Opinion
No. 12329.
November 16, 1949.
Appeal and cross-appeals from the United States District Court for the Western District of Louisiana; Benjamin C. Dawkins, Judge.
On rehearing.
Rehearing denied.
For former opinion, see 176 F.2d 1004.
Sidney L. Herold, Sidney M. Cook, Shreveport, La., and E.B. Stroud, Dallas, Tex., for appellant and cross-appellee.
Monte M. Lemann, New Orleans, La., Otis W. Bullock, Marion K. Smith, Byron D. Bullock, all of Shreveport, La., S.W. Plauche, Sr., and S.W. Plauche, Jr., Lake Charles, La., for appellees and cross-appellants.
Before HUTCHESON, SIBLEY, HOLMES, McCORD, and WALLER, en banc.
The petition of J.T. Connolly, Receiver, and the petition of R.T. Moore et al., intervenors, for rehearing in the above cause are both hereby denied.
Someone has said that when the heavens and the earth have passed away and the universe has returned to cosmic dust, divine truth will stand unscathed amid the wreck of matter and the crash of worlds. We were reminded of this when we read the petition for rehearing and saw the spear of truth thrust into the vulnerable heart of the contention that Class B assets were not pledged to anyone but were acquired in full ownership by the new bank. With the argument in that petition fortified by the quotation from Hightower v. American National Bank, 263 U.S. 351, 44 S.Ct. 123, 126, 68 L.Ed. 334, it is apparent that the decision in the case at bar not only resembles but actually realizes the illustration therein given of a court that adjudges the nature of a mortgage deed while disregarding the defeasance clause. One qualification must be added, however, which is brought into bold relief by the alternative request that the old bank be relieved of any charges for taxes paid by the new bank on real estate that is held to belong absolutely to the new bank. Unless the majority opinion is modified on the tax item, this will become the classic case that the Supreme Court had in mind as the ne plus ultra of what ought not to be done, when it said: "To do so would be much like determining the nature and effect of a mortgage deed without considering the defeasance clause."
An equally vulnerable contention is that, by interest on assets, the parties meant services for administering assets. It is not often that several weeks after the execution of a contract, while it is actually in the process of being performed, the parties meet and agree upon what they intended by a certain paragraph therein, which paragraph years later becomes the subject of litigation; but that very thing happened in this case. On January 10, 1933, the parties, with the contract before them, solemnly agreed that there was an error in Article V thereof, which provided a reasonable fee for all services in administering Class B assets. To correct this error it was expressly agreed that there should be a reasonable fee for administering Class C assets only. The 6% interest charge was neither characterized as compensation for administering Class B assets nor specifically mentioned; but, to make assurance doubly sure, it was expressly provided that the costs of administering Class B assets should fall entirely upon the new bank. Thus the parties agreed to eliminate the service charge, and to let the 6% interest charge remain in the contract. The court now by interpretation eliminates the 6% interest charge and reinstates the service charge, which is exactly the reverse of what the parties recited in the amendment was their intention.
This court necessarily takes judicial notice of the proceedings in this case and of its own membership. Consequently, it knows that this case was heard before a duly constituted court in bank consisting of all six active judges of the court, except one who was disqualified by reason of his having been of counsel prior to his appointment as judge. Likewise, it knows that one of the majority judges who participated in the decision has since retired, effective October 1, 1949; that the judge who was disqualified died in July, 1949; and that successors to fill both vacancies were appointed in October, 1949.
The four active judges remaining upon the court, who participated in its decision, are equally divided as to what action should be taken upon the petition for rehearing now pending in this case, two of said judges being in favor of granting, and two in favor of denying, said petition. The retired judge is not competent to participate in the decision of the petition for rehearing because of Section 46(c) of the Judicial Code, 28 U.S.C.A., which provides that a court in bank shall consist of all the active judges of the circuit. Section 294(d) provides that no retired judge shall perform judicial duties except when designated and assigned. It is therefore apparent that a retired judge is not eligible to sit upon a hearing in bank, even by special designation of the chief judge. Since there are six active judges who constitute the court in bank, the petition for rehearing should be submitted to them. No other judge, except a circuit justice, is qualified to sit on this court in this case, since the duly constituted court in bank has heretofore been ordered by a majority of the judges. Two judges are not authorized to deny a petition for rehearing in this case.