Petition for Rehearing — Johnston v. McIntee

Noss ‘3

a * ¥ ote ® Xt $3

“2 * SE rit -;

eo Slave Ee

SO ek ae

IN THE

Supreme Court of the United States

OctosEr Term, 1949.

No. 118

CHARLES RALPH JOHNSTON,

Petitioner,

vs.

DAVID McINTEER, ete., et al.,

Respondents.

PETITION FOR REHEARING.

CuarLes RaLpo JOHNSTON,

and Hector A. Brovr.er,

Attorneys for Petitioner.

IN THE

Supreme Court of the United States

Ocroser Term, 1949.

No. 118

CHARLES RALPH JOHNSTON,

Petitioner,

vs.

DAVID McINTEE, etce., et al.,

Respondents.

PETITION FOR REHEARING.

May Ir Piease Tue Court:

Petitioner, by his attorneys, presents herewith his Peti-

tion for a rehearing of his Petition for Certiorari to the

United States Court of Appeals for the Seventh Circuit,

and says:

te La

LEER ALIA

I.

The Court of Appeals ruling deprives Petitioner of his

day in Court solely by reason of its error in interpreting

Rule 25(c) of the Federal Rules.

The sole issue on this appeal is whether petitioner is en-

titled to his day in court. The Court of Appeals ruling

denies petitioner that right. Such denial is based entirely

upon @ misinterpretation of Rule 25(c) of the Federal

Rules of Civil Procedure. This Court repeatedly has

granted certiorari when an important denial of justice has

occurred in the Courts of Appeal where the sole issue in-

volved is an interpretation of the Federal Rules of Civil

Procedure. The denial of petitioner’s day in court is an

important denial of justice, since it affects other future

litigants also.

The Cireuit Court’s misinterpretation of Rule 25(e) is

based primarily upon an improper application of this

Court’s decision in Anderson v. Yungkau, 329 U.S. 482,

which interprets Rule 25(a) exclusively, and has no applic-

ability whatever to Rule 25(c). In construing Rule 25(e),

the Cireuit Court also by judicial fiat, has injected a con-

dition into Rule 25(c) which is not contained in that Rule

by any language whatever; and which will result in a sub-

stantial denial of justice to petitioner and to other future

litigants, by depriving them of their day in court, if cer-

tiorari should not be granted by this Court.

The condition so injected into Rule 25(¢c) requires an

intervenor, in an action in the District Court involving

a res, to claim ownership of or a lien upon the entire res;

and deprives the intervenor of the right to intervene when-

ever, as in the instant case, he claims ownership of or a

lien upon only a part of the res. The Cireuit Court er-

a

=7>"

3

roneously has deprived petitioner of his day in court upon

the sole ground that he does not claim ownership of or a

lien upon the entire res, thereby injecting into Rule 25(c)

a condition which is neither directly or indirectly con-

tained in said Rule 25(c).

Respondents’ Answer (p. 4, 6) concedes that petitioner

was deprived of his day in court solely under Rule 25(a),

as interpreted by this Court in the Anderson v. Yungkau

ease. It is respondents’ argument that ‘‘since this case

had to be and was dismissed pursuant to Rule 25(a)(1)’’ in

relation to another litigant, whether petitioner was en-

titled to his day in court under Rule 25(c) is irrelevant.

The complete answer to this position is that it makes no

difference whether the case, as to a litigant other than

petitioner, was dismissible under Rule 25(a) (1), since peti-

tioner’s right to his day in court under Rule 25(c) per-

sisted and still persists.

The Court of Appeals’ denial of petitioner’s right to his

day in court ynder Rule 25(c) cannot be justified upon

the theory that the case was dismissible as to an entirely

different litigant under Rule 25(a)(1). Such dismissibility

was based upon the death of the other litigant, and the

failure (for wihch petitioner was not responsible) of the

legal successors in interest to said deceased litigant to

appear in the case within the two-year period prescribed

in Rule 25(a) cannot concern petitioner’s separate right

to his day in court under Rule 25(c).

The case was still pending when petitioner sought his

day in court under Rule 25(c); and no valid ground for

denying petitioner his day in court under Rule 25(c) ap-

pears in the Cireuit Court’s opinion, except upon the un-

tenable theory that he claimed to be an owner or a lienor of

less than the totel res involved in the litigation.

3

4 |

This Court should not permit the Federal Rules of Civil

Procedure to be so far misinterpreted and distorted as to

deprive petitioner of his day in court (1) by a misappli-

cation of this Court’s opinion in the Anderson v. Yungkau

case construing only Rule 25(a), and having no applicabil-

itu to Rule 25(¢); and (2) by the improper injection into

Rule 25(c) of a requirement that petitioner must claim to

be the owner or lienor of the entire res involved in the liti-

gation, which condition does not appear in Rule 25(e) either

in terms or by implication.

II.

The Court of Appeals ruling is in conflict with other opin-

ions of the Circuit Courts of Appeal.

Petitioner contends that his right to one-third of the

res sued for in this case was assigned to him pendente lite

on September 5, 1942 (Tr. 23), which date was ten months

after the suit was filed on November 29, 1941 (Tr. 2).

Respondents’ argument under Point I of their Answer

admits that if petitioner was a transferee pendente lite,

then the rule in Dryden v. Land Investment Co., Ine., 127

F. (2d) 586, would apply, holding that a transferee pen-

dente lite may have his day in court under Rule 25(c).

Hazeltine Corp. v. Kirkpatrick, 165 F. 2d 683, Roberts Min-

ing & Milling Co. v. Schrader, 95 F. 2d 522, and Sanders

v. Hall, 75 F. 2d 399, are to the same effect. In the latter

case, the transferee became the sole party plaintiff.

Petitioner construed the Dryden case to hold that a trans-

feree before suit may have his day in court under Rule

25(¢); but if respondents are correct and the Dryden case ;

involved a transferee pendente lite, then that case would

support petitioner’s right to nis day in court in the instant

ease, because he did not become transferee until ten months

after the suit was filed.

a

a .

It follows that respondents’ denial that there is any con-

flict between the Dryden case as they construe it and the

instant case is without merit, since in this case petitioner

is a transferee pendente lite, and should be granted his

day in court under that decision, which conflicts directly

with the Circuit Court’s decision in the instant case.

Respondents also argued that the case of Hood v. Bell,

84 F’, 2d 136, is not in conflict with the Court of Appeals’

decision in the instant case because the Hood case was

decided before the Federal Rules were adopted and did not

involve a deceased party. We have already seen that Rule

25(c) does not involve a deceased party, that being a mat-

ter of significance only under Rule 25(a). The date of the

adoption of the Federal Rules has nothing to do-with ‘ne

holding in the Hood case. The whole point of the Hood

case was that a transferee who makes his motion for sub-

stitution prior to the time an order of dismissal is entered

in the case is entitled to his day in court therein, even

though the case was subject to a possible order of dismissal

at the time the intervenor sought to intervene. It thus fol-

lows that respondents’ attempt to distinguish the Hood

case on irrelevant matters cannot meet petitioner’s correct

contention that the deprivation of his right to his day in

court in the instant case is directly contradictory to the

rule in the Hood case, in which the transferee was granted

his day in court under circumstances identical to the instant

case,

Petiticner concludes that the square conflict between the

unanimous opinion of the Fourth Cireuit Court by Judge

Parker in the Hood case and the opinion of the Seventh Cir-

cuit Court in the instant case, upon the very same issue as

to whether an intervenor shall be deprived of his day in

court if, while the case is still pending, and although sub-

ject to possible dismissal, the intervenor’s application

Heat

6

actually is made before any order of dismissal is entered,

is a conflict which justifies the granting of certiorari under

both the meaning and spirit of Rule 38(5)(b) of this Court.

CONCLUSION.

There is no more important right to be protected by the

Supreme Court than the right of every litigant, present

and prospective, to have his day in court.

Wherefore, petitioner prays that this Court may grant a

‘rehearing and reconsider its order denying certiorari

herein.

Respectfully submitted,

CuHarLEs RALPH JOHNSTON

and Hector A. Brovut.er

Attorneys for Petitioner.

Certificate.

I hereby certify that I am one of the attorneys for the

petitioner in the above entitled cause; and that I am a

member of the bar of this Court. I hereby further certify

that the foregoing Petition for Rehearing is made in good

faith; and in my opinion is well founded in point of law;

and is not filed herein for purposes of delay.

Hector A. BroviLLetr

IN THE

Supreme Court of the United States

Octosrr Term, 1949.

No. 118

CHARLES RALPH JOHNSTON,

Petitioner,

Vs.

DAVID McINTEE, etce., et al.,

\ Respondents,

PETITIONER’S BRIEF SUPPORTING PETITION

FOR REHEARING.

I.

Respondents’ brief states (p. 1-2) that ‘‘Reka Goldberg

Hofheimer (hereinafter called ‘‘plaintiff’’) filed her com-

plaint November 29, 1941 (Tr. 2),’’ and that the assign-

ment of the 500 shares of preferred stock and 1500 shares

of common stock to petitioner was made on September 25,

1942, and was therefore made pendente lite.

Respondents’ argument under Point I is that both Dry-

den v. Land Investment Co., Inc., 127 F. (2d) 586, and ‘‘the

opinion of the Court in this case’’ (p. 5) hold that a transfer

pendente lite is ‘‘a transfer within the meaning of Rule

“eA LIBAAE RSTO ELAN LEP LEIA LIBERAL EVAL ERI INO AOS i Se Er reaite Once

25(e).’’ Petitioner thoroughly agrees that a transfer

pendente lite requires a substitution under Rule 25(c).

See Hazeltine Corp. v. Kirkpatrick, 165 F, 2d 683; Roberts

Mining & Milling Co., v. Schrader, 95 F. 2d 522, and Sand-

ers v. Hall, 75 F. 2d 399, where the transferee became sole

party plaintiff.

The decision, as distinguished from the opinion, of the

United States Court of Appeals in the case at bar is there-

tore in direct conflict with both the Dryden case and the

opinion itself, for the reason that, as shown by respond-

ents’ opposing brief (p. 1-2), the assignment to petitioner

was made on September 25, 1942 (Tr. 23), which was ten

months after the suit was filed on November 29, 1941 (Tr.

2) and was therefore an assignment pendente lite insofar

us petitioner’s rights are concerned.

Thus it makes no difference it the Dryden case involved

a transferee pendente lite rather than a transferee before

suit. The truth is that Rule 25(c) contains no condition re-

quiring the party seeking to be substituted to be a trans-

feree before suit or a transferee pendente lite; and as we

read the Dryden case, the Court there so held. That hold-

ing is clearly in direct conflict with the decision (as distin-

euished from the opinion) of the United States Court of

.\ppeals in the instant case.

II.

Respondents argue (p. 5) under Point II that the case

of Hood vy. Bell, 84 F. 2d 136, is not in conflict with the

Court of Appeals’ opinion in the case at bar, because: ‘* The

Hood case was decided before the adoption of the Federal

Rules of Civil Procedure and did not involve a deceased

party.’’? These matters, however, do not go to the issue

on which petitioner cited the Hood case in his petition.

_

9

The whole point of the Hood case is that Judge Parker,

speaking for a unanimous court, squarely held that it was

reversible error for the District Court to enter an order

dismissing the case, even though such order of dismissal

as to the prior plaintiff was proper, where the transferee

had made his motion for substitution prior to the time the

order of dismissal was entered. This was precisely the

situation in the case at bar.

Respondents, in an effort to distinguish the Hood case,

argue (p. 6) that ‘‘Rule 25(c) contemplates that the original

party be living.’’

But there is no such condition in Rule 25(e).

Nor is there any provision in Rule 25(¢) which incor-

porates Rule 25(a) into Rule 25(c). The two Rules are

completely separate, as respondents correctly say (p. 6).

Rule 25 is divided into four sections headed as follows:

(a) ‘‘Death’’; (b) ‘‘Incompetency’’; (c) ‘‘Transfer of

Interest’’; and (d) ‘‘Public Officers; Death or Separation

from Office.’’

An examination of Rule 25(a) (death provision) shows

that the word ‘‘substitution’’ is there used as meaning the

substitution of a deceased party by his ‘“successors or

[legal] representatives ;’’ and the penalty clause provides

that if such ‘‘substitution’’ is not made ‘‘by the successors

or representatives of the deceased party,’’ then ‘‘the action

shall be dismissed AS TO THE DECEASED PARTY.”

(Emphasis added.) Had the Advisory Committee drafting

this Rule intended that Rule 25(c) (transfer of interest

provision) should include and apply to transferees in inter-

est of a dead party, they surely would have said so, in clear

and specific language.

In other words, it is plainly contemplated by Rule 25(a)

(death provision) that the ‘‘substitution’’ there referred to

ae

is a substitution in which the duly appointed legal repre-

sentatives of the deceased party, or his successors in in-

terest resulting from his death, shall have the right, within

two years of such party’s death, to come in and prosecute

or defend the action for the benefit of the estate or the

heirs of the deceased party. The only penalty provided in }

Rule 25(a) (death provision) is that, if this is not done

within two years, ‘‘the action shall be dismissed AS TO

THE DECEASED PARTY.’’ (Emphasis added.)

It will be particularly noticed that there is in Rule 25(a)

(death provision), which says that under such circum- )

stances, that is, the death of a party and failure to sub- :

stitute his legal representatives or heirs within two years, q

‘¢the action shall be dismissed’’, no penalty as to any party

other than the deceased party.

Petitioner’s motion for substitution, on the other hand,

was made under Rule 25(c) (transfer of interest provision),

which expressly provides that ‘‘the action may be continued

by or against the original party’’ in the event that there

shall be any voluntary ‘‘transfer of interest,’’ (as distin-

euished from an involuntary transfer resulting from death

of a party); and that in that event the transferee may be

‘‘oubstituted in the action or joined with the original

party.’’ (Emphasis added.)

Thus the word ‘‘substitution’’ has an entirely different

meaning in Rule 25(c) (transfer of interest provision),

which has no relation whatever to the death of a party,

but relates exclusively to a voluntary transfer inter vivos;

and is not the type of ‘‘substitution’’ which is contemplated

under Rule 25(a) (death provision), which relates exclu-

sively to the involuntary transfer resulting from the death

of a party. The ‘‘substitution’’ contemplated in Rule 25(c)

(transfer of interest provision) assumes that the transfer

shall he by some voluntary means, in contrast to the i-

_

11

voluntary legal transfer to a decedent’s representatives or

heirs-at-law referred to in Rule 25(a) (death provision) ;

for in Rule 25(c) it is made plain that if all of the trans-

feror’s interest has not been voluntarily transferred to the

transferee, then the transferee shall not be ‘‘substituted”’

for but shall be ‘‘joined with the original party.’’

The case of Individual Drinking Cup Co. v. Lily-Tulip

Cup Corp., 15 F. Supp. 393, clearly supports the foregoing

statements. In that case, the plaintiff corporation trans-

ferred pendente lite its interest to its transferee and then

was dissolved; such dissolution being the equivalent of the

death of an individual party litigant. It was nevertheless

held that the voluntary transferee pendente lite was en-

titled to be substituted for the plaintiff and to continue the

‘litigation. See also Irving Airchute Co. v. Switlik, 26 F.

Supp. 329, Myers v. Canton National Bank, 109 F. 2d 31,

allowing a substitution by a transferee pendente lite on

appeal to the Circuit Court of Appeals. The Drinking Cup

Co. case cites and relies upon Ross v. City of Ft. Wayne,

63 F'. 466, which summarizes many earlier cases to the same

effect. George W. Jackson, Inc. v. Friedstedt, etc., Co., 159

F. 496.

The case of Anderson v. Yungkau, 329 U. S. 482, deals

exclusively with Rule 25(a) (death provision); and has

nothing whatsoever to do with Rule 25(c) (transfer of in-

terest provision). It cannot effectively be argued, there-

fore, that this Court held in the Anderson case that Rule

25(c) (transfer of interest provision) should have incor-

porated in it by judicial fiat (for the rule actually contem-

plates no such limitation) a condition to the effect that a

transferee in interest cannot be ‘‘substitnted”’ or ‘‘joined,’’

unless the transferor is still alive (or, if a corporation, is

still undissolved) at the time when the transferee’s motion

is made, or unless the motion is made within the two-year

limitation appearing only in Rule 25(a) (death provision).

12 |

Respondent’s brief concedes (p. 6) that Rule 25(c) con-

tains no reference whatsoever to the death of a party. It

correctly says:

‘“‘The term ‘deceased party’ nowhere appears in

Rule 25(c).’’

By this concession it must also be conceded that the Ander- |

son ease has no applicability to the issue on this appeal.

III.

; The whole basis of respondents’ argument under Point

III (p. 6-7) is that: ‘‘The petitioner sought to adopt Hof- ?

heimer’s complaint in its entirety to recover the entire res,

whereas petitioner himself claims no more than one-third

thereof.’’ Respondents then argue (p. 7) that petitioner’s

eases do not hold ‘‘that an assignee of part of a res may

sue to recover the entire res.’’

These statements are without the slightest foundation

in fact. Both ‘‘Plaintiff’s Amended and Supplemented

Complaint, as Further Amended and Supplemented’’ (Tr.

24-5) and plaintiff’s affidavit in support of his motion to

be substituted (Tr. 17-24) state flatly that plaintiff is su-

ing only for his one-third of the stock originally claimed

by Reka Goldberg Hofheimer, the original plaintiff herein.

Respondent’s amendment to the complaint alleges:

‘This plaintiff [petitioner] is the assignee and own-

er of an UNDIVIDED ONE-THIRD (1/3) of fifty

(50) shares of common, and twenty (20) shares of

preferred, stock of, and other interests in, the Hump

Hair Pin Manufacturing Company, a West Virginia

corporation, and Chain Store Products Corporation,

a Delaware corporation, and their respective subsidi-

aries and affiliates, and certain claims against them,

their officers, agents, and others, all of which hereto-

fore were owned by Reka Goldberg Hofheimer, the

original Plaintiff herein’’ (Tr. 24). (Emphasis added.)

Sos. PELE SEES PIE ES

=a) ERROR aaa aie

13

Petitioner’s affidavit states that petitioner

‘tis the sole and absolute legal and equitable owner of

an UNDIVIDED ONE-THIRD (1/3) of all the afore-

said common and preferred stock, together with a like

proportion of the additional stock claimed by Plaintiff

(Reka Goldberg Hofheimer) and of all other of Plain-

tiff’s claims, as set forth in said Amended Complaint”’

(Tr. 18-19). (Emphasis added.)

The statement in respondents’ brief (p. 6-7), that peti-

tioner cannot be substituted because he claims the whole of

the stock claimed by the original plaintiff, Reka Goldberg

Hofheimer, is completely untrue.

All that petitioner claims is his one-third of the preferred

and common stock assigned to him as transferee pendente

lite, as the foregoing quotations from petitioner’s plead-

ings incontestably show. Many cases support petitioner's

right to become a party and carry on the litigation under

such circumstances. Friedman v. Harris, 158 F. 2d 187:

Kellogg v. Winchell, 273 F. 745; Woodbury v. Andrew Jer-

gens Co., 69 F, 2d 49; Patrick v. Leach, 17 F. 476; Universal

Ou Products Co. v. Standard Oil Co. of Ind., 1 F. Supp.

612; Walker v. Hartford Realization Co., 74 F. 2d 56;

Byram v. Miner, 47 F. 2d 112.

It will be noticed that none of the decisions of this Court

and the Cireuit Courts of Appeal cited in petitioner’s Peti-

tion for Certiorari (p. 7-8) are contested by respondents.

These cases show that the statements in the opinion of the

Court of Appeals in the case at bar, to the effect that peti-

tioner could not be substituted as sole plaintiff because

‘‘he is not the owner of the entire res involved (Tr. 50)”’

and because ‘‘he was not an assignee of the whole res (Tr.

50)’’, are without the slightest merit, and are in direct con-

flict with all of the cases cited on pages 7 and 8 of peti-

tioner’s Petition for Certiorari.

14

CONCLUSION.

Respondents do not deny that this Court will grant

certiorari in eases involving the true and proper construc-

tion of the Federal Rules of Civil Procedure, including

Rule 25(¢), which is the question here involved, Especially

will this Court grant certiorari where a litigant has been

deprived of his day in court upon jurisdictional matters

which do not appear in the Federal Rules.

Respondents’ brief is soley directed to an effort to show

that there is no conflict between the ‘‘opinion’’ (as disting-

uished from the ‘‘decision’’) in the case at bar, on the one

hand, and the Dryden and Hood eases, on the other hand.

But it is not necessary for petitioner to show any such

conflict, although it clearly appears, for the reasons above

stated, that such a conflict does exist.

This Court has made it plain that it will grant certiorari

whenever a proper construction of the Federal Rules of

Civil Procedure in general, and particularly Rule 25, as

in the Anderson ease, is involved. Not only is it of utmost

importance that there may be uniformity in the holdings

of the Federal Courts as to jurisdiction: but this Court’s

interpretation of the Federal Rules of Civil Procedure in

and of itself is sufficiently important to the effective opera-

tion of the Federal Rules throughout all the District Courts

of the United States to warrant granting certiorari in this

case.

Wherefore, petitioner respectfully submits that this

Court should grant a rehearing and reconsider its order

denying certiorari herein.

Respectfully submitted,

CHarLEs RatpH JOHNSTON

and Hector A. Brovt.1et,

Attorners for Petitioner.

LSE) MO LY oP ERT EES OS oS VE RRL RAPA TAR aie tegare PI EE o O ee

Supreme Court of the United States

Ocroser Term, 1949.

No. 118

CHARLES RALPH JOHNSTON,

Petitioner,

Us.

DAVID McINTEE, Erc.,

Respondents.

RESPONSE TO PETITION FOR REHEARING.

Ciaupe A. Rorn,

Harry E. Smoor,

GoTTLigsB AND SCHWARTZ,

Attorneys for The Hump Hairpin

Manufacturing Company, a cor-

poration, and Chain Store Prod-

ucts Corporation, a corporation,

respondents.

Lovis M. MantrynBanp,

Gerorce L. SIEGEL,

Arvey, Hopes & MantTynBanp,

Attorneys for David Mclntee,

Theodor Lange, Irving Richard

Green and Ruth K. Goldberg,

individually and in the capacities

sued, respondents.

THE GUNTHORP. WARREN PRINTING COMPANY, 210 WEST JACKSON, CHICAGO

enh Ae ls,

ARN ES NAR IRAE Di

ADA RSET WERT DEG:

tat

PERMA RT IIIS LB

BES

meee:

SELLER RABI RR ONS ROO Rte SMM

+ eg A RR |

IN THE

Supreme Court of the United States

Ocroser TERM, 1949.

No. 118.

CHARLES RALPH JOHNSTON,

Petitioner,

vs.

DAVID McINTEE, Erc.,

Respondents.

RESPONSE TO PETITION FOR REHEARING.

The petition for rehearing fails to ‘‘state grounds which

are confined to intervening circumstances of substantial or

controlling effect or to other substantial grounds available

to petitioner although not previously presented’’ as re-

quired by Rule 33 of this Court. Further, the certificate

of counsel supporting the petition for rehearing fails to

certify that the petition is restricted to the grounds above

specified, as required by Rule 33.

The points set forth in the petition for rehearing and

also in the petitioner’s supporting brief were made in the

petition for certiorari and in the brief supporting that

petition, and were answered by respondents in their

opposing brief.

2

For this reason the petition for rehearing should be

denied.

Respectfully submitted,

Ciaupe A. Roru,

Harry E. Smoot,

Gorruigs AND SCHWARTz,

Attorneys for The Hump Hairpin

Manufacturing Company, a cor-

poration, and Chain Store Prod-

ucts Corporation, a corporation,

respondents.

Louts M. MantynBanp,

Grorce L. Srecet,

Arvey, Hopes & MantynsBanp,

Attorneys for David Mclntee,

Theodor Lange, Irving Richard

Green and Ruth K. Goldberg,

individually and in the capacities

sued, respondents.