*1 ESTATES, INC. v. SUTPHEN STATES UNITED al. Argued November
No. 25. October 1951. Decided *2 Pickering H. G. argued appellant. the cause for With him on the brief was Bertram F. Shipman.-. H.
Charles Weston for argued the cause the United States. With him on the brief were Solicitor General Perlman Attorney and Assistant, General Morison.
Joseph M. Proskauer argued the Bros. cause Warner Pictures, al., Inc. appellees. him With on the brief were R. W. Perkins and Harold Berkowitz. Douglas
Mr. opinion delivered the Justice Court.
Rule 24 (a) of the Rules of Civil Procedure Federal provides in part as follows: Right.
“(a) Upon ap- timely Intervention plication anyone shall to in be intervene permitted an . . . (2) action: representation when the the applicant’s by existing parties interest is or may inadequate and the applicant is or be bound a judgment in the action; (3) when applicant the is so situated as to adversely dis- affected a tribution or other disposition of property is which in custody the or subject to the control or disposi- tion of the court or an officer thereof.” Appellant claims intervention of the right Sherman Act proceedings involving the reorganization of certain producers and distributors picture of motion films whose activities had been found to violate the Act. See United Pictures, Inc., 334 If Paramount U. S. 131. States appellant may intervene of right, as the order' the court denying intervention appealable. is See Railroad Trainmen Co., v. B. & O. R. S. 32 Stat. 524: 331 U. amended, (Supp. II) S. C. It was § to question postponed question that we resplve jurisdiction our to the appeal hearing merits. reorganization The from the present controversy stems Inc., Bros. a decree of Pictures, pursuant Act proceedings. court in the Sherman Under this of Warner’s provision made for divorcement from production theatre business its and distribution are not steps reorganization business. various according material here. It is to note that sufficient plán the stockholders of Warner will dissolu- vote tion companies formed, Two Will be Warner. new other, one to assets, receive the theatre receive the production and assets. of the new distribution Each will capital rata to pro distribute its stock *3 Warner’s stockholders. guarantor
Warner is a of a lease of properties theatre by appellant subsidiary subsidiary made to a of a of in lease, Warner. The modified in executed 1928 and reorganiza- is for a term of years. plan 98 of tion submitted to as provides, the stockholders we read it by argu- and as oral appellees construed counsel ment, guaranty that liabilities of class in the which the falls will by Ap- be assumed new company. the theatre pellant protect seeks intervention guaranty. its 24 right (a) (2)
There is intervention as of under Rule representation “when the the applicant’s by of interest is or existing parties inadequate applicant and the is or bound may be a in judgment Ap- the action.” by pellant, however, is of privy rights not a its Warner; not only do not Warner, derive from are indeed they case, adverse to Warner. The in like this that States, Credits Commutation Co. United 177 S.U. sought therefore is not res of judicata rights through be protected intervention.
22 by- of right to intervene is entitled appellant
Nor is a case 24 is true that this (3). It (a) Rule reason which property “a distribution or disposition other disposition or to the control custody subject in the is (a) (3). meaning of Rule . . .” within of the court the Sherman of the court under authority For it is the United reorganization. that directs the Act sanctions and Inc., seq. Pictures, supra, v. Paramount pp. 170 States is affected” argues “adversely that it Appellant points It out under disposition property. of the that divided guarantor property its is dissolved his plan one of which assumes among companies, only two new argues lease. It that it liabilities under the guarantor’s for the judicially equivalent is entitled to a ascertained And it that in this that guaranty. claims case guaranty by would a of the new each equivalent companies. think, however, appellant do that on this record
We not re- it “adversely has shown that will be affected” (a) (3). It meaning within the organization Rule No company. new theatre guaranty will have the lacks showing attempted company made or that that strength responsibilities to assume the the financial showing attempted is made or guaranty. No liability is so imminent contingent guaranty under the. the new com- guaranty and onerous as make the than the pany substantially guaranty less valuable know, company For all of a guaranty we Warner’s. *4 freed from the of business, pro- the "theatre hazards business, may and distribution be even more valu- duction guaranty pass than of do able Warner’s. We not of plan reorganization. here on the fairness Cf. States, 259 Continental Co. United S. hold' We that has not maintained the of only appellant burden (3) 24 showing (a) may under Rule it intervene as that right. governed (b). intervention is Permissive Rule But we said enough injury have to that the claim of show appellant speculative too bn contingent too unknown factors to that there conclude was an abuse discretion in denying leave to The court had intervene. ample reason to prevent the administration of the decree being from with this burdened a collateral issue that on record adjudicated can be properly elsewhere. appeal is therefore
Dismissed. Jackson, Clark, Me. Justice Mr. Justice and Mr. Justice Minton took no in the part consideration decision of this case. Black,
Mr. Justice dissenting. Warner on a Brothers, Inc., guarantor has been lease of theater made Estates. properties by appellant Sutphen Under a split court decree of to be dissolution Warner is into up two companies, only expressly one of which will assume guarantee Sutphen’s Sutphen. lease no can longer guaranteed by be the combined assets illegal corporation we ordered dissolved. have Perhaps it is will im- guarantee inevitable that be paired to extent, Sutphen some but we insure that should suffers no more than its fair losses share whatever result from the laws. enforcement the antitrust am of the opinion impairment that issue can
.1 best be and Court should determined the District a part proceedings. Furthermore, of the dissolution I cannot assent to an opinion permits question this impairment open adjudication remain elsewhere at some time future. indefinite ordered, of Warner, which we have cannot
Dissolution completely if consummated doubt leaves whether obligated both new are jointly *5 Co. v. United Insurance Cf. lease. Continental Sutphen’s if have the we States, Surely, 173-174. S. prevent Sherman Act dissolution power order newly created to insure that violations, power we have totally and disinterested permanently are no way united activities, future are other’s each obligations. by past