United States v. Hougham/Dissent Whittaker

Mr. Justice WHITTAKER, with whom Mr. Justice DOUGLAS joins, dissenting.

With all deference, I cannot agree and must dissent for two reasons.

First. One may not appeal from a money judgment that he has collected and satisfied. Here, as the Court recognizes, after the judgment was entered the Government accepted promissory notes from respondents in payment of the judgment. I think, with, I respectfully submit, the support of all the relevant cases-which are legion-that the Government, having recovered a judgment for $8,000, over the serious protests of respondents that they owed it nothing, and having, with knowledge of all the facts, accepted the benefits of the judgment by collecting and satisfying it, cannot thereafter prosecute an appeal to reverse it.

The Court relies on Embry v. Palmer, 107 U.S. 3, 2 S.Ct. 25, 27 L.Ed. 346, and Erwin v. Lowry, 7 How. 172, 184, 12 L.Ed. 655, for its conclusion that the Government may prosecute this appeal from the judgment notwithstanding it has satisfied it. But, with deference, I must say those cases do not support the Court's conclusion. The issue in the Embry case was whether Embry was entitled to $9,185.18, as he claimed, or to only $2,296.29, as the respondents contended and admitted to be due. The court awarded recovery of only the latter sum which Embry accepted. He afterwards appealed from the judgment, and it was held that he might do so for, as the court pointed out: 'The amount awarded, paid, and accepted constitutes no part of what is in controversy.' Id., 107 U.S. at page 8, 2 S.Ct. at page 29. How different from the situation here! That case was like the later one of Reynes v. Dumont, 130 U.S. 354, 9 S.Ct. 486, 32 L.Ed. 934, where the appellants received so many of certain bonds as were not taken to satisfy the judgment from which they appealed. It was contended that their action in doing this so completely accepted the judgment that they could not appeal. In rejecting that contention, this Court said:

'The acceptance by appellants of what was confessedly theirs     cannot be construed into an admission that the decree they      seek to reverse was not erroneous, nor does it take from      appellees anything, on the reversal of the decree, to which      they would otherwise be entitled. Embry v. Palmer, 107 U.S.     3, 8, 2 S.Ct. 25 (27 L.Ed. 346).' 130 U.S. at page 394, 9     S.Ct. at page 497.

Those cases fall within a well-recognized but very narrow exception to the general rule that is applicable here. Similarly, the Erwin case did not involve the collection and satisfaction of a judgment. Rather, it involved only the performance by Erwin of a minor collateral 'condition imposed upon him before he (could) have the fruits of the decree' in equity. Id., 7 How. at page 184. Like Embry, that case does not at all rule the question here presented.

The case in this Court that most nearly rules our question is Gilfillan v. McKee, 159 U.S. 303, 16 S.Ct. 6, 40 L.Ed. 161. There appellant claimed an interest in a special fund of $7,070 and also claimed to be entitled jointly to participate in a general fund of $147,057.63. A portion of the special fund was awarded to him in one division of the judgment, but another division of the judgment denied to him any right to participate in the general fund. He appealed, and was met with the claim that by accepting the award of a part of the special fund, he had taken under the judgment and therefore could not appeal from it. Recognizing that one cannot appeal from a judgment that he has collected and satisfied, the Court said: ' * *  * the acceptance of the whole or a part of a particular amount awarded to a defendant might, perhaps, operate to estop him from insisting upon an appeal.' But the court found that 'there were practically two decrees in this case, one applicable to the special fund, which, in the bill, the subsequent pleadings, and in the decree, had been kept as a distinct and separate matter, a portion of which fund was awarded to McPherson; and the other applicable to the general fund in which McPherson had been denied any participation whatever.' And the court held that 'his acceptance of a share in the special fund did not operate as a waiver of his appeal from the other part of the decree disposing of the general fund.' Id., 159 U.S. at page 311, 16 S.Ct. at page 9.

The Fourth Circuit has flatly ruled this question in Finefrock v. Kenova Mine Car Co., 37 F.2d 310, among other cases. There the appellant accepted payment of a judgment for an amount substantially less than he claimed and afterwards appealed. In holding that he could not appeal from a judgment that he had collected and satisfied, the court said at page 314:

'We do not find it necessary to enter into a discussion of     these questions in view of the acceptance by the appellant of      the amount allowed him in full satisfaction and discharge of      the judgment. He contends that there is no inconsistency in     his acceptance of the money and the prosecution of the      appeal, relying on such decisions as Embry v. Palmer, 107      U.S.

3, 8, 2 S.Ct. 25, 27 L.Ed. 346; McFarland v. Hurley (C.C.A.)     286 F. 365; Carson Lumber Co. v. St. Louis, etc., Railroad      Co. (C.C.A.) 209 F. 191, 193; Snow v. Hazlewood (C.C.A.) 179      F. 182. But it is obvious that he falls within the general     rule and not within the exceptions thereto as set out in      Carson Lumber Co. v. St. Louis, etc., Railroad Co., supra.'

The Third Circuit has likewise flatly ruled the question in the same way, Smith v. Morris, 69 F.2d 3; so has the Fifth Circuit, Kaiser v. Standard Oil Co., 89 F.2d 58; White & Yarborough v. Dailey, 228 F.2d 836, and the Eighth Circuit, Carson Lumber Co. v. St. Louis & S.F.R. Co., 209 F. 191. Literally dozens of cases by the courts of last resort in almost all the States in the Union have so held.

I, therefore, respectfully submit that the settled law requires the conclusion that the Government, having collected and satisfied this judgment with knowledge of all the facts, cannot prosecute this appeal to reverse it. This appeal should, therefore, be dismissed.

Second. At all events, the Government is not entitled to a reversal of the judgment, because it went to trial, and proceeded all the way to judgment, upon a complaint that asked damages only under subdivision (1) of § 26(b), not under subdivision (2) of that section. The procedural chronology was as follows. In its original complaint the Government sought damages 'of $2,000 for each such act,' under subdivision (1). It thereafter filed a motion for leave to file a First Amended Complaint asking damages in 'a sum equal to twice the consideration agreed to be given,' under subdivision (2). But it did not press that motion to decision. On the contrary, the record shows that the Government formally withdrew that motion and instead filed a Second Amended Complaint, again, as in its original complaint, asking damages in 'the sum of $2,000 for each such act,' under subdivision (1). It was upon that complaint that it went to trial and all the way to judgment.

Of course, under the express terms of § 26(b), the Government had the right to elect which of the three allowable measures of recovery it would seek, but surely it is possible for the Government at some stage irrevocably to make that election. I agree it did not irrevocably do so by the filing of the original complaint, but I insist that it did do so by filing the Second Amended Complaint and going to trial and all the way to judgment on it. If that conduct did not effect the election, I would ask what could?

It is true that a pretrial conference was held and a pretrial order was entered, under Rule 16 of Fed.Rules Civ.Proc. One of the objects authorized by that Rule is '(t)he simplification of the issues,' and another is to consider 'The necessity or desirability of amendments to the pleadings.' The order recited that one of the issues of fact to be tried was whether the 'defendants became and are liable to pay to the United States the sum of $2,000 for each act committed by them that (may be) determined by the court to be in violation of said statute'; and, under 'issues of law * *  * to be litigated upon the trial,' the following appears:

'It is the contention of plaintiff that it is entitled to     double the amount of the sales price of the vehicles      described in the Second Amended Complaint *  *  *. Previously     the Court has indicated that an irrevocable election has been      made by the United States by virtue of the successive      complaints on file. It is the contention of plaintiff that it     is entitled to make its election at any time prior to      judgment. Plaintiff elects, in the event of judgment in its     favor, to receive as liquidated damages a sum equal to twice      the consideration agreed to be given to the United States or      federal agency involved. Plaintiff respectfully calls this to     the attention of the Court so that the point may be preserved      for purposes of appeal.' (Emphasis added.)

Of course, in simplifying the issues, the Court may, by the pretrial order, define the issues to be tried, but those issues must be within the pleadings. And amendments to the pleadings should be freely allowed as Rule 15 provides. But here the Government did not seek leave at the pretrial conference, or at any time after having voluntarily filed its Second Amended Complaint, to amend its pleading. It did not even unconditionally elect at the pretrial conference to proceed under subdivision (2) but only 'in the event of judgment in its favor.' Instead, it went all the way to trial, and to judgment, on the complaint that sought damages in 'the sum of $2,000 for each such act,' and it obtained a judgment on that basis. Surely, that conduct constituted an irrevocable election by the Government to recover damages in the measure claimed in its final complaint, and I think the Government is bound by it.

For the first of these reasons, I would dismiss the appeal, but inasmuch as the Court does not agree, I would, at the minimum, affirm the judgment on the ground that the Government irrevocably elected to recover the measure of damages that it recovered and hence is bound by that election.