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07/05/56 Mount Vernon Mortgage v. the United States As

July 5, 1956

MOUNT VERNON MORTGAGE CORPORATION ET AL., APPELLANTS

v.

THE UNITED STATES AS PARENS PATRIAE, BY ITS ATTORNEY GENERAL, ET AL., APPELLEES. NATIONAL HOME LIBRARY

FOUNDATION AND FANNIE SESSIONS MITTELL, APPELLANTS

v.

THE UNITED STATES AS PARENS PATRIAE, BY ITS ATTORNEY



Before EDGERTON, Chief Judge, and BAZELON and BASTIAN, Circuit Judges.

UNITED STATES COURT OF APPEALS DISTRICT OF COLUMBIA CIRCUIT.

GENERAL, et al., Appellees. 1956.CDC.120

Petitions for Rehearing In Banc Denied Sept. 11, 1956.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE EDGERTON

EDGERTON, Chief Judge.

The United States as parens patriae sues to rescind certain transfers of shares of stock in the Longfellow Building Corporation. The transfers were made by trustees of the National Home Library Foundation, a charitable corporation organized in the District of Columbia. From a judgment in favor of the United States for some of the shares and some dividends, the defendants appeal. They contend among other things that the suit is barred by laches and by a three-year statute of limitations, D.C.Code 1951, § 12-201.

Though the transfers were made several years ago, it is not clear that there was unreasonable delay on the part of the United States in bringing this suit. If the plaintiff were a private person, the statute of limitations might be a bar. Moran v. Schlosberg, 67 App.D.C. 163, 165, 90 F.2d 408, 410. But charitable trusts are "favorites with courts of equity." Ould v. Washington Hospital, 95 U.S. 303, 313, 24 L. Ed. 450.

The United States is not suing on behalf of particular beneficiaries, to enforce a "private right, which might have been asserted without the intervention of the United States at all." See United States v. Beebe, 127 U.S. 338, 346, 8 S. Ct. 1083, 1088, 32 L. Ed. 121. "A suit for the enforcement of a charitable trust cannot be maintained by persons who have no special interest in the enforcement of the trust. The mere fact that as members of the public they benefit from the enforcement of the trust is not a sufficient ground to entitle them to sue . . .." Restatement, Trusts, § 391, comment d; cf. comment c (1935).Since the beneficiaries of the National Home Library Foundation are a practically unlimited and wholly indefinite group of persons, unless the United States or the Attorney General can sue to prevent the Foundation's property, which has been dedicated to a public purpose, from being diverted to private profit, no one can sue. This makes the suit analogous to one brought to enforce a public right, and closely analogous to one brought to enforce a right of an Indian tribe. Neither statutes of limitations nor laches apply to suits of either sort. See United States v. Summerlin, 310 U.S. 414, 416, 60 S. Ct. 1019, 84 L. Ed. 1283; Board of Commissioners v. United States, 308 U.S. 343, 351, 60 S. Ct. 285, 84 L. Ed. 313; United States v. Minnesota, 270 U.S. 181, 196, 46 S. Ct. 298, 70 L. Ed. 539.

We think the court's findings of fact are not clearly erroneous. We have considered appellants' other contentions and find no error affecting substantial rights.

Affirmed.

MINORITY OPINION

BASTIAN, Circuit Judge (dissenting).

While there was very substantial evidence to the contrary, I am not prepared to say that the findings of the trial court (except as hereinafter noted) in support of the allegations of the complaint were clearly erroneous. Rule 52(a), F.R.Civ.P., 28 U.S.C.A. Accordingly, they must be accepted.

I think too that there is considerable doubt that the Foundation was a charity in the true sense of the word; but, again, I cannot say that the findings of ...


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