In re BARNETT. BARNETT v. JASPAN
No. 66
Circuit Court of Appeals, Second Circuit
Decided Jan. 7, 1942
Argued Nov. 7, 1941.
124 F.2d 1005
The determination of that is at last for the commissioner. His decision on it, if supported by evidence, is final. The commissioner definitely found, that because of the fact that evidence of the pressure on the trachea was not before him, he mistakenly found the fact as to claimant‘s disability. The re-award in question here was made to correct that mistake. We find nothing in the proceedings, nothing in the re-award itself, which subjects it to corrective review. The libel should have been dismissed. The decree is reversed and the cause is remanded with directions to dismiss it.
HOLMES, Circuit Judge (dissenting).
I agree with the district judge that an employee may not withhold the facts from the deputy commissioner and later ask for a modification of the award. Because the appellant knew at the time of the first hearing of the disability upon which he now relies, I think he is estopped to ask for a second hearing on the ground of such disability. The judgment appealed from, in my opinion, should be affirmed.
Abraham R. Kartzman, (Jacob M. Mandelbaum, of counsel), for bankrupt-appellant.
Before L. HAND, CLARK, and FRANK, Circuit Judges.
FRANK, Circuit Judge.
The District Court, reversing an order of the referee, declared that an instrument by which Cecelia Barnett, the bankrupt, assigned to her mother, Clara Essenfeld, her testate and intestate interest in her father‘s estate, was invalid as to her trustee in bankruptcy. In 1935, her father had made a will, leaving to her 15% of his residuary estate. The following year she assigned to her mother, in consideration of $5,000 paid by her father, all her rights, in intestacy or under any will previously or thereafter made, to her father‘s estate. Some four years later, on August 29, 1940, she filed a voluntary petition in bankruptcy and was adjudicated. On the following day her father died, and his 1935 will was admitted to probate soon thereafter.
No appeal was prayed by the other parties. But the attorney for the bankrupt signed his brief, filed in this court, as attorney both for the bankrupt and her mother Mrs. Essenfeld. He apparently believed that the rights of the mother were before this court. No objection to his thus signing his brief was made by the trustee. Going below the surface appearances and viewing the situation realistically, as the Supreme Court admonishes us to do,1 it is obvious that the mother assumed that the order, so far as it affected her, would be dealt with by us on this appeal.
1. In the brief which he filed here, counsel for the bankrupt and her mother, seemingly believing that the District Court had correctly decided that the assignment was invalid as against the trustee, asserted that the order was erroneous on another ground not argued in the trial court, i. e., that the consideration paid to the bankrupt by her father operated as an ademption. The trustee strenuously argued that we should not consider that new issue. Although we are inclined to agree that, if the assignment were invalid, there was an effective ademption, we prefer not to decide the case on that basis. We do not feel that we are precluded from deciding on a ground not pressed by counsel.2 Such a course, however, is undesirable where not necessary; it is usually better, if possible, to consider a case as it was presented to the lower court.3 If the trustee opposed our consideration of the ground relied upon by the lower court merely because it was abandoned on appeal by his adversary, we would still feel free to consider it; where, as here, the trustee expressly urges that only the original theory is open to us, we are of course doubly justified in preferring to rest upon that theory rather than upon the new one.
2. Disregarding the ademption issue, it is clear that, were it not for the assignment, the trustee would win; for
As early as 1867, in Stover v. Eycleshimer, 4 Abb.Dec. 309, 42 N.Y. 620, 3 Keyes 620, it was held that the assignment of an expectancy is enforceable in equity. With apparently only one exception, In re Zimmerman‘s Will, 104 Misc. 516, 172 N.Y.S. 80, later referred to as “mistaken” (In re Strange‘s Estate, 164 Misc. 929, 300 N.Y.S. 23), that doctrine has stood the test of time. Nugent v. Smith, 202 App. Div. 279, 195 N.Y.S. 338; In re Eisner‘s Will, 129 Misc. 106, 221 N.Y.S. 598; In re Cornell‘s Will, 170 Misc. 638, 12 N.Y.S. 2d 162. In Stover v. Eycleshimer, it was held that the assignee‘s rights were superior to those of a creditor who levied an
Our conclusion is not in conflict with our decision in Irving Trust Co. v. Commercial Factors Corp., 2 Cir., 68 F.2d 864, upon which the court below relied. That case held that an equitable lien created by a factoring agreement could not be upheld against a trustee in bankruptcy unless it was perfected by the taking of possession more than four months before bankruptcy. That decision, like ours here, rested upon New York law. The New York cases there cited showed that certain types of equitable liens, especially those created by mortgages and pledges of after-acquired property, could not withstand the onslaught of creditors who obtained judgment before the mortgagee or pledgee took possession. Titusville Iron Co. v. New York, 207 N.Y. 203, 100 N.E. 806; Zartman v. First National Bank, 189 N.Y. 267, 82 N.E. 127, 12 L.R.A., N.S., 1083; Rochester Distilling Co. v. Rasey, 142 N.Y. 570, 37 N.E. 632, 40 Am.St.Rep. 635; In re Friedman, 2 Cir., 72 F.2d 412, and Okin v. Isaac Goldman Co., 2 Cir., 79 F.2d 317, similarly turning on New York law, did not involve the equitable rights of assignees of expectancies. It is not our duty, of course, to explain why the New York courts distinguish between the validity of mortgages and pledges of after-acquired property, and assignments of expectancies.
3. So that the pertinent facts should more clearly appear, we have followed the unusual course of first discussing the merits. We now turn to the trustee‘s contention that the appeal must be dismissed because the bankrupt, sole appellant, was not affected by the decree and hence is not a proper party appellant. It is true, as the bankrupt admits in her brief, that the adjudication as between the trustee in bankruptcy and the assignee, is not, as such, her concern. But the trustee petitioned for, and the District Court granted, an order requiring the bankrupt to execute an instrument assigning her rights to the trustee in bankruptcy. That this order is appealable there can be no doubt, for if the assignment was valid, then the District Court lacked power to compel the bankrupt to execute an assignment. This is true regardless of whether such an assignment would deprive the bankrupt of any substantial property rights. For a citizen cannot be wrongfully compelled by a court to do any involuntary act, and therefore, if the District Court‘s order was in error, it should be reversed. Moreover, it must be noted that the assignment, executed by the bankrupt to her father for the benefit of her mother, in 1934, contained an express covenant on bankrupt‘s part to execute all further necessary instruments to vest and confirm title in the property assigned, in effect, substantially a covenant for further assurance. Without deciding whether or not such a covenant would be completely terminated by the order entered below, we may point out that this covenant demonstrates still more the practical interest of the bankrupt in opposing the order, an interest, too, upon which the other parties might well be expected to depend. Compare Tuffy v. Nichols, 2 Cir., 120 F.2d 906, 908, certiorari denied 62 S. Ct. 113, 86 L.Ed. 529, Oct. 13, 1941.
4. As previously observed, the other parties adversely affected by the
Moreover, it is patent that, although the bankrupt‘s mother did not herself explicitly appeal, she assumed that her rights would be brought before this court on the appeal taken by the bankrupt.4
We have jurisdiction in the premises. Several courts have recognized that, where reversal of a judgment wipes out all basis for recovery against a non-appealing, as well as against an appealing, defendant, the reversal may operate to the benefit of both. Kline v. Moyer, 325 Pa. 357, 191 A. 43, 111 A.L.R. 406; Gebhardt v. Village of La Grange Park, 354 Ill. 234, 188 N.E. 372; Maryland Casualty Co. v. City of South Norfolk, 4 Cir., 54 F.2d 1032; and cf. Merchants Discount Corp. v. Federal Street Corp., 300 Mass. 167, 14 N.E.2d 155, 118 A.L.R. 412; Rowell v. Ross, 89 Conn. 201, 93 A. 236; 5 C.J.S., Appeal & Error, § 1920, p. 1423; 3 Am.Jur. 695; Shreeder v. Davis, 43 Wash. 129, 86 P. 198, 10 Ann.Cas. 80; L.R.A.,N.S., 310.
In such a case as this, we should, then, consider the parties to the order below as before this court, at least to the extent that where modification of the judgment affecting them is necessary in order to afford proper and adequate relief to appellant, they are bound thereby. And we should make every effort to achieve such a result here since, as already observed, it is obvious that the bankrupt‘s mother, one of the parties below, and for whose benefit, the bankrupt‘s assignment to her father was made, assumed that a reversal of the order would mean a reversal as to her. The executors are mere stakeholders, and to reverse as to the bankrupt and her mother, leaving outstanding an order enjoining the executors, would be to frustrate the relief afforded by our decision. In declining to make a narrow disposition of this appeal, which will afford only inadequate relief to the parties and leave in effect a truncated order, we are in part guided by the fact that a court of bankruptcy is a court of equity,5 and that once a court of equity has taken jurisdiction of a case, it will endeavor, in order to do justice, to dispose harmoniously of all its aspects. It is established doctrine, furthermore, that in disposing of a case before it, an appellate court has a broad power “to make such disposition * * * as justice requires.”6
A member of this court, Judge Augustus N. Hand,8 twenty three years ago, while a District Judge did not hesitate to abandon that outmoded theory: In a jury case, for goods sold and delivered, before the trial began, and without the consent of the parties, he made an order appointing an auditor to examine the books and papers, make computations, hear testimony and file a report, separating the disputed from the undisputed items, and expressing an opinion as to those in dispute; the order provided that the report should function as prima facie evidence of the facts found and conclusions reached by the auditor, but left the parties free to call, examine and cross-examine witnesses as if the report had not been made. Peterson v. Davidson, D.C., 254 F. 625. The Supreme Court, in affirming that order, approved of the innovation, saying that the
That theory stems from the original function of trials in courts as substitutes for private wars. That function, to be sure, is still of prime importance. Chambers v. Baltimore & O. R. Co., 207 U.S. 142, 148, 28 S.Ct. 34, 52 L.Ed. 143. But we think that courts, in civilized communities, should do more than decide cases, one way or another; without regard to considerations of justice, merely to prevent private brawls and breaches of the peace. Government having, through its courts, established, in large areas, a monopoly of dispute-deciding,9 should try, as far as possible, to decide cases correctly—both by ascertaining the actual facts, as near as may be, and then by applying correct legal rules in an effort to do justice to the parties affected by their decisions. And not merely the parties, but the public as well, are interested that justice shall be done. The Supreme Court has said that “a trial in court is never * * * ‘purely a private controversy * * * of no importance to the public.’ ”10 While the obligation to do justice does not mean, of course, that courts can act ad lib, the fact that such tribunals are called “courts of justice” is surely not without any significance. We should no longer look upon a lawsuit as if it were “in the nature of a cock-fight,” so that “the litigant who wishes to succeed must try and get an advocate who is a game bird with the best pluck and the sharpest spurs.”11
As Wigmore says, the judge should “cease to be merely an umpire at the game of litigation. Often he is little more. This, to be sure, is in part the continuance of a tradition, inherited from the spirit of gentlemanly sportsmanship which dominated the administration of British justice. But it has been intensified, instead of lessened, by the spirit of strenuous struggle and unrestrained persistence which drives the bar of our country to wage their contests to the extreme of technicality.” Wigmore also remarks that “the common law, originating in a community of sports and games, was permeated essentially by the instinct of sportsmanship. This has had both its higher aspect and its lower aspect. On the one hand, it has contributed a sense of fairness, of chivalrous behavior to a worthy adversary, of carrying out a contest on equal and honorable terms. The presumption of innocence, the character rule, the privilege against self-crimination, and other specific rules * * * show
Of course, courts should be exceedingly cautious in disturbing (at least retrospectively)14 precedents in reliance on which men may have importantly changed their positions. Other deviations from traditions, which have no such hurtful consequences, but which, relating solely to procedure, improve the administration of justice, may win adverse criticism from those members of the bar who regard all procedural changes as wrong because, as Wigmore puts it, they interfere with the “mere mental convenience of the profession.” Wigmore notes that “such a naive confession as that of Lord Ellenborough we do not often receive, but its significance is radical: ‘If that rule were to be changed, a lawyer who was well stored with these rules would be no better than any other man is without them.’ ”15
Nothing we have said is to be taken as disparaging the contentious mode of procedure, which has demonstrable values: It aids courts in effectively discharging their basic function of deciding disputes because, in the clash of wits between the contending parties, factual and legal aspects of a case, which might otherwise be ignored, are brought sharply to the court‘s attention. For that reason, the federal courts are forbidden by the Constitution to give decisions except in respect of actual “cases or controversies.” But while a court must often rely chiefly on the arguments of opposing counsel, and while, as a consequence, inadequate arguments may sometimes lead courts to overlook points which counsel have not pressed (so that, indeed, the decision may have little value as a precedent),16 the occasional resulting incompleteness or error in a decision should not be cherished as a virtue. A court, striving to do justice between the parties, should not put on blinders and ignore matters which counsel overlook. We do not, however, mean to suggest that there are no limits to the extent to which a court may relieve a party from the procedural mistakes of his lawyer; thus, for instance, we would be powerless here if no party had appealed.
5. There is to be considered the following alternative route by which the same result might be reached as to the vacation of the order concerning the non-appealing parties: In Simmons Co. v. Grier Bros. Co., 258 U.S. 82, 42 S.Ct. 196, 66 L.Ed. 475, suit was brought for both patent infringement and unfair competition. Subsequently, and while the unfair competition issue was still pending, the Supreme Court, reversing the decree in another suit, brought in another circuit and between different parties, held that same patent valid.
The Supreme Court held that the fact that the plaintiff, by asking the District Court to dismiss its action as to the patent, had acquiesced in the first decision of the Court of Appeals against the patent‘s validity,17 did not preclude such subsequent relief when a higher court sustained that patent in another suit. So here, the failure of the bankrupt‘s mother and the executors to pray an appeal from the order of the District Court, if regarded as an acquiescence in that order, should not preclude them from similar relief now that, on the appeal of the bankrupt, an upper court finds the legal foundation of that order to have been fatally defective. Accordingly, as considerations similar to those in the Grier Bros. case exist here,18 it would seem that we could direct the District Court to entertain a motion for rehearing by the bankrupt‘s mother and the executors, and, pursuant thereto, to vacate its prior order and sustain the order of the referee.
In the Grier Bros. case, as above noted, the earlier decree holding the patent invalid was not final because the action as to unfair competition was still pending. In the instant case, the order as to the bankrupt‘s mother and the executors is not final because it was entered in a bankruptcy proceeding where an order may be vacated, on motion for rehearing, at any time before the bankruptcy proceeding is terminated. Wayne United Gas Co. v. Owens-Illinois Glass Co., 300 U.S. 131, 57 S.Ct. 382, 81 L.Ed. 557.
However, more than six months have elapsed since the order was entered in the instant case;
But, as we are reluctant to determine those questions unnecessarily, we rest our conclusion as to the vacation of the order concerning the non-appealing parties, on the alternative ground previously discussed. We feel the more justified in doing so, since thereby we avoid an anomalous result, like that which the Supreme Court found undesirable in the Grier Bros. case, should it be true that
6. The trustee, in his brief and initially in his oral argument, sought to sustain the order in its entirety, including that part of the order which directed the bankrupt to execute an assignment to the trustee. Subsequently, in the course of the oral argument, however, a member of this court asked the trustee‘s counsel whether he would consent to a deletion of that part of the order, and he said he would. That consent, thus prompted, was, in effect, no more than a belated attempt to accomplish a voluntary dismissal, at least in part, of the trustee‘s action, for we may treat his petition to the referee, to have the bankrupt make the assignment, as the equivalent of an action. Such an attempt voluntarily to dismiss does not, without approval by this court, render the case moot. By
We have already said that the rights of the bankrupt‘s mother are before us on this appeal by the bankrupt. When the voluntary dismissal was attempted, the time for the mother to pray an appeal had expired and that dismissal, if permitted, would therefore trap her. Because of that fact and the general importance of the issue presented, and because the judgment below is a broad adjudication of a status which may affect later proceedings in the state court, we decline to permit the deletion of the order without a determination of the real question before us.
The order appealed from is reversed, and the District Court is directed to affirm the order of the referee so far as it “in all respects denied” the prayer of the trustee‘s application herein.
L. HAND, Circuit Judge (dissenting).
When the trustee upon the argument consented to the deletion of the clause in the order directing the bankrupt to execute an assignment by way of further assurance, the appeal became moot as to her. In no event could she have any interest in the property; if her assignment to her mother was valid, her mother was the owner; if it was invalid, the trustee was. I agree that she had the right to appeal from the provision which directed her to execute the assignment—idle formality though it was—and that the appellee‘s consent did not deprive us of jurisdiction. The question is not what we can, but what we should, do; ordinarily no court decides a question which has ceased to have any real importance for the parties. Indeed, my brothers would not do so here, I apprehend, if they did not also reverse the order so far as it declared that the trustee was entitled to the property as against the widow.
The real question is therefore whether upon the bankrupt‘s appeal we may, and should, reverse that part of the order also; i. e., whether that appeal opened it up for all purposes. I cannot see that
I believe that we should hold that it is not enough that the law was misunderstood by the lower court, and that it is precisely to raise such questions that the right of appeal is provided. I feel very confident that the bar so understands it and is not misled when we do not disturb judgments in the interest of appellees. Particularly is this appropriate in the case at bar, where the widow has not so much as intimated that she is not content with the order, unless we are to account it such an intimation that the attorney for the bankrupt signs the brief in this court as attorney for her as well as for the bankrupt. It is a sound instinct that confines courts to the decision of disputes and does not seek to redress grievances of which the parties do not complain.
Since for the foregoing reasons I think the appeal should be dismissed, I have not considered the validity of the assignment. Indeed, I should not have done so in any event, because even the bankrupt does not challenge the correctness of the ruling below, but now asserts no more than that the testator‘s payment was an ademption of the legacy. I quote from her brief: “Appellant rests her case squarely upon the sole proposition that there has been an ademption of her legacy.” Again: “We therefore take no issue with the propositions of law and the authorities cited in support thereof as set forth in the opinion of the Court below.” Thus, we are insisting upon deciding the case on a point which the only appellant has expressly abandoned, on behalf of a party who has not appealed at all. I am sorry, but I cannot go along with that result.