendant appeared and consented to the appointment of a receiver. At page 634 the court used the following language, which is a complete answer to Judge Woolsey’s astounding statement that in equity receivership cases ‘‘ practice only commences after’’ the appointment: ‘‘An order appointing a receiver made at cham- bers, like an order allowing an injunction or other interlocutory order, presupposes a pending case. The objection that there was no pending suit when the order in this case was made is a misconception.’’ (Italies ours.) If it be contended that “Rules” l-a and 1l-a were authorized by Section 27 of Title 28 of the United States Code, they could have no binding effect upon Judge Manton who in no way participated in their adoption. Moreover, Judge Woolsey admitted that they had not been adopted under authority of that section. Section 27 of Title 28 of the United States Code (Judi- cial Code Section 23) reads as follows: ‘‘DIsTRICT WITH MORE THAN ONE JUDGE; DIVISION oF BUSINEss. In districts having more than one dis- ili | TORCH TRC ORD SiGe ww ho 41 trict judge, the judges may agree upon the division of business and assignment of cases for trial in said district; but in case they do not so agree, the senior circuit judge of the circuit in which the district lies, shall make all necessary orders for the division of business and the assignment of cases for trial in said district.’ (1) Judge Woolsey, in his opinion, stated that it was pursuant to the power vested in the District Court by See- tion 731 (not Secticn 27) that it claimed to have made and promulgated ‘‘Rules’’ 1-a and 1ll-a (R. 713). Since he participated in the adoption of these ‘‘Rules,’’ he must be deemed to speak on this subject from personal knowledge. Judge Woolsey’s holding to this effect was foreshadowed by his statements as contained in the following colloquy which took place on the argument (Rh. 888-890). ‘“‘Mr. Tuttle: * * * I am not quite clear whether I gathered from your Honor’s remark—to take up another angle of this matter—whether I gathered from your Honor’s remark this morning that you thought these so-called Rules l-a and 11l-a were passed under authority of Section 27 relative to the division of business? ‘*The Court: Oh, not ai all.’’ ‘‘Mr. Tuttle: Well, then, I understand your Honor’s position to be that Rules 1-a and li-a are not to be supported under that particular section. ‘The Court: Under division of business, I do not think that has anything to do with rule making under the law. ‘‘Mr. Tuttle: Then I assume your Honor’s posi- tion is that the authority for them, as rules, would fall under Sections 731 and 730 of the statute deal- | cme PARAL Scr 3 42 ing with rules of practice in District Courts and the regulation of practice in District Courts by the Supreme Court. Otherwise ‘‘The Court: Yes, absolutely.’’ (2) Moreover, it is quite obvious that ‘‘Rules’”’ 1-a and 1l-a cannot, as Judge Woolsey thus conceded, be deemed authorized by Section 27. Section 27 confers no power to make permanent ‘‘Gen- eral Rules,’’ as these are called. That power is fully dealt with in Section 731; and that Section is clearly designed to be exclusive and to exhaust the subject. Section 27 deals solely with agreements between the individual judges them- selves to divide business from time to time. It would cover current arrangements among the judges as to what particular judge shall sit at a particular part of the Court at a particular time. It would not cover a permanent rule ] that business of a particular class shall be conducted at a : given part. Only three constructions of Section 27 are possible: 1. That in districts having more than one regu- larly appointed district judge, the regularly ap- pointed district judges may agree upon a division of all the business and the assignment of all the cases for trial in the district, without regard to any desig- nated judge or judges acting under sections 22 and 23 of Title 28, and that these latter judges must be bound by any division agreed to by the regularly appointed district judges. 2. That in districts having more than one regu- larly appointed district judge, the regularly ap- i pointed district judges may agree upon the division of business and assignment of cases for trial as be- tween themselves, but without any effect on the TROD SG AES 43 jurisdiction, rights, powers or duties of a designated judge or judges acting under sections 22 and 23. 3. That in districts having more that one district judge, whether by regular appointment or such desig- nation, those judges may agree upon the division of business and assignment of cases for trial. We submit that the first construction is absurd. It would result in the right of the regularly appointed district judges to strip any designated judge, whether appointed by the Chief Justice, the Circuit Justice or the Senior Circuit Judge, of all powers, although in case of designations under Section 22 the statutes specifically provide that the desig- nated judge ‘‘shall have all the powers, and rights, and perform all the duties, of a judge of the district, * * *’’ (Section 22) and be obligated ‘‘to discharge all the judicial duties for which he is so appointed * * *’’ (Section 23). In Harmon vy, United States, 43 Fed. 817 (1890), the court held in effect that the dcsignated judge had the same status as the regularly appointed judge. Certainly Section 27, which as shown above, is open to two other constructions, both more reasonable, cannot be so construed as to be inconsistent with Sections 22 and 23 and the prior sections of Title 28 of the United States Code giving powers to judges designated pursuant thereto. Cer- tainly it is not jurisdictional. The jurisdiction of the court remains the same, however the judges may agree among themselves to divide the work of the court. The jurisdic- tion of the designated circuit judge ‘‘to discharge all the judicial duties for which he is so appointed’’ remains the same, however the district judges may agree among them- selves upon a division of their respective work. 44 (3) Judge Woolsey states in his opinion: ‘‘Judge Manton’s second order of August 235, 1932, which I shall call the Pivision of Business Order, involved an attempt to get around General Rule 11-a which requires all applications for receiver- ships in equity cases to be made only to the Judge assigned to hold the Bankruptey and Motion part of the business of the Court and to no other Judge.”’ On the contrary, it was ‘‘Rule’’ 11-a itself, we respect- fully submit, which was the actual and certainly the original ‘‘attempt to get around”’ something, to-wit, to get around and circumvent the authority of the Senior Circuit Judge under sections 22 and 23 of Title 28. Judge Manton by his second order of August 25th merely registered his protest against that attempt and his determination that it was in- effective. Judge Manton’s jurisdiction was fully established by his Designation Order, That order was in itself ample founda- tion for all later interlocutory orders in the cause. Evi- dently, out of an abundance of caution, he made the Division of Business Order so that there could be no possible infer- ence that he in any way agreed to or recognized himself as bound by ‘‘Rules’’ 1-a and 11-a. 45 POINT IV. Judge Woolsey had no power to vacate orders made by Judge Manton in the Brake Shoe suit for the further reasons (1) that Judge Manton’s status in that suit was at least that of a judge de facto and his acts as such could not be reviewed in the Johnson suit or by a judge of coordinate jurisdiction, and (2) that the orders made by Judge Manton in the Brake Shoe suit were not open to collateral attack. “Rules” 1-a and 11-a, if they can have any validity at all, are merely directory. They cannot strip any judge of the authority and power conferred by statute. They cannot render Judge Manton 2 mere “usurper.” We submit that Judge Manton was, for all of the pur- poses of the Brake Shoe suit, a de jure judge; but in any event he was, for the purposes of that suit, at least a de facto judge. (1) In the Brake Shoe suit the status of Judge Manton had back of it the following predicates: (a) A statute authorizing the Senior Cireuit Judge of a Circuit to designate and assign any Cir- cuit Judge of his Cireuit to hold a District Court within his Cireuit, if the publie interest requires, and giving to a Cireuit Judge so designated ‘‘all the powers and rights’’ of a judge of the district and re- quiring him to perform all the duties of such a judge (Section 22). (b) A judge acting as a Senior Circuit Judge in the Second Judicial Circuit and duly authorized so to act. 46 (c) A duly made order of such Senior Circuit Judge containing a finding that the public interest required that Judge Manton be designated and as- signed as a Cirenit Judge to hold a District Court within the Second Cireuit and designating and as- signing Judge Manton to hold a District Court for the Southern District of New York and particularly to hear and determine all applications and proceedings in the Brake Shoe suit (the Designation Order). The application of plaintiffs in the Johnson suit for the vacation of this order was denied by the Court below for want of jurisdiction, and that portion of his order was never appealed from by the present petitioners. (d) A statute which provides that it shall be the duty of any Cirenit Judge so designated ‘‘to dis- charge all the judicial duties for which he is so ap- pointed’? (Section 23). (e) A suit (the Brake Shoe suit) over which, and over the subject matter of which, the Distriet Court for the Southern District of New York had compe- tent jurisdiction by reason of the necessary diversity of citizenship and the amount involved. Judge Wool- sey in his opinion finds this to be a fact (R. 712). (f) Parties over whom in said suit the District Court for the Southern District of New York had personal jurisdiction. Judge Woolsey found this to be the fact in his opinion (R. 712). (x) A consent by all the parties to said suit to the jurisdiction of Judge Manton in the suit. (h) Judicial action taken by Judge Manton in the Brake Shoe suit pursuant to the provisions of the Designation Order. Thus all conditions required to make Judge Manton at least a de facto judge in the Brake Shoe suit are present, 47 i. e., a duly constituted court, a duly instituted suit, juris- diction in the court over the subject matter and the parties, and the exercise therein by Judge Manton, acting and pur- porting to act as judge of the court, of judicial powers under color of the direction and authority contained in the Designation Order. (2) The status of a de facto judge cannot be attacked collaterally either in the suit in which he is acting or in any other suit. His right to hold his office can be ques- tioned only in proceedings, regularly instituted for that purpose, to which he is a party, in the form provided by law. The acts of a de facto judicial or other officer are as valid and binding in all respects as if he were a de jure officer. The officer may be ousted from holding his office and thus prevented from performing any future acts. But if he is a de facto officer, then any acts he has already per- formed cannot be assailed except for such irregularities or errors as would make those acts assailable had he been a de jure officer. In 33 Corpus Juris (p. 933) it is said: “Judge de Facto. A judge de facto is a judge de jure as to all parties except the state, and his official acts, before he is ousted from office, are bind- ing on third persons and the publie. is right to hold his office can be questioned only in proceedings, regularly instituted for that purpose, to which he is a party, in the form provided by law; it cannot be attacked in a collateral proceeding. Nor can his title be determined in an action tried before him; nor in certiorart proceedings; nor on an appeal. The rules apply, although the person acting as judg» is incap- able of holding the office, and irrespective of the BERT ba ORAS it 48 question whether he was properly elected, or whether he is holding two incompatible offices.’’ (Italics ours.) Directly in point are many authorities which are con- trolling: Ball v. United States, 140 U. S. 118 (1891). This was a writ of error from a judgment sentencing defendants to be hanged. The facts were as follows: Judge Sabin, the regular District Judge for the Eastern District of Texas, could not hold court during the year 1889, because of illness. Judge Boarman (the District Judge for the Western District of Louisiana), purporting to act under the Circuit Judge’s appointment, held the October, 1889, term of the Circuit Court at Paris, Texas. No record of his appointment appeared on the minutes of the court in the clerk’s office at Paris. The statute under which the Circuit Judge made the designation did not confer the power to designate a judge from another state im case of a vacancy. Judge Boarman also held the April, 1890, term of the same court (Judge Sabin having died in the mean- while), notwithstanding that he was not designated to hold any term in Texas in 1890. At this April term the de- fendant was convicted before Judge Boarman. This Court held that, as to the April, 1890, term, Judge Boarman was at least a judge de facto, if not de jure. As such, his acts were not open to collateral attack even in the very litigation in which his said acts were performed. This Court said (at p. 128) :* ‘We are of opinion that the irregularities alleged did not place Judge Boarman, in holding the October term, in any other position than that of a judge de * The conviction was reversed on other grounds. Pe. | 49 jure, and that as to the April term, he was judge de facto if not de jure, and his acts as such are not open to collateral attack. Norton v. i helby County, 118 U. S. 425; In re Manning, 139 U. £ . 504; Clark v. Commonwealth, 29 Penn. St. 129; Fowler v. Beebe, 9 Mass. 231; Commonwealth v. Taber, 123 Mass. 253; State v. Carroll, 38 Connecticut, 449; Keith v. State, 49 Arkansas, 439; People v. Bangs, 24 Illinois, 184.”’ McDowell v. United States, 159 U. S. 596 (1895). There Judge Seymour of the Eastern District of North Carolina was designated by the circuit judge to hold the February, 1894, term in the Western District of South Carolina, the regular judgeship in that district being vacant. He did so until, in the middle of February, the newly qualified judge for the district took over the term. The defendant who was convicted during the remainder of that term contended that the circuit judge had no power to designate Judge Sey- mour to hold the February term; that in consequence that term had never been lawfully instituted or lawfully kept alive by Judge Seymour; and that, since no special term had been called, the new judge could not lawfully hold the balance of the non-existent or lapsed February term. In overruling this contention, this Court (pp. 601-2) stated: ‘‘But whatever doubts may exist whether the order of designation by the Circuit Judge was within his power, there is another consideration which is decisive of this case. Judge Seymour must be held to have been a judge de facto, if not a judge de jure, and his actions as such, so far as they affect third persons,” are not open to question. Ball v. United *It is here to be noted that the defendant himself was con- sidered a ‘‘third person,’’ that is, even an attack by a party to the action upon the power of the de facto judge is collateral and will not be heard. x > ees es Resear ited Meee Lat OO i I ED J ~ States, 140 U. S. 118, 129; Norton .. Shelby County, 118 U. 8. 425; Hunter’s Adm’r v. Ferguson’s Adm’r, 13 Kansas 462.’’ In State ex rel. Buisson v. Lazarus, 33 La. Ann., 1425, the constitution of Louisiana established a court with a number of judges, and provided that the judge to whom the cause was assigned should alone have the power of render- ing judgment on the merits of the case except in specified contingencies. A cause not within any of the excepted con- tingencies was decided by a judge to whom it had not been assigned. It was there held that the judge exercised ‘‘if not the powers of a judge de jure, at least those of a judge de facto.’’ Luhrig Collieries Co. v. Interstate Coal & Dock Co., 287 Fed. 711 (C. C. A., 2nd, 1923), certiorari denied 262 U. S. 751. Receivers had been appointed for the defendant on a creditor’s bill. All the orders in the suit had been made by a circuit judge at a time when there was on file no desig- nation of that judge to sit in the District Court for the Southern District of New York, in which the action was brought. In dismissing an appeal from the order denying the motion to vacate these orders, the Court said, per curiam, at page 713: ‘*The interest of appellant in this litigation began with its bid; it has no other " the snit. All the orders made without designation by tnx if Judge above referred to were prior to any right on the part of appellant to be heard in this cause. There- fore it has no right to complain about orders made before its rights accrued, but in any event the orders were made by a de facto judge and cannot be assailed collaterally. Ball v. United States, 140 U. S. 118, 11 Sup. Ct. 761, 35 L. Ed. 377.’’ (Italics ours.) aaa OY Sa ee OR ee - LL OL PII LLG TOL § GB 51 (3) If an attack could not be made in the Brake Shoe suit itself, and this fact has been clearly demonstrated, it fol- lows of necessity that it cannot be made in another case (the Johnson suit). The authorities on this subject are like- wise ample. In re Manning, 139 U. S. 504 (1891). This was a writ of error to review a judgment of the Supreme Court of Wisconsin denying Manning a writ of habeas corpus to dis- charge him from a sentence of the municipal court for Ash- land County. On his behalf it was claimed that the sen- tencing judge’s appointment to the municipal court by the governor was invalid and void. In affirming a denial of the writ, this Court said (p. 507): ‘‘Tt must, therefore, be taken as conclusively set- tled that by the law of Wisconsin, at the time of the trial and sentence of the petitioner, the court in which he was tried and sentenced was a court de jure, and the judge who tried and sentenced him was at least judge de facto, and the sentence itself was valid; and there is no ground on which this court can hold that sentence, or the imprisonment under it, to be a violation of the Constitution of the United States. Norton v. Shelby County, 118 U. S. 425; In re Graham, 138 U. S. 461; In re Duncan, 139 U.S. 449.”’ This Court thus decided that habeas corpus was a col- lateral attack within the meaning of the rule that a col- lateral attack zannot be made upon the judgment or orders of a de facto judge. Ex parte Henry Ward, 173 U.S. 452 (1899). Ward was convicted before Judge Meek who had been appointed to fill an alleged vacancy caused by the death of Judge Rector. Ward contended that Judge Meek’s appointment was void, a4 — 52 because under the statute Judge Rector’s death terminated the office and left 2o vacancy, and because the Senate, which was sitting when the appointment was made, had not given its consent. In denying Ward leave to file a petition for a writ of habeas corpus, Mr. Chiet Justice Fuller, writing for the unanimous court, said at page 454: ‘“We need not, however, consider the elaborate argument of counsel, in this behalf, since we regard the well settled rule applicable here that where a court has jurisdiction of an offence, and of the ac- cused, and the proceedings are otherwise regular, a conviction is lawful although the judge holding the court may be only an officer de facto; and that the validity of the title of such judge to the office, or his right to exercise the judicial functions, cannot be determined on a writ of habeas corpus.’’ (4) The plaintiff Boehm, intervenor in the Johnson suit, endeavors to differentiate the cases above set forth on the ground, erroneous in point of fact, that in those cases the parties had consented to the jurisdiction of the particu- lar judge. But the parties to the Brake Shoe suit consented to the jurisdiction of Judge Manton, and no single objection was made by a party to that suit. Hence, as we submit, Mr. Boehm’s contention leads to the extraordinary conclusion that, as to the parties to the Brake Shoe suit who had con- sented to the jurisdiction, Judge Manton was sitting in the suit as a de facto judge, but as to the plaintiffs in the Johnson suit, he was a mere usurper. (5) Case v. United States, 14 Fed. (2d) 510, decided by the Cireuit Court of Appeals for the Eighth Circuit and CONT a ee OR 53 cited by Judge Woolsey in his opinion, is readily distin- guishable. There the Circuit Court of Appeals upset the conviction in a habeas corpus proceeding on the ground that no man could be lawfully tried criminally by a court having no jurisdiction in the territory where the offense was committed. Obviously that case in no way parallels the present. If a judge sitting in the Southern District of New York undertook to try a defendant for an offense com- mitted only in the Eastern District, his action would not merely be irregular as violative of some rule of practice or principle of procedure but would be wholly without juris- diction at all and violative of the constitution. In other words, the Case case was an instance where the Court itself was without jurisdiction, and not an instance such as the present where the Court’s jurisdiction was not in issue but merely the identity of the proper judge to hear the matter. Further reasons showing the irrelevancy of the Case case are stated in the opinion below (R. 1031). POINT V. In addition, a disregard of a rule of Court merely regulating practice or assigning business as between judges or parts of court, does not affect the jurisdic- tion of the Court itself and cannot subject the orders of the Court to collateral attack,—especially where the parties to the cause have themselves waived the application of the rule. (1) A party to a cause may waive even his constitu- tional rights as to practice and procedure in the conduct of a cause. A fortiori, where disregard by both parties of a MBB ear ete cra 54 rule of practice creates a mere irregularity, such irregu- larity does not make null and void the jurisdiction of the court. Abbott v. Brown, 241 U.S. 606 (1916). There a defend- ant in a criminal action claimed that a motion for a new trial on the ground of newly discovered evidence had been invalidly granted because of violation of a District Court rule which required that such a motion had to be made within four days after the entry of the verdict. This Court held otherwise, saying (p. 609): ‘“‘It was a mere regulation of practice and a breach of it would be, at the utmost, a mere error of procedure, not affecting the jurisdiction.’’ (Italics ours.) In Lively v. Picton, 218 Fed. 401, the Cireuit Court of Appeals said (at p. 408): ‘*The objection is also made that the common pleas court violated its local rules, which are said to require notice of application for receivership, un- less upon the filing of affidavit * * * “If, under the circumstances stated, the court disregarded its local rule by dispensing with affidavit, from the fact, as alleged, that the verification of the petition was only upon information and belief (as is permitted under sections 11351 and 11354 of the Gen- eral Code of Ohio), jurisdiction to appoint the re- cewer was not thereby lost. The dispensing with notice or affidavit on personal knowledge was matter of judicial discretion, an abuse of which would be reviewable directly but not collaterally.’’ (Italics ours.) 59 See also: Payne vs. Garth, 285 Fed. 301, 310; People ex rel. Childs v. Extraord. Trial Term, 228 N. Y. 263. This view is further supported by a series of cases in which it is held that a court may in the exercise of its discre- tion waive the application of certain rules in particular cases for the purpose of proper administration of justice. Holmes vs. Ginter Restaurant Co., 54 Fed. (2d) 876 (C. C. A., Ist, 1932) ; Southern Pacific Co. v. Hamilton, 54 Fed. 469 (C. C. A., 9th, 1893) ; Strohbar v. Dwinnell, 29 Fed. (2d) 915 (C. C. A., 5th, 1929) ; Omaha Electric Light & Power Co. v. City of Omaha, 216 Fed. 848 (C. C. A., 8th, 1914); United States v. Breitling, 20 How. 252. (2) Moreover, where there is more than one judge ina district. and any one of them can exercise jurisdiction in a particular suit but for a rule under which that suit is assigned to another judge or part, a violation of the rule iy a mere irregularity, inasmuch as the rule is merely a rule of procedure. Each judge is legally competent through inherent power to hear such suit. The violation of the rule, when waived by the parties, does not affect the juris- diction. This rule is especially applicable because by Sections 22 and 23 of Title 28 of the U. S. Code, the circuit judge designated by the Senior Circuit Judge has ‘‘all the powers Hoar aetna aah ame a EG LILI A IE EVE ALONE Se III NRA PEA IE GS ee ee and rights’’ and must ‘‘perform all the duties’’ of a judge of the district. In State ex rel. Hill v. Lichtenberg, Judge, 4 Wash. 553, it is said: ‘** * * The rules of said court in partitioning the business between the respective judges thereof should be upheld, as far as possible, in order to facili- tate the orderly and convenient discharge of the business, and we have no doubt of the court’s author- ity to classify and partition it as was done. How- ever, there can be no question, notwithstanding this, but that each judge has all the power that any other Judge of said court has to try any cause within the jurisdiction of said court, regardless of said appor- tionment.’’ (Italics ours.) In Foley v. Utterback, 196 lowa 956, the Supreme Court of Iowa said: ‘*The district court is a court of general jurisdic- tion, and the mere division of judicial duties by agreement of the judges does not in itself deny judi- cial functions to any judge of that court.’’ In White v. Superior Court of City and County of San Francisco, 110 Cal. 60, it was held that: ‘Whether sitting separately or together, the judges hold but one and the same court, and the jurisdiction they exercise in any cause is that of the court, and not the individual. The division into de- partments is purely imaginary, and for the con- veniences of business and of designation. Transfer- ring a cause for trial or disposition from one of those departments to another does not affect a change or transfer of the jurisdiction of that cause; that re- mains at all times in the court as a single entity.” LLNS ROSEN RIAL TEESE AIG LAE IIE LOLI OTD 57 This is also true, although the division of business is by statute instead of by rule. The case of State ex rel. Buisson v. Lazarus, Judge, 33 La. Annual 1425, is a case peculiarly striking in its perti- nence. There Article 130 of the Louisiana Constitution provided that a judge of the Civil District Court to whom a cause had been assigned should thereafter have ‘‘exclu- sive control of it from its inception to its final determina- tion,’’ subject only to disability through sickness or other- wise. In construing this provision, the Supreme Court of Louisiana held, to quote the headnote (p. 1426) : ‘“‘But the Constitutional direction is not one of public order, and does not strike with absolute nullity such a judgment when rendered by any other of the five judges. The parties to suit themselves may consent that the judgment be so rendered. There- fore, a judgment rendered by another judge than the one to whom the cause was assigned, in case writs of absence or other disability of the latter, may be valid, if no timely opposition or objection is made thereto.”’ The opinion in that case might well have been written in the present case. To quote (p. 1431): ‘‘The objection is aimed, not at the jurisdiction of the court as a court, but at the irregularity of the mode, or illegality of the process, by which the cause appeared before the judge and was passed upon by him. It goes to the administrative power of regula- tion exercised by the judge, in disposing of the suit.’’ In People v. Barbera, 78 Cal. App. 277, it was said: ‘** * * The trial was had in department 11 of the superior court, state of California, in and for the a 58 city and county of San Francisco, and it is con- tended that this department and the judge presiding therein are not those designated by the judges of the superior court to hear cases coming under the Juvenile Court Law, in accordance with the provi- sions of section 16 of said law. * * * ‘Tf it be true that this cause should more properly have been heard in another department of the su- perior court, the record discloses, at most, an irregu- larity. Graziani v. Denny, 174 Cal. 176, 179, 162, p. 397; Nickel v. State, 179 Cal. 126, 129, 175, p. 641. Whether sitting separately or together, the judges of the superior court hold but one and the same court, and the jurisdiction they exercise in any cause is that of the court * * *.’’ (Italics ours.) (3) Judge Woolsey in his opinion (R. 713) has referred to certain cases in which it is stated that a rule of court has the force of law. But granting this premise, the conclusion does not follow that a rule regulating practice, or directory in its nature, or assigning business as between Judges or parts of Court touches the jurisdiction of the Court itself or of the presiding Judge. Furthermore, in the cases cited by Judge Woolsey it will be found that one or the other of the parties objected to the disregard or violation of the rule. Such cases ean have no bearing upon the present instance where all parties to the Brake Shoe suit raised, and now raise, no such objection. qe 59 POINT VI. Judge Woolsey’s lack of power to make any order in the Johnson suit vacating Judge Manton’s orders in the Brake Shoe suit was not affected by the Consolida- tion Order, since even if the Consolidation Order were proper it could not result in merging the two suits into one cause. The independent and separate existence of the two suits could not be affected by consolidation. Moreover, Judge Woolsey could not do by indirec- tion what he could not do by direction. Since he had no power in the Johnson suit to vacate orders in the Brake Shoe suit, he could not clothe himself with such power by forcibly reaching over into Judge Manton’s court and possessing himself of the Brake Shoe suit by the alleged process of consolidation. Furthermore, applying Judge Woolsey’s own reasoning, his action was a violation of Equity Rule 4 of the Southern District of New York. (1) In his opinion Judge Woolsey stated that there was in his mind ‘‘a residuum of doubt’? whether so long as the Brake Shoe suit and the Jonhson suit remained separate causes an order could properly be made in the Johnson suit which would affect the receivership orders and the other orders made in the Brake Shoe suit (R. 710-711). Further in his opinion Judge Woolsey concludes that he could avoid such difficulty by consolidating the two suits (R. 710-711), and accordingly he made the Consolidation Order (R. 722-724). The consolidation by Judge Woolsey of the Brake Shoe suit and the Johnson suit, even if effective, did not accom- ai Xe soe tal he ay 60 plish a merger of the two suits. The suits remained sepa- rate, distinct, and independent suits. The consolidation could not affect the rights of the parties in either suit. Such a consclidation is merely a procedural expedient for the sake of convenience and economy. Since the suits re- mained separate and independent an attempt in one of them to attack proceedings in the other is a collateral attack. The attacks on Judge Manton’s orders were made by the complainants in the Johnson suit. The Consolida- tion Order did not make the complainants in the Johnson suit parties to the Brake Shoe suit nor to any one cause of which the Brake Shoe suit was a constituent part, and accordingly it did not give to the complainants in the John- son suit any standing to attack the orders in the Brake Shoe suit. As said below in the opinion of Circuit Judge Hand (R. 1034): ‘*Consolidation does not merge the suits; it is a mere matter of convenience in administration, to keep them in step.’’ The rule regarding the operation and effect of consoli- dation of actions in equity causes and in the Federal courts is stated as follows: ‘It is ordinarily held that the effect of a consoli- dation of suits in equity is different from the effect of a consolidation at law, and amounts practically to no more than a trial of the different suits at the same time. The cases preserve their separate iden- tity, and are to be determined exactly as if they were heard separately. The consolidation does not make the parties in one suit parties to the other, er change the issues in the respective cases, or alter the rights of the parties, which must still turn upon Adame - , he PUAN IE ERIM GA, Cate a SD “ " Se FANS 61 | the pleadings, proof and proceedings in the respec- ) tive cases. * * *”’ (1 C. J. 1137 [Actions] §353). ‘‘In the federal courts, although the statutes ex- pressly authorize them to ‘consolidate’ actions, the effect of the so-called consolidation differs from that above stated, in the case of a technical consolidation at law, and, as in the equity practice, amounts to no more than a trial of the several actions together. Under the practice in these courts each of the sev- eral actions consolidated preserves its separate identity, and while they are all tried together, each is treated as a separate action and different verdicts and judgments or decrees are rendered.”? 1 C. J. 1157 [Actions] §358). In Toledo, etc., R. R. Co. v. Continental Trust Co., 95 Fed. 497 (C. C. A. 6th, 1899) (certiorari denied 176 U. S. 219), the court, by Lurton, J., said, at page 506: ‘*Such consolidation is primarily but an expedient adopted for saving costs and delay. Each record is that of an independent suit, except in so far as the evidence in one is, by order of the court, treated as evidence in both. The consolidation does not change the rules of equity pleading, nor the rights of the parties, as those rights must still turn on the pleadings, proofs, and proceedings in their respec- tive suits. The parties mn one suit do not thereby become parties in the other, and a decree in one is not a decree in the other, unless so directed. It operates as a mere carrying on together of two separate suits supposed to involve identical issues, and is intended to expedite the hearing and diminish the expense.’’ (Italics ours.) To the same effect are: Taylor vs. Logan Trust Co., 289 Fed. (C. C. A.) 51, 53; Igyprramamene rece PE ann 62 : Vapor Car Heating Co. vs. Gold Car Heating & Inghting Co., 296 Fed. 201; E. A. Holmes & Co. v. U. S. Fire Insurance Co., 142 Fed. 863 (C. C., W. D. Tenn., 1906), at page 866; Nolte v. Hudson Nav. Co., 11 Fed. (2d) 680 (C. C. A, 2nd, 1926), at page 682; Adler v. Seaman, 266 Fed. 828 (C. C. A. 8th, 1920), at page 831; Mutual Life Insurance Co. v. Hillmon, 145 U.S. 285. (2) The orders of Judge Manton were, as we have shown in Point IV, valid whether or not Judge Manton was a de jure or de facto judge. Their validity as such was no less after than before the attempted consolidation. The ‘‘orderly procedure’? upon which Judge Woolsey so much insists seems to us, with all deference, to have been grossly disrupted by the unprecedented procedure of one district judge reaching over into the court of another judge of at least coordinate, if not superior, jurisdiction and forcibly snatching away from him, under guise of consolidation, a cause which the latter judge then had pending before hin, —particularly when this tour de force was for the avowed purpose of cloth’ ig the former judge sitting in another suit with the alleged power not otherwise possessed to vacate the orders of the latter judge in the cause then pend- ing before the latter. The whole procedure was, we respectfully submit, an effort to rise into power by pulling on one’s own boot straps; and was wholly inconsistent, since the observation of Judge Woolsey that the district judges must be ‘‘masters 63 in their own house”’ would, if sound, apply with far greater force to the right of Judge Manton, sitting as a district court, to be master in his own court. This use of power to consclidate, not for the purpose of mere judicial convenience and the saving to the litigants of time and money, but for the purpose of forcibly depriv- ing a coordinate judge of further jurisdiction over a cause sub judice before him, is novel in the extreme and provides a precedent for judicial conflict, the uses of which in prac- tice may be most destructive to the dignity and peace of the courts. (3) Furthermore, applying Judge Woolsey’s own rea- soning, his action was a violation of Equity Rule 4 of the Southern District of New York. This Rule provides, among other things: ‘‘In any suit in which a receiver is appointed the Judge who appoints the receiver shall retain super- vision over the cause, including appointment of solicitors and applications for allowance.”’ This Rule had been submitted by the district judges to the circuit judges for approval in accordance with Supreme Court Equity Rule 79, and had been approved by the cir- cuit judges. Judge Woolsey concedes that he had ‘‘a residuum of doubt’’ that in the Johnson suit, standing alone, he could make any order which would affect any of the orders made by Judge Manton in the Brake Shoe suit (R. 710-1). This doubt was surely due to the obvious considerations that those orders were not open to any such cellateral attack and were valid as the exercise of power by a judge who was at least de facto. Quite obviously, therefore, this pri . . ~ ; ~ 54 Equity Rule 4, by its very terms, deprived Judge Woolsey of power forcibly to take the Brake Shoe case away from Judge Manton who had immediately followed his two orders of August 25th by the order of August 26th appointing receivers, and who had continued his term of court for the further conduct of the cause for three years (R. 225), and who, at the time when Judge Woolsey made his order, had various matters in the Brake Shoe case sub judice before him. POINT VII. The question as to whether the petitioners would have any means of reviewing the validity or propriety of Judge Manton’s order appointing receivers is really irrelevant. But, even if this were otherwise, the peti- tioners were extended by that very order an oppor- tunity to present to him the so-called jurisdictional points which they are now urging. They were thereby furnished a forum, the privileges of which they neglected to utilize; and any adverse determination by Judge Manton they could have presented in the Circuit Court of Appeals for review. (1) We submit that we have shown in Point IV, supra, that as to third parties the orders and determinations of a de facto judge are not open to question on the ground that he is not a de jure judge. —_— Consequently, the question whether, as to past orders of Judge Manton, the complainant in the Johnson suit has in any form or by any means a remedy to review the said orders, is wholly immaterial to any issue in this action. If eh PL AE OTOL DE LET 65 the complainant desired to prevent future action by Judge Manton, believed by him to be illegal, his remedy was to apply for writs of certiorari, mandamus, prohibition or quo warranto, or possibly to appear specially or otherwise in the action and question in advance the legality of judicial acts thereafter proposed to be performed. (See Title 28, Section 377. U. 8. C. A.) In the following cases, upon application of a petitioner who was not a party to the action but who had an interest in the subject matter of the action, a writ of prohibition was granted. State v. Calhoun, 207 Mo. App. 149 (1920); Midland Inv. Corp. vs. Ballard, 101 W. Va. 591 (1926). (2) Furthermore, it must be borne in mind that in the very order by which Judge Manton appointed temporary receivers of Interborough Rapid Transit Company on Au- gust 26, 1932, and in the subsequent order on September 6, 1932, appointing a temporary receiver for Manhattan Rail- way Company, he designated September 22, 1932, as a date when any creditor of either of these defendants or any ‘other party im interest’’ might show cause before him ‘‘why the receivership should not be continued’’ (R. 184, 200). These orders were published on September 13, 1932 (R. 304), and were known to Johnson and Boehm before September 22nd, 1932, because they are referred to in the Johnson bill of complaint filed on September 21, 1932 (R. 43, 8). Thus, Judge Manton himself provided an adequate forum in which precisely the objections now made could be heard. Spero SeseRs 66 These orders in no way required the persons who re- sponded thereto on the date fixed to become parties to the action or even to intervene. It expressly empowered and invited them on special or other appearance to present any reason whatever why Judge Manton should terminate or annul the receivership. As said below in the opinion of Cireuit Judge Hand (R. 1033) : ‘“‘They (Johnson and Boehm) too wished a re- ceivership, and indeed had no objection to ‘the pro- priety of the main proceeding,’ except for the judge | who was to conduct it, and the receivers appointed. As to both, they had their opportunity to appear on the return day of the rule nisi, September twenty-second, to ask for a removal of the cause to another judge, if the rules forbade the Circuit Judge to proceed, and for the appointment of other receivers. The bill at bar was filed on the twenty-first, a week before the de- cree passed continuing the receivers pendente lite. : Nothing had happened, at least before the twenty- second, to their prejudice, and if it was wrong to pro- ; ceed in the face of the rules, the objection could then : have been raised.’’ It cannot be urged that this forum was not adequate for the reason that Judge Manton would be passing on the validity of his own judicial action. In the first place, it cannot be assumed that he would not, for that reason, give fair and full consideration to any grounds of attack which | might be urged. In the second place, the presentation to himself of such objections to his order was precisely the practice urged and upheld by Judge Lacombe under iden- tical circumstances in the New York City Railway Company case, 221 Fed. 440, 442. 67 Although the original appointments of receivers was without the giving of general notice, the temporary appoint- ments expired with the decree, making the receiverships permanent (R. 223). Thereafter the receivers held only under that decree,—a decree, as already stated, made upon full notice to all parties including even these very peti- tioners (R. 1033, 1034). (3) There is nothing in Equity Rule 37 which would prevent an appeal by a person who so presented himself in response to the invitation tendered in Judge Manton’s aforesaid orders to show cause why the receiverships should not be continued. Courts of equity frequently permit parties to appear for the special purpose of being heard upon particular ques- tions without becoming parties to the suit or without a gen- eral intervention under Equity Rule 37 which clearly con- templates intervention as a party. If Judge Manton’s decision proved adverse, Johnson and Boehm could have appealed or could have secured writs of certiorari, mandamus or prohibition as the situation might justify. Mitchell v. Lay, 48 Fed. (2nd) (C. C. A. 9), 79, 84, 85; : Blake v. District Court, 59 Fed. (2nd) (C. C. A. 9) 78, 79; Kingsport Press, Inc. v. Brief English Systems, D4 Fed. (2nd) 497; Wood v. Oregon Development Co., 55 Fed. 901; Christian v. Hoe, Inc., 63 Fed. (2nd) (C. C. A.) 218. 68 In the Blake case, supra, the District Court had granted a receivership of the Oil Well Supply Company on a bill in equity filed by a creditor and consented to by the defend- ant,—precisely as in the present case. The petitioner in the Blake case was not a party to the action but claimed to be an oil ‘‘percent-holder.’’ He sought a writ of certiorari for, review of the order appointing the receiver on the ground that such order could not be validly made without notice to oil ‘‘percent-holders’’ who were not parties. The Circuit Court of Appeals for the 9th Circuit held that the petition for a writ of certiorari was premature, saying (p. 79): ‘If petitioner feels aggrieved by the order of the District Court appointing a receiver, he should in- voke the power of that court to correct the alleged error before applying to this court for relief. See Mitchell v. Lay (C. C. A.) 48 F. (2d) 79.”’ POINT VIII. The Johnson bill supplied the District Court with no jurisdiction. The plaintiff, Johnson, in his capacity as a stockholder of the Manhattan, had no standing to institute a suit for the appointment of receivers of the Interborough. This absence of jurisdiction cannot be remedied by the intervening complaint of Lillian Boehm. (1) The Johnson suit was brought by Johnson in a de- rivative capacity as a minority stockholder of Manhattan in his own behalf and in behalf of such other stockholders of Manhattan as might join in the suit and become parties thereto (by leave of court) for the benefit of Manhattan 5-5 Rea 69 (R. 14). As regards the defendant Interborough, the only claim alleged in the suit is that of an unsecured creditor, i. e., Manhattan Railway Company. Hence, so far as the relief sought in the Johnson suit against Interborough is concerned, the plaintiff cannot in- voke the equitable jurisdiction of the Federal Court for the appointment of a receiver of the Interborough because the claim alleged is that of an unsecured creditor, and there has been no waiver from the Interborough of its defense that such creditor is without a judgment or a return of execution nulla bona, and has an adequate remedy at law. The appointment of receivers of the Interborough is the very essence of the Johnson bill so far as that corpo- ration is concerned, because there is no such thing as an action in equity merely to set aside an order granted by a coordinate judge in another suit. (2) The lack of jurisdiction in the Johnson suit could not be cured by the intervention of Lillian Boehm as a complainant therein, or by the filing of her ‘‘supplemental’’ bill of complaint, because: (a) She could only intervene as a party plaintiff in the Johnson suit in her capacity as a stockholder of Manhattan, and not as a creditor of Interborough (R. 140). (b) She is a resident of the State of New York and, therefore, in her capacity as complainant in the Johnson suit, there is no diversity of citizenship between her and the Interborough. (c) Her own ‘‘supplemental’’ bill of complaint sets forth an alleged cause of action by herself and in her own right as a creditor of Interborough.