Full opinion text
BONE, Circuit Judge. I Appellants above named appeal from a Preliminary Injunction issued by the lower court enjoining (1) the Home Loan Bank Board, its members, and other persons and defendants from holding or participating in an administrative hearing which was on September 9, 1949 ordered by Home Loan Bank Board (by Order No. 2015) to be held in Washington, D. C., on October 25, 1949, and (2) the initiation of or participation in any administrative or judicial proceedings by any person in conflict with the alleged jurisdiction of the court below. The injunction on appeal was issued on December 1, 1949, in a proceeding which had •been pending in the lower court since May, 1946 and which involved a veritable army •of litigants and innumerable issues. The controversy really revolves around contentions raised in two .major actions, and these actions drew within their orbit the issues and litigants above mentioned. During the course of the litigation, and for convenience, the lower court consolidated these two major controversies into one action. The Major Parties For a better understanding of the complex pattern of litigation revealed in the long record on this appeal it is necessary to clearly indicate and emphasize at the outset the original contentions of the two major plaintiffs below because these first contentions clearly reveal the fundamental issues which precipitated the litigation and prolonged it to the present moment. In referring hereafter to these two major contenders we use abbreviated terms to identify them and their actions. One of these actions is the so-called “Mallonee Case”; the other is the so-called “Los Angeles Action” and we will designate them as “Mallonee” and “Los Angeles,” respectively. By way of further identification the term “iMallonee” means the action initiated by a group of litigants who were (and are) shareholder-members of the “Long Beach Federal Savings and Loan Association” of Long Beach, California, a corporation organized and existing under and by virtue of the terms and provisions of the Home Owners’ Loan Act of 1933, as amended, 12 U.S.C.A. § 1461 et seq., and which functions as a mutual thrift association in the City of Long Beach, California. In form, the Mallonee action was a “class-action” on behalf of the named plaintiffs who also claimed that in their suit they represented the interests of approximately 20,000 shareholder-members of the said Association who were similarly situated. We hereafter refer to the Long Beach Federal Savings and Loan Association as “Association.” By reason of the virtual identity of interest existing between Mallonee and Association the contentions of the latter logically merged with those of Mallonee. So far as relief sought is concerned they may properly be viewed in this appeal proceeding as one party since they seek the same remedy. We now consider the contentions of these major parties in the original complaints and pleadings which launched this extended litigation. Prior to the issuance of the three Orders of the Federal Home Loan Bank Administration on March 29, 1946 (see text of Footnote S, infra) the “Federal Home Loan Bank of Los Angeles” (herein called Los Angeles) was a body corporate, a Federal Home Loan Bank established by the Federal Home Loan Bank Board under authority and within the meaning of Chap. 11 of Title 12 of the U.S.C.A. The first complaint of Mallonee was filed in the lower court on May 27, 1946 by Paul Mallonee and certain other shareholder-members of Association, and it named as defendants John H. Fahey, individually and as Chairman of the Federal Home Loan Bank Board; Ammann, individually and as purported Conservator for Association; Association, and several Does and Roes. In this action Mallonee demanded that Ammann (who had been appointed Conservator of Association on May 20, 1946 by the “Federal Home Loan Bank Administration” ) be removed by order of the court. Among other matters the complaint charged in general terms that because Association had objected to a previous seizure of Los Angeles by the administrative officials of the Federal Home Loan Bank Board (thereby becoming unlawfully possessed of and interfering with property belonging to Association) the said administrative officials had unlawfully seized Association and named Ammann as Conservator thereof; that in this action the administrative officials were willful, wanton, malicious and vindictive, and acted illegally and without warrant of law; that the Conservatorship had caused large withdrawals of funds from Association; that the administrative officials had previously unlawfully seized possession of Los Angeles, to the injury of Association (a stockholder in Los Angeles) and its members. The relief sought was an adjudication of the “rights” of all parties to the Conservatorship transaction; an injunction which would, among other matters, forbid a merger of Association with any other organization and preserve (with immaterial exceptions) the status quo ante of Association, and in addition, require Ammann to account to Association for all property received by him and Administration. This pleading made no reference to an administrative hearing on the Ammann appointment. As indicated above, Mallonee named Association as a defendant, obviously upon the theory that since Association was then under a Conservatorship and in possession and under control of the Conservator (Ammann), it was thereby rendered legally impotent to defend itself against the actions of the administrative officials of Administration who were named as defendants because of their appointment of a Conservator. By its first pleading Association “injected” itself into the Mallonee suit, this by way of an answer in the Mallonee action. 'In this pleading Association styled itself “defendant and third party plaintiff” and its pleading a “cross-complaint.” This pleading was filed July 1, 1946, and it named and brought into the Mallonee action (as third party defendants) the three Federal Home Loan Banks of Portland, San Francisco and Los Angeles, the last named being the party we designate herein as “Los Angeles.” As respects the said Home Loan Banks, Association demanded that there be an accounting of and return to Association of all its property of every kind then held by said banks. Among other matters Association demanded that the court determine and adjudge in which Bank Association was a stockholder, and also that all of the acts of Ammann, as Conservator, be invalidated as unauthorized, illegal and void. The lower court made a formal order on July 1, 1946 in which it directed that the aforesaid three Home Loan Banks be made parties in the Mallonee action, reciting in this order that the three Banks were “necessary and proper parties to the complete and final determination of the above [Mallonee] action.” The pleadings of Mallonee and Association both had as their basic premise and contention the charge that the appointment of a Conservator for Association was an illegal act wholly without authority of law, as a consequence of which these parties had been deprived of their property without due process of law, or any process of law. We shall later comment at length on the contentions of Mallonee and Association but, as we have noted above, their position on basic issues reflects a true identity of interest on all material matters. They have maintained a formal separation of their pleadings in various proceedings below and have filed separate briefs on this appeal, but any relief here granted will inure to the benefit of both. An independent plenary action which we style “Los Angeles,” was instituted on August 22, 1946. It grew out of three Orders issued by the Federal Home Loan Bank Administration (hereafter called “Administration”) on March 29, 1946. These Orders liquidated and reorganized Los Angeles and “adjusted” and reorganized that branch of the Federal Home Loan Bank System operating in the Pacific Coast area of the United States which embraced the Home Loan Banks of, and located in, Portland, Oregon and Los Angeles, California. In this suit Los Angeles named as defendants, Fahey individually and as Chairman of the Federal Home Loan Bank Board and purportedly serving as Federal Home Loan Bank Commissioner; also the corporate body called the Federal Home Loan Bank of Portland, “sometimes known and referred to as Federal Home Loan Bank of San Francisco”; also 16 Does. The complaint of Los Angeles was in two counts, a brief description of which seems necessary. Count one challenged the legality of the Orders above noted and charged that they unlawfully dissolved the Los Angeles Bank and transferred (its) lawfully held and lawfully possessed assets of a value in excess of $45,000,000, and its liabilities, to the Federal Home Loan Bank of San Francisco ; that all actions taken under them were illegal; that these actions deprived Los Angeles of its property “without due or any process of law”; were a trespass and a fraud in law upon and an invasion of the constitutional rights of Los Angeles; cast a cloud upon the rights, titles and interests of Los Angeles in and to assets and properties of the Bank which at all times was being efficiently and economically operated with its affairs in a healthy and prosperous condition. It was further charged that all of the acts and things done by defendant officials of Administration were illegal, invalid and void and were part of a fraudulent scheme to deprive Los Angeles of its property, to abolish the Twelfth Federal Home Loan Bank District and to establish a new district without regard to the convenience or course of business of institutions eligible or likely to subscribe to stock in the Federal Home Loan Bank established within the (new) district, including all of the stockholders and members of Los Angeles; that the scheme of defendants was to compel members and stockholders of Los Angeles to become members and stockholders of the Portland Bank which had assets of less than one-third of those of Los Angeles. Joining as parties plaintiff in the Los Angeles action were six members and stockholders in Los Angeles, these co-plaintiffs being six Federal Savings and Loan Associations (similar to” Association) all located and doing business in Southern California. Their contentions appear in 'Count 2 of the Los Angeles complaint and these set forth generally that their “right to relief” arises out of the transactions and occurrences described in Count 1, all questions of law and fact being the same. Insofar as it concerns these six member associations Los Angeles is a “class action.” One of these member associations filed a separate brief on this appeal. All parties plaintiff in Los Angeles pray for sweeping relief, the granting of which would wholly nullify the Orders set out in Footnote 5 herein and. completely restore the status quo ante of these associated plaintiffs. On August 26, 1946 Los Angeles filed an answer to the Third Party Complaint of Association (above noted) in which Association had made Los Angeles a third party defendant. In this pleading Los Angeles admitted all of the material contentions of Association save and except to deny that the Federal Home Loan Bank of San Francisco was a validly created Federal Home Loan Bank or that it existed at any time under or by virtue of the laws of the United States. Los Angeles also averred that the name San Francisco was but a name under which third party defendant Federal Home Loan Bank of Portland had been purportedly transacting business since on or about March 29, 1946 (the date of the challenged Orders). On August 26, 1946, Los Angeles filed another pleading styled a “cross-claim” in which it named as cross-defendants Federal Home Loan Bank of Portland; Fahey, individually and as Federal Home Loan Bank Commissioner and as Chairman of the Federal Home Loan Bank Board. The averments in the pleading are lengthy and numerous. They recite the three reorganization Orders of Administration and challenge their legality and validity; assert that these Orders were the result and consummation of a plan and scheme to liquidate and dissolve Los Angeles and deprive it of and confiscate its property without notice or hearing and without due or any process of law; assert that the Portland Bank is not entitled to possession and ownership of the assets of Los Angeles; assert that the Orders abolish the Twelfth Federal Home Loan Bank District and establish a new district to the inconvenience of institutions eligible or likely to subscribe for stock in the Federal Home Loan Bank established within said (their) district including all of the stockholders and members of Los Angeles. Commissioner Fahey is charged with usurping the functions of the Board (Administration) without the concurrence or knowledge of any other member thereof in the making of the challenged Orders. The prayer of this lengthy “cross-claim” is for an order declaring and adjudging the three Orders of Administration to be null, void and of no effect; that all of the property and property rights in controversy be restored to and title thereto be quieted in Los Angeles; that Portland Bank be ordered to execute and deliver possession of, and deeds and assignments to, property of Los Amgeles in the hands of Portland Bank and render an accounting of acts and omissions done or omitted with reference to such assets. Los Angeles and its co-pleaders did not join in the motions of other appellees for the preliminary injunction which is the subject of the'instant appeal. Nor were they parties to the initiatory proceedings which we describe in Part Two of this opinion since the first pleading of these litigants was not filed until August 22, 1946. These litigants at no time sought injunctive relief. The problem of an administrative hearing on an agency order or orders, and judicial review thereof, is not urged as an issue in the Los Angeles case. That action proceeds upon an entirely different theory of law and for this reason it is’ necessary to indicate at some length its precise nature in order that its relation to the other actions (which were consolidated with it for trial) may be made plain. To this end we quote from the Los Angeles brief as follows : “The complaint in the Los Angeles action accurately described its nature as being a ‘Complaint to enforce legal and equitable claims to, to obtain possession of and to remove liens from and clouds upon title to, property and for other and general relief.’ Jurisdiction was invoked under old Section 57 of the Judicial Code (then 28 U.S.C., Sec. 118, now 28 U.S.C., Sec. 1655) and under Sections 3, 12, 17, 25 and 26 of the Federal Home Loan Bank Act (July 22, 1932, 47 Stat. 725 et seq., 12 U.S.C., Secs. 1421-1499 [1449]); and the complaint alleged in terms that the activities complained of had operated to deprive these appellees of their property without due process of law, to cast a cloud upon their title and other interests as to such property, and that the claims of the defendants with reference thereto were wholly without right. It was also alleged that the matter in controversy exceeded, exclusive of interest and costs, the sum of $45,-000,000 as to the first (Los Angeles Bank) count and the sum of $14,000,-000 as to the second (the five member associations) count. The prayer was in the conventional form of an action quasi-in rem to remove a cloud on title, to quiet title and to regain possession.” and “The Los Angeles action is neither an action to enforce the charter of the Los Angeles Bank nor is it an action brought to review the actions of the commissioner evidenced by his Orders Nos. 5082, 5085 and 5084. It is, on the contrary, a plenary equity action in rem or quasi-in rem brought under former Judicial Code Section 57, in which the effect of the orders above referred to is drawn in question purely as an incident to the District Court’s inquiry into title, ownership and the right to possession of the assets and properties constituting the res before the Court. In addition to this, and as an incident to its basic jurisdiction in rem, the Court has acquired jurisdiction in personam of the San Francisco Bank, the party in actual possession of the assets and properties in dispute. “The activities of the commissioner leading up to the seizure of the demanded assets and properties are subject to judicial scrutiny. “The orders of March 29, 1946, are not valid on their face, nor are they immune from attack by a showing dehors the orders themselves, that the seizure was unlawful, arbitrary and punitive in its nature.” and “A reading of the complaint makes it perfectly obvious that all of the elements of the conventional cause of action in equity by an owner out of possession to quiet title, to remove a cloud on title and to regain possession are present. Ownership and right to possession in the Los Angeles Bank down to March 29, 1946, deprivation of possession as of that date, an adverse claim under color of title (evidenced by the three orders as published in the Federal Register), plus the customary allegation that such claim is wholly without right, are all set forth. “So viewed, and correctly viewed, the Los Angeles complaint is open to neither of the interpretations which appellants seek to put upon it. The action is purely and simply an equitable action quasi-in rem to try title as between one who alleges itself to be an owner out of possession — the Los Angeles Bank — and one who alleges itself to be an owner in possession — the San Francisco Bank. The latter claims, as its sole muniment of title, the three administrative orders of March 29, 1946, and particularly Order No. 5082, the purported instrument of transfer. The question presented, therefore, is whether or not the orders in question did or did not operate to pass title to the disputed assets and properties; a question which is present, generally as regards a deed or other instrument under which the defendant claims, in any quiet title suit or action to remove a cloud on title. “This is certainly a question which the District Court has jurisdiction to determine, whether its ultimate decision be right or wrong. And the decision of this question calls for no species of review of the administrative orders, in the sense in which appellants use the term. The question is, not whether the orders should be set aside, in the administrative sense, but whether they, and particularly Order No. 5082, operated to transfer title to the San Francisco Bank. It is the contention of the latter that the orders did have this effect. It is the contention of the Los Angeles Bank that they did not; that from the standpoint of legal title the orders had no more effect than would a wild deed, executed in favor of the San Francisco Bank by a third party (here the Commissioner) not connected with the title. These are questions for the District Court to determine, along with the other questions which appellants raise on this appeal, and none of which go to the jurisdiction of the District Court. All of these questions go to the merits of the key question below, which.is: Did or did not the orders in question pass title to the demanded assets and properties ? And it is certainly a novel experience to the writers of this brief that an appellate court should be asked to decide this question in advance of a trial on the merits.” Subsidiary Actions At this point we' find it desirable to refer to three subsidiary litigants whose claims serve to shed significant light on most important aspects of this tangled litigation while it was still in its earliest stage. It was at this point that the litigation was set upon a decisive course from which it never deviated — a course followed in the face of vigorous protests registered by Administration, through Ammann. The Title Service Company Action Title Service Company, a California corporation, was served as John Doe One in the Mallonee suit. Its answer and cross-claim in interpleader (filed June 4, 1946) recited that it is “engaged in a general escrow, acting as trustee under deeds of trust and real estate business,” and that it had been named as trustee upon approximately 8000 deeds of trust conveying to it, as trustee, the legal title to the properties described in the said deeds of trust in which its co-defendant Association is named beneficiary; that the balance upon these deeds of trust is approximately $12,000,000.00. It is averred that all of the property covered by these escrows is situated in Los Angeles County, State of California. The answer of Title Service Company further avers that Ammann, purporting to act as and with the authority of a Conservator, delivered to it 174 notes and deeds of trust securing the same, together with 174 requests for reconveyances and gave instructions to Title Service Company to reconvey said property described in said deeds of trust and to release said property from the further operation and encumbrance of said deeds of trust in which Association was named as a beneficiary; that Association had not executed instruments assigning and conveying title to Ammann ¡but had advised Title Service Company in writing that Ammann and/or Fahey had no authority to act for Association, and that their actions were invalid and unconstitutional and were being attacked in the lower court (in the then pending Mallonee suit); that the answering defendant was thus faced with conflicting claims and found it necessary to file this cross-claim in interpleader to avoid a multiplicity of actions and prevent irreparable damage to it arising out of multiple liability upon obligations in favor of one of said other defendants. In its prayer for relief, Title Service Company demanded that all defendants be required to interplead and litigate with each other their various conflicting claims to 174 trust deeds having a face value of $800,000 which had been deposited in the registry of the lower court; that this defendant be ordered to deposit in court the balance of the 8000 trust deeds; that this defendant be instructed and ordered by the court as to its rights and duties as such trustee, present and future, in its dealings with the Conservator and Association. (Appellants advise us that the officers and directors of Title Service Company and Association were then identical. By motion filed on June 28, 1946, Title Service Company also demanded an' order of the court restraining the holding of an administrative hearing at Los Angeles on July 3, 1946, thereby joining Mallonee and Association in their demand for similar relief.) The Wallis Action Robert H. Wallis, (sued by Mallonee as John Doe Two) filed his answer and cross-claim on June 12, 1946. Wallis had been acting as attorney for Association in its disputes with Administration and its deputies in connection with the alleged unlawful seizure of Association and Los Angeles and during the month of May, 1946 had received for attorney’s fees and expenses a cashier’s check for $50,000 which he deposited in court when filing his answer in the Mallonee suit. In his answer and cross-claim Wallis asserted, among other matters, that Fahey and Ammann had attempted to use the appropriation (of Association) of $50,000 as a pretext to justify their seizure of Association from its management under the claim that Association had no right to use this money to defend itself; that Association desired that said money be used by Wallis for that purpose; that these claims are conflicting, and that this defendant found it necessary to file this cross-complaint in interpleader to avoid a multiplicity of actions, etc. The prayer of Wallis was for an order requiring all defendants except Association to set forth and present their claims to the said check and the funds its represents, and for said particular defendants to present their claims as to why the appropriation of the money for the services of Wallis was justification or ground for their seizure of Association; also that Association present its claim that Wallis be permitted to use said fund for the defense of Association; also that the various claims be litigated and that the court adjudicate said claims and instruct Wallis as to his rights and duties in respect to said check after which he be released and discharged of all responsibility and liability arising out of said check. Home Investment Company Action Home Investment Company, a California corporation, is the third of the early interveners, first appearing in the Mallonee-Los Angeles litigation on July 1, 1946. It was not a movent in the preliminary injunction proceedings leading to the present appeal. In substance, it adopts the arguments of Association on this appeal. It intervened in the litigation to secure an order of court quieting title and to secure reconveyances of 174 deeds of trust, involving approximately $800,000 which had theretofore been brought into the proceeding by the answer and cross-claim in interpleader of Title Service Company, supra. Home Investment Company is the borrower named in the 174 deeds of trust on deposit in the registry of the court and the record owner of the real property affected by these deeds. As indicated above, Title Service Company was the trustee thereunder and Association was the beneficiary. We consider the legal posture of the pleadings of Wallis and Home Investment Company in Part Three of this opinion. II In Part I we summarized some of the important contentions and issues raised in the initial pleadings of Los Angeles, Mallonee, Association, Title Service Co., Wallis and Home Investment Co. The claims for relief urged by Mallonee, Association and Title Service Co. were in the main identical; the last two parties named asserted claims of a subsidiary nature having their roots in the troubles of Association. Since the original injunctive relief demanded by Mallonee, Association and Title Service Co. was sought for the same purpose we hereafter refer to these three litigants as the Mallonee-Association group. Identical claims of Mallonee and Association may be referred to as those of Mallonee-Association. We confine the discussion in this part of the opinion to procedures in the lower court which were the result of the original demands of the Mallonee-Association group which launched this litigation and we hereafter refer to this earliest period of the controversy as its “initiatory stage.” The decisions then made by the court on the demands of this group (including their motions for injunctive relief based on their pleadings) reflect adoption of a theory which gave permanent course and direction to the litigation. We emphasize this fact because of its significant and controlling effect on all of the problems later injected into the case, including vital aspects of administrative law and judicial review of the acts of goverment agencies. It should be emphasized that in the original actions and/or motions filed by Mallonee and Association and in the answer of Title Service Co., the question of an administrative hearing on the validity of the appointment of Ammann as Conservator of Association was squarely injected into the litigation and was thus before the lower court. The length of the pleadings of these parties requires that we paraphrase the allegations concerning this particular matter. Mallonee asserted in its first pleading (filed May 27, 1946) that the Acts of Congress under which Administration and Ammann acted did not provide for a judicial review of their actions; that the regulations adopted by these defendants which purported to give them the authority under which they “seized” Association and the delegation of legislative authority (under the Home Owners’ Loan Act of 1933, as amended) to make and create rules and regulations for hearings and seizures, do not prescribe any rules, guides or controls for the proper exercise by an administrative official like Ammann, of the legislative authority so delegated; that the said regulations made no provision for any representative of the membership shareholders of Association to appear before the Board to have a determination of their rights considered; that the regulations and Acts under which they were adopted do not provide for any judicial determination of the truth or falsity of allegations made by Commissioner Fah.ey of the Home Loan Bank Board in making the seizure of Association and appointing Ammann as Conservator, or for determination of the validity of Ammann’s acts. Based on this pleading and on other pleadings, motions, affidavits and records in the Mallonee action, plaintiff Mallonee filed a motion for a Preliminary Injunction to restrain the holding of an administrative hearing on the Ammann appointment. This motion and supporting papers were filed on June 20, 1946. We refer to this matter at greater length infra. In its first pleading filed July 1, 1946, Association relied upon certain Acts of Congress, including the Home Owners’ Loan Act of 1933, as amended, and as to these Acts, repeated the substance of the contentions of Mallonee. Association further alleged that the seizure of Association by Conservator violated the Fifth Amendment; that by Order No. 5309 (see text in Footnote 10) the defendants have pretended to hold a purported administrative hearing at which some person is to be authorized to take testimony in Los Angeles, California, which testimony is to be sent to defendant John H. Fahey and his subordinates for them to decide whether or not they were justified in seizing and attempting to destroy Association; that these defendants have already determined that their conduct was perfect despite the fact that it was inspired by malice, vindictiveness and spite, these defendants will use such administrative hearing for the purpose of further destroying and undermining confidence in Association and its management and if they are permitted by the court so to do they will cause irreparable harm, damage and destruction to Association; that Association is entitled to a fair and impartial tribunal such as the district court to hear, determine and pass upon all of the questions involved between Association and defendants, Fahey, Ammann, and their various deputies and employees. Association also alleged that the Acts and regulations under which all of the defendants purportedly acted were repugnant to and violated the provisions of the Fourth and Fifth Amendments. The prayer of Association was that the defendants be enjoined and restrained from holding any administrative hearings for themselves, with particular reference to the purported hearing these defendants had set for July 3, 1946 at Los Angeles, California. (The issues thus raised on the question of an adminstrative hearing were considered by the Supreme Court in Fahey v. Mallonee, June 23, 1947, 332 U.S. 245, 67 S.Ct. 1552, 91 L.Ed. 2030, which decision we later discuss.) Ammann, Conservator of Association, (not named as a defendant by Los Angeles but present in California) was personally served with process in the Mallonee-Association group of actions. John H. Fahey, then Chairman of the Federal Home Loan Bank Board and serving at the time as Federal Home Loan Bank Commissioner was an inhabitant of the District of Columbia where (as “Chairman”) his principal office was located in the City of Washington. He was never served with process within the State of California, and at all times material to a consideration of the issues then posed by the aforesaid contentions, challenged the jurisdiction of the lower court to entertain the suits of these appellees and grant the relief they sought. Contention as to failure of this attempted service upon Fahey, and absence of jurisdiction over him, was urged by Ammann through the United States Attorney at Los Angeles at all stages of the proceedings above noted. Other appellees named above sought to secure service of process on Fahey by resort to somewhat similar methods. Compare Blackmar v. Guerre, 72 S.Ct. 410. The Mallonee action and the cross-claim of Association were filed as in rem actions to secure the return of property (all) located in the State of California and to remove a cloud on title thereto. The only attempt then made to serve any of the non-resident defendants was made outside the State of California. Service of the complaints in the consolidated actions designated as in rem actions was made pursuant to the order for service on non-resident defendants under Title 28, Sec. 1655. The Federal Savings and Loan Insurance Corp. with headquarters in the District of Columbia and which neither maintains an office nor has any agent or representative in the State of California, also was served only in the District of Columbia pursuant to a like order. Service of the so-called “cross-claim in interpleader” was made on the non-resident defendants purportedly pursuant to the interpleader provisions of Title 28, Secs. 1335, 1397, 2361. Before proceeding to discuss an important problem of administrative procedure which was injected into this litigation at its inception, we refer to another matter which later became a controversial issue in the proceedings — the question of whether or not certain defendants residing out of the State of California ever made a general appearance in this litigation. The General Appearance Issue The question of whether at any time appellants (other than Conservator Ammann and his official assistant or assistants then in Los Angeles) made a general appearance in this litigation is before us in the record and arguments of appellees on this appeal. They reveal that the lower court formally found (in its findings of fact accompanying the injunction order here on appeal) that in January of 1948 the (then) Home Loan Bank Board (see Footnote 3) made a “general appearance” in this litigation by filing its Order No. 388 which was dated January 17, 1948. It is not contended that Ammann, at any time prior thereto had purported to appear generally in this litigation for and on behalf of officials of Administration, the Board or the officials thereof (other than himself) these officials being referred to by the court as “the official defendants.” Appellees rely on this so-called “general appearance” in 1948 contending that it establishes that all appellants did then and by this act generally appear and submit to the jurisdiction of the court. If this were true as a matter of law, it would not affect the status of the parties during the “initiatory stage” of the litigation here considered, although the contrary seems clearly implied by arguments of appellees. For reasons hereafter appearing we do not regard the issue of effective service (or non-service) on Fahey or members of Administration as controlling in the initiatory stage of the litigation so far as concerns the problem of the propriety of the action of the lower court in entertaining the Mallonee suit, the cross-claim and answer of Association therein, and the interpleading cross-complaint of Title Service Company. The allegations in the initial pleadings of these appellees laid the foundation for, and the groundwork of, their immediate demand on the lower court for an injunction restraining an administrative hearing on the question of the legality of the appointment of the Conservator for Association, this local and preliminary hearing having been set before a “hearing officer” designated by the then Administration and directed to be held on July 3, 1946 at Los Angeles, California under Order No. 5309. This hearing had been called pursuant to a formal written request by Association for such a hearing which was dated May 30, 1946 (As we shall later note, the order setting this hearing is asserted by appellees to be a final and judicially reviemable order of Administration.) (See text of Order in Footnote 10.) An Administrative Hearing Is Enjoined The clear and undisguised purpose of the Mallonee-Association group was to seek immediate injunctive relief at the outset of this litigation which would forbid recourse to and thereby by-pass the entire administrative process including judicial review of any final determination of Administration after the completion of the field hearing held at Los, Angeles. It is of course obvious that if the court could be persuaded that no legal obligation rested upon it to require, or permit, resort to and exhaustion of the available and tendered process of administrative review prior to entertaining their actions and motions for an injunction, the only alternative was for the court to then proceed to adjudicate all of the issues and contentions presented by their pleadings and amplified in their motions for an injunction. The court agreed with these appellees (as did a later called three-judge court in a supporting opinion reported in D.C., 68 F.Supp. at page 418 under the title of Fahey v. Mallonee) with a result we later discuss. And see Fahey v. Mallonee, supra. We emphasize that this early technique of the Mallonee-Association group was obviously based upon certain assumptions, (1) that the order appointing the Conservator for Association was a final administrative agency order and being final, it was subject to judicial review then and there in the lower court, (2) that the order was issued without semblance of authority in law, (3) that the said order and the order tendering and directing an administrative hearing on this appointment were futile, meaningless and useless gestures without legal significance or authority, (4) that the charges in the first pleadings, motions and arguments of the Mallonee-Association group of litigants sufficiently established that officials of Administration appointed the Conservator because they were biased and prejudiced in their attitude toward Association and motivated by malice toward its management and that these considerations were sufficient in law to call for injunctive relief against any and all attempts to require resort to the purported process of administrative review, and justified an adjudication by the lower court wherein the validity of the said orders could and would be finally determined in that court. It is clear that the court accepted all of these postulates as sound legal gospel and, entirely sufficient to justify its immediate issuance of an injunction (on July 1, 1946) which completely frustrated and thwarted all efforts to compel a prior resort to and exhaustion of administrative remedies. This restraining order recited, inter alia, “that to permit said administrative hearing to be held would constitute a duplication of actions and a multiplicity of suits for the hearing and determination of questions, issues and matters including constitutional questions now pending in this action before this Court, and would cause immediate and irreparable injury to Plaintiffs and others * * The defendants were restrained and enjoined “until further order of this Court” and this restraint covered the holding, or attempt to hold, “any hearing or hearings pursuant to Order No. 5309 of the Federal Home Loan Bank Administration * * * without first obtaining the further written order of this Court.” (That the record may be clear on this matter we note at this point that this restraint was continued after the rule later announced and emphasized in Fahey v. Mallonee, supra.) In short, this holding of the lower court rested upon the assumption that in its then posture, the entire controversy could, by option of this group of litigants, be forced into the court for de novo determination regardless of fundamental tenets of primary jurisdiction, exhaustion of administrative remedies and the orderly procedures derived therefrom. The argument against requiring a prior resort to the administrative process in the initiatory stage of this litigation was squarely before the Supreme Court nearly a year later in Fahey v. Mallonee, supra, where the Court considered and refused to agree that charges of bias, prejudice and malice of Administration were. sufficient to justify judicial interference with or restraint of resort to the process of administrative review. Because it was later held by the lower court that if Mallonee and Association amended their original pleadings to charge Administration with “fraud” when it named Ammann as Conservator of. Association, such an amendment to the pleadings would sustain the original collateral attack on the Ammann appointment, we here point out that this charge of fraud was not added to the original pleadings of Mallonee and Association until the court authorized such an amendment on November 10, 1947. We discuss this phase of the case at greater length, infra. The above noted assumptions of the Mallonee-Association group must be appraised by the rule announced in June, 1947 in Fahey v. Mallonee, supra. In that case the Supreme Court considered and rej ected the Mallonee contentions that the above noted injunctive remedy was properly employed and we think that its decision also makes plain that' the lower court erred when it entertained the suits of these parties prior to a resort to an available and tendered administrative remedy. The significant conclusions reached by the Supreme Court in that case highlight the most vital aspects of the problem facing the lower court in the initiatory stage of the litigation and furnish us with a standard applicable to the early rulings of the lower court which we are here considering. Before calling attention to some of these conclusions it is well to understand just how the lower court regarded the holding in that case and its view as to the issues decided is indicated by pertinent statements. On November 11, 1949, it stated that “it seemed to me in reading Jackson’s opinion that the only thing he decided was that you were estopped from asserting the unconstitutionality of the statute.” Further: “But while he dissolved the [three-judge court] order restraining the administrative hearing, he did not say that you are es-topped from asserting the legality of the regulations.” And at another point on the same day the court expressed the view that “the only thing the Supreme Court did * * * was to hold that the plaintiffs [Mallonee] were estopped from challenging the constitutionality of that section and nothing else.” Association reaches a different conclusion. In its brief on this appeal Association states: “In reversing this judgment, the United States Supreme Court approved either or both administrative hearings or court proceedings, to inquire into the merits of the claims of mismanagement made by appellants as grounds for the seizure and the charges made by appellees Shareholders Protective Committee, et al., that fraud and malice were the causes of the unjustified seizures.” We find it impossible to reconcile the conclusion of Association that the Supreme Court approved both the administrative hearings and the lower court proceedings outlined in this Part of our opinion. It is obvious that if the Supreme Court approved the administrative hearing it could not have approved a proceeding in the lower court which completely nullified administrative procedures at the outset of this case. And the charge of fraud or a fraudulent conspiracy of Administration officials was not before the Supreme Court in the then pleadings of Mallonee. The length of the Fahey-Mallonee decision forbids setting out the full text but its importance justifies a summary of the decision. The Supreme Court said: (1) Section 5(d) of the Home Owners’ Loan Act of 1933, as amended, was constitutional, (2) that the removal of the Conservator of Association by the three-judge court, supra, was improper and that its drastic decree could stand only if 5(d) was unconstitutional, (3) that institutions like Association are created, insured and aided by the federal government, -(4) that the provisions of the statute under attack were regulatory, (5) that the Board adopted rules and regulations governing appointment of conservators and they provide grounds upon which a conservator may be named, these being the usual and conventional grounds found in most state and federal banking statutes, and these rules and regulations are sufficiently explicit to be adequate for proper administration and for judicial review if there should be proper occasion for it, (6) that the regulations provide for a hearing after the Conservator takes possession and while this is a drastic procedure it is an almost invariable custom to exercise supervision in this summary manner, and it is not unconstitutional, (7) that in this case an administrative hearing was demanded by and accorded to Association, and a specification of charges against its management was requested and furnished by the Board, (8) that the causes for the appointment of a conservator set forth by the Board were (the ' Court enumerates the serious charges laid against the. management of Association, 332 U.S. at page 254, 67 S.Ct 1556, 91 L.Ed. 2030), (9) that plaintiffs nevertheless demanded and obtained an injunction to prevent the administrative hearing and they have therefore cut off the making of a record as to whether these charges are well founded. Nor did the trial court take evidence on the subject, (10) that the Court must assume that the supervising authorities would be able to sustain the statements of fact and justify the conclusions in their charges against the management of Association for the purpose of determining the case without trial, (11) that the Court was unable to agree that the management of Association was free to go on undisciplined and unchecked regardless of the charges of the Board, (12) that Association was organized under Section 5 of the Home Owners Loan Act of 1933, which it now seeks to have declared unconstitutional, (13) that the present management of Association obtained a charter which provided that it “shall at all times be subject to the Home Owners’ Loan Act of 1933 * * * and to any valid rules and regulations made thereunder as the same may be amended from time to time * * * and * * * liquidated, merged, consolidated, or reorganized, as provided in the .rules and regulations for Federal savings and loan associations”, (14) that plaintiffs (Mallonee) sue only in the right of the Association and (as related to the rights of the parties) one may not “retain the benefits of the Act while attacking the constitutionality of one of its most [here Section 5(d)] important conditions,” the Act in this case being the one under which Association has its existence, (15) that plaintiffs (Mallonee) attack the validity of the only provision of the law under which proceedings may be taken (by the Board) to liquidate or conserve Association for the protection of its members and the public, (16) that if it can hold the charter that it obtained under the Act and strike down the provisions for terminating its powers or conserving its assets, it may perpetually go on, notwithstanding any abuses which its management may perpetrate, (17) that it would be intolerable that Congress should endow an Association with the right to conduct a public banking business on certain limitations and that the Court, at the behest of those who took advantage from the privilege should remove the limitations intended for public protection. The Supreme Court further considered the matter of the administrative hearing called by Administration and the charge by Mallonee that it would rob Association of its rights because the hearing would be before the same authority which had preferred the charges — also charges that the Act itself does not provide for a judicial review of the Board’s determination on the hearing. The Court refused to agree with Mallonee that courts should assume in advance that an administrative hearing may not be fairly conducted, and withheld any opinion as to whether the final determination of the Board was subject to any manner of judicial review. In some general observation the Court stated that absence from the statute of a provision for court review has sometimes been held not to foreclose review and that if supervising authorities wantonly and maliciously destroy the credit of an institution there are not remedies. The Court carefully refrained from passing upon or deciding Mallonee charges that ill will and malice actuated the supervising authorities and upon charges of the supervising authorities (Board) that Association had been mismanaged and its management was unfit, and it made no determination or intimation concerning the merits of these issues or as to other remedies or relief. The final decision of the Court was that it was error in the three-judge court below to hold Section 5(d) of the Home Owners’ Loan Act of 1933, as amended, unconstitutional, to oust the Conservator or to enjoin any of his proceedings, or to enjoin the administrative hearing and this without prejudice to any other ■ administrative or judicial proceedings which may be warranted by law. In sum, the decision in Fahey v. Mallonee upholds the constitutionality of the law, and the validity of the rules and regulations iinder which a Conservator for Association had been appointed. It likewise put the stamp of approval on the administrative hearing which had been ordered, and settled the status of apjpellant Ammann as Conservator. To the foregoing views of the Supreme Court must be added a reference to the fact that prior to the filing of any of the actions in this litigation and approximately one month prior to the issuance of the injunction of July 1, 1946, Administration had furnished to Association a document demanded by Association which detailed with great particularity serious charges of misconduct against the management of Association in its handling of the affairs of that institution. Numerous qffenses against sound business practices were specified, and if true, these charges would seem to justify corrective measures at the hands of Administration. It was this set of charges (referred to' by the Supreme Court) upon which Administration had based the appointment of a conservator. This array of charges clearly stated the reasons upon which the appointment was based, and with respect to the matter of timing of the hearing and the preservation of procedural due process, this specification of charges fully advised Association of the precise nature of the charges it would have to meet when these charges were formally considered in the administrative hearing granted at the request of Association. The Fahey-Mallonee decision makes abundantly plain that the Supreme Court regarded the original charges laid against Administration in the pleadings of Mallonee and Association as utterly failing to provide any sort of legal justification for the lower court to entertain the plenary suits of these parties and upon their demand restrain all attempts to require resort to the process of administrative review prior to court action. In short, this decision simply means that the lower court committed reversible error when,, on July 1, 1946, and over the protest of the administrative officials here involved, it entertained the. suits of the Mallonee-Association group thereby asserting a primary jurisdiction clearly without foundation or justification in law. Long ago the Supreme Court announced the principle that “Courts will not issue injunctions against administrative officers on the mere apprehension that they will not do their duty or will not follow the law.” Waite v. Macy, 246 U.S. 606, 609, 38 S.Ct. 395, 396, 62 L.Ed. 892. Cf. Lehmann v. State Board, etc., 263 U.S. 394, 397, 44 S.Ct. 128, 68 L.Ed. 354. See also cases cited in Footnote 7 herein and the illuminating discussion on the question of exhaustion of administrative remedies as a prerequisite to suit, in Aircraft & Diesel Equipment Corp. v. Hirsch, 331 U.S. 752, 67 S.Ct. 1493, 91 L.Ed. 1796. The Injunction and Its Consequences Because of the duration and character of this litigation and the vast number of litigants and issues finally involved, it has seemed desirable to here outline in considerable detail the proceedings leading up to the issuance of this injunction and the various steps associated with and following the injunction order. The early course pursued by the court at the insistence of the Mallonee-Association group was promptly challenged by Administration (through Ammann), the first Ammann challenge being directed at the assumed right of the court to entertain the Mallonee suit, this by a motion to dismiss filed on June 14, 1946. This motion asserted that the court was without jurisdiction over the person of Fahey, an indispensable party to this action, and that the plaintiffs failed to state a claim upon which relief could be granted. Subsequently, and by a formal answer to the Mallonee suit (filed on October 21, 1946) Ammann set up certain defenses including that of failure of Association to exhaust available administrative remedies provided by Rules and Regulations of the Federal Home Loan Bank Administration after Association had demanded and had been accorded such an administrative hearing;' also that Association and Mallonee, over the protest of Ammann, had secured an injunction order restraining the holding of the administrative hearing which had been set by Administration.' The prayer was for dismissal of the Mallonee action. We refer to this pleading, infra. And see our comments, infra, re the Administrative Procedure Act, Title 5, § 1001 et seq., which became effective on September 11, 1946. As noted above the Mallonee suit was filed on May 27, 1946 and the Association answer and cross-claim (in the Mallonee suit) was filed on July 1, 1946. Upon the filing of the Mallonee suit the lower court issued a “Temporary Restraining Order” which restrained interference by Administration in the affairs of Association. No reference was made in this order to an administrative hearing since that was not ordered until June 5, 1946 (by Administration Order 5309). Prior to the last mentioned date and on May 24,- 1946, Association filed with Administration a formal written “Demand for a More Definite Statement of Cause for the Appointment of Conservator” for Association whereupon Administration (under date of May 29, 1946) did provide and serve upon Association such a “More Definite Statement.” After these formalities had been observed Administration issued its said Order No. 5309 which directed a “hearing officer” to conduct a field hearing at Los Angeles, California on July 3, 1946, at which hearing he was to take testimony in accordance with and pursuant to the terms of the said order. The purpose of this order is clear. It set a preliminary field hearing at which complainants could present each and all of their objections to the appointment of a Conservator for Association and challenge the validity of the Ammann appointment. All of this is made plain by an inspection of the order, The transactions above referred to all indicate that the legality of the appointment of a Conservator was a subject of bitter controversy prior to the filing of any of the pleadings of the Mallonee-Asso-ciation group of litigants and thus became the basic and decisive issue presented in their pleadings and motions for an injunction. On June 20, 1946, Mallonee moved for a “Preliminary Injunction” to restrain the holding of the administrative field hearing set for July 3, 1946. The Mallonee motion is lengthy but it averred generally that such a hearing at Los Angeles would irreparably injure the Mallonee group and other shareholders in Association. In part it asserts: “That the holding of said purported administrative hearing, the constitutionality of which is placed in question by this pending action, would constitute a multiplicity of actions, be an encroachment and infringement upon the jurisdiction and authority of this-Honorable Court to hear and determine the questions, including constitutional questions raised by this pending action and would cause immediate and irreparable damage and injury to these plaintiffs and to the interest of the other approximately 16,000 shareholder members in the said Long Beach Federal Savings and Loan Association and would injure and damage the good-will and going concern value of said Association and its shareholder members, and the result of publicity might restart a ‘run’ of withdrawals from said Association, which might even exceed the ‘run’ or withdrawals .caused by the seizure of said Association by said defendant, A. V. Ammann, as purported Conservator, which said ‘run,’ within’a comparative short time, caused withdrawals in excess of $6,000,000.00.” This Mallonee motion also asserted that the proposed administrative hearing would be a travesty upon justice for the reason that it would not be conducted in a fair and impartial forum; that Fahey would not be fair and impartial in passing on his own acts; that Administration- would not only be influenced -by bias and prejudice but had already decided and determined the issue of the validity of the Ammann appointment; that the Mallonee group (Association shareholders) was not a party to the administrative hearing nor were the (then) interpleading parties, yet their “rights” (all local property rights) would be seriously affected by the decision or determination made by Fahey or Administration. (Here 'they are obviously referring to the “final determination” of Administration reached after and as a result of the showing made by all parties at the preliminary hearing before the field hearing officer in the Los Angeles hearing.) In a long argument filed with the aforesaid motion Mallonee states that practically all of the (Association) assets seized by Administration belonged to California residents ; that the administration officials have previously and on March 29, 1946, seized the assets of the Federal Home Loan Bank of Los Angeles by reason of which seizure the administration officials had come into possession of Association assets held by that bank amounting to $400,000; that the seizure of Association was an act done to prevent the officers of Association from bringing appropriate litigation against Fahey, Ammann and others for the return' of Association assets held by the said Bank; that the seizure of Association was an act of reprisal and retaliation against officers of Association for their resistance to the usurpation by Fahey of the management, control and direction of the said Bank and the Federal Home Loan Bank of Portland, and the refusal of Association officers to permit Fahey to -control elections of the President of the Los Angeles Bank. Other charges were made including that of malice and animosity of Administration officials against Association and its officers. To the foregoing “objections” Mallonee added a demand for a three-judge court to pass upon its claim of unconstitutionality of Section 5(d) of the Home Owners’ Loan Act of 1933, as amended. (The lower court later convened such a three-judge district court to consider this issue and it held the section unconstitutional. Its decision was reversed in Fahey v. Mallonee, supra.) On July 1, 1946 Mallonee filed another motion for a “Temporary Restraining Order” to enjoin the holding of an administrative hearing, urging that this order remain in effect until its motion for a “Temporary Injunction” could be heard. Upon the filing of this motion the lower court issued a “Temporary Restraining Order” (the injunction referred to supra) which enjoined the holding of such a hearing “without first obtaining the further written order of this court.” This restraining order remained in effect for a long time— in fact it was not vacated until sixteen months later (November 10, 1947) on motion of appellants. Thus the restraint on an administrative hearing was not vacated until more than four m