Before CLARK, WILBUR K. MILLER and PRETTYMAN, Circuit Judges.
UNITED STATES COURT OF APPEALS DISTRICT OF COLUMBIA CIRCUIT
Writ of Certiorari Denied March 12, 1951.
These are three appeals from a judgment entered by the District Court pursuant to our mandate of November 17, 1950. This is the third time this controversy has been here.
Dollar, et al. brought a civil action praying that the defendant members of the Maritime Commission be restrained from selling or disposing of certain stock and "That the defendants be directed and ordered by this Court to deliver to the plaintiffs the following stock: . . .." In response to a motion for a preliminary injunction the defendants submitted affidavits representing that the stock had been transferred outright to the United States and that the suit was, therefore, one against the United States. The trial court thereupon dismissed the action. This court reversed that judgment, *fn1 and the Supreme Court, granting certiorari, affirmed. *fn2 The question there was how the court should proceed when confronted with a claim by private persons for the delivery to them of property which Government agents claim to hold on behalf of the United States. The issue as to whether the United States is a necessary party to such an action depends upon whether the United States in fact owns the property. Therefore, the question of jurisdiction depends upon the merits. The Supreme Court held that in order to determine jurisdiction the court must determine the merits to that extent. The Court discussed the Lee case *fn3 and pointed out that while an adjudication to which the United States is not a party cannot be res judicata against the United States "the courts have jurisdiction to resolve the controversy between those who claim possession." *fn4 In one succinct paragraph the Court prescribed the disposition of the case then before it and now before us. It said:
"It is in the latter category that the pleadings have cast this case. That is to say, if the allegations of the petition are true, the shares of stock never were property of the United States and are being wrongfully withheld by petitioners who acted in excess of their authority as public officers. If ownership of the shares is in the United States, suit to recover them would of course be a suit against the United States. But if it is decided on the merits either that the contract was illegal or that respondents are pledgors, they are entitled to possession of the shares as against petitioners, though, as we have said, the judgment would not be res judicata as against the United States. *fn5
The result, which is inescapable from the very nature of the controversy, is paradoxical. In an action between a private individual and a public official, the court decides that the United States has no interest in the property involved and so the action will lie, but the ensuing judgment is effective only as to the parties before the court and is not res judicata against the United States, not a party.
The case was returned to the District Court, was tried, 82 F.Supp. 919, and was appealed to this court, and it was here held that (1) the Commission had no power to acquire outright ownership of the stock and (2) the plaintiffs were pledgors. *fn6 The Supreme Court denied certiorari. *fn7 Therefore, as the Supreme Court directed in the opinion from which we have quoted above, the plaintiffs "are entitled to possession of the shares as against" the defendant officials. We directed the District Court to enter judgment pursuant to our opinion.
Upon the remand the District Court entered an order and final judgment as follows:
"1. That in conformance with and obedience to the said mandate of the Court of Appeals the judgment of this Court of the 2nd day of December 1948 is hereby vacated.
"2. That under the provisions of Rule 70 FRCP
The present appeals are from that judgment. Appellants contend that the District Court did not enter the judgment which the Supreme Court said would follow from the allegations of the complaint, if proved, but went further and purported to determine the title to the shares of stock as against all the world, which, in effect, say appellants, is an attempt to make the judgment res judicata against the United States.
The second paragraph of the judgment of the District Court is modified to read as follows:
"2. That plaintiffs are entitled to possession of the shares as against defendants,* and the defendants are ordered and directed to deliver forthwith to the plaintiffs the said shares. The possession to which plaintiffs are entitled is an effective possession of the shares. In so far as such right requires action on the part of defendants in addition to physical delivery of the certificates, such action is hereby directed to be taken. Plaintiffs are entitled under this judgment to all rights belonging to possessors of the shares. Plaintiffs are further entitled, as provided by Rule 70 of ...