Richfield Oil Co. v. Western Machinery Co.

279 F. 852, 1922 U.S. App. LEXIS 1631

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 3, 1922
• Docket: No. 3789
• Status: Published

Opinion

HUNT, Circuit Judge

(after stating the facts as above). [1] The question presented is whether or not the Oil Company made a showing which gave it an absolute right to intervene. If it did, the District Court erred in denying the motion to intervene; while, if the facts presented but a case for the exercise of judicial discretion, this court will not disturb the order appealed from.

[2, 3] Of course, the general rule is that an application to intervene is addressed to the sound discretion of the court. Credits Com. Co. v. United States, 177 U. S. 316, 20 Sup. Ct. 636, 44 L. Ed. 782. But that rule is founded upon the assumption that the petitioner for intervention has other and adequate means of redress available to him, and therefore it is not unjust to him to rule that the main controversy should he proceeded with, freed of the complication injected by his assertions. Obviously, serious injustice would often be done to the principal litigants, if it were obligatory upon the court to halt the progress of a suit in order to let a new party come in and try out his claims, regardless of the fact that he can, by an independent action, sufficiently protect any right he may have. But, on the other hand, if one presents a situation where he will lose a meritorious claim unless he can obtain relief by coming into the main suit, to say that he may not intervene is to deprive him of the only way by which he can have an opportunity to be heard. This would be equivalent to holding that, notwithstanding the fact that one has a direct interest in the litigation and the subject-matter thereof, and who shows that he is remediless unless he can assert his claim, has no absolute right to be heard, and must abide the discretion of the court, which may be exercised adversely to him, and so deprive him of any relief whatsoever.

A court of equity will not proceed in that way, and where it has obtained jurisdiction, and has taken possession of the property of defendants in the main suit through a receiver, will be guided by principles which will more efficiently and effectually meet the ends of justice. U. S. Trust Co. v. Chicago T. T. Co., 188 Fed. 292, 110 C. C. A. 270; Credits Com. Co. v. United States, 91 Fed. 573, 34 C. C. A. 12, and 177 U. S. 316, 20 Sup. Ct. 636, 44 L. Ed. 782; Farmers’ & Merchants’ Bank v. Arizona M. & S. & L. Association, 220 Fed. 1, 135 C. C. A. 577; Cathay Trust Co. v. Brooks, 193 Fed. 973, 114 C. C. A. .125; Rouse v. Letcher, 156 U. S. 47, 15 Sup. Ct. 266, 39 L. Ed. 341 ; B. & M. R. R. Co. v. Sullivan (C. C. A.) 275 Fed. 892; Western Union Tel. Co. v. United States, 221 Fed. 546, 137 C. C. A. 113; Swift v. Black Panther Oil Co., 244 Fed. 20, 156 C. C. A. 448. The justice of applying the views expressed is well illustrated by the case under consideration, where it appears in the record that the assets of the defendants, valued at about $2,000,000, were sold at public sale by the receiver for about $86,465, plus amounts which made a total of .$275,000, and out of an indebtedness of about $800,000 claims for less than $270,-000 were established in court, and each and every claimant of the claims aggregating such amount was adjudged entitled to a lien. The assets are therefore gone, and, although appellant moved with reasonable expedition, it was denied a right to contest the claim of plaintiffs below, or to dispute their allegations of right to the preferences awarded them.

The decree must be" reversed, and the cause remanded, with directions to set aside the decree and the sale thereunder, and the order denying appellant’s petition to intervene, and to permit the appellant herein to intervene and be heard in support of its claim.