Alcohol Warehouse Corporation v. Canfield, 11 F.2d 214 (2d Cir. 1926)

*215 Alfred D. Van Buren, of New York City, for appellant.

Emory R. Buckner, U. S. Atty., of New York City (U. S. Grant, Asst. U. S. Atty., of New York City, of counsel), for appellees.

Before MANTON, HAND, and MACK, Circuit Judges.

HAND, Circuit Judge (after stating the facts as above).

We decline to consider this case upon the merits, because of the absence of the Commissioner of Internal Revenue as a defendant. The cause is of a class now well recognized in the decisions of the Supreme Court, where an official is charged with duties under a statute, which he may and does execute by means of deputies, and where, whatever the former practice, courts will not now review the conduct of the deputies, in the absence of the superior for whom they have acted. The theory which lies back of the doctrine is not altogether clear. It may be because the deputies would otherwise be put in a cross-fire by a decree which forbade what their superior had commanded. It may be because the superior could repeat through other deputies the forbidden conduct, though that could scarcely be an objection in the mouth of the defendants. In the first case, Varnon v. Blackerby, 2 Atk. 144, Lord Hardwicke seemed to be thinking only of a purely ministerial duty. Whatever the explanation, it has, especially of late, become perfectly established, and we need not inquire into its sources or justification. Warner Valley Stock Co. v. Smith, 17 S. Ct. 225, 165 U.S. 28, 41 L. Ed. 621; Gnerich v. Rutter, 44 S. Ct. 532, 265 U.S. 388, 68 L. Ed. 1068; Webster v. Fall, 45 S. Ct. 148, 266 U.S. 507, 69 L. Ed. 411; Dami v. Canfield (D. C.) 5 F.(2d) 533.

We do not understand that Lord Hardwicke's comment arguendo has limited the scope of the doctrine. In Warner Valley Stock Co. v. Smith, supra, the action of the subordinate was, it is true, only incidental, and in execution of decisions with which the Secretary of the Interior was primarily charged; but in Gnerich v. Rutter, supra, the case was quite different. There the plaintiff complained of restrictions in a permit issued by the prohibition commissioner, which the local prohibition director threatened to enforce. The prohibition commissioner had so written the permit in the exercise of a discretion which he assumed to be vested in him by the regulations. While the result might be accounted for under Lord Hardwicke's dictum, if the prohibition commissioner alone had been thought a necessary party, it is impossible to see how the Commissioner of Internal Revenue was necessary, unless the doctrine covers acts of subordinates, discretionary as well as ministerial. Webster v. Fall, supra, involved a case where the act of the subordinate involved a decision whether an Indian who claimed payment was drunk at the time or had liquor within convenient reach, scarcely a purely ministerial duty.

In the case at bar the Commissioner alone has power to revoke a permit, a power no doubt judicial in its general character, and necessarily to be exercised by deputies. Still they must act under his supervision, and in the end at his direction. We can see no more reason for omitting him from a suit to revise the conclusions of those deputies, than if the question were of a subordinate's discretion under a regulation (Gnerich v. Rutter), or his decision of a question of fact (Webster v. Fall). At any rate, there is no such distinction suggested anywhere in the recent expression of the doctrine, and all that has been said applies equally well to this case, as do any possible considerations of policy on which the rule may rest.

*216 Finally, as the Commissioner is not only a necessary, but an indispensable, party, the point is not waived by not being taken in limine; indeed, the court might take it sua sponte. Minnesota v. Northern Securities Co., 22 S. Ct. 308, 184 U.S. 199, 46 L. Ed. 499; Texas v. Interstate Commerce Co., 42 S. Ct. 261, 258 U.S. 158, 66 L. Ed. 531. In Webster v. Fall the same cause had gone to decree on the merits; so it had in Gnerich v. Rutter, the point being raised for the first time in the Circuit Court of Appeals.

Decree reversed, and cause remanded, with instructions to dismiss the bill without prejudice, because of the absence of a necessary party.