Full opinion text
CLARK, Circuit Judge. This is a later stage of a case previously before us and reported as W. E. Hedger Transp. Corp. v. Ira S. Bushey & Sons, 2 Cir., 155 F.2d 321. That appeal involved solely a question of jurisdiction. Hedger, the owner of tugs and vessels subject to a preferred ship mortgage, had consented to a decree of the district court, March 8, 1945, foreclosing the mortgage. Then on April 4, 1945, it instituted a suit by summons and complaint asking for the vacation of the consent decree, an accounting, damages, and other relief. The district court dismissed this suit for lack of jurisdiction, holding that its powers would be limited to consideration of a libel in review, to the exclusion of a “bill in equity to nullify the consent decree and to recover damages.” This court agreed with the lower court on the issue of substance, holding that its powers were restricted by the limitations of federal jurisdiction to what it could appropriately do on a libel in review or, within the term, a petition to vacate the decree; it differed with the district judge as to the procedure, however, since it thought that the so-called complaint would actually fulfill all the functions of such a libel or petition. Accordingly it affirmed the decree so far as that dismissed a claim of a third individual (Hedger individually), but reversed it as to the Hedger Company and directed that the complaint be considered a petition in the foreclosure suit to vacate the decree. It did, however, exclude therefrom certain claims for damages for abuse of process and for repayment of sums paid under a mutual mistake of fact (Arts. 67-69 of the complaint) as not being within the admiralty jurisdiction. It expressly refrained from passing upon the legal sufficiency of the complaint as a petition for the purposes stated. Upon the going down of the mandate the district court transferred the case from its equity docket to the admiralty docket as a part of the former foreclosure case. Then it set the case for a hearing before the same judge who presided at the foreclosure hearing. He heard the parties and thereafter dismissed the complaint for legal insufficiency, writing a lengthy opinion, 70 F.Supp. 578. Respondent then filed a motion to expunge this opinion on the grounds that there was no motion regularly before the court and that the judge was disqualified, since he had conducted the original foreclosure hearing. This was heard and denied by another district judge. Next respondent filed a motion to vacate the decree, which was heard and denied by the original judge upon consideration of a further brief from respondent. This appeal is from not only the original decree of dismissal, but also the two further orders denying respondent’s motions. The substantial question on this appeal is whether the “complaint,” now become a petition to reopen and vacate, is sufficient in law, or more particularly whether it shows a legal basis for vacating a formal decree of the district court. True, respondent also states, without argument, its contention that it was denied due process of law by reason of the disqualification of the judge and the latter’s treatment and dismissal of the petition. But in any event we can see no error here if the judge’s main legal conclusion was and is sound. The mandate of this court directed certain actions by the district court, and no motion of the parties was necessary to stimulate the judge to obedience. We see no ground of disqualification in that the issue was referred to the judge who should know most about it — a course which seems sensible and is not a statutory ground of disqualification. 28 U.S.C.A. § 24. Nor are we cited to precedents otherwise. Compare Frank, Disqualification of Judges, 56 Yale L. J. 605 et seq. And the judge certainly allowed respondent full opportunity to present its legal claims, as we are doing on this appeal. We are sure that respondent has been deprived of no constitutional or other rights by the course the proceedings have taken, and we pass therefore to the substantive issue decided below in libellant’s favor. The petition is long and detailed, containing seventy-one paragraphs or Articles, of which, as we have seen, three have been eliminated on the previous proceedings. It also contains seven prayers for relief. Not unnaturally for so lengthy a document it tends to be both verbose and abstract and conclusory in its allegations. Nevertheless, the main gravamen of the, petition, as we pointed out in the earlier appeal, can be discovered; and we are now aided by the complete record of the earlier hearing. Respondent complains because the trial judge in his opinion regretted the absence of these records before the court on the earlier appeal, “as they will be in an appeal from this decision,” 70 F.Supp. 578, 581, saying that this constitutes an admission that the judge considered proceedings in the foreclosure action. But he would have been remiss in his complete consideration of the case had he. not done so to the extent that they were relevant. It is of course thoroughly settled that the court takes judicial notice of its own records, particularly in the very case; and it is hard to see how a petition to vacate a decree can be intelligently appraised without examining the circumstances under which the decree was entered. Here the transcript of the earlier hearing adds life and color to what doubtless would be apparent from the more formal documents of record and furnishes the background against which this quite remarkable claim must be viewed. The proceedings began in a normal way in the district court on February 10, 1945, with a libel for a foreclosure of a preferred ship mortgage and the issuance of process in rem against the vessels. This is not only usual, but is also the only way of proceeding in the case of these mortgages, which since 1920 have been brought within the exclusive jurisdiction of admiralty. 46 U.S.C.A. § 951, providing for enforcement “by suit in rem in admiralty,” with original jurisdiction granted “to the district courts of the United States exclusively.” After citation and notice to the Hedger Company, the owner and respondent-appellant here, the latter on February 21, 1945, filed its answer, in which, while it admitted the execution of the preferred mortgage of March 21, 1939, it denied that it received good and valid or adequate consideration for the notes secured, as well as “any present obligation to pay any sum of money or interest to the libellant.” It then went on to state in some detail its defense which again figures prominently in the present proceedings. This grows out of an asserted joint venture between the Hedger and Bushey interests beginning on July 30, 1932, from operation of the Hedger boats, purchased upon foreclosure by the New York Scow Corporation, a Bushey subsidiary, and then subjected to a mortgage of about $155,000 to a third party. The Hedger Company was formed to operate the vessels and to pay off the indebtedness. According to respondent’s assertions a large sum of money had been paid from the earnings by the 23d day of December, 1938, but the Bushey interests then represented to Hedger that there was approximately $400,000 due on open account and that certain other boats should be purchased for $200,000, with the result that certain transactions were had by which the Hedger Company gave the mortgage in question to the Scow Corporation on March 21, 1939, for $600,000, $400,-000 representing the amount claimed for barge and tug • hire and repairs, and the balance the purchase price of the additional vessels. It was asserted that these amounts were not due, although Hedger was unable to obtain an accounting from the libellant, now assignee of the mortgage. Further, it was said that on December 21, 1944, the Hedger Company and Hedger individually had brought an action in the Supreme Court of the State of New York against the Bushey interests to compel an accounting. The answer concluded with not only general prayers for dismissal of the libel, for damages, and for other and further relief, but specific prayers that the action be deferred until the conclusion of the state court action, that a joint receiver with Hedger be appointed under 46 U.S.C.A. § 952 to operate the vessels, and that, if the court determined that it would proceed in this action without regard to the state court action for an accounting, then the matter be referred to a special master for an accounting between the parties. , No attempt having been made by respondent to secure release of the vessels, permitted by filing a bond or security pursuant to the statute, 28 U.S.C.A. § 754, Admiralty Rule 12, 28 U.S.C.A. following section 723, or the local rule, E.D.N.Y. Admiralty Rule XXI, the libellant took steps to ask for an immediate hearing, which the court proceeded to grant. This was also in accordance with a local rule to avoid long and expensive custody of many vessels, here 32 in number, by the United States marshal. Respondent, however, made extensive efforts to delay the hearing, by direct application, by filing exceptions to answers which the libellant had made with promptness to its interrogatories, by asking for preliminary hearing on such exceptions, and so on. This is a significant feature of this case in connection with respondent’s main contention on this appeal, namely of coercion through libellant’s abuse of process. The normal form of such duress is by steps taken to prevent a litigant from reaching a court to protect his interests. Here the situations are reversed. At all times the party accused of the abuse is endeavoring to get before the judge and to have the case thoroughly heard, while the party who claims to be the victim has strenuously opposed such judicial hearing. In any event the court did set the trial for March 7, 1945, and it began on that day before Judge Byers. The record of the hearing discloses how thoroughly the points at issue and the respective positions of the parties were explored with the judge. An opening statement on behalf of the libellant called attention to much of the dispute, with a direct statement of the state court action for an accounting. Libellant’s counsel pointed out that of the original $600,000 mortgage there was a forgiveness of about $290,000, and an application of payments out of earnings reducing the sum until, as it was asserted, the parties agreed in 1944 that it was $115,000, which was covered by installment notes, of which the failure to pay one then due had led to the proceedings. Then respondent’s counsel in his opening statement immediately went back to the joint venture starting in 1932 and made his general position quite dramatically clear. Thus he said, among other things, that the Hedger interests had turned over to Bushey over $1,000,000 in cash and property during the period, and that “Mr. Bushey and his associates have been milking the Hedger Company and Mr. Hedger for some twelve years and had them right by the scruff of the neck where they could not help themselves because of the various amounts that they claimed to be owing at that time.” As a-, result of this fairly extensive discussion the court said to resp'ondent’s counsel: “In other words, you claim that the amount said to be due is not due?” and receiving the answer, “That’s right,” made the rather natural response: “Then it seems to me, my duty to go ahead and take testimony.” Counsel agreed, but stated he was not prepared to go ahead with all his evidence that day, to which he received the courteous response from the court that “you may be assured that you are not going to be forced. I have tried to make that clear.” But before going to the testimony respondent’s counsel went on to say that he had tried to tender the amount due in order to have the boats released, so that they would not be idle and held up, and to allow the accounting issues to be tried either later in the federal action or in the state court. In reply, libellant’s counsel stated his willingness to accept an adequate tender, but asserted that the tender was never accompanied by the production of the money and was always conditioned by a demand for a full release of the mortgage. There ensued a long discussion among court and counsel thoroughly exploring issues which respondent would now reopen. As it turned out, the parties had little or no dispute as to the amount to be covered by the tender. In its libel, libellant had claimed the sum of $73,766.66, which included $60,700 indebtedness, interest, and attorneys’ fees, the latter set at $10,000. The amount offered by respondent, and which in fact became the basis of settlement, $69,491.56, was upon the same basis, with the single modification of a reduction of the attorneys’ fees by one-half. On the other hand, the real dispute at this time was as to the form and circumstances under which the tender should be made, in the light of its possible legal effect upon the issues in litigation between the parties. Respondent repeatedly sought an agreement for acceptance of the tender and complete release of the mortgage security, together with a reservation of all its asserted rights to be tried out later in the accounting between the parties. This libellant resisted,making the formal objection that there had been no actual or unconditional tender of the money and explaining further that acceptance of anything but an unconditional tender would prejudice it from asserting what it felt to be its full rights on an accounting. It had already served notice of an intention to amend its libel to claim approximately $25,000 more asserted to be due on further installment notes; and it said that the results of a full accounting might well be not a reduction, but a substantial increase, of the claim. During the course of the hearing the judge also explored the possibility of a bond or deposit of the money as security. Nevertheless respondent continued to assert its position that any security furnished should be a complete substitute for the vessels, though with all its rights reserved; and libellant stood on its contention that any such security, not offered as payment of the indebtedness,, should cover also the additional amount it was prepared to claim. It appeared, however, that respondent was prepared to obtain the money represented by its offer from a bank whose counsel was in attendance at the hearing, the money to be advanced on release of the mortgage, thus making the vessels available as security to-the bank. The court adjourned the discussion over the noon recess in order to afford the parties an opportunity for adjustment. But since that did not occur, the court accepted the inevitable consequence for which the libellant was asking, namely that the trial must proceed. Respondent objected that a trial would be a long drawn-out affair, but was disputed by libellant’s counsel, who wondered “if it would take more than a half hour. The libellant’s case will go in in ten minutes.” But the court directed the trial to proceed, and the libellant proceeded with its testimony, with the original mortgage received in evidence as Libellant’s Exhibit 1. At that point respondent’s counsel requested a recess for a conference with his client. Then after a short recess he made an unconditional tender, which libellant agreed to accept as such, giving satisfaction pieces on receipt of the money. The case was then adjourned until the next morning in order that the money might be produced at the Customs House, where the mortgage had been recorded and the satisfactions were to be recorded. When the hearing was resumed the next morning, respondent’s counsel stated that they were ready “to have your Honor sign a decree under our tender of yesterday afternoon.” A colloquy disclosed that satisfactions were being held in the Customs House, together with the mortgage, to await a consent decree, after which the money would be paid and the releases given. Respondent’s counsel thus specifically requested the signing of the decree, which, indeed, carries the endorsement of his consent, as well as that of the proctors for the libellant. This decree orders recovery of the sum of $69,491.56 “from the barges attached herein and the respondent” and release of the attached vessels upon payment of this amount and of all clerk’s and marshal’s fees. Payment was then made, the satisfactions were given, and the vessels were released. When the complaint or petition was filed less than a month later, it repeated the contentions of respondent’s answer as to the joint venture in essentially the same language. Then it alleged duress on the part of libellant, in that the latter, knowing of respondent’s financial needs and the necessity of keeping the boats in operation, particularly because of important pending contracts, forced respondent to pay the sum stated to secure the release of vessels reasonably worth in excess of $250,000. It should be noted that respondent does not seriously criticize the original institution of the foreclosure action. It could hardly do so in view of the exclusive nature of the remedy in admiralty to enforce a preferred ship mortgage. Certainly realization upon the security of such a mortgage cannot be defeated by the mere device of institution of a state court action covering somewhat the same ground. The claim of duress is, however, for the pressure exerted by libellant to have the hearing proceed until and unless the money were paid. That is the sum and substance of the case. It should be noted that the court never did get to the questions of appointing a receiver or a special master or of granting any of the special relief requested in respondent’s answer. We do not now know how much of this might have been granted had the hearing proceeded. Respondent finds something coercive in libellant’s reference to its further claim of approximately $25,000; but there seems nothing illegal or improper in a statement by libellant of its utmost claims to the judge. Certain general allegations that the libellant was attempting to stir up other litigation against respondent are removed from this case by our previous holding as to the restrictions of admiralty jurisdiction. Hence we have the single bare point whether libellant’s action in pressing the libel to trial before Judge Byers until respondent actually produced and paid the money unconditionally was such “economic duress” as to justify the almost immediate upsetting of the formal court decree. Here the main gist of respondent’s argument is that libellant was acting oppressively in asking unconditioned payment and refusing to accept the money in place of the vessels while the issue as to the fact or amount of indebtedness was being litigated later. Respondent cites and relies upon the well-established principle that security given to release a vessel arrested in admiralty proceedings in rem takes the place of the res for all purposes and hence does more than merely restore possession of the vessels. United States v. Ames, 99 U.S. 35, 25 L.Ed. 295; The Susana, 4 Cir., 2 F.2d 410; The Fred M. Lawrence, 2 Cir., 94 F. 1017, 1018; J. K. Welding Co. v. Gotham Marine Corp., D.C.S.D.N.Y., 47 F.2d 332; The Morning Star, D.C.E.D.N.Y., 5 F.Supp. 502 ; 2 Benedict on Admiralty, 6th Ed. 1940, § 378; 25 Col. L.Rev. 665. How far this principle is applicable to proceedings under the Ship Mortgage Act has not been determined, though we recognize the force of respondent’s legal contention. Even so, we do not see how it helps respondent here. If sound, it meant that the vessels were available as security for a bank loan to provide either a deposit or payment. That would leave as the only proper dispute between them at this time the amount of the security in ths light of libellant’s proposal to amend its demand if the amount due was to be later litigated. How far in addition libellant was prepared to controvert respondent’s claim of law never became clear; for the issue remained academic in the absence of any actual tender of security by respondent. Libellant’s continued emphasis upon the amount of the bond and a not wholly unnatural failure to distinguish in the discussion between release of the security and release of the debt might indeed suggest that it was not prepared to refuse a substitution of fully adequate security. But the important point is that libellant at most asked only for its asserted legal rights or alternatively for the immediate hearing which the court stood ready to give. Libellant is hardly to be charged with duress for merely stating its claims in the presence of a court ready to afford complete protection against injustice or overreaching. Nor is the court to be charged with a callous disregard of the respondent’s rights in its quite patient exploration of the alternatives of bond, deposit, payment, trial, followed by its direction for the hearing to proceed as the only way of settling the conflicting claims and ultimately by its acceptance at face value of the respondent’s settlement and request for a final decree upon consent. It is therefore quite clear that this was no real case of duress. Rather, it was upon the part of the respondent a choice of strategy or tactics. Admittedly and expressly the parties were determining their immediate actions at the hearing in the light of the effect of such actions upon the pending accounting wherever that might be held. Faced with the alternative of immediate settlement of the accounts, respondent deliberately chose to procure a postponement by meeting the legal conditions set by libellant. Having chosen this strategy, respondent should abide by it and not try to overturn, within a month after rendition, a formal court decree which it itself had sought for the purposes it had immediately in view. How far its strategy may permanently prejudice or reduce its further claims in its pending state court action is not for us to attempt to say. There involved are other debts and other mortgages, as well as the whole series of transactions long antedating this present mortgage. It is obviously the task of that court, if the issues go to trial, to disentangle and settle all the other conflicts which divide the parties. Nevertheless on this appeal respondent asks us to discount the history of the case as thus clearly disclosed by applying the well-known and useful rule that upon dismissal of a pleading upon motion all intendments are taken in favor of the pleader, in the endeavor to support the allegations so far as possible. The difficulty with this is that it is controlled by a presently more important, apposite, and well-settled principle of law that the petition must be read as though it included the facts of which the court takes judicial notice, even though these may be contrary to some of the allegations. Jones v. United States, 137 U.S. 202, 214-217,11 S.Ct. 80, 34 L.Ed. 691; Greeson v. Imperial Irr. Dist., 9 Cir., 59 F.2d 529, 530; Verde River Irr. & Power Dist. v. Salt River Valley Water Users’ Ass’n, 9 Cir., 94 F.2d 936, 938; Walsh v. Trustees of New York & Brooklyn Bridge, 96 N.Y. 427, 438; Masline v. New York, N. H. & H. R. Co., 95 Conn. 702, 111 A. 639; Morgan, Judicial Notice, 57 Harv. L. Rev. 269, 273; cases collected Clark, Code Pleading, 2d Ed.1947, 251. Indeed there would be little reason to the rule compelling the judge to take judicial notice of known facts (Morgan, op. cit. supra; cf A.L.I., Model , Code of Evidence, 1942, Rules 801, 803; 9 Wigmore, Evidence, 3d Ed. 1940, § 2583) if he must also accept contrary allegations until disproved by formal proof. Here it is true respondent’s petition contains several allegations which we do accept of libellant’s intent and desire to take advantage of respondent’s known financial stringency. But on the crucial issue whether this was illegal or improper, the allegations become vague and hesitant. Thus on the vital point as to the amount due on the mortgage there are such statements as a lack of “any or adequate” consideration for the original indebtedness; but even this indefinite charge is explained elsewhere to mean adequate consideration “beyond” various listed matters such as the original debt to a third-party mortgagee, the reasonable value of repairs, supplies, materials, labor, charter hire of and for the barges and tugs, and accrued interest. So, as to the amount due at the time of institution of the action, respondent alleges “upon information and belief” in a conclusory paragraph near the end of the petition that it did not owe libellant, but that the latter owed it, the “exact amount” being unknown for reasons stated in an earlier paragraph. But these reasons turn out to be its lack of knowledge of the accounts and transactions; that this lack was caused by libellant’s agent does not change the obvious fact that the actual state' of the account is at present unknown. When these allegations are read in the light of statements by counsel at the hearing we can see that this is the case as to both parties and there is a real dispute between them as to the debt. Unless we are to indulge in the melodramatic assumption (not even claimed) that respondent’s counsel was then forced not even to silence, but to a concession of what he knew to be false, the conclusion that there was a properly triable issue is unavoidable. It is also true that beyond this the petition makes much of the charges that respondent was forced hastily into what should have been a long trial before a Special Master and that libellant refused to accept either security, stipulation for value, or a tender and deliver “proper satisfactions of the mortgage.” As to the first charge, it is of course true that libellant pressed for immediate trial. As we have seen, however, there was nothing improper in this, and it was the indicated and desirable course, as the judge held. Respondent could not claim, as of right, the frowned-upon step of a reference (McCullough v. Cosgrave, 309 U.S. 634, 60 S.Ct. 703, 84 L.Ed. 992; Los Angeles Brush Mfg. Corp. v. James, 272 U.S. 701, 47 S.Ct. 286, 71 L.Ed. 481; Federal Rules of Civil Procedure, rule 53(b), 28 U.S.C.A. following Section 723c; Equity Rule 59, 28 U.S.C.A. § 723 Appendix); there was real doubt as to how lengthy a trial was necessary to settle the immediate matter before the court; and counsel had the judge’s assurance that he would not be forced in producing his evidence. As to the second charge, respondent actually never made tender of bond, payment, or other security until the ultimate tender of payment and its acceptance. Because of this and of the uncertainty as to the law, libellant was never put to a definite choice of legal platform. The further charge that its proctors misled the court as to the law is therefore manifestly absurd. Actually libellant’s counsel appear to have shown a commendable desire throughout to seek and abide by judicial settlement of the issues; it was respondent who held back. Against this background the issues of law on this appeal seem to us both simple and clear. The Restatement of Judgments sets forth the comparatively limited grounds upon which a judgment within the court’s jurisdiction and authority may be set aside. See c. 5 in general, and note § 126 for the many instances where such relief is to be denied. Of course duress preventing a party from contesting a fraudulent claim or defense is an appropriate ground for relief, § 121; but the examples cited are revealing of the kind had in mind by the restaters, as in Illustration 6, p. 592, where “A threatens to kidnap B’s child if B defends the action.” Further, the granting of relief is subject to the general rules of equity, §§ 127-130, and one ground of refusal is that of “contributory fault,” § 129, where before or after the judgment the complainant or the person representing him “failed to use care to protect his interests,” or “after ascertaining the facts the complainant failed promptly to seek redress.” Here there was more than a mere failure to seek court protection; there was a deliberate choice to avoid it when the doors of justice were already open and the parties were within the temple. Such a voluntary payment cannot be duress. Radich v. Hutchins, 95 U.S. 210, 213, 24 L.Ed. 409; Brown v. Swann, 10 Pet. 497, 505, 35 U.S. 497, 505, 9 L.Ed. 508; Brown v. Buena Vista County, 95 U.S. 157, 24 L.Ed. 422; Knox County, Mo. v. Harshman, 133 U.S. 152, 154, 10 S. Ct. 257, 33 L.Ed. 586; Pickford v. Talbott, 225 U.S. 651, 661, 32 S.Ct. 687, 56 L.Ed. 1240; Chase Nat. Bank v. City of Norwalk, 291 U.S. 431, 440, 441, 54 S.Ct. 475, 78 L.Ed. 894. Respondent relies rather generally on cases of abuse of civil process by a litigant to secure an unjustified end. While the courts have shown a natural hesitancy to act broadly, for fear of depriving a litigant of those rights which the law accords him, yet there is undoubtedly a field for the operation of these principles, as acutely developed by Professor Dawson in his articles, “Duress Through Civil Litigation,” 45 Mich.L.Rev. 571, 679. He is there dealing not with relief from judgments already rendered, but with a quasi-contractual remedy, which would not be a part of admiralty jurisdiction under our previous ruling. Reference may be made to these articles, however, for the very limitations they so pointedly suggest, such as that recovery should be only on the basis of unjust enrichment, pp. 577, 578, and that the gist of the duress is the preventing of ■ resort to the protective activities of a court, p. 591 et seq., p. 685 et seq. Thus, stress is laid throughout the articles on the lack of “opportunity to litigate.” We have been cited to no case, and have discovered none, where relief is accorded a suitor who runs away from court, instead of toward it. But reference to cases involving illegal or excessive attachments or other recognized abuses of process does have this relevancy that it highlights the sharp difference between them and the present case. Here we have no illegal or excessive attachment; we have only the enforcement of a mortgage in the way provided by law. The claimed abuse is that libellant refused to release the mortgage upon respondent’s offer of payment. This was not a legal tender, and refusal of it in its tentative form or otherwise would not be an abuse of process in the light of the dispute actually existing as to the amount due. But further, libellant’s counsel made clear the basis of his decision, leaving as the real crux of the case his one act of refusing the offer while it remained conditional, in order to retain the opportunity to prove the greater amount at the projected later trial. How really burdensome this claim could ever be is none too clear; apparently we are asked to assume that the bank, prepared to loan $70,000 against vessels worth more than $250,000, would advance no more. Even making this assumption we do not see how the statement of an amount as due, coupled with an expressed willingness for immediate trial as to its validity, can be a misuse of the agencies of justice. Unlike the usual precedents, we have here no attempt to avoid or prevent the effective operation of the court’s protective shield. On the contrary, libellant did what it could, against respondent’s opposition, to set the court processes speedily in motion. Small wonder is it, therefore, that respondent can cite no authority to support its extreme position. Respondent has rested its appeal to us upon its claim of duress, rather than upon a claim of discretionary power in the court to revise a decree within the term. The reason is, of course, obvious. The district judge directly familiar with the facts had refused to act after a very careful re-examination of the entire case; and his decision, so far as it was discretionary, was final. The I. F. Chapman, 1 Cir., 241 F. 836, 839, certiorari denied 245 U.S. 647, 38 S.Ct. 9, 62 L.Ed. 529. Further, in our reading of the record, this was the only appropriate result. A contrary ruling would have given us concern in view of the fact that this was a decree arrived at by agreement of the parties (McArthur v. Thompson, supra, 140 Neb. 408, 299 N.W. 519, 139 A.L.R. 413), the admonition against “too ready unravelling of judgments” expressed by this court in the earlier opinion (W. E. Hedger Transp. Corp. v. Ira S. Bushey & Sons, supra, 155 F.2d 321, 324), and the well-settled rule that an error of judgment of counsel is inadequate justification for such unravelling. Mr. Justice Story in Baker v. Whiting, C. C. Me., Fed.Cas.No. 786; Merchants’ Banking Co. v. Cargo of the Afton, 2 Cir., 134 F. 727, 731, certiorari denied 196 U.S. 639, 25 S.Ct. 794, 49 L.Ed. 630. Since all the facts are now fully known, there is no occasion for a trial or for the taking of testimony. It is as much the duty of the court to protect litigants from long and utterly useless litigation as it is to afford an opportunity for trial to those deserving it. And while a court will be astute to prevent misuse of its processes, it can hardly be expected to look with favor upon the device of obtaining postponement of effective trial by seeking a decree to be repudiated after its immediate objective has been obtained. Obviously the respondent has no such extrinsic facts to present as the Restatement refers to (such as threat of kidnapping a party’s child) and has not suggested any addition it could make to its petition. The facts are all shown by the record. Accepting the motives and intent ascribed to libellant in the petition we can still find nothing illegal in its acts or erroneous in the court’s grant of respondent’s request for the consent decree and later refusal to vacate it. Affirmed. “ * * * the cause will be remanded with instructions to treat the complaint as a petition in the foreclosure suit to reopen the decree upon the grounds therein alleged, on whose sufficiency, however, we are not to be understood to pass. Our decision is no more than that the admiralty court had jurisdiction in the foreclosure suit to give all the relief that the district court had power to give in any capacity, and that it was possible and proper to treat the complaint as a petition in that suit for all such relief, though for no other relief.” W. E. Hedger Transp. Corp. v. Ira S. Bushey & Sons, 2 Cir., 155 F.2d 321, 325. Nahtel Corp. v. West Virginia Pulp & Paper Co., 2 Cir., 141 F.2d 1, citing Butler v. Eaton, 141 U.S. 240, 11 S.Ct. 985, 35 L.Ed. 713; Lesnik v. Public Industrials Corp., 2 Cir., 144 F.2d 968, 972; I. & I. Holding Corp. v. Greenberg, 2 Cir., 151 F.2d 570, certiorari denied 327 U.S. 781, 66 S.Ct. 681, 90 L.Ed. 1009; Gilbert v. General Motors Corp., 2 Cir., 133 F.2d 997, 1003, certiorari denied 319 U.S. 743, 63 S.Ct. 1031, 87 L.Ed. 1700; Crichton v. United States, D.C.S.D.N. Y., 56 F.Supp. 876, 880, affirmed 323 U. S. 684, 65 S.Ct. 559, 89 LEd. 554; Freshman v. Atkins, 269 U.S. 121, 124, 46 S.Ct. 41, 70 L.Ed. 193; Bienville Water Supply Co. v. City of Mobile, 186 U. S. 212, 217, 22 S.Ct. 820, 46 L.Ed. 1132. The rule extends even to records of other cases in the same court. National Fire Ins. Co. of Hartford v. Thompson, 281 U. S. 331, 336, 50 S.Ct. 288, 74 L.Ed. 881; Goldstein v. Groesbeck, 2 Cir., 142 F.2d 422, 426, 154 A.L.R. 1285, certiorari denied 323 U.S. 737, 65 S.Ct. 36, 89 L.Ed. 590. The Ship Mortgage Act of 1920 was a novel attempt to support the merchant marine and to afford a better market for ships of the United States Shipping Board. Before that no mortgage foreclosure could be had in admiralty; its constitutionality was sustained in The Thomas Barium, 293 U.S. 21, 42, 55 S. Ct. 31, 37, 79 L.Ed. 176, which states, “If a mortgage is within the Act, there can be no suit to foreclose it in a state court; if the mortgage is not within the Act, there can be no suit for foreclosure in the admiralty.” Preferred mortgages are defined in 46 U.S.C.A. § 922, and the priority of their lien is stated in § 953. See Robinson on Admiralty 1939, 195, 196, 440 — 450; cf. Morrison, The Constitutionality of the Ship Mortgage Act of 1920, 44 Yale L.J. 1. Even had the admiralty jurisdiction not been exclusive, the defense of another action pending in the state court could not have prevailed. McClellan v. Carland, 217 U.S. 268, 30 S.Ct. 501, 54 L.Ed. 762; Stanton v. Embrey, 23 Wall. 548, 93 U. S. 548, 23 L.Ed. 983; 1 Moore’s Federal Practice 236; cf. Sutcliffe Storage & Warehouse Co. v. United States, 1 Cir., 162 F.2d 849, 851, and cases cited. The Ship Mortgage Act was obviously drawn in the light of this admiralty principle and appears to accept it; for 46 U.S.C.A. § 951 expressly makes the mortgage a lien enforceable only in admiralty, and 46 U.S.C.A. § 953(b) states rules of priority among maritime liens which would obviously be seriously disturbed if the giving of security released the liens, but not the mortgage. The suggestion of the district court that there is no provision for such release in the Act seems unpersuasive, for discharge of record by the mortgagee — on court order if necessary — would seem both the normal and the appropriate step. Libellant’s counsel succinctly summarized its position, late in the hearing and after the issues had been thoroughly canvassed, when in response to the court’s question, “Would you be willing to release the attachment on the boats?” he said: “If they file a bond on the amount fixed by your Honor and if you raise the amount of the libel on my motion and they bond it for that amount, of course we will release the attachment — we have no choice. We won’t, however, give satisfactions and I do not think it is fair that we be asked to give satisfactions until we have the money. “On a tender we will give satisfactions, on a bond we will release the boats.” Then the court said to respondent’s counsel: “He said he would be willing to release the attachment from the boats which would result in your being able to operate them, pending the outcome of this litigation. I think that the bond only takes the place of the boats and I do not think that that disturbs the lien of the mortgage.” But the latter continued to dispute the court’s ruling until the court ordered the trial to proceed. These principles of course apply to a consent decree, Snell v. J. C. Turner Lumber Co., 2 Cir., 285 F. 356, certiorari denied 261 U.S. 616, 43 S.Ct. 362, 67 L.Ed. 828; Harding v. Harding, 198 U.S. 317, 335, 25 S.Ct. 679, 49 L.Ed. 1066; indeed, the cases hold that, save for fraud, a consent judgment cannot be vacated as can an ordinary judgment in invitum. Thompson v. Maxwell Land-Grant & Ry. Co., 95 U.S. 391, 39,7, 24 L.Ed. 481; McArthur v. Thompson, 140 Neb. 408, 299 N.W. 519, 139 A.L.R. 413, with extensive annotation 421-455. P. 591, “Again the alleged debtor is deprived of the opportunity to litigate the merits of the dispute before application of pressure”; p. 596, “Altogether it seems remarkable that so few decisions have given this recognition to the coercive results of the seizure of assets under mesne process in civil actions”; p. 085, “In this caso [sale on execution of assets really owned by a stranger] * * * no ‘opportunity to litigate,’ to establish immunity from seizure, will ordinarily be provided before the seizure is made. The reasons for refusing relief to the judgment debtor can scarcely apply to a stranger who is no way precluded by the judgment or subjected to its sanctions”; p. 089, “If the mortgage creditor has proposed to employ a judicial proceeding, in the form and with the sanctions specifically authorized, it seems at the outset impossible to spell out misconduct or provide relief from the pressure. If the debtor contends that the claim asserted is excessive or wholly unfounded, be may claim that his debate with the mortgagee will be conducted at a disadvantage; but this claim can be countered with the suggestion that the debate will be conducted before a court, with full opportunity to contest the creditor’s claim before foreclosure can be decreed,” citing many cases, including Martin v. New Rochelle Water Co., 11 App.Div. 177, 42 N.Y.S. 893, affirmed 162 N.Y. 599, 57 N.E. 1117; Pziepoira v. Long, 338 Pa. 242, 12 A.2d 904; and Pease v. Francis, 25 R.I. 220, 55 A. 086.
FRANK, Circuit Judge (dissenting). 1. This appeal presents, I think, the question whether a court should allow its processes to be employed abusively as coercive weapons. Were the facts as stated by my colleagues, I would agree that that question is not here. But, as I shall try to show, my colleagues reach that conclusion by disregarding what I consider pivotal facts. While my major disagreement with my colleagues derives from differences about the facts (or their interpretation), I disagree also with several of their legal conclusions. The major items in their opinion with which I disagree are as follows: (a) They recognize no important distinction between an attack made on a decree or judgment during the term and one made thereafter, (b) They indicate that a decree or judgment will not be vacated or modified, during or after the term, on the ground that it was obtained by duress, unless the duress was the equivalent of a threat of kidnapping the defendant’s child, (c) They suggest that, in particular, a consent decree will not be vacated or modified, during or after the term, on the ground that the consent was procured by duress, (d) They say that petitioner, the Hedger Company, made no tender of payment before it made the tender coupled with its consent to the decree, (e) They indicate that petitioner’s counsel, before entry of the decree, admitted that a bona fide dispute existed as to whether petitioner was indebted to Bushey. (f) They give no weight to the fact that Bushey said that, unless its demands were mét, it would increase its claim by $25,000. (g) They say that the petition is so defective in important respects that we must affirm its dismissal, as if on a demurrer, without remanding to permit amendment. In the course of this opinion, I shall discuss each of those points. Including what I regard as important, omitted, facts, as they appear from the petition and record for the purposes of this appeal, the case, I think, comes to this: The holder of a preferred ship mortgage, which, to his knowledge, has been fully paid, brings suit to foreclose, wrongfully claiming that some $70,000 is still owing under the mortgage, and attaches the mortgaged vessels. Proof by the defendant mortgagor that the mortgage debt has been paid will lead to a trial lasting for several weeks. If, during those weeks, the vessels are idle because of the attachment, the defendant will suffer severe financial loss, and probably financial ruin. By giving a bond for the $70,000, defendant can obtain the release of the vessels from the attachment. The defendant offers to give such a bond, on condition that thereupon (a) not only will the attachment be dissolved but also (b) the plaintiff-mortgagee will satisfy the mortgage of record. The plaintiff rejects the second condition. The judge rules that, if a bond is given, it will release the attachment only, not the mortgage lien, and that, despite the filing of a bond, he will not direct the mortgagee to satisfy the mortgage. As the plaintiff knows, the defendant’s financial condition is such that defendant cannot give a bond for $70,000, or pay that sum to plaintiff, except through the aid of a certain bank. As plaintiff also knows, the bank will supply such a bond, or make an advance to enable defendant to pay the $70,000, if, but only if, simultaneously the mortgagee executes and delivers a satisfaction of the mortgage, so that the bank can have an unclouded first mortgage on the vessels as security. Defendant tenders the $70,000, and the plaintiff mortgagee at first indicates that, upon a decree for that amount and payment thereof, it will satisfy the mortgage. Subsequently, however, plaintiff refuses to execute and deliver such a satisfaction of the mortgage, unless the defendant both consents to a decree and pays the wrongful $70,000 claim. Mere payment of the $70,000, without a consent, will not cause prompt termination of the suit, thereby freeing the vessels of both the attachment and the outstanding mortgage. For plaintiff notifies defendant that unless defendant both so consents and pays, plaintiff will amend its pleadings and claim $95,000. This will mean that, to bring the suit to an end without a long trial, defendant must either (a) consent to and comply with a $70,000 decree or (b) without a consent, pay $95,000 which defendant cannot obtain. Under this pressure, defendant yields, consenting to a $70,000 decree and paying the $70,000 decreed, (borrowing the money from the bank on the security of a first mortgage on the vessels). Within the term, defendant petitions the court which entered the decree for vacation of the decree and restitution of the amount thus paid to plaintiff. I stress the fact that the petition was filed within the term. For it has often been held that, during the term, a judge has plenary power to modify or revoke his judgment or decree, a power far more extensive than that which exists to relieve from a judgment or decree after the term, whether the relief is then sought, by bill of review or otherwise, in the same court or in another court. It is important to recall just what we decided on the former appeal. Significantly, we did not hold that the “complaint” was to be considered a “libel of review.” Our opinion (per Judge Learned Hand), after carefully noting — 155 F.2d 321 at 323 — that the “complaint” had been filed during the term, said that consequently it was not necessary to resort to a “libel of review,” and that the “complaint” should be deemed but “a petition in the suit,” to vacate the decree within the term. We said further (page 322) : “The complaint alleged that in fact nothing was due upon the mortgages, as an accounting would show; but, since the accounting would have taken a long time to state,” the Hedger Company “could not afford to wait, and” was “forced to pay the demand under duress.” We held that the district court had no jurisdiction with respect to Hedger individually or as to any claim for damages except restitution. Accordingly, we reversed and remanded (page 325) “with instructions to treat the complaint as a petition [by the Hedger Company] in the foreclosure suit to reopen the decree upon the grounds therein alleged, on whose sufficiency, however, we are not to be understood to pass.” But we said (page 325) that the district court had jurisdiction to “direct restitution of any sum” which Bushey “may be found to have collected from” the Hedger Company “in excess of * * * the amount due upon the mortgage, if any”; as we otherwise put it (page 324), the district court had jurisdiction to order “restitution of any balance which, after stating the account, the court may find to have been an overpayment by the Hedger Company to the Bushey Company, extorted by duress, or abuse of process. * * *’’ It remained, then, for the district court to pass on “the sufficiency” of the petition, i. e., to determine whether petitioner made out a case of overpayment through “duress, or abuse of process” practiced by Bushey in connection with the suit. On the coming down of our mandate, the district judge proceeded thus: Before any answer to the petition had been filed, and without hearing any evidence in support of the petition’s allegations, he considered parts of the face of the petition and some of the previous record in the foreclosure suit. On that basis, he held that no duress or abuse of process appeared, and that the petition was therefore without merit. Accordingly, he entered an order dismissing the petition (and without leave to amend). In other words, the judge, of his own motion, acted as if defendant had demurred. As I shall point out later, dismissal, without leave to amend, on a motion to dismiss based solely on pleadings (i. e., a demurrer) is today considered most undesirable, and has always been so considered in admiralty. But, assuming that the judge properly thus dealt with the petition, he was obliged, of course, to take as facts all the matters which were of record in the previous stages of the foreclosure action. 2. The judge, however, was also bound to take as true all the facts alleged in the petition, except in so far as they contradicted those record facts. Consequently, for purposes of this appeal from that order, we must assume that, if permitted to do so, petitioner, the Hedger Company, would prove the uncontradicted facts so alleged. The sole issue before us, then, is whether, on that basis, there was “duress, or abuse of process.” My colleagues hold that there was not. I would agree with them if the facts we must here consider were solely the facts as stated in the majority opinion. For the facts as there stated, if summarized, disclose merely this: When Bushey instituted its foreclosure action, the Hedger Company, in its answer, alleged that there was lack of “any or adequate consideration” for the mortgage, the inadequacy '(my colleagues say) being but vaguely stated; in court, before the decree was entered, Hedger’s counsel conceded that there was a real dispute as to whether the amount claimed was owing to Bushey, and objected to a prompt trial; the Hedger Company, with ample opportunity to offer evidence in proof of its defense, and able meanwhile to obtain a release of its vessels by giving a bond, voluntarily refrained from doing so; instead, for reasons of its own, it deliberately chose to consent to the decree of foreclosure for the amount claimed by Bushey and paid that amount to Bushey. Patently, if such were the facts, then petitioner would not be entitled to a vacation or modification of the decree or to repayment of any part of what it paid Bushey. 3. But I read the record differently, emphasizing what I consider crucial facts which my colleagues (like the district judge) omit to mention. Of course, I may mistakenly interpret those facts. In order that, if I do, my error will be apparent, and because the petition and the colloquy between the judge and counsel (prior to the decree) are lengthy, I have set forth in an Appendix to this opinion (1) excerpts from the petition and (2) the complete record of that colloquy. For I entirely agree with my colleagues that (1) must be read in the light of (2). I believe that the data in the Appendix discloses that the case is as I depicted it at the outset of this dissenting opinion. However, to bring out sharply my divergence from my colleagues as to the facts, I think it desirable, even at the expense of some repetition, to summarize that data i-n somewhat greater detail, as follows. In its answer filed in the foreclosure action, the Hedger Company alleged these facts: Beginning in 1932, that company and Bushey engaged in a joint venture relating to the ships involved in this suit. The mortgage under foreclosure was given by the Hedger Company to Bushey in connection with transactions relating to that joint venture. Bushey, in those transactions, had so defrauded the Hedger Company that the mortgage was given for little or no consideration. As part of those transactions, the parties agreed that the primary source of payment of the mortgage was to be the earnings of the mortgaged ships. In fact, the mortgage, after it was given, had been paid in full out of those earnings and before the foreclosure action began. The payments had been made under the supervision of Provo, an officer of the Hedger Company who kept its books but who was an employee of Bushey; and they were kept by him in such a way that these payments had been concealed from the Hedger Company until a few months before the institution of Bushey’s foreclosure suit. The answer therefore alleged that nothing was due from the Hedger Company to Bushey. In addition, it alleged that the Hedger Company was informed and believed that the concealed payments went beyond payment of the amount due on the mortgage, and left Bushey owing a substantial amount to the Hedger Company. Because of these very facts, the Hedger Company, some seven weeks before the foreclosure action started, had brought suit in the state court against Bushey, seeking an accounting and a large money decree. The petition for vacation of the decree referred to the answer and further alleged the following: After the foreclosure suit was begun, Bushey claimed that the amount owing on the mortgage was $69,-491.56. The Hedger Company had been prevented from proving that it owed Bushey nothing on the mortgage by the following (much of which my colleagues ignore) : (1) Such proof would have required a long, complicated accounting which would have related to the many transactions, out of which the mortgage arose, that had occurred over a period of some twelve years. During that long trial, the Hedger Company’s vessels would have remained idle, because they had been seized through the institution of the foreclosure suit; this prolonged inactivity of these vessels would have paralyzed the Hedger Company’s business during that long trial, unless the Hedger Company could give a bond for the vessel’s release or pay the amount claimed. (2) However, as Bushey knew, the Hedger Company was then in such straitened financial condition that it could not obtain a bond for $69,491.56 necessary to procure such release, or the funds to pay that amount to Bushey, otherwise than through a certain bank. That bank would not assist in supplying that bond, or in advancing that money, unless the Bushey mortgage were simultaneously cancelled (so that the bank might, as security, procure a first lien on those vessels). Consequently, as Bushey knew, the Hedger Company could not have its vessels promptly released unless Bushey would cancel the mortgage; and, as Bushey also knew, the Hedger Company’s business would stop, to its grave financial loss and probable ruin, during the lengthy trial necessary (if Bushey resisted) to prove that the Hedger Company owed Bushey nothing on the mortgage. The judge ruled that, if the Hedger Company gave the required bond, the attachment would be dissolved but the mortgage lien would remain alive, and that he would not order it to be satisfied of record. The Hedger Company then tendered the $69,491.56, and at first Bushey indicated that it would satisfy the mortgage if that sum were paid pursuant to a decree therefor. But, subsequently, Bushey refused to do so unless and until the Hedger Company would both consent to a foreclosure decree for that sum, and, pursuant to that decree, pay it to Bushey. Mere payment of that sum, minus the consent, would not have terminated the suit, thereby releasing the vessels from the attachment and the mortgage. For Bushey had notified the Hedger Company that, unless it not only paid the $69,491.56 but also consented to a decree for that amount, Bushey would amend its pleadings and claim $25,000 more. Thus, without a consent to a decree for $69,491.56, immediate . release of the vessels would require the Hedger Company to pay $25,000 in addition to the $69,491.56. But the Hedger Company could not obtain this additional $25,000. It thus faced these alternatives: (a) It could, for many weeks, litigate in the foreclosure suit, proving its defense that it owed Bushey nothing; but, in that event, with its vessels tied up because it could not give a bond, the Hedger Company would suffer serious financial loss and probably ruin, (b) The only alternative which would avert that dire result was to forego a trial, consent to the decree, and pay Bushey the $69,491.56 which it demanded. The Hedger Company chose the second alternative, believing that it could not afford to await the outcome of a trial or of an appeal. By yielding, it brought about the prompt release of its vessels. It procured the money, needed to pay the unfounded claim, from the bank which, upon satisfaction of the Bushey mortgage, secured itself by a new first mortgage on the ships. In the circumstances, that choice was made under duress.- Bushey, in instituting and pressing its foreclosure action, intended thus to coerce the Hedger Company, in order to bar recovery by the Hedger Company in its pending state could accounting suit and to obtain this payment of money not owing from the Hedger Company to Bushey. (3) The Hedger Company, having yielded to this duress, less than four weeks later, and during the term, filed its petition asking to have the decree set aside and the money restored. 4. I shall now try to show that my colleagues have misconceived the situation before us. (a) My colleagues say that petitioner, the Hedger Company, “never made a tender” of any kind until the ultimate tender of payment of $69,491.56 which was coupled with a consent to the decree. I think the following portion of the record (see my Appendix) contradicts that statement. On March 7, 1945, just after Bushey began to put in its proof, there was a short recess, and the following then occurred: “Mr. Tibbetts (counsel for the bank): Your Honor, I am asked to present this check again and say that the check has been prepared ready for delivery on receipt of satisfaction of the mortgages and discontinuance of this action, concurrently —that is, at the time when the new mortgage can be recorded. “Mr. Gray: And this check is made payable to the order of Foley & Martin, attorneys for Ira S. Bushey & Sons, Inc. and is in the sum of $69,403.28. Therefore, in addition, I tender, in cash, the sum of $94.84. “The Court: Then, we really haven’t moved ahead one centimeter, have we? “Mr. Gray: Oh, yes, your Honor. “The Court: I think not. This is a conditional tender, that is, you will pay the money if you receive satisfaction of the mortgages. “Mr. Gray: That condition has already been approved by the other side because they said they would take the tender and give us satisfaction of the mortgages. “Mr. Heckman: We will give the satisfactions on an unconditional tender. “Mr. Tibbetts: Of course, it is understood that the satisfactions are to be satisfactory to the attorneys. “Mr. Martin: The satisfactions are right here. “The Court: I think they should have an opportunity to examine them. “Mr. Gray: May this check and this cash be delivered in the Customs House where it is usual to pass these papers, so that there can be no intervening liens filed, and that, of course, can be done tomorrow morning. “The Court: I don’t think Mr. Heckman will stand on that kind of ceremony but do you wish to examine the satisfaction pieces in connection with the tender? “Mr. Gray: No, sir. “Mr. Heckman: They are all here, executed. We tender the satisfaction pieces to counsel, for his examination, being the satisfaction of the mortgage previously marked here in evidence as Libelant’s Exhibit 1, being an original and a duplicate, which I understand to be a Customs House requirement, and executed by the President of Ira S. Bushey & Sons, Inc., with the corporate seal and the usual acknowledgments. “I can state to your Honor that to secure the same indebtedness, there was a mortgage on some enrolled vessels which did not have a sufficiently high status to have a preferred mortgage and I now submit for their examination, the satisfaction of those other mortgages. “Mr. Gray: May it be understood that the papers will be passed and the money passed to the libelant at the Customs House. “Mr. Heckman: No, the money and the papers will pass right here. We do not want to try this case in the Customs House. “The Court: Will you agree that the tender is kept good if the money is produced at the Customs House tomorrow morning at 9:30, so that you can exchange it then for these satisfactions? "Mr Heckman: If, before we leave, we can agree that these papers I am showing now ar