Record and brief — General Houses, Inc. v. Reconstruction Finance Corp.

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IN THE

Supreme Court of the United States

a) ben TER Eee.

GENERAL HOUSES, INC., a corporation,

: : ae : : ee Le titvonenr,

a VS.

RECONSTRUCTION FINANCE CORPORATION, a corporation,

MARLOCH MANUFACTURING CORPORATION, a corpora- ,

tion, THE GREENPORT BASIN “AND CONSTRUCTION—____-_—————

COMPANY, & corporation, ELIZABETH W. TULLOCH AND

CHARLES M. ROSS. as Executors and Trustees of the Estate

of Marshall E Tulloch. Deceased. and FRANKLIN G.FLOETE. .

.s Administrator ofGENERAL SERVICES. a

‘ 3 - ? in , Re spond ltt.

ta" | | :

PETITION FOR WRIT OF CERTIORARI TO THE oa

-UNITED STATES COURT OF APPEALS FOR THE

SECOND CIRCUIT. ee

iV ACE A Yn ne

¢ [Sar ssonthie is yeh bE NE OMe

( bdengwo. 3. Pliers

gos" ~ oSTate 2-020

“@

Attorne ae gee Petitioner

we Ss ee Gee ‘

‘ ARG oEs ee PAGE :

| Citations to Opinions Below oe ~

*. ; : ; ;

Stafement of the Grounds-on which the Jurisdiction of

The Questions Presented for Review cae - “eo :

“Statement of: the Case 00... ROT Voth le a

_» Reasons Relied Upon for the GriMting of the Writ 0. 10

Conclusion —............ oe OO EGE ONCE AE A IS ik 15

Se Prayer tor this Court's Writ of Certiorari: | lt

_ Argument de 17

a ]; Ts Opinion. of Court cates cial afirming

vara 2 “District Co areata. sa beigsbeumamcn dele tls Ancol tm cat 2

—~- °. Appendix IT ‘denial of mandamus by-Court of “Xppeals 22

- Appendix IIT; ‘de nial ‘of maindanitis: by Supreme € ourt

‘of the U hited States MEDEA eS YAIR IN Uinta easels eerste 24 .

Appendix Iv : Saihieenes.. of, District Court oid noe ne a

. . eS ee

Appendix V; Reorganization P Tan No, Let 953 a

~—=—Nppendix VI; Act of July 30, 1953, as amended by 3 |

Act of June 29,1954, -providing for Continpation —

a of Pending Proce edings pe eri lb oper at ONE or SOR

: al THORITIES

Cases

Brinkerhotf- Faris Trust & Sav. Co. v. Hill, 2st U.S.

Dick-v. New York Lite 8 Co, 19S. Ct 22t 0 .-

. at. wet e

: He : ee ie PAGE

General Houses, Inc. v. Franklin G. Floete, as Ad-

ministrator of General Serviees, etral, Loo Be (2d),

See ee Bia td gh inet tek site 2 mot.

. General Houses, Inc., v. The Honorable Walter Bo

Bruchhausen, Judge of the District Court for the

> Eastern. District of New York, 206 F » (2d) a hee,

General Houses, Ine. ¥. The Honorable Walter Bb.

-Bruchhausen, Nudge t. Bs. Supreme Court No. 768

wees. ¢ ........ cE We Demet Sey. SAE es ie Pr Reo Cae Be A

General Houses, Inc., v.. Franklin’ @. +oete, ‘as Ad-

ministrator of: General Services, et al. 166 Fed.

Supp. 106. ..:...:......... <otGhewen adienpacenhe erst aaa oe

General Hous¢s, Ine. v. Mar loch Manufacturing C orp i

I I oc ns as paavieeoh ath omonsndossndagsooenons ~ ©

Hemingway v. Stansell, ‘106: v S: 399-22. a 6. 9, 1, 13, i

(Srarvtes; Rttes =

Federal C onstitution cited?

Sth Amendment ..........--. -- plnamaeannces 9, 14, b 1, 16,19

| Federal Rules of Civil Divindaae cited + :

Federal Statutes cited: =. sae is

15 U.S.C.A., See. 601 ........:...--3, 6, 10, 12,13, 17-18, 25

_. 68 Stat. 320 fe POT ea eat ae Se

15 U.S.C.A., See, 603, p. 30 ../........ ea aa. aD

eee ee Ne 8

50 U.S.C.A., Sees, 1822, 1992 on eet a

Reconstruction Finance Corporation Liquidation Net

cited: : Be ott,

GERI i die ee EA AERO OD

INTHE. Kes

Supreme Court of the United States

.-, OCTOBER Tenis. 1958

° No. | ‘

| A

a : | a

GENERAL HOUSES, INC., a corporation, oe

me ote Oe | : Pet etiioner. .

- é J oe \ . ; VS. . : : . , . :

RECONSTRUCTION FINANCE CORPORATION ‘corporation,

MARLOCH MANUFACTURING aa a corpora-

tion, THE GREENPORT BASIN AND ,€ONSTRUCTION

COMPANY, a corporation, , -ELIZABETH We. TULLOCH AND.

‘| CHARLES M. ROSS, as ‘Executors and /Prustees of the Estate

of Marshall E. Tulloch, Deceased, and FRANKLIN G. FLOETE,

-. as Administrator of GENERAL’S gers

_ Respondents.

ra .

PETITION FOR WRIT me ‘CERTIORARI TO THE

UNITED STATES GOURT OF APPEALS FOR THE:

SECOND CIRCUIT: ) |

’ Petitioner, GENERAL HOUSES, INC.,. a corporation,

respe etfully prays this Court's writ of certiorari torreview

and reverse the decision of the United States Court of

Appenis for-the Second © ireuit in this case,

O-

a : : 2. o

* . d

Orr, ATIONS TO OPINIONS. BELOW.

The opinion of the U nited States ¢ ‘ourt of - -Appe sak. for

_ the Second Cireuit in this case is reported. as General

Houses, Inc:, Plaintiff-Appellant, v. Franklin G. *Floe tous

Administrator of Gent ral Service’, ctoal., Defe ndanis-. Lpe ,

- pellees, 267, F. (2d) 306.- It is reprinted in fw as Ap.

pendix | to this Petition. ee Aaa ee ce.

- Petitioner filed petitions. for a writ in the nature of’

mandamus or, in the alternative, for a writ of prohibition |

* .or certiorari, against the trial judge in. this case, the Honor-

able Walter Bruchhfusen, Judge of. the United States Dis-°

_-—trict Court for the Eastern District of New York, in both

the United States Court of A ppeals*for the Second Circuit

and in this Court. The decision.in the United States Court

_ of Appeals denying the petition in that court is reported |

as General Houses, Inc., Petitioner, v. The Honorable

Walter B. Bruchhausen, Judge of the District Court for the

Eastern District - of New. York, Respondent, 256.F. (2d) .

674. It is reprinted as as Appetidix, II to this Petition. The

mandamus proceeding | in’ this Court beats No, 768 Mise.

and is not reported. The order (without opinion) denving

the petition in this Court: is reprinted as Appendix IIT to

this Petition. -

The final ident of the United States District Court

for the Eastern District of New York from which this ap-

peal is taken is reported as General Houses, Ine. a cor:

poration, v. Franklin‘G. Floete, as Administrator of Ger,

eral Services, et al.,166 Fed. Supp. 106. Fhe opinion’ in:

that.court is printed at page. 125a of Petitioner’s Append

‘in that court. The judgment of that Court is iacsiacasias as

Appendix IV to this Petition.

A prior appeal | in this: ease to the U nited States Court

of Appeals for the Second Cireuit, which has nothing to

. as ~ a »

;: . . $ 2

a : - : o 2

° ‘ « ‘ :

ae c

/ 3

do with the issues here, .is reported us General’ Pe

Ihe. v. Murloch Maniifacturing Corp., 239 F..(2d) 510.

- This. case involves the Reg ganization. Plan No. 1 of»

1997" ‘which the Federal Congress adopted an@ made cf- *

- fective as of June 30,1957 (15 U.S.CLA., See. 601). It is

reprinted- -as Appe ndix' V to this P ctition, Poe

This case also involfes amended Section ivd of the Ke-

. construction Finance Corporation. ‘Liquidation Act © (68

Stat. 320) (15 U.S.C.A,; 1958, ‘Cumulative Annual Packet

. Parts, See. 603, p. 30) w hich the Federal Congress, adopted -

and made effective as of June 29, 1954. It is reprinted as

— VI to. —_ Petition. , as |

STATEMENT OF THE GROUNDS ON WHICH. THE

JURISDICTION OF THIS COURT IS INVOKED.

The opinion of the Court of Appesis was filed and its

_ ” judgment was rendered on June 1, 1959. No petition for _

-Trehearing..was. filed. ‘This Court has: entered an. order.

on August 19, 1959 extending the time for the filing of this

‘Petition for Certiorari to Se ‘ptember 18, 1959.

This Court’s jutindiction- Is invoked “under. Section.

1254(1) of the United States Jndicial Code (U S.C ee y 8

28, See. 1254(1)), which confers upon this Court “eats.

tion. to review decisions of the United States Courts of |

Appeals. Seas

‘THE QUESTIONS PRESENTED 1 FOR REVIEW

The questions: for review are:

(1) Was Petitioner de .prived. of its- property (its. con-

tractual rights against Reconstruction Finance Corpora.

tion. (hereinafter called “R.F.C.)) when the District

Court failed and refused to adjudicate Plaintiff's cause of

_action against R.F.C. upon the gr ‘ound that the functions

“of R.F.C. had been % abolished”’, when in fact: R. B.C - had .

neither béen ‘*dissolved *’ 1ior-‘¢ extinguished "’ as a Federal

corporation ! |

(2) Was! Petitioner deprived of its ‘tact to its sdav

in court’’ and to procedural duc procéss of law under the

Fifth Amendment to the Federal .¢ ‘gnstitution, when Peti-

tioner was deprived ‘of’ its right under Rule 33 of the Feil-

eral Rules of Civil Procedure to require R.F.C. and. Fratik-

: lin G. Floete, as Administrator.of General Services (here:

. inafter called ‘‘Floete’’), to answer Petitioner's Interroga-

tories in the-trial cpurt prior to the trial therein si that

Petitioner was. prevented from obtaining the, ev idence Cx

sential-to prove its — of action against all of the de-

‘fendants (Respondents) in this ¢ case, including both R. B.C

and paneer: St oe

STATEMENT OF THE CASE. a :

Petitioner filed this action in the United States. District

Court for the Eastern. District of New York in ¥930 against

R.F.C., a. corporation created by Act of Congress, and

_Marloelr. Manufacturi ing ¢ _—. a New York corpora- ,

tion, (and others) for dama¥ es for breach of ‘three written

contracts {one between Petitioner and R.F.C, and the other

- two between’ Petitioner. and Marloch ‘Manufacturing: Cor- |

' poration) and for inducing a breach of suth contracts. The

_ first eantract required. the mass, production in. a factory

of hoe thousand (2,000) prefabricated houses by Peti-

tioner, and guaranteed a market for ‘any unsold. houses

by R.F. C. (38a-72a).* ~The second, and third contracts, (01

‘more properly ‘sub-contracts) required “Marloch ~Manu-.

_ faeturing Corporation to make the entire 2,000 houses: for

Petitioner exactly in accordance with Petitioner's obliga- .

‘tion to R. B.C. ‘under. the first contract {75a-80a, Sta- 85a).

There Was diversity jurisdiction’ in the Fedeyal Court

as between Pétitioner and: Marloch Manufacturing Cor-

: poration and the other. Def fendants (except R.F.C.), and

there was Jurisdiction of Petitioner’ s cause of action- |

against RIF.C. by virtue of the Veterans peerage Hous-

ing Act of 1946, Act of May 22, 1946, C. 286, §s-1, 12, 60 -

Stat. $s 207, 215 (50 U.S.CLA., Sees. 1822, 1832).

Petitioner. filed’ w ritten Interrogatories: to be answered

by R.F.C. “under: Rule 33 of -the .Federal Rules, which

Interrogatories were essential for Petitioner’ s prepara-,

_tion for trial of the several causes of action’in. the Peti-—

‘tioner’s complaints ‘against R°F.C. and the other detend-

— * Figures in parentheses refer to pages in’ : Mi Mant’ s | Peti-

. Monler’s ft Apyendig filed in | the’ Court of iia

ants. These Interrogatories were never required to. be

‘ answered by .R.F.C. prior to trial (115a-116a) and there hy

, Petitioner was deprived: of its: right tits **day invcourt”

“and. td procedural due process .of Jaw under the Fifth

Amendment. ‘ |

On per 29, 1957, President Eisenhower ‘diliteed to the

Federal Congress his ‘* Reorganization Plan No. | of 1957"

- which the Congress adopted and made effective as of Jtiue

30, 1957 (Appendix V to this Petition). This Reorganiza-

tion Plan purported to ‘‘abolish’’ Reconstruction. Finance

Corporation (15 U.S.C.A., See. 601), but it did not ‘‘dis-

‘solve’’ R.F.€., there’being an important distinction between

the two (Hemingway .v. Stunsell, 106 U.S. 399). Three

years earlier, on June 29, 1954, the Cofigress had athende “d

Section 105 of the Reconstruction Ae igg Corporation

Liquidation Act (68 Stat. 320) (15 U.S.CLA., 1957, Cumuka-

tive Annual Pocket Parts, Sec. 603, p. oe to provide that

no suit then pending against R.F.C. should be abated by

reason of the dissolution of R.F.C. ( Appendix VI to thi-

—Fetition),_Htavas further provided in said: Amendment that ——

in the event R.F.C. should be: dissolved, then within 12. °

.months thereafter the court in which any suit was then

pending against R.F.C. ‘may... allow the same to be C

maintained ... against the officer or ageney of the Govern. ‘

ment performing the functions with respeet to whieh any

suit ... was commeateed:’’ -This provision of the Liquida-

tion Act is still in force: ro:

On January 6; 1958, Petitioner moved in the trial eourt

in this case. for an order to‘add'Franklin G. F eg as Ad-

ministrator of #eneral- Services, -and«the Uniféd States

of America as additional patties defendant (102a-110a).

Petitioner's posftion was that it had the constitutional -

right to keep > ‘R.F.C. in the case as a defendant because, #

ie ‘though as ans ™ a had never been ‘dissolved.’ Pet:

on re ee

« »

tioner’also’ moved the trial court to require both R. BC.

and Flocte to answer Petitioner's Inter rogatories, without

which answers Petitionér could not prepare its case for

trial (102a-103a, 1172).

On March 25, 195s, the trial Judge (Judge, Bruchhausen)

denied Petitioner’s motion to make Flocte an additional

defendant and orderéd that Floete be ‘*substituted’’ for

RPC. (lloa-116a)? At the same time Judge Bruchhausen

denied ,Petitioner’s motion to require answers to: be filed.

by both R. F.C, att Floete to Petitioner's Interrogatories,

with the result that Petitioner Was never able to get the

essential evidence to, prove Petitioner’ s Causes of action

against REA. ‘and the other defendants at a trial on the

“merits in the trial court, and was forced to vo to trial

without it. Petitioner claims that it was the reby deprived

of its right to procedural due process of lew under the’

Fifth Amendment. ree

Plaintiff there cupon-promptlytiled-ainandatius proceed=

ing in the United States Court of Appeals for the Second

Cireuit on April -f, 1958, asserting its constitutional rizhts

and asking for.the vacating of the order of March 20, 1958

(a) refusing to add Floete as an additional Wefendant and.

. (b) refusing to order -both R.F.C. and Floete to answer .

Petitioner ® Interrogatories before placing the case. on

trial. The United States Court of Appeals for the Second

Circuit denied this mandamus petition on April 28, 195s,

upon the express eround that Petitioner could have. these

matters reviewed by the present direet appeal (General

Hoes; Ine. v. Bruchhausen, 256°F. (2d) 674) (Appendix

IT to this Petition). jee

_- Petitioner then filed another mandamus proceeding in

‘. this Court as General Houses, Tne. ve Bruchhiusen, No.

“68 Mise., asking for the same relief. This petition was

- denied by. this Court ow June 23, 1958, without opinion °

(Appendix Ill to this Petition). ee :

8. oe .

~ On May 20, 1958, while Petitioner's application for »

-writ of. mandamus was still pending undetermined in this

Court, the trial judge forced Petitioner to go to trial with-

out requiring ¢ither R.E.C or Flocte to answer _Peti-.

tioner’s Interrogatories, orcs preventing © Petitioner

from preparing its case for trial against all of the de-

fendants. In other words, thesforegoimg procedures in.

the trial court effectively deprived Petitioner of its ‘day

in court’? by preventing Petitioner from exercising its.

peremptory right under Federal Rule 33 to proeure es.

sential evidence to prove its case against all of the defend. —

ants, in the form of: the answers of R. oC. and Floete to

Petitioner’s Interrogatories.

. Floete never filed any answer - ‘the Petitioner's Com.

plaint or any other pleading in the case, either before or

after being purportedly ‘substituted’? for R.F.C. ‘as a

defendant. Nevertheless, his attorney appeared and par-

ticipated in the trial. However, R.F.C., which had previ

-ously answered Petitioner's Chnabeied, neither: appeared |

nor participated, nor made any defense, at the trial.

«The trial judge entered a tinal judgment on October 2

1958 against Ietitioner and. in favor of Floete (and. the

other defendants) (Appendix -IV ito this Petition), but

‘entered no final juadqment either in: favor of or against

R.F.C.) Thus Petitioner's cause of action agamst. RLELC.

has never beer adjudicated either against or in favor of

R.F.C

The final judgment of the trial court was affirmed by the

United States Court of Appeals for the Second Cireuit on

June 1, 1959, in an opiniow which is reprinted in full a-

Appendix 1 to this Petition and. which is reported a;

General Houses, Inc. vo Franklin G. Floete, as Administra

tor of General Services, et al., 267 FB. (2d) 306.

Petitioner expressly raised and relied upon its constitu:

tional right to keep R.F.C. as a defendant in fe case,

. e

ei,

and to have e Petitioner’ s cause of action against RLFC.

vadjudieated in this action, under Point IV of Petitioner’ =

Brief (p. 40-1) filed in the€ ourt of Appeals. In support

of Petitioner's Point IV, under the heading **The Trial

_dudge’s Orders: Substituting Flocte Por ‘R.F.C. As De-

fendant Were Brroneous. And Should Be Reversed Ou

This Appeal”’, Petitioner relied upon the, same grounds for

its position as were previously set forth in its. mandamus

petition filed in the Court of Appeals on April 1, 7mm,

in which Petitioner eited Hemingway v. Stansell, 106 US

3899, and other Federal Canes. :

: Petitiquer also expre sssly raised ow relied upon its con-

stitutional right to its ‘‘day in court’’ and its right to

require R.F.C. and Floete to answer Petitioner’s Interroga-

~ tories as a part of Petitioner's right to due process of law

under the Fifth Amendment in Point V of its Brief (p.

— 42- 4) filed in the Court of Appeals. U ew te heading *

“The Judgment Appealed From Should Be Revprsed -

cause Plaintit? Was Deprived Of Its Right To Haye R.F.«

. and Flocte Answer Plaintiff's Inte ‘rrogatories”’, ’ etitioner

relied upon the mandatory latiguage of Rule 33. ofthe Fed-

eral Rules requiring that Pkiintiff’s Interrogatories ‘ ‘shall

be answered expressly and fully in writing under oath’.

_ Petitioner there coiitended that the refusal of the trial -

judge to contitue the trial of the case, and to. require

R.F.C. and Floete ty answer Petitioner's Inter rogatories

before Petitioner should be foreed to ‘trial, deprived Peti-

tioner of its right to prepare‘its ease for trial and thereby

effectively deprived Plaintiff of its ‘*day inXeourt’’ and its —

right to procedural due. process of law in violation of the.

ag Amendment, citing Brinkerhoff-Faris Trust & Sav.

Hill, 281 U.S. 673, and othet Federal cases.

It thus appears that Petitioner expressly raised and r¢-

‘lied upon its samé constitutional rights in both of the |

" mandamus -_proecedings, and in the Court of Appeals on

the direct appeal thereto in this case, upon which Poti-

tioner now relies in this Petition.

10,

REASONS RELIED UPON FOR THE GRANTING

OF THE WRIT.

PETITIONER WAS DEPRIVED OF ITS CONSTITU-

TIONAL RIGHT TO KEEP R.F.C. AS A DEFENDANT :

IN THE CASE IN THE TRIAL COURT, AND TO

" HAVE THE TRIAL COURT ADJUDICATE PETI-

TIONER’S. CAUSE ‘OF. ACTION AGAINST R.F.C.

THEREIN.

Petitioner in its Complaint showed that it is the owner

of an extremely valuable property right consisting of its

claim against R.F.C. for $6,200,000 as damages ° for

breaches by R.F.C. of its written contract .with Petitioner

"dated. February 7, 1947. (4a-Sfa). This-valuable- property -_

- right is plainly such that Petitioner may not lawfully be

deprived thereof without due process of law, in view of

the Fifth Amendment ‘to the Federal Constitution.

The order of March 25, 1958 entered by the trial judge.

(Bruchhausen), insofar as it ‘‘substituted’’ Franklin G.

Floete, as’ Administrator of General: Services, ‘in place

-_ of defendant Reconstruction-Finance Corporation’ * (11a).

effectively terminated and dismissed and thereby. destroyed

Petitioner’s valuable property right to sue R.FC. for dam.

ages for: R.F.C.’s breach of said written contract dated

February 7, 1947, in violation of the Fifth Amendment.

The fact that the Federal Congress adopted President,

FKisenhower's so-called ‘‘Reorganization Plan No. 1. of

1957"? on June 30, 1957, in which it is provided that R.F.C:

he thereby {‘abolished’? (15 U.S.C.A., See. 601), did- not

thereby “dissolve?” R, F.C. or terminate or extinguish its

corporate existence ( Appendix V to this Petition).

This crucial distinetion between ‘the abolishime nt oof

RoC. on the onte haned, and its dissolution or extinetion;

on the other hand, w as. consides ‘ed and relied upon. by this

Court in //e ming au. Stansell, 106 U.S, BO,

In the Hemingway cause; In an unanimous opinion by

Judge Gray, this Court expressly held that a state statute

purportedly : abolishing” A municipal (state) ele onbutinn

“did not dissolve or ‘extinguish the corporation.’’ Accord-

ingly, this Court held that the plaintiffs in the Heming-

¢: Way Cast he right to continue to sue the original

municipal corporation, whieh -had heen abolished but had

not been dissolved or extinguished. P

The effect yl the Me ming ay case, When applied: to the

ease at bar, is that, even ‘thougli the, so-called * Reorgani-

zation Parr No. 1 of Tye purportedly ‘abolished’? the-

functions of RFC. as a Fede ral government Bop ckaeoneng

nevertheless it did not thereby “dissolve , * terminate

‘or extinguish RLFC. | as a governme ntal sistcgeiioe

But even if RUE.C. had been “dissolved”, tix distini-

euishvd from ‘its ‘+ functions’ being “abolished”, never-

theless Petitionér was entitled lo cpntinue to litigate its

Cause of action against R. BAC. as a defendant in this case,

in view of Section 105 of the Reconstruction Finanee Cor-

Poxation Liquidation Act, as amended on June 29, 1954

(68 Stat. 320) (15t U.S.C.A. | 1957, Cumulative Annual. —

i a,

_ Pocket’ Parts, See. 603, p. 30), which expressly provides —

that no suit, aétion or other proceeding lawfully com. -

menced against REBP.O. shall abate by reason 6f the dis.

~olution of the corporation’. (Appendix VI to this Peti-

| tion).

Moreover, it was further prov ided in the amended See-

tion 105 that in the event REC. should he dissolved, then

Within 12 months the reatter the court in whic h any suit

/ nc

was then pending dzainst R-P.C. ‘tniay’* allow said: suit

to be maintained against the officer or agency of the CGiov-

ernment ‘performing the functions with respect to which,

‘any such suit was commenced. Since RBLCL was) nef

dissolved, but its functions Were merely, q tbolished™, the

trial court in this case did not have any ee to substitute

Floete for R.F.C. under: amended Section 105 of the e-

construction Finance Corporation Liquidation Act.

As indicated above, the Court of Appeals denied Peti-

tioner’s mandamus petition secking to require Judge

Bruchhausen to vaeate his order of Mareh ti, 1s, pur-

* po.ting ‘to substitute Floete for RELC., upon the express

_ ground that-Petitionér could have its right to keep REPL

asa defendant in the case revie wed by this direct appeal,

However, the Court of Appeals in its decision in this:case

(p. 22 of Appendix T below). ¢in affirming the jadgmes

of the trial court, merely noted that: se ia

~*BPranklin Go Floetes as Administrator of Genera!

“Setvices, lias been substituted for the Defeidant

naa.” a ei sg techy A

The Court of Appeals, therefore, did not give considera: .

tion to and pass upon Petitioner's right to keep RBC. in

the case and to require the trial judge to adjudicate: Pet.

tioner’s cause of action against R. Me

This Court i in denying Le titioner's Tight to amandanus

writ, which petition Was based tipon substantially the same

grounds as Petitioner's dike petition in the Court of Ap-

peals, wrote no opinion. and gave no grounds for its de-

nial-of the petition (Appendix IIL to this Petition), How

eves, it may ‘safely: be assumed that this Court's ground

‘*was the same as that of the Court of Appeals, e.. that

Petitioner was not entitled to a writ of mandamus: because

Petitioner's right to an adjudication“of its cause of action

against R.F.€, could be reviewed by the Court of Appeals,

and by this Codrt by, the issuance of its writ of certiorari,

as prayed in this Petition.

Petitioner's position, therefore, is that it has been de-

prived of its right to keep RUF.G. as a defendant in this

ease; that Petitioner'’s Complaint shows that Petitioner is

entitled fo a valuable property right consisting of its claim

against RORLC. arising by reason of R.F.Co% breach of its

written contract: with Petitioner ; that this is a property

right of which Petitioner may not Jawfally be deprived —

— under the Fifth Amendment without due- protess of law;

and that Petitioner has not had its **day in. count” and due

process of Jaye to establish its eanse of action against

RoRLCL by reason of the refusal hy hoth the Arial court and -

the Court of Appeals to adjueicate Petitioner’ x said cause

- oF action, apparently both courts relving upon the er-

reneous theory that RLFC. was abefished by the adoption

‘hy the Padleral Congress of ‘Reorganization Plan No. 1 of

INT". despite the tact that this Reorganization Plan, al-

thongh it purported to abolish RF.C., did not dissolve or

extinguish RBC. this being the crucial distinetion made

by this Court in Mencdinqueay v. Stansell, 106 U.S..399,

PETITIONER WAS DEPRIVED OF ITS CONSTITU.

‘TIONAL RIGHT TO HAVE R:F.C. AND FLOETE

ANSWER PLAINTIFF'S INTERROGATORIES PUR.

SUANT TO RULE 33 OF THE FEDERAL RULES.

Rule 33 of. the Federal feles’i is mondaters in language.

It pe rmits any party to serve written inter rogatories upon

any adverse party in order to prepare for the trial of the:

case, Rule 33 expressly provides that. ;

“The interrogatories shall be ams red separately a

and fully: in writing under oath.’ * (Italies added.)

The trial judge in his order of March 25, 1958 denied —

Petitioner’ s motion for an ‘adjournme ‘nt of the trial of this -

case unless and until RUF.C. and F locte should first answer .

certain Interrogatories theretofore propounded by Pe.

fifioner (15a), and thereafter compelled Petitioner to go

to trial without this crucial evidence, thereby depriving

Petitioner of its right to prepare its case for trial by pro-

-euring- R.F.C.’s.and Floete’s answers to Petitioner's Inter-

_ rogatories. : | | ’

Petitioner’s position is that it was thereby deprived of

its “day ii court’ as a part of its. right to procedural due

process of law in violatiq@ot the Fifth” Ame ndment to the

Federal Constitution.” 2

This Court will notice — the opinion of the Court-of”

. Appeals (Appeidix fT, pp. 21-22) that the Court of Appeal-

expressly affirmed the trial court upon the ground that the

trial judge, -having: tried the ease without ir jery, nade de-

tailed findings of fact, which findings the ourt of Appeals

held to be *‘clearly correct’’

This finding was based upon the record presented to the

Court of Appeals containing the: evidence in the,tr ‘ial court,

which record naturally contained ‘none of the crucial facts

which: Petitioner would have been i a position to offer in

evidence in the trial court, ‘and thereafter to, include. in

the record on appeal, if Petitioner has not been deprived

of but had heen granted its right to require R:F.C. and

Floete to answer Petitioner's Interrogatories under Rule

33.

Expresse ad in other words, no matter how justitfed either

the trial court or the Court of Appeals may ‘have been in

holding that, under the limited evidence in this ease which-

‘appears in the record, the final judgment against Peti-

tioner and in favor of Floete and the other defendants

(other than RLFC.) was corrects nevertheless Petitioner

has been deprived of its right to procedural due process of

law because it was prevented by order of the trial judge

15 est ee ee

’

——een

from obtaining under Rule 33 the crucial evidence neces-

sary to support ts causes of action aginst R. F.C.-and the

other, dete ndants herein, * Bi A

Petitioner’ is not here nape thy correctness of the

trial judge’s findings: of faet, o the Court of Appeals’

holding that such findings were tbe correct”’, both of

which were exclusively based upon the evidence which was

offered’ in the trial court. . What Petitioner is complain-

ing of in this Petition is not: only that Petitioner has been

deprived of its. constitutional right to have R.F.C. kept |

in the case so:that Petitioner’s cause of action ‘against -

a F. C. may be Adjudicated therein, but also that the trial

court failed and refused to require R.F.C. and Floete to

answer Petitioner's Interrogatories, so that Plaintiff was

unable to prove. the facts - ‘necessary to support its causes

of action against R. F.C. and the other’ defendants,

In this case Petitioner has thu® been deprived. of its”

substantial property right. by reason of R.F:C.’s breach of

its written contract with Petitioner without due process\

of flaw, as well as of its right to procediaral due process

cof iaw by reason of its inability to obtain essential evidence

to sup port its causes of action in accordance with Rule 33

of the Fede ral Rules, beth in defiance, of the provisions of

the Fifth Amendment to the Federal ( ‘onstitution.

Only hy this Court's issuance of .its writ of certiorari

porsuant to this Petition can this result be prevented. :

‘\___ GONCLUSION.

Petitioner recognizes that the granting of this Petition

for Certiorari ls discretionary with the Court, and that >

such w rit will not ordinarily che granted merely because

of error by the District Court or the Court of Appeals

unless such error contravenes fundamental ’ederal law.

’ In the case at bar, the v iolation of Fe dg ‘al law is so plain:

sn undeniable that Petitioner submits that it has been

deprived of its fundame ntal rights under the Ly ifth Amend.

ment to-the Federal Conetieen.

PRAYER FOR THIS couRT’ s WRIT OF ‘CERTIORARI )

For reasons: apparent from the record and stated in

this Petition for Certiorari, Petitioner respectfully prays

that this Court issue its writ of ¢ertiorari to’ review. and

reverse the judgment of the U nited States Court of Appeals

for the Second Circuit in this case, with directions to-that

Court to reverse the judzment ofthe District Court and /

to direct the District Court (a) to vacate the order sub,

stituting Franklin G, Floete, ax Administrator of General —

Services, for R.F.C., and denying Petitioner's motion 40

require’ R.F.C. and Floete to answer Petitioner's Inter-

rogatories under Federal Rule 33, and thereupon (b) to

conduct a trial de noro in this case in.the Dis trict Court

upon the merits of Petitioner's causes of action against

R.F.C. = the other defendants. @

28 Respectfully submitted,

Horace A. Younes, |

Attorney. for General Houses, Inc.,

a corporation, s

; Petitioner..

Horace A. Youne

435 South La Salle St... - a

Chicago 3, Illinois

Attorney-tor Gene ral House &,

_Tne., a corporation,

Petitioner.

ARGUMENT.

This is not a’edse similar to the recent decision of this

Court in Dick ve New York Life Insurance Co” 79S. Ct.

W21, in which?’ Mr. Justice Frankfurter 's dissenting opinion

objects to this Court's granting certiorari ‘to examine

records for sufficiency of evidence’ ' following * a trial: on

the merits in the trial court.

The sole questions raisiid on this appeal are “constitu:

tional que sfions., They are, first, whether Petitioner hav:

ing made a contract with R.F.C. atid having sued R.F.C

-for its breach. is entitled to kee ‘p RFC. as a defendant in

. the case, to compel, R-F.C. as a defendant to answer Peti-

tidner’s TInterrogatories under Rule 33. and to have an

adjudication of its claim against R.F.C.. because of the

fact that, although the functions of R.F.C. have been abol-

ished, R-F.C. has never been dissolved or extinguished as-

a corporation, cither hy ‘Reorganization’ Plan No: 1 of

1957," or otherwise. ee |

In views of the decision of this Court in Hemingway v.

Stansell, 106 U.S..399, Petitioner submits that the fact that

the functions of R.F.C. may have been abolished did not

have. the effect of either dissplving or terminating R.F.C.

as a govermmental corporation, and. therefore Petitioner

is entitled. to have discovery from R.F.C. under Rule 33

‘and ‘to have its cause of action adjudicated in the trial

court in this case, and to have R.F.C. kept as a defendaut

-in the case for that purpose. )

‘Tn caustruing ‘Reorganization. Plan No. 1 of 1057S, i it

is obvious that if w as wot intended to dissclve’ RFC aad: ;

was not intended t6 pe rmit.a court to elimindte RURLC. asia

defe ndaut in pe nding: litigation aqgamst R. F. (., because the

ef?

‘18

abe Mt: nee

amended Section. 105 of the Reconstruction Finance Cor

poration Liquidation Act expressly provides that

‘No suit, action or other: proceeding lawfuliy Col.

menced ‘by or.against [| R.F.C.] shall abate | by reason

of the dissolution of the [RBLC.] ¢ ‘orporation, a au

pendix «VI, p. 30). .

If the ‘*Reorgani tion Plan No. 1 of 1997” heal dissole dy

R.F°C. and had ated pending suits againat it akin

Petitioner’s suit in this case), such 1 an“would have been

“unconstitutional as _a_ deprivation of ‘the property rights

of the R.F.C.’ Ss creditors (such as P etitioner) without due

process of law. It,was no doubt for these two‘ reasops that

the ‘Reorganization Plan’’ merely ‘‘abolished’’ R.F.C.'s

functions and ‘‘transferred”’ them to Flocte ( Agdonndix

V, p. 25), but did not dissolve R.F.C. 4 i,

In the second place, Petitioner's s position is that the. evi- |

dence making up the record in this case did hot include

the crucial evidence which Petitioner, was entitled to. offer .

at the trial of the action, because the trial court refiised

_ to require either R. F:C..or Floete to answer Petitioner's —

Interrogatories undér Federal Rule 33 preparatory fo trial.

Petitioner’s right to have its Interrogatories answered

_ either by R.F.C. or by Flocte is a mandatory’ right ginder *

Rule 33 of the Federal Rules. Nothing can be clearer than

the fact that Petitioner has been deprived. of its right to

procedural due process of law by the refusal of the trial

judge to require either R.E.C. or Floete to answer Peti-

tioner’s Interrogatories, to the end that: Petitioner might .

‘obtain the necessary evidence to sustain its causes of action

against R.F.C. and the other defendants..

In other words, evén if the present decision on the. pres-

ent record should be correct (whith Petitioner denies, but”

does -not raise here), nevertheless Pétitioner’s position is,

‘ 19 4

that it has been deprived. of its cqustitutional right to its’

~“day in court’? and thereby! has been deprived. of its right:

_tg procedural’ due: process of law under the Fifth Anend-

ment, because Petitioner ha is been prevented from obtain- |

Be: -ing-the evidence essential | ko proving its case at the trial

of this action from either: R.F.C. or Flocte, under Rule 33.

It is'a fundamental principle of constitutional law that

if a party te action cannot obtain discovery in accord:

ance with Ph, ee Rules, such. ds Rule 33, it has there:

_ by been deprived of procedural die process of law in vio-

‘dation of the Fifth Amendment.

It.is respectfully submitted that: this Court should grant

the present. t ’etition for the reasons set forth in the Peti-

tion and i in the Argument above... =. °

‘ | — > Respeetfully subinitied,

Horace A. Youn

Attorney for, eheiert Housed vie a

corporation, ene” Fd

| PRuitioner!

“Horave A. Youne ‘: ee

.135 South La Salle St. ieee re aes

Chicago .3, Llinois” js Re thal

Attorney for General ——

Inc., a corporation.

* “>

_ APPENDIX I.

“GENERAL HOUSES, INC. Plaintif’-Nppellant,

: ve

I . ANKL IN G. FLOETE,: «As- En ee oe of General’

ke et al., Defendants-A ppellees.

No. 311, Docket 25487 | bs) .

Uuited States Court of Appeals

on Second Circuit

Argued May 15, 1999.

Decided June 1, 1959.

Before Sw AN, Hincks, aid Moone, Cireuit Judges.

Per L URIAM,

This is an detion for alli ‘eed breach of. two contracts,

one between plaintiff and Reconstruction Fiance C ‘orpora-

tion, the other between plaintitf and Marloc ‘+ Manufactur- |

ing Corporation. Karly in 1947 plaintiff, without any pro-

‘duction facilities, agreed with RFC to produce 2,000 pre-

fabri@ated houses. before the end of the year, promising.

to use.its best efforts. to sell them. RFC agreed to pay a

stipulated sum for each lrouse ‘plaintiff should not be able

to sell. Plaintitf then contracted. with Marloch Manufac-

‘turing. Corporation to: produce the 2,000 houses during

1947, and Marloch proceeded to carry out its obligations.

In August Marloch refused to continue’ bec eause of plain-

tif’s failure to perform, only one house having been sold —

hy plaintift.. The damages claimed by plaintiff are more

than six million dollars. «Federal jurisdiction over the ~

“defeftlants other than REC rests on dive sity of citizen:

co) a ne : aang Se

- 22 wis

ship. Franklin G. -Flocte, as Administrator’of General

Services, has been substituted for the defendant RFC. The:

case was tried without a jury. by Chief Judge Byers who

wrote a lengthy opinion and made detailed findings, of fact.

It is reported in D.C., 166 FP. Supp. 106. Far, from regard-

ing his findings as clearly erroneous, we think them wlearl

correct. The appeal, as well jas the- alleged causes of ac-

tion, appears to be utterly lackipy: iti merit. They deserv

no further discussion. Judgment affirmed.’’

APPENDIX II. | -

“GENERAL HOUSES, INC., Petitioner,

-The Honorable WALTER BRUCHHAUSEN, Judge ot

the District Court for the Eastern District of New York.

\ Respondent. | | .

Docket 25109

| United States Court of Appeals

® © + * Seeond Circuit. .

Argued April 7, 1958. 3

Decided April 28, 1958. .

*~ Before Sway, HixcKs and Moore, Circuit -hudges.

“Per CuRIAM. 7 a

The petitioner secks a writ of mandamus to direct vaca-

tion of an order made by .ludge Bruchhausen in an action

pending in the United States District Court for thé East. .

ern District of New York, in which the petitioner is plain-

- tiff. The action is for breach of contract and was:com-

menced. in 1950 against Reconstruction Finanee Corpora-

tion as the primary defendant: In. February 1958, when

the ease was on the Civil Non-Jury Calendar and about to |

he reached for trial. the plaintgff moved to add as additional

parties defendant, the United States and Franklin @.

93. t

Hloete, is Administrator of General Services, and for ati:

adjournment of the trial until all original defendants and

such additional defendants shall have answered interroga-

tories previously propounded by plaintiff to the original

defendants. Judge Bruchhausen: heard the motion and en-

tered an order denying it ‘in all respects ¢ xcept that. Frank.

lin Ge Floete as Adntinistrator of Publie Services may be

Sand hereby is. substituted in place of defendant Recon.

struction Finance Corporation pursuant to Regrganization

Plan 1 of 1957." This is the order whic h the petitioner

sioks taggave re ‘viewed under the ‘ All Writs’ section of

the Judici: al Code,-28 U.S.C.A. $ 1651.

With: respect to interrogatoriés and refusal to postpone

trial until they were answered, thie order under attack was

plainly intetlocutory. The petitioner’s complaint is that

the decision should have been different: but it is too well

settled to- require the citation of authorities that manda-

istrator of General Services in: place of the

mus cannot be uxed to coutrol. the lower-court's decision in

interlocutory matters Which ‘an be reviewed on appeal

from the final judgment, exce ‘pt under ‘extraordinary’ cir.

cumstances which are not present here, .

With respect to so nfuch of the order as oe ey to add

the United States as a party and substituted|the Adimin-

\ :

‘Reeonstrue-

tion Finanee Corpotation the remedy of. mandamus. is

also unavailabte. The All Writs statute * is to -be used

only in exceptional: cases where abuse of diseretion or

usurpation of judicial power is ‘*clear and indisputable. "* *

Here’ the petitioner's right is far from ‘clear and in=

disputable.’ *". |

i APPENDIX III. |

SUPREME-COURT OF THE UNITED STATES

“RE: GENERAL HOUSES'v. BRUCHHAUSEN,

-. NO. 768 Mise., Oct. Terni 1957:

‘The motion for leave to file petition for writ of man.

damus or, in thé alternative, for writ of: prohibition or

-certiorari, is denied.’ ”’

| APPENDIX IV.

“DISTRICT COURT OF THE UNITED STATES |

FOR THE BasTers District or New York

Civil Action No. 10994

. GENERAL HOUSES, INC, a corporation, Plaintiff

Appellant, ‘. En ees

¥. ;

RECONSTRU C TION FINANC b CORPORAT 10N, a cor-

> poration, M ARLOCH MANUFACTURING ¢ ‘ORPORA.

TION, a corporation, THE ‘GREEX PORT BASIN AND

CONSTRUCTION: COMPANY, a corporation, ELIZA.

BETH W. TULLOCH and CHARLES M. ROSS, ay

Executors and Trustees of the Estatg of Marshall F.

Tulloch, Deceased, and Franklin G. Floéte, as Adminis:

‘trator of General Services, Defendants-A ppellees. 7

JUDGMENT.

At Brooklyn, New York, in said district on October

3, 1958. ;

The issues in the above tilde de action having duly come

~ on to be heard before the, Honerable Mortimer W. Byvr-

without a jury at a Trial Termpot this. Court, held in, the -

8 =“

_ United States Court House, 271) W: ashington Street;

Borough of Brooklyn, City and State of New York,‘on the

20th, 21st, 22nd, 23rd, 26th, 27th and 28th days of May,

1998, and the plaintiff liaving appeared therein by Bokat

& Bokat, Edmund W. Bokat, Esy., of counsel, and de fend-_

-ant Franklin G. F ‘how ‘te, as Administrator of General Serv-

ices by Charles R. L. Hemme rsley, I sq. and the ‘defendants

Marloe ‘h Manufacturing Corporation, The Greenport Basin

and Construction Company, Elizabeth W. Tulloch’ and

Charles M. Ross, by Donovan, Leisure, Ne wton & Irvine,

Esqs.,. Walter N,. Mansfield: and Helmut Furth, Esqs., of

counsel, and the issues having’ been duly tried and the |

Court having heard.the allegations and proots of the par-

ties, and after due deliberation having been had thereon:

and the Court having duly made and filed i its decision on

“September 19, 1958; it is

Ordered, Adjudged ‘and Deereed, that dtocdant and

each of them ‘is hereby awarded judgment on the merits

against the plaintiff as to each and all of the so-called

counts in the. complaint, and that the defendants herein

recover from plaintiff their respective ‘costs in this action.

Mortimer Byers |

: : U.S.D.J.’’

“* % ae ; ‘

“REORGANIZATION PLAN NO. 1 OF 1957

_ Eff. Jung 30, 1957, 22 F.R. 4633.71 Stat——

Prepared by the President and transmitted to the Senate

* and the House of Represcntiitive ‘s in Congress assembled,

Apri] 29, 1957, pursuant to the provisions of the Re-

organization Act of 1949, i ii June 20,°1949, as

amended. |

ABOLITION OF THE RECONSTRECTION =f INANCE ne

CORPORATION |

Section 1. Definitions, As used in this reorganization

plan: |

(a) The term ‘Corporation’ means: the Reconstruction.

- Finance Corporation.

(b) The term ‘remaining functions’ means (1) all tune

tions of the Corporation,:(2) except as otherwise. provided

in subsections (b) and (¢) of section 6 of this, recreaniza

tion. plan, all functions of the Secretary of the Treasury

under section 10 of the Reconstruction Finance Corpora..

tion Act, as amended (15 U.S.CLA. 609) [section 609 of this’

title], and (3) all functions of the Seeretary of the Treasur

‘ander sections . 102 and 106(b) of the Reconstruction

Finance Corporation Liquidation Act (67 Stat. 230, 251).

as amended [sections 603 and 609 note ef this titie |

Home Finance Aghyinistrator, the Administrator of Gen

eral Services, the Administrator of the Small Busines. Ad.

ministration, and the Secretary of the Treasury.

Sec. 2. Transfer of. functions. | (ai) “Phere are ieréby

. transferred to the Housing*and Home Finance Administra:

‘ tor the remaining furctions with respect to or arising oul

of (1) the securities and obligations of, loans made’ to, and

contracts or other agreements with,. States, municipal

ties, political subdivisions thereof, public agencies, hoards.

* commissions or other public bodies, and (2) loans, seeur-

ties and obligations acquired in connection with program:

of financial: assistance for drainage and irrigation project

(b) There are here by transferred to the Administrator

of General Servieés the remaining funetions with respec

‘to or arising out of (1) ‘the affairs of the Smaller War

at 7

. .Dlants. Lorporation. whiel were tfausferred to the Cer-

— poratioaipurseant to Executive OFEET Noster Dtece ns

= 2, 1940 411 FER. 3) and section 207 of Publie Law

—S0th Congress (61 Stat. 20%); <2) the national dé

fense, Warand reconversion ac Hivities with respeet to which -

notes Of the Corporation we re cancelled pursuant to the

provisions of Tithe IL of Public Law s60- om Congress

(62 Stat. L187), and 3) activities of the REY" Price Ad-

justment Board and the funetions ienneterend to sai A‘or-

poration by Executive Order No. S41 of April 25, 1947

(12 FLR. 2645) 4 set outoas note under seetion a af Ap 3

» pendix to Title 50}. 7

(¢) Bxeept as otherwise provided in sections A¢d)y ol)

and 2(d) (2) of this reorganization plan (re lating t& tan

cial assistance to railroads, ete. . and to Schedule A \hereto |

annexed), there’are hereby transferred to the Admi ust ra-

tor of the Small Business Administration the remaining

functions with respect te or-arising out of prograhus of

financial assistance to busine ‘ss Chte prise ~ and to victims

of floods or other disaste ‘Ts.

(d) There are he reby transte red to ‘the Seofetary of

the Treasury all functions of the Corporation not other.

wise transferred by the provisions of this’ reorganization .

plan, including. but not limited to, all danetions. of the

Vorporation with ve spect tovor arising 4 (1) programs

of financial institutions, and insurance companies, (2) the

obligations and loans listed in Schedule AChereto annexed,

sand (3) the War Damage Corporation.

te) The foregoing transfers ticlude the transfer to each

trausteree, for tse in executing his respective funetions-

thereunder, of the powers, authority, rights, and Jmmuni-

ties now vested in or available or applicable to the Cor

poration for carrying-out the functions transterred to the

(ransferee under this reorganization plan.

Sec. 3. Transfer of assets and liabilities. The |bans,

obligations, securities, capital stock, and other asset Aper-

tuining to the functions. transferted by Section 2 oof this.

reorganization plan (ineluding accrued interest) thereon,

and property acquired in connection therewith) and thy

liabilities, contracts, bonds, mortgages, notes amd other in .

struments relating thereto: are hereby transferred fron

the Corporation to the respective transferees: Provided.

however, That all assets, liabilities, and commitments »&

lating to the functions -teansterred hy section 2(a) of this

reorganization plays are hereby transferred to the Re.

volving Fund (Liquidating Programs) established by the

Independent Offices. tag ation Act, 100 (68 Stat. 25)

[section 170}g-5 ‘of Title 12).

Sec. 4. Administrative property, personnel, funds and

records. In addition to the transfers made by the prov.

sions of section 3 of this reorganization plan, there shall be

transferred to the Housing and Home Finance Ageney.

General Services Administration, Small Business Admin.

istration, and Treasury Department so much as the Diree

tor of the Bureau of the Budget shall determine to be ap

propriate by reason of transfers made by sections 2 aud.

3 of this reorganization plan of the administrative prop-

erty, personnel, records, liabilities and commitments of the

Corporation or of the Office of Production and Defense:

Lending in the. Department ‘of the Treasury and of.

— authorizations, allocations, and funds available sor to che’

made available ith respect to the transferred function

(ineluding, but in no war limeitina the generality of the’

foregoing, the authority to issue ‘notes orvother obligation a

to the Secretary of the Treasury, Whieli may be purchased

by the Seer retary, under” section 7 of tie <r omapiyge

Finanee Corporation Act, as amended (15 ULS.C.A) 606)

[section 606 of this title}, and the duty. of ead pay-

ments On such notes or obligations: issued hy or transferred

_ 29

to the respective trimeife ree hereunder). bn allocating the

“sadministrative expense funds appticable to the functioiis

transferred by the provisions of thi reorganization plan

the said Director shall allocits and transfe r to the Gen.

eral _Services:’ Administration as a payment son behalf of

the Housing and Home Finance Agency, General Services

Administration,’ Small ° Bus sity Administration | and.

Treasury Department: such sum for refit of building space .

for the carrying out of the transferred functions during

the fiscal vear ending June 30, 1958, as the said Direetor

shall determine. Such further measures and disposition

as the Director of the Bureau of the Budget stall de- -

termine to he Necessary in ordet.toe ‘{fectuate the transfers.

provided for in this section: shall be carried owt. in’ such

Manner and by such agencies as the Director shall direct,

See. De leqation of authority. Bach transferee may

“appropriate authorizing .the performance by any ofticer,

employee, agency, ‘or administrative unit under his juris-

‘diction of any function transferred to cor by the provisions

of this: reorganization plan.

‘Sec. 6. Abolition of the C vrporation, (a) The Corpora-

tion is hereby abolished.

(b). The Seeretary of the Treasury shall) retire the.-

capital stock of the Corporation and, subject to the provi-

sions of section 4 hereof, shall pay into the Treasury, ats

escellancous sis wll unused funds of the: Corpora:

tion.

Treasury: shall transmit’a report to the Congress, which

report ( 1) shall cover the affairs of the Corporation up te

the time of the taking effect of the provisions ofgthis re’

organization plan, and oy shall correspond to the fins

from siaaab to time make such provisions as he shall deem.

report required by section 10 of the Reconstruction Financ

Corporation Act, as amended (15 U.S.C..609) [section 60%

of this. title]. The function of making the final report

_ rovided for in the said section 10, [section 609 of -

title] is hereby “abolished.

Sec. 7, Effective date. . The provisions of this reorgani. :

zation plan shall take-ctlect at the time determined unde:

_ the provisions of section 6(a) of the Reorganization Net

-* of 1949, as amended [section 133z-4(a).of Title 5|. or at

the close of June 30, 1957, whichever is later’ .

APPENDIX VI. _ aa

15 U.S.C.A., 1958, Cumulative Annual. Pocket Parts, Sec.

603, -p. 30. é Si

3 ‘*Continuation of rena Proceedings. — Act July 3b.

1953, ¢. 282.-Title I. § 105, 67 Stat. 237, as amended I)

Act June 29, 1954,°c. “410 § 2(c), 68 Stat..320, provided

that: ‘No suit,.action, or other’ proceeding lawfully com-

menced by or against the: Reconstruction Finance Cor pora

tion shall’ abate by reason of the dissolution of the Cor-

- poration; but the: court may on motion or supplementa:

petition filed at any time within twelve months after the

date of such dissolution and showing a necessity for «

survival of such suit, action, or‘other.proceeding to obtain

a settlement of the questions involved, allow the same to

be maintained by or against the officer or agetiey of the —

Government performing the functions with respect to whic

any such suit, action, or ‘other . proceeding Was COM:

menced.’’? ree

+ INDEX:

‘ Page

Opinions below - 1

Jurisdiction — . : l

Questions presented 2

Statute and reorganization plan involved... 2

Statement ___. é 9g

Argument 4

Conclusion 7

- Appendix - 8

CITATIONS

Cases: j .

General Tlouses, i Vv; Brichhausen, 256 F. 2d 674

357 U.S. 924. - ; %

General Houses, Ine. v. Marloch Manufacturing Corp.,

239 F.2d 510 a

Newell v. Phillips Petroleum Co., “144 F.2d 338 é

"181 ; as : ti

Porter.v. Montaldo’s, 71 F. Supp, 372. 6

Volunteer Electric. Co-operative Vv. Tennessee Valley

Authority, 139 F. Supp? 22, 6

Statutes: a

Reconstruction Finance Corporation Liquidation Net,

67 Stat. 231, as amended, 15 USC. HO3 note, See-

tion 105 4.5, 11

mapeienination Act of 1949, 63 Stat. 203, as amended,

5 U.S.C. 1332, et “eq. . : fie 5

Sieresnination Plan No. 1 of 1957, 22% F.R. 4633, 71

Stat. 647, 15 5 U.S.C. 601 note. 3,8

Miscellaneous: | . 3

Message of the President ‘Transmitting Reorganization

~ Plan No. 1 of 1957 to the Congress, 5 6UUS.C.

$ae-18. 5c. Dr = 5

. (1)

526986 -—59

sn he Supe Court of the Cnited sins

October TERM, 1959

No. 408:

GENERAL Howsrs, INC., PETITIONER

8 a ' ».

FRANKLIN G. FLORTE, AS ADMINISTRATOR OF GENERAL

_ SERVICES, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

_ STATES COURT OF APPEALS FOR. THE -SECOND CIRCUIT

BRIEF FOR FRANKLIN G. FLOETE, ADMINISTRATOR OF

. GENERAL SERVICES, IN OPPOSITION

OPINIONS BELOW

The opinton of the United States District Court

for the Eastern District of New York (R. 125a-162a)

is reported at 166 F. Supp. 106. The opinion of the

Court of Appeals for the Second Circuit ‘CR. 450a) is

reported at 267 F. 2d 306.

JURISDICTION

The judgment of ,the court of appeals was entered

‘on June 1, 1959 (R. 458a). On August 19, 1959, Mr.

Justice Brennan entered an order extending the time

for filing a petition: for a writ of certiorari to Septem-

her 18, 1959. The petition for a writ of certiorari

(1) |

was filed on: September 15, 1959. ‘The jurisdiction ot

this Court is invoked under 28 U.S.C. 1254(1).

b meTIONS PRESENTED

+ “Whether, after the Reconstruction ‘ial e Cor

poration was abolished and the Administrator of Gen-

eral Services succeeded to those of gts function:

involved in“this case, the district court erred in sub

stituting ‘he Administrator for’ the She as a

defendant. ey

— 2. Whether the district court abused. its discretion

in not requiring the Corporation or the Administra-

tor to answer a set of three hundred interrogatories

propounded by petitioner.

STATUTE AND REORGANIZATION PLAN INVOLVED

The pertinent. provisions of the Reconstruction

Finance Corporation Liquidation “Act, and of Reor.

ganization Plan No. Ll of 1957, are set forth in the

Appendix, infra, pp. 8-11. tek 2

STATEMENT -—

This is an action for alleged breach of a contract.

entered into in 1947 between petitioner and the Re-

construction Finance Corporation ("REC'), under

which petitioner agreed to produce 2,000 prefabri-:

cated houses and the RFC guaranteed aemarket [or

any houses which petitioner could not sell. bn 1950.

petitioner instituted this. action in the distriet court

against, inter. alia, REC and Marloch Manufacturing

Corporation, a subcontractor which had agreed. te

construct the houses for petitioner,

a ue 3 ae

The REC. was abolished on June 230, 1957, by Re-

organization Plan Ne. L-of. W957 (22 KR. 4633, 71

Stat. O47, 15 OoS8.C. GOL noted) cufra, po. Sand its

_ remaining funetions transferred to Various govern-.

“ment agenqies, including the General Services Ad-

ministration, On February 14, L958, petitioner moved

in the distriet court for an order (1) joming the

United States of America and respondent ‘Floete, as

Administrator - of General Services, as additignal

parties defendant, and (2) postponing the, commence-

ment of the trial until the original defendants and the

proposed additional defendants answered a’ lengthy

set of interrogatories previously propounded: jointly

to all of the original defendants (CR. 103a). Prior to

-the hearing on this motion, answers te all the inter-

rovatories were. furnished by all of the original

On March 6, 1958, after a hearing, the district court

denied the motion, but directed that the Administrator

he substituted for the REC CR. 102a; 115a—H6a).

Petitioner unsuccessfully attempted to review these

interlocutery orders through an extraordinary writ.

General Houses, Ine. v. Bruchhausen, 256 F.2d 674

- (CA, 2).357 UUS. 924. } Ag

After trial without a jury, the district court, in a

lengthy opinion which diseussed the evidence in detail

(R. 125a- 162a), held that | petitioner had failed to

comply with its contract with RFC, and that the latter

had not breached the contract (R. 147a), and entered

judzment in favor of all defe ndants on all counts of

the complaint. (R. 162a-163a). In so ruling, it stated

(R. 146a) that the “inference is almost inescapable”

that this suit ‘was instituted * * * in the hope of

forcing a settlement, rather than for the purpose of

litigating whaf was believed to be a meritorious caus

of action.” : ‘

The Court of Appeals for the Second Circuit af:

firmed per curiam, It stated that “the appeal, as well

as: the alleged causes of action, appears to be utter!

lacking in merit. They deserve no further diseus-.

sion” (Pet. 21-22). eat e

an ARGUMENT

Petitioner specifically accepts the correctness of the

trial court's findings that: the contract had ot been

breached, and the“ court of appeals’ affirmane ‘e thereof

as. “clearly correct” (Pet. 15). It contends only that

the trial court erred (1) m substituting respondent

Floete, as Administrator of General Services, for the

defendaht RiPC, after the latter had been abolished

and those of its functions involved’ in the instant ¢ ase”

transferred to the General Services Administr: ation:

and (2) in refusing to direct. hoth REC and Flocte

to answer certain inte rrogatories propounded by at.

Neither of these contention’ has any substance.

1. Petitioner’ s contention (Pet. 10-13) that, despite

the abolition of the RFC and the transfer of its fune-

tions to othe ‘T Government agenciés (one of whieh was

substituted for it), it neverthe less had a constitutional

’ right to retain the RFC as a party, is frivolous. “The

argument ° is that since Reorganization Plan No. 1 if

1957 did nit “dissolve” the RFC, but only “abolished”

it, the provision in Section 105 of the Reconstruction

Finance Corporation Liquidation Act providing for

substitution of successors to the RFC upon Its “disse-

. 5° .

lution” is inapplieable. “This argument Iniiores the

obvious facts thatthe purpose of the Plan was toe

terminate the agenev's existence and.to transfer its

funstions to other agencies, and not Just te provide

termination, for .continfiation by the osuecessors of

pending litigation invelving: the REC. The use in

the Plan of the word “abolished” rather than “dis-

solved’? stems from the Reorganization Act of 1949

463 Stat. 203, as amended, 9 USC. 18ha, ef seq),

pursuant te which. the plan was transmitted. Phe

latter Act contemplated? the termination’ of beth core

porate and. . non-corporate Government . agenches,

Since the term “dissolve is generally employed. only,

fora teghnical, “abolition” of the Corporation: | and

that the purpose of Seetion 105 Was te. provide. after:

In connéetion with terminating the existe nee of a cor.

—_—

This purpose is reflected) in the President’s Inessage tins:

mitting the Reergan ization Plan to Congress, which st; ated: |.

“The plan also transfers the. pertinent assets of the Corpora.

hon to the respective agencies, together with the related liabili-

ties and by operation gf law substitutes the particular trans:

feree for the Corporation with respect to al instrument of

every kind and character pertamig to the transferred functions,

assets, and diabrlities. Ino order to .permit tae transferees to

administer the transferred matters with the same flexibility®of

operation as obtains at present, the plan transfers to each trans.’

feree those Powers, authority. rights. and immunities which are

now available or applicable to the Corporation for carrying out

the respective functions. To the extent that it becomes necessary

r desirable, therefore, the transferees will ‘be enabled. with

set to the transferred functions, te. sue and shé sued,

eiyage private attorneys in conjunction with litigation involv-

ing the transferred functions, and to avail themselves of any

other authority. powers or immunities now available to. the

Corpération, whether under the Reconstruction fe yey Corpo-

ration Net, as amended, or otherwise, * * *" (5 Ue 2 E5z-

1.4

"poration, the Act used the: more general term “tabel-

ish.’ Obviously, the use of the word * “dissolved”

the Reeonstruction Finance Corporation bichidion’

Act was not intended to make. substitution of steces- ”

sors turn upon technical distinetions of corporation

law. ‘ ite .

Contrary to petitioner's. statement (Pet. 13), the

district couly fully aensidered, and rejected, pe tition:

er’s claim that the RFC had breached the contract.

It is irrelevant that, at the time of suc hy adjudication,

respondent Floete had) been substituted as, a sparty

defendant for the REC. For the RFC’s liabilities

had been transfe ‘rred to him, and any judgment which

/ petitioner might. have obtained would, of course, have

run against liim and been: satisfied by him. Indeed,

petitioner's counsel himself conceded in the district

court. that the substitution of: deferidants would not ,

affect the issues to. be tried 3. 359 7a—358a ).

2. There is no greater me rit to the contention (Pet.

A3-16) * that petitioner had a constitutional right to

have its inte rrogatories answered by the RFC and

Floete. It is well settled that the district court may,

in the exercise of: its discretion, refuse to" compel

answers to Mterrogatories. See, cg.. Newell v. Phillips

Petroleum Co., 144 F.2d 338 (CAL 10); Volunteer

Electric Co-operative v. Tennessee V alley Authority,

139. F. Supp. P> me > “ Tenn.) ; Porter v. Montaldo’s,

wl F. Supp. 372 (S.D. Ohio) ; Onofrio v. ;American

Benuty Macaroni Co, WW F.R.D. 181 (WL). Mo.).

The court did not abuse; but on the contrary tor.

reetly exercised, its discretion in refusing te require

the RP C or Floete to answer the set of three hundred

fiterrogatories e eevering mere than. a hundred, pages.

AX\ appears, from the uncontradic ‘ted’ affidavits CR.

DP la\: Bd) submitted) ino opposition to petitioner's

motion . require answe rs, os REC had no employees

who could answer the interrogatoric ‘sy there is no one

employed by the General Services Administration who

‘has any pe rsonal knowledge of the matters referred to,

in them, and-all the interrogatoric ‘s Were already an-

swered by the othe r defendants. Tw have required

answers in these citeumstances would. have caused an

mawarranted additiorial de lay in litigation which had

‘already been. “cluttering up: the docket for many

years”? (General Houses): Ine. vo Marloch Manufac-

turing Corp. 239 F: 2d dO, 515 '(C.A: 2)). . Pe 'ti-

tioner’s unsupported claim (Pet. 14) that, had the

interrogatgries been answered, it could have ‘discoy-

ered certain “erneial facts,” affords no basis forover-

turning the trial ecourt’s ruling. et

CONCLUSION

For the foregoing reasons, it is respectfully ine

initted that the petition for a writ of certiorari should

be denied. nes aa °

‘ o/h ae eee ,

es Solicitor Gene ral.

GEORGE CocHran Dove,

Assistant Attorney General,

ALAN S. ROSENTHAL,

“MARVIN S. SHAPIRO,

Attorneys.

OcTOBER 1959. :

. ™ a

3 Ps a

APPENDIX

. Redrganization Plan No. 1 of 1957, 22 F.R. 4633,

71 Stat. 647, 15 U.S.C. 601 note, provides in part: : -

~ ty Fe

: : ° ’ F . \ :

ABOLITION OF THE RECONSTRUCTION FINANCE

af CORPORATION 7

Section 1. Definitions.-As used in this re-

organization So. 7

(a) The term ‘Corporation’ means the Re-

- construction Finance Corporation.

(b) The term ‘remaining functions” inns

(1) all funetions of the Corporation, (2) ex-

cept as otherwise provided in subsections (b)

and (c) of section 6 of this reorganization plan,

all functions of the Secretary of the Treasury .

under section 10 of. the Reconstruction, Finance

Corporation Act, as amended ‘(15 U.S.C. 669)

[section 609 of this title], and (3) all functions

of the. Secretary of the Treasury under:sections

102 and 106(b) of the Reconstruction Finance

Corporation Liquidation Act (67 Stat. 230,

231), as amended [sections 603 and 609 note of

this title]. - |

~ (ec) The term ‘transferees’ means the Hous- °

ing and Home Finance Administrator, the Ad-

ministrator of General Services, the Admin-

istrator of the Small Business Administration,

and the Secretary of the Treasury. ie

Sec. 2. Transfer of functions. * * *

; (b) Thefe are hereby transferred to the Ad-

ministator of General Services the remaining

functions with respect to or arising. out of (1)

the affairs of the Smaller War Plants Corpora-

tion which were transferred to the Corporation

| ‘pursuant to Executive Order No. .9665 of De-

cember 27, 1945 (11 F.R. 3) and section 207 of

(8)

’

Public’ Law 132—80th Congress. (61 Stat. 209),

(2) the national defense, war and. reconversion

activities with respect to which notes of the

‘Corporation were e¢ancelled pursuant. to the

provisions of Title IL of Public Law 860—80th

Congress (62 Stat. 1187), and. (3) activities of

the RFC Price Adjustment. Board and. the

functions transferred to the Corporation by Ex- -

ecutive Order No. 9841 of April 23, 1947 (12

F.R. 2645) [set out as note under section 601 of

_ Appendix to Title 30), 0.

* - a .

(ec) The foregoing transfers. include -the

transfer to each transferee, for use in executing:

his respective functions thereunder, of the

powers, authority, rights, and immunities new

vested in or available or applicable to the Cor--

poration, for carrying out. the fuhetions trans-

ferred to the transferee under this: reorganiza-

fion ‘plan. 7

See, 3. Transfer of .assets and liabilities,

The loans, obligations, securities, capital stock, -

‘and other assets pertaining to the functions

transferred by section 2 of this reorganization

plan (including accrued interest thereon, and

property aequired in connection therewith) and

the liabilities, contracts, bonds, mortgages, notes

_and other instruments relating thereto are here-

by transferred from the Corporation to the re-

spective: transferees: Provided, however, That

all assets, liabilities, and commitments relating

to the functions transferred by section 2(a) of

this reorganization plan aré hereby transferred

to the Revolving Fund: (Liquidating Programs) ~

established by the. Independent’ Offices “A

(1701g-5 of Title 12]. ee asic ee

See. 4.°° Administrative property, personnel,

funds and records. In-addition to the transfers

made by the provisions of section 3 of this re

Appro-

—priation Act, 1955 (68 Stat: 295) - [section -

organization plan, there shall be transferred to’

the Housing and Home Finance Agency, Gen-

n* :

eral Services: Administration, Small Business

Administration, and Treasury Department so,

much as the - Director of the Bureau of the -

Budeet shall determine to be appropriate by.

reason of transfers made by sections 2 and 3 of

this: reotganization plan of the administrative |

property, personnel, records, liabilities and ¢om-+

mitments of the Corporation or of the Office of

Production and Defense Lending in the Depart-.

ment of the Treasury and of the authorizations,

allocations, and funds available or to be mace

available with respect to the transferred fune-.

tions: CGinecluding, but im no way.Jimiting’ the

venerality of the foregoing, the authority to

issue notes or other obligations to the Secretary

of the Treasury, which may be purchased by.

.the Secretary, ander section 7 of the Recon-

struction Finance Corporation Act, as amended |

(15 U.S.C. 606) [section 606 of this. title].

and the duty of making prayments’an such notes

or obligations issued by or transferred to the

respective transferee hereunder). Tn allocating

the Administrative expense funds applicable to

the functions transferred by the provisions of

this reorganization: plan the said Diréeter shall

‘allocate and transfer to the General: Services

Administration as a payment on Jehalf of the

Housing and Home Finance Agenty, General

Sorvices, Administration, Small Business Ad-

ministration and Treasury Department such

-sum fér rent of building space for the carrying »

out of the transferred functions during the fiseal

vear ending June’30, 1958, as the said Director

shall detettaine. Such further meastires and

disposition as the Director of the Bureau of. the

Budget shall determine to be- necessary in order .

to effectuate. the transfers provided for.in this

section shall be carried out in such manner and

by such agencies as.the Direetar shall direct.

* % * ; ae *

“Tl

See,,6. ° Abolition of the Corporation. (a)-

The Corporation is hereby abolished.

(b) The Secretary: of the Treasury shall

.. retire the capital stock of the Corporation and,

subject to the provisions .of section. 4 hereof,

shall pay into: the Treasury, as miscellaneous |

receipts All unused funds of the Corporation,

tary of the Treasury shall transmit a report to

the Congress, which report (1) shall cover the

affairs of the Corporation up to the time of the

taking effect of the provisions of this -reorgani- —

zation plan, ‘And (2) shall correspond to the ~

- final report required by section 10 of the “Re-.

-constructio: Finance . Corporation .Act;. as

amended (15 U.S.C. 609) [section 609 of this .

title}. The funetion of making the final report

provided for in the said section 10-{section 609

of this title] is hereby abolished.

* eres * ite ~ +

Section 105 of the Reconstruction Finance Corpora-

» tion Liquidation Act, 67 Stat. 231, as amended, 15

~ ULS.C. 603 note, provided: Be .

— No suit, action, or.other proceeding lawfully

commenced by or Against the Reconstruction

Finance: Corporation shall-abate by reason of

\ the dissolution of the Corporation; but the court

. ° may, on-motion or supplemental petition filed at

“any time within twelve.months after the date. -

of such dissohition and showing a.necessity: for

a survival of such suit, action, oreother proceed-

ing to obtain a settlement of the questions in-\

volved, allow the same to be maintained by or

against the officer or agency of the Government

-any such suit, action, or/other proceeding was

commenced. , i

US GOVERNMENT PRINTING OFFITE 1989

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.