1. A suit brought by the United States in the assertion of a
substantial claim is within the jurisdiction of the district court
under § 24 of the Judicial Code, whatever the decision on the
merits. P.
264 U. S.
249.
2. Where the United States joined with the United States Spruce
Production Corporation (a federal war instrumentality,
cf.
Clallam County v. United States, 263 U.
S. 341) in an action on contracts made by the latter
with the defendants,
held that the case had the
jurisdictional status of an action by the United States,
irrespective of the merits of its claim, and that objection to the
jurisdiction on the ground that the Corporation and one of
Page 264 U. S. 247
the defendants were citizen of the same state and the United
States not a necessary or proper party was rightly overruled.
Id.
Affirmed.
Error to a judgment of the district court to review only the
question of jurisdiction in an action on contracts.
MR. JUSTICE McKENNA delivered the opinion of the Court.
Action by the United States and United States Spruce Production
Corporation, praying judgment against C.J. Erickson in the sum of
$56,670.35, and against the United States Fidelity & Guaranty
Company in the sum of $56,670.35, the ground of recovery being
alleged breaches of certain contracts entered into between the
Spruce Corporation and Erickson for the sale of certain logs
belonging to the Spruce Corporation.
There was a motion to strike out certain allegations of the
complaint, and, being overruled, the complaint was demurred to. It
and the motion to strike out were upon the ground that it appeared
upon the face of the complaint that the court had no jurisdiction
of the subject matter of the action. The demurrer was overruled. An
answer was then filed, and a reply thereto. In the answer, there
was also a denial of jurisdiction.
Upon the issues thus made, a jury was impaneled to try, which
rendered a verdict fixing the recovery against Erickson at
$45,710.70, and against the Fidelity & Guaranty Company in the
sum of $20,000. For these sums, judgment was entered.
Page 264 U. S. 248
Accompanying the writ of error is the certificate of the
district judge that a question of jurisdiction arose in the case.
The certificate recited that, on the motion to strike out and upon
the demurrer, the defendants raised the question of the
jurisdiction of the court as a federal court to hear and determine
the cause, "and asserted that the United States of America was
neither a necessary nor proper party to the said action," it being
one
"founded on contract between a corporation organized under the
laws of the State of Washington, on the one part, and a citizen and
resident of the State of Washington, on the other part, the said
court was without jurisdiction to hear and determine the same, but
this Court in, consideration of the allegations and facts"
of the complaint "was of the opinion that it had jurisdiction to
hear and determine the case."
Even a summary of the facts of the certificate would be somewhat
long. Fortunately, we may dispense with it, as the elemental facts
are sufficiently set forth in
Clallam County v. United
States, 263 U. S. 341.
Reference to that case is satisfactory to plaintiffs in error,
they conceding that the connection of the United States with the
litigation can be completely and accurately stated in the language
of the
Clallam case by adding the following quotation from
the case:
"In short, the Spruce Production Corporation was organized by
the United States as an instrumentality for carrying on the war,
all its property was conveyed to it by or bought with money coming
from the United States and was used by it solely as means to that
end, and, when the war was over, it stopped its work except so far
as it found it necessary to go on in order to wind up its affairs.
When the winding up is accomplished, there will be a loss, but
whatever assets may be realized will go to the United States."
In addition it is only necessary to say that the Spruce
Production Corporation is a corporation of the State of Washington.
Erickson is a citizen of the State of Washington,
Page 264 U. S. 249
and a resident of the Western District of the state, Northern
Division. The Fidelity & Guaranty Company is a corporation of
the State of Maryland.
The matter in dispute exceeds $3,000, exclusive of interest and
costs. The United States joined as plaintiff to protect its
asserted interests.
In connection with the petition for a writ of error, the errors
assigned are based on the action of the district court and noted in
its certificate, and that the "court was without any jurisdiction
whatsoever to enter any such judgment."
There is no question of the merits of the case or of the
judgment. In other words, the question of jurisdiction is alone
before us for decision, and, the letter of the complaint being
regarded, there is no doubt of the jurisdiction of the court, for
the first subdivision of § 24 of the Judicial Code expressly gives
the district court jurisdiction of suits brought by the United
States. This is such a suit. The United States is one of the
plaintiffs, and joined in the suit by way of asserting and seeking
to enforce a right in which it claims to have a direct and legal
interest. Judged by the complaint, the claim made by the United
States is not frivolous or wholly without support, but is real and
substantial. In other words, it calls for consideration and
determination. This involves an exercise of jurisdiction whether
the ultimate decision sustains or rejects the claim. Jurisdiction
is power to decide the case either way, as the merits may require.
The Fair v. Kohler Die Co., 228 U. S.
22,
228 U. S. 25;
Geneva Furniture Co. v. Karpen, 238 U.
S. 254,
238 U. S. 258;
Hart v. Keith Exchange, 262 U. S. 271,
262 U. S.
273.
That another party joins in the suit does not take from it its
status as a suit brought by the United States.
It follows that the ruling of the district court sustaining the
jurisdiction must be, and it is,
Affirmed.