author: PER CURIAM: BERNHARDT, Trial Judge:

text:
    Ansel Byron THOMAS et al. v. The UNITED STATES and Beech Creek Railroad Company and Penn Central Company, Third-Party Defendants.
    No. 352-69.
    United States Court of Claims.
    Nov. 20, 1974.

      William A. Bradford, Jr., Washington, D. C., attorney of record, for plaintiffs. Hogan & Hartson, Washington, D. C., of counsel.
    David W. Miller, Washington, D. C., with whom was Asst. Atty. Gen. Wallace H. Johnson, for defendant.
    William P. Jones, New York City, attorney of record, for third-party defendants.
    Before COWEN, Chief Judge, and SKELTON and MILLER, Judges.

       Associate Judge of the United States Court of Customs and Patent Appeals, sitting by designation pursuant to 28 U.S.C. § 293(a).

   OPINION

PER CURIAM:

This case comes before the court on plaintiffs’ exceptions to the recommended decision filed March 12, 1974, by Trial Judge C. Murray Bernhardt pursuant to Rule 134(h), having been submitted and considered upon the briefs and oral argument of counsel.

Since the court agrees with the trial judge’s recommended decision, as to the claims of the plaintiffs against the defendant, as hereinafter set forth, it hereby affirms and adopts the said decision as the basis for its judgment as to these claims in this case. It is therefore concluded that plaintiffs are not entitled to recover on their claims and, as to them, the petition is dismissed.

In view of this court’s decision in Bowser Inc. v. United States, 420 F.2d 1057, 190 Ct.Cl. 441 (1970), the court concludes that it has no jurisdiction of the claim asserted in the petition of the United States against the third-party defendants. It is therefore ordered that the petition of the United States against Beech Creek Railroad Company and Penn Central Company (now Penn Central Transportation Company) be and the same is hereby dismissed.

On the basis of this court’s decision in Rolls-Royce Limited v. United States, 364 F.2d 415, 176 Ct.Cl. 694 (1966), the court concludes that it has no jurisdiction- of the counterclaim by the third-party defendants against the plaintiffs. It is therefore ordered that the counterclaim of Beech Creek Railroad Company and Penn Central Company (now Penn Central Transportation Company) be and the same is hereby dismissed.

OPINION OF TRIAL JUDGE

BERNHARDT, Trial Judge:

The plaintiffs claim Fifth Amendment just compensation for the alleged taking in 1964 of their leasehold, sidetrack, and coal tipple beside the main line of the New York Central Railroad at Bells Landing, Pennsylvania. The taking was consequent to a flood control project on the West Branch of the Susquehanna River undertaken by the United States pursuant to the Flood Control Act of 1954. 68 Stat. 1248, 1257. The project entailed construction of the Curwensville Reservoir, which necessitated relocation of the Railroad right-of-way and tracks in the affected area. In lieu of authorized land condemnation proceedings the United States contracted with the Railroad for the latter to remove, at Government expense and under its supervision, the tracks and structures from the superseded right-of-way, while the United States constructed a new right-of-way and tracks. In 1966, approximately 2 years after the rail traffic had been diverted to the new track, the parties exchanged deeds whereunder the United States acquired the abandoned right of-way and the Railroad the replacement.

In 1944-45 Ansel Thomas and his late father, H. S. Thomas, as partners, were assignees from one Lark of the latter’s leasehold and sidetrack agreement with the Railroad providing a sidetrack and ramp adjacent to which the assignees erected in 1948 a coal tipple and accessory facilities for the weighing, cleaning, sorting, crushing, and loading of coal strip-mined from their nearby coal-bearing lands. The lease was for one year which was automatically renewable for successive yearly increments by holding over, and was terminable by the Railroad at any time on 30 days' written notice, or on 10 days’ notice in the event of nonpayment or other breach by the lessees. Upon lease termination the lessee had 5 days to remove his property on penalty of it becoming Railroad property. The sidetrack agreement was not for a fixed period and was terminable by either party on 30 days’ written notice. Both the lease and the sidetrack agreement required the written consent of the Railroad to any assignment or subleasing. Such consent had been given Lark for his previous assignments to the Thomases.

By 1962 the Thomases had stripped all of the coal from their coal-bearing lands that was economically accessible with the equipment they possessed. In May 1962 the Thomases “leased, assigned and conveyed” to the Shawville Coal Company the exclusive right to use the sidetrack and tipple in issue, including the right to use “so much of the Lessors’ land surrounding or adjacent to the sidetrack * * * as may be convenient for the Lessee’s enjoyment.” At the same time the Thomases leased certain coal rights to Shawville in their adjacent coal-bearing lands, subject to the payment of prevailing tonnage royalties which, obviously for tax depreciation benefits, greatly out-dollared rents under the tipple and sidetrack agreement. Both of these agreements were for 3 years with options to renew for an additional 3 years, and in each Shawville could terminate at any time on 30 days’ notice. Shawville cancelled both agreements in April 1965 without exercising the renewal options because the leased lands could no longer be economically mined without going deeper than their equipment permitted. Shawville was a large operator with mines elsewhere in the vicinity.

The Thomases did not obtain the Railroad’s consent to the tipple and sidetrack assignment to Shawville, although they knew of the requirement and on several previous occasions had made temporary assignments to others after securing the Railroad’s consent. The Railroad’s local operating personnel, such as the area trainmaster and his subordinates, as well as the Railroad’s project engineer for the dam, knew of Shawville’s use of the tipple and sidetrack almost throughout the relationship, if they did not know of the assignment itself, and did not inform the Railroad’s distant Real Estate Agent or its accounting department who were responsible respectively for leases of Railroad property and for collection of rents thereon. Shawville knew of the requirement for the Railroad’s consent to the assignment but did not suggest that it be obtained. Nor did the attorney who prepared it.

The Railroad’s Real Estate Agent and its accounting department were not only unaware of the assignment to Shawville, but were even oblivious of the fact that in June 1966 the subject property had been deeded to the United States by the Railroad without mention of a lease encumbrance. They continued to carry the Thomases as lessees following June 1966 and also continued to bill the Thomases for rent until November 1969. Needless to say, at no time did the Railroad ter-mínate the lease and agreement by 30-day written notice as it could have done whenever it wished, without cause. On at least one occasion after the Railroad no longer owned the property it even raised the rent by an endorsement accepted by Ansel Thomas. For reasons which are only speculative Ansel Thomas continued to maintain sidetrack insurance and to pay rent to the Railroad until June 1967 and possibly beyond despite the fact that the siding had been inoperable and unused since October 1964. The circumstances are a mute commentary on the sprawling inefficiency of a railroad so vast that a lease and even a fee title can get lost in the bureaucratic warren.

The last use of the sidetrack and tipple for loading coal was on September 4, 1964. By.the end of October 1964 the sidetrack and tipple had become unusable due to the removal by the Railroad, in the course of the track relocation project, of the tracks from the superseded right-of-way and the Railroad’s portion of the sidetrack serving the siding. No formal advance notice had been given by the Railroad or the United States to An-sel Thomas of the removal, but notice would have been superfluous since he was conscious at all times of the status of the project and its impending threat to his siding. Between July and October 1965 the United States dismantled, demolished and removed remaining structures from the siding, Ansel Thomas was permitted to salvage betimes anything of value he wished from the tipple, such as the crusher, part of the scales, and his portion of the sidetrack, and presumably did so. By this time he personally considered that his agreement with the Railroad for use of the sidetrack had terminated, although inexplicably he continued to pay rent for several years as stated before.

After the closing of the Ansel Thomas tipple in October 1964 Shawville processed and loaded coal extracted from the plaintiffs’ property (until April 1965) and elsewhere through the Jefferson Thomas tipple, which was located within a mile of the superseded tipple and, while it involved a slightly longer haul, approximated the latter’s net use charges when certain adjustments were made for services rendered. For example, whereas Shawville paid from 20 to 25 cents per ton to use the Jefferson Thomas tipple as against 3 to 5 cents per ton for the Ansel Thomas tipple, Shawville paid certain maintenance and operation charges at the latter which were included in the other’s price, so the net cost of each tended to even up. Suffice it to say that Shawville ostensibly used both of the tipples indiscriminately for loading coal while they were simultaneously available, with emphasis on the Ansel Thomas facility, as though a price difference was inconsequential. If the choice was dictated by respective capacities or other factors it is not shown.

As part of the flood control project the United States provided a new siding along the relocated right-of-way within a mile of the superseded Ansel Thomas tipple. Ansel Thomas expressed interest originally in the new siding but was not offered, and did not request, an undertaking by the Railroad or the Government to move his tipple to the new location at no cost to him, although he could have leased the new siding had he wished, with the moving of his tipple to be optional with him and at his own cost. Nor is there adequate proof of the plaintiffs’ assertion that the Railroad offered compensation for the tipple, or that the Government ever intended to move it. For the Railroad to have borne the removal expense would have been inconsistent with its customary policy and with the fact that the tipple was erected at the Thomases’ expense in the first place. There was no obligation in fact or law for the Railroad to bear the expense. Thus it is reasonably concluded that Ansel Thomas was interested in leasing the new siding only if the cost of moving his tipple was borne by others. This explains why he made no effort to lease it. By then he was losing interest in being a coal operator other than as a lessor of coal rights and then only to hire out an occasional coal site or two to meet his bare subsistence needs.

The new siding was opened on a first-come first-served basis in April 1966. Shawville had dickered with the Railroad as early as 1963 over using the new sidetrack and ultimately leased it in June 1966. Thereafter Shawville graded the siding with quantities of fill so that coal dumped there could be conveniently loaded onto railroad cars with a front end loader. Shawville used the new siding as late as 1969 and 1970 when it was loading coal obtained from other lands controlled by Ansel Thomas.

From these facts the plaintiffs contend that a taking occurred on and after September 4, 1964, when the Ansel Thomas sidetrack was rendered unusable, that the taking was compensable even though contrived through a contract between the United States and the Railroad rather than by a conventional physical appropriation by the Government, that the expectancy of renewal of the year-to-year lease should be included in the taking, and that the nature, extent and value of the property taken would be the same whether the taking occurred on September 4, 1964, or thereafter. They also maintain that severance damages are allowable because of the unity of use between the leasehold and the plaintiffs’ noncontiguous coal lands and rights. The United States defends on the several grounds that the Railroad’s acts in removing the tracks and thus destroying the leased use of the Ansel Thomas siding as well as his tipple are not attributable to the United States, that the leasehold and private sidetrack agreement were of no compen-sable value to plaintiffs after October 1964 because, they had terminated previously, that the plaintiffs are not entitled to a unity of use valuation basis, and that even if there had been a taking the property rights taken were of no value at the time the United States formally exercised dominion over the land in question in June 1966 by acquiring fee title.

The third-party defendants Beech Creek Railroad Company and the Penn Central Company, whose roles in this litigation are explained in footnote 1, defend on the principal ground that under basic landlord and tenant law the plaintiffs divested themselves of their leasehold rights prior to the alleged taking by expiration of the term, and by their covert assignment to Shawville. They also contend that plaintiffs are equitably precluded from any recovery by reason of their tacit participation with Shaw-ville in a scheme to defraud the Railroad.

These various issues were presented to the court at an earlier stage on cross-motions for summary judgment. The court’s order of October 22, 1971, denied the motions and returned the case to the Trial Division for findings and conclusions on two issues: whether and when a taking occurred and, if so, whether there was a unity of use between the property alleged to have been taken and the noncontiguous coal lands owned by plaintiffs.

A fully dispositive flaw in plaintiffs’ case, obviating treatment of other promising candidates, is that by the time of the alleged taking of his lease in September or October 1964 Ansel Thomas had lost his leasehold interest by assigning it to Shawville in May 1962 lock, stock, and barrel. Pennsylvania law governs the issue, for the lease and sidetrack agreement were effected there.

A universal rule of landlord and tenant law is expressed in Haynes v. Eagle-Picher Co., 295 F.2d 761, 763 (10th Cir. 1961), cert. denied 369 U.S. 828, 82 S.Ct. 846, 7 L.Ed.2d 794 (1962):

It is well settled that a conveyance by a lessee of an estate less than his own, retaining a reversion, is a sublease, while a conveyance which operates to transfer the entire interest of the lessee is an assignment.

This is the law in Pennsylvania, In re Bayley, 177 F. 522 (W.D.Pa.1909); Girard Trust Co. v. Cosgrove, 270 Pa. 570, 113 A. 741 (1921). The assignment of a lease is the passing of the owner’s title to such lease, the legal effect thereof being the same as a sale of the lease. 21 P.L.E., Landlord and Tenant, Sec. 86, citing Goldberg v. Grossman, 105 Pa.Super. 50, 160 A. 138 (1932). After assignment the lessee has no reversionary interest. However, he remains liable to the lessor unless released therefrom by the latter. Gale Industries, Inc. v. Bristol Farmers Mkt. Co., 431 Pa. 464, 246 A.2d 391 (1968). Reservation by the lessee of the right of entry on default, or additional rent charged the assignee, do not detract from the transaction as an assignment rather than a sublease nor constitute retention of a reversionary interest. This is unlike the case of a lessee who does not transfer his whole remaining term but licenses it for 3 months with 3-month renewals subject to termination by the lessee. In that state of facts the court construed a sublease to result because a term less than the lease term was involved. Morrisville Shopping Center v. Sun Ray Drug Co., 381 Pa. 576, 112 A.2d 183 (1955).

Plaintiffs oppose these contentions of the third-party defendants by relying on the terms of the Shawville assignment, particularly a claimed limitation of the scope of the property interest assigned, the provision that improvements made by Shawville were to belong to the Thomases on termination, retention by the Thomases of any condemnation proceeds relating to existing structures on the premises, and the right of reentry on default.

The May 1962 instrument gave Shawville “the right to the use of so much of the Lessor’s land surrounding or adjacent to the sidetrack and the improvements erected thereon or thereby, as may be convenient for the Lessee’s enjoyment of the herein leased premises and improvements, and for necessary or convenient extension or additions to the herein leased premises.” The limitation is entirely meaningless, for the determination of what would meet Shawville’s “convenience” was in its sole discretion and could encompass the entire property leased by the Railroad to the Thomases. There is no suggestion of a declaration by Shawville as to what its convenience embraced or excluded, or that any portion of the total premises not used by Shawville would be of the slightest utility to the Thomases. A limitation so vaguely expressed is tantamount to no limitation at all. It has been stated that “What is necessary to the enjoyment of the thing demised passes with it, as an appurtenance, without express words, yet, what is merely convenient does not.” 21 P.L.E., Landlord and Tenant, Sec. 211 citing Messer v. Rhodes, 3 Brewst. 180 (1870). However, the instrument in the present case expressly transferred the use of such portions of the premises as were convenient to Shawville, without limitation.

The other special features in the Shawville instrument relied on by plaintiffs to rescue the transaction from being regarded as an assignment do not do so because they do not amount to retention of a reversionary interest, which is the hallmark of a sublease. Thus the provision that improvements made by Shawville should belong to the Thomases on termination pertain to structures not in esse in May 1962 and, therefore, not part of the premises demised by the Railroad to the Thomases. It was a private arrangement between the Thomases and Shawville concerning the ownership of improvements, just as was the provision confirming the right of the Thom-ases to retain the proceeds of future condemnation awards relating to their own improvements on the property which, by their lease with the Railroad, belonged to the Thomases and could be removed by them on termination of the lease. Finally, the reservation by the Thomases of the right of reentry on Shawville’s default would not constitute retention of a reversionary interest, as held in Ottman v. Nixon-Nirdlinger, 301 Pa. 234, 151 A. 879 (1930).

The petition must be dismissed.

      . The term “Railroad” connotes collectively the Beech Creek Railroad Company, the New York Central Railroad which held a long-term lease on the property in dispute from Beech Creek, and the Penn Central Company into which the New York Central was merged. Beech Creek and Penn Central were motioned in as third-party defendants.

      . Hi S. Thomas, who died in 1962, was the father of Ansel Thomas and the other plaintiffs herein.

      . Factual backing for other issues is nevertheless presented in the Opinion, and in detail in the Findings of Fact following it.


source: Caselaw Access Project

author: MILLER, Judge.

license: Public Domain

text:
    MEGO CORP., Appellant, v. The UNITED STATES, Appellee.
    Customs Appeal No. 74-19.
    United States Court of Customs and Patent Appeals.
    Nov. 21, 1974.
    Allerton deC. Tompkins, New York City, atty. of record, for appellant.
    Carla A. Hills, Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Steven P. Florsheim, New York City, for the United States.
    Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.
   MILLER, Judge.

This is an appeal from the judgment of the Customs Court, 71 Cust.Ct. 53, C. D. 4471 (1973), dismissing appellant’s action based on its complaint against the classification of its imported merchandise under item 737.90, Tariff Schedules of the United States, and the failure to classify said merchandise under item 734.20 or, alternatively, 734.15 or 735.20. We reverse and remand.

Schedule 7, Part 5, covers, among other things, Games and Toys. Subpart E provides as follows:

Subpart E headnates:
1. The articles described in the provisions of this subpart (except parts) shall be classified in such provisions, whether or not such articles are more specifically provided for elsewhere in the tariff schedules, but the provisions of this subpart do not apply to—
*x- -jf & ■$£ -X’ ■x* •x*
(iii) games and other articles in items 734.15 and 734.20, toy balls (items 735.09-.12), and puzzles and games in item 735.20 (see part 5D of this schedule).
2. For the purposes of the tariff schedules, a “toy” is any article chiefly used for the amusement of children or adults.
* -X* -X- * * 'X- -X*
Toys, and parts of toys, not specifically provided for:
-X- * -X- * * * *
737.90 Other ................................ 35% ad val.

Subpart D provides as follows:

734.15 Chess, checkers, pachisi, backgammon, darts, and other games played on boards of special design, all the foregoing games and parts thereof (including their boards); mahjong, and dominoes; any of the foregoing games in combination with each other, or with other games, packaged together as a unit in immediate containers of a type used in retail sales; poker chips and dice................. 20% ad val.
734.20 Game machines, including coin or disc operated game machines and including games having mechanical controls for manipulating the action, and parts thereof ................................. 11.5% ad val.
*******
735.20 Puzzles; game, sport, gymnastic, athletic, or playground equipment; all the foregoing, and parts thereof, not specifically provided for ........................ 20% ad val.

The merchandise is a miniature pinball article consisting of a tilted cardboard base, resting on two short pegs, and clear plastic sides and upper surface, and is approximately %" x 14" x 8" in size. The cardboard surface depicts a spaceship-planet or baseball motif. Six small plastic balls are provided, which can be projected by a manually-operated spring mechanism or trigger into nine slots (numbered 400, 500, 600, 750, 800, 900, 1000, 1200, and 2000) or behind various barriers on the cardboard surface. It is designed for use by children from ages six to twelve.

The Customs Court, in dismissing the action, concluded as a matter of law that appellant had failed to establish, prima facie, that the imported merchandise was chiefly used as a game and had failed to overcome the presumption that it was chiefly used for the amusement of children or adults and was, therefore, properly classified as a toy under item 737.90.

As a general rule, the plaintiff in a customs classification case has a dual burden of showing that the classification by the Customs Service was incorrect and that the plaintiff’s proposed classification is correct. Morris Friedman v. United States, 50 CCPA 53, 56, C.A.D. 819 (1963). According to this rule, if the record supported appellant’s contention that the merchandise was not chiefly used for the amusement of children or adults and was, therefore, not a toy, the record would also have to support classification under item 734.20, 734.15, or 735.20 for appellant to prevail ; and appellant could prevail by showing that the merchandise was chiefly used as a game, which would rebut the presumption of correctness that it was chiefly used for amusement of children or adults and was, therefore, a toy.

However, we do not believe the conclusions of the Customs Court or appellee’s arguments correctly state appellant’s burden. The Subpart E headnotes provide that games and other articles in 734.15 and 734.20 and puzzles and games in item 735.20 are excepted from the requirement of classification under Sub-part E even though they are described in the provisions of Subpart E (e. g. “Toys”). Therefore, we conclude that appellant’s burden is to show (not necessarily by chief use) that its merchandise is described in one or more of items 734.15, 734.20, or 735.20, and in which one of them it is most specifically described. See Broderick & Bascom Rope Co. v. United States, 59 CCPA 130, C.A.D. 1053, 460 F.2d 1070 (1972).

In our determination of whether appellant has sustained this burden, we direct our attention to the description in item 734.20, “games having mechanical controls for manipulating the action,” because an examination of the article (importer’s exhibits 1 and 2) and the testimony of record leave no question that the article has a mechanical control (manually operated spring mechanism) for manipulating the action. Appellee argues that the phrasing of item 734.20, “[g]ame machines, including coin or disc operated game machines and including games having mechanical controls for manipulating the action,” requires that appellant’s article be a “machine.” However, the legislative intent derived from the Tariff Classification Study (1960) and the First Supplemental Report thereto (January, 1962) clearly was otherwise. The Study (Subpart D, Part 5 of Schedule 7) proposed the following provision for item 734.20 (p. 264):

Game machines, including coin or disc operated game machines and parts thereof

The First Supplemental Report recommended the following insertion before “, and parts thereof” (p. 80):

and including games having mechanical controls for manipulating the action

The following comments accompanied this recommendation:

The proposed change in the definition of “toy” might cause a significant change in the existing treatment of certain hockey games imported in substantial volume from Canada. These games have simple, mechanical controls for manipulating the hockey players, but might not be regarded as a game “machine”. The foregoing change in item 734.20, together with the change in headnote 1 of part 5E [to except games and other articles in items 734.15 and 734.20] will insure that the existing treatment of these games will be substantially continued.

The key question is whether appellant’s merchandise is a “game,” regardless of whether it is also a toy. Both parties agree that the common meaning of “game” should be followed. Both cite various dictionary definitions which indicate that a “game” must be competitive or involve a contest, and must possess an element of skill, chance, or endurance.

Although the only witness was the director of creative projects for appellant, his unrebutted testimony and an examination of the article clearly show that the objective is to get the balls into the highest numbered slots to make the highest score, so that the element of contest is present. The manual operation of the spring mechanism to trigger the balls gives the article an element of skill, and the barriers provide an element of chance. As the Customs Court said in Montgomery Ward & Co. v. United States, 66 Cust.Ct. 233, 238, C.D. 4195 (1971):

Of course, a game is necessarily a contest, but one which may be between two or more persons, or between one person and the game itself. For example, a slot machine can only be played by one person at a time . . . . A pinball machine can only be played by one person at a time and is a contest between man and machine which involves an element of skill, while the slot machine is essentially a game of chance. Darts can be played or practiced by one person alone simply as a test of skill of the player, with no necessity for an opposing player. All the above are “games” or “game machines” within the provisions for “games and sporting goods” in schedule 7, part 5, subpart D of the tariff schedules, and do not necessarily involve more than one person in their playing. The point is that these activities are games since they result in a “score” measuring one’s skill or luck or combination thereof against a given set of rules.

With respect to the construction of appellant’s merchandise, the witness testified that the plastic cover, cups, and pegs are made of high-impact styrene— “just about the strongest plastic”; that the board is “not of an extremely good grade but fairly strong.” Additionally, an examination of the article confirms that it is reasonably sturdy and is not of “flimsy” construction.

Appellee points out that the article was not accompanied by any instructions or rules for play, but it seems obvious that the contest would be to make the highest score with the six balls; moreover, no instructions would be needed for operating the spring mechanism. By its very design and construction, the article is directed to a contest or competition.

Appellee argues that the fact that the article has numbers which might be added to achieve a score, or, a score higher than one’s opponent, “means nothing to a five to twelve year old who is unable to total a combination of four, three, and one digit numbers,” and suggests that judicial notice be taken of “the fact that the average child, at least until age 11, cannot add up a combination of four, three and one digit numbers, with or without the aid of paper and pencil or pen.” However, the court is inclined to take judicial notice that such average child can do so. Even if we were to adopt appellee’s suggestion, however, such child would learn which slots were more important and would engage in a contest or competition on that basis.

Appellee also argues that appellant’s witness was unable to recollect how he observed the merchandise being used during the relevant period. On the contrary, appellant’s witness declared that he had seen the article being used “literally hundreds of times,” and further testified as follows:

Q. Will you please explain how the article was being used in accordance with your observations and your sales experience ?
A. As a contest; a game of skill. Two people play it or one person plays it to see how good he is at it.
Q. Where is it used, according to your knowledge and observations?
A. I’ve seen it used in homes; I’ve seen it used in front yards and on stoops; I’ve seen it used in our showroom, of course; and I've seen it used in stores.

Appellee further argues that the record shows that appellant failed to prove that the merchandise was chiefly used as a game, citing General interpretative rule 10(e)(i). However, items 734.15, 734.20, and 735.20 are not “chief use” provisions. The comments on Sub-part D, Part 5 of Schedule 7, in the Tariff Classification Study (1960) include the following (Schedule 7, pp. 287-288):

The classification problems connected with sports equipment and games and game equipment which may be chiefly used for the amusement of children are particularly troublesome. . Such equipment may be diminutive in size for use by children, such as a boy’s baseball glove, but it would nevertheless be classified under these provisions so long as it was of a character suitable for use in organized play of these games. [Emphasis supplied.]

Thus, even though an article may be “chiefly used” for amusement of children, it is nevertheless to be classified under Subpart D if it is a “game.”

It is noteworthy that the Fifth Supplemental Report (1963) to the Tariff Classification Study (1960) recommended amendment of Subpart E headnotes to add puzzles and games in item 735.20, with the following comment (p. 53):

Explanation: This change is for clarification to fully reflect the intention that games provided for in item 735.-20 are not to be included in the provisions for toys.

In view of the foregoing and on the basis of the record before us, we hold that appellant has established a prima facie case that its merchandise is a game having a mechanical control for manipulating the action and, as such, is more specifically described in item 734.-20, TSUS.

The judgment is reversed. However, inasmuch as the judgment was rendered on appellee’s motion prior to presenting its case, the cause is remanded for further proceedings not inconsistent with this opinion.

Reversed and remanded.

      . On defendant-appellee’s motion at the close of plaintiff-appellant’s case.

      . On the basis of the record, we agree with appellee that the merchandise is not a game played on a board of special design under item 734.15 under the doctrine of ejusdem generis, considering the eo nomine designations of chess, checkers, pachisi, backgammon, and darts. And the Tariff Classification Study (1960) states (Schedule 7, p. 287) that item 735.20 is a “basket” provision which covers games, puzzles, and sport equipment “not specially provided for elsewhere in the schedules.” As our discussion discloses, we are satisfied that appellant’s merchandise is specially provided for under item 734.20.

      . See Tariff Classification Act of 1962 (Pub.L.No. 87-456, 76 Stat. 72), Tiüe I, Sec. 101(b). United States v. Andrew Fisher Cycle Co., 57 CCPA 102, C.A.D. 986, 426 F.2d 1308 (1970); F. L. Smidth & Co. v. United States, 56 CCPA 77, C.A.D. 958, 409 F.2d 1369 (1969).

      . Appellee makes the following concession in its brief: “By virtue of Headnote 1 (iii) to Subpart E, Part 5, Schedule 7, TSUS, a ‘toy game’ is classifiable as a game.”

      . The comments on Subpart E in the Tariff Classification Study (1960) include the following (Schedule 7, p. 291) :
      With respect to games and sports equipment, it is intended that only those articles of such character and quality as are ordinarily used in the serious pursuit of the game or sport are to be covered by the provisions for such game or sport equipment.
      Flimsy construction would not appear to satisfy the quality requirement.

      . 10. G-eneral interpretative rules. — For the purposes of these schedules — •
      (e) in the absence of special language or context which otherwise requires — ■
      (i) a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of articles of that class or kind to which the imported articles belong, and the controlling use is the chief use, i. e., the use which exceeds all other uses (if any) combined; . . ..


author: BALDWIN, Judge.

text:
    SPICE ISLANDS, INC., Appellant, v. The FRANK TEA AND SPICE COMPANY, Appellee.
    Patent Appeal No. 74-567.
    United States Court of Customs and Patent Appeals.
    Nov. 27, 1974.

      John P. Sutton, Limbach, Limbach & Sutton, San Francisco, Cal., attorney of record, for appellant.
    Frank P. Presta, Jacobi, Lilling & Siegel, Arlington, Va., attorney of record, for appellee.
   BALDWIN, Judge.

This appeal is from the decision of the Trademark Trial and Appeal Board dismissing an opposition to appellee’s application to register SPICE TREE and tree design for garlic powder and minced onion and denying a petition to cancel appellee’s registration SPICE TREE per se for the same goods. Appellant asserts that appellee’s marks so resemble appellant’s mark SPICE ISLANDS, either alone or with various tree designs, or with its registered tree design for seasoning herbs and spices as to be likely to cause confusion, mistake, or deception. We reverse.

IsTo dispute arises over appellant being the first user, and, as stated by the Trademark Trial and Appeal Board:

Since it thus appears that opposer is here the prior user and the goods of the parties are in part identical in kind, this case turns solely on a comparison of the marks.

Appellant’s marks appear as shown below:

Appellee’s marks appear as follows:

The record shows that appellant for many years has continuously used the mark SPICE ISLANDS alone and/or in association with a representation of a tree or the top of a tree in connection with the sale of spices and food seasonings of various kinds, including garlic powder and minced onions. Its goods are marketed throughout the United States, its sales thereof have ranged between five and ten million dollars a year, and it has spent approximately $500,000 a year in promoting its goods through such media as radio, nationally distributed consumer magazines, and the distribution of seasoning charts and cookbooks.

Appellant markets condiments displaying both its SPICE ISLANDS mark and -tree mark. Further, store marketing displays similarly depict both marks being used together.

Since March of 1970, appellee has used its marks in connection with the sale of a line of spices, food seasonings, and condiments. Its sales under these marks have totaled approximately $500,000. From 1959 until 1970 appellee sold its goods under another mark, a portion of which comprises the same tree design that appears in the instant application, and sales under that mark amounted to approximately $51,000,000.

OPINION

After having carefully reviewed the record and the arguments of counsel, we are convinced that the board erred in dismissing the opposition and in denying the petition for cancellation of appel-lee’s registration.

In reaching its decision, the board improperly dissected the marks. For example, the board stated:

In this regard, the word “SPICE”, common to the word marks “SPICE ISLANDS” and “SPICE TREE”, possesses an obvious descriptive connotation as applied to the goods of both parties, and as further shown by the record herein, this word or variations thereof form a part of numerous marks registered by third persons for goods of the character here involved. While it is true opposer points out that the instant marks are used in association with tree designs, there obviously are substantial differences between the designs in appearance.

Of paramount interest is not the descriptive nature of SPICE, but the overall commercial impression derived by viewing the marks in their entireties in determining whether a likelihood of confusion exists. Clairol Incorporated v. Roux Laboratories, 442 F.2d 980, 58 C.C.P.A. 1170 (1971). Arguments to the effect that one portion of a mark possesses no trademark significance leading to direct comparison between only what remains is an erroneous approach. Magnavox Co. v. Multivox Corp. of America, 341 F.2d 139, 52 C.C.P.A. 1025 (1965).

Furthermore, it is unclear whether the board accorded proper weight to appellant’s most pertinent trademark usage in arriving at its conclusion that a likelihood of confusion does not exist. Although the board acknowledged that appellant markets its goods under the mark SPICE ISLANDS in connection with its tree mark, which depicts an entire tree, it stated that the grounds for the opposition and cancellation were the mark SPICE ISLANDS alone and in association with a design depicting the top of a tree, positioned to the left and right of SPICE ISLANDS. The former trademark usage would give rise to an association, in the minds of consumers, between appellant’s mark SPICE ISLANDS and various tree designs. We find that this usage is certainly more pertinent than the usage apparently emphasized by the board. It therefore should weigh heavily in determining whether a likelihood of confusion exists between the marks of the parties.

In reaching our decision, we note that the goods are identical, are in direct competition with one another, are of low cost and presumedly purchased without great reflection, and, finally, are purchased by the same class of purchasers. We find that the marks, when applied to seasonings such as garlic powder and minced onion, convey to prospective purchasers the same idea, same mental reaction, and same meaning. Procter & Gamble Co. v. Conway, 419 F.2d 1332, 57 C.C.P.A. 865 (1970).

Appellee has referred to a number of third party registrations which, appellee submits, indicate that appellant does not possess exclusive rights to the representation of a tree, as applied to spices, seasonings, or other food products. Ap-pellee has also introduced 38 third-party registrations, which include the word SPICE, for the purpose of showing that SPICE is commonly used in registered marks applied to spices, seasonings, and other food products. While third-party registrations are to be considered, they are of little help and do not control our determination of whether the marks are so similar that they are likely to cause confusion, mistake, or deception. Clairol Incorporated v. Roux Laboratories, supra.

Appellee further argues that the commercial impression created by each mark is significantly different. Thus, it is contended that SPICE ISLANDS connotes a group of islands in Indonesia where the climate is semi-tropical, while SPICE TREE serves to create the impression of a fanciful tree on which various spices are grown. We do not find such an argument persuasive. Suffice to say, we note that it overlooks the fact that appellant uses its mark SPICE ISLANDS in connection with its tree mark.

For the foregoing reasons, the decision of the Trademark Trial and Appeal Board is reversed.

Reversed.

      . 181 USPQ 179 (1973).

      . Application serial No. 359,841, filed May 15, 1970, alleging first use on March 25, 1970.

      . Reg. No. 918,142, issued Aug. 10, 1971, on Application serial No. 359,840, filed May 15, 1970, alleging first use on Mar. 25, 1970.

      . Reg. No. 574,147, issued May 12, 1953, alleging first use on March 17, 1941.

      . Reg. No. 781,485, issued Dec. 8, 1964, alleging first use in April 1961.

      . Appellant’s Exhibits 21, 22, and 23 show three seasoning product labels displaying appellant’s tree mark positioned directly above its mark SPICE ISLANDS.

      . Appellant’s Exhibit 45 shows a cardboard display case for various seasonings which depicts appellant’s tree mark positioned directly below its mark SPICE ISLANDS.

      . Reg. No. 714,805, issued May 2, 1961. The mark appears as shown below:

      In January of 1970, the drawing of this registration was amended to appear as shown below:

      . Worthy of note is the fact that another court has previously found that appellant’s mark SPICE ISLANDS, when considered in its entirety, is not merely descriptive and has acquired secondary meaning. Spice Islands Co. v. Spice Land Products, Inc., 165 F.Supp. 92 (E.D.N.Y.1958), aff’d, 262 F.2d 356 (2d Cir. 1959).

      . In its opinion, the board reproduced Reg. No. 654,201, issued November 5, 1957, which is shown below:


text:
    Application of Norman W. BOE and Bascum H. Duke.
    Patent Appeal No. 74-555.
    United States Court of Customs and Patent Appeals.
    Dec. 5, 1974.
    Kelly 0. Corley, Pensacola, Fla., attorney of record, for appellant.
    Joseph F. Nakamura, Washington, D. C., for the Commissioner of Patents, Robert D. Edmonds, Washington, D. C., of counsel.
    Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE and MILLER, Judges.
   MILLER, Judge.

This is an appeal from the decision of the Patent Office Board of Appeals affirming the examiner’s rejection under 35 U.S.C. § 103 of claims 1-9-^-all the claims in application serial No. 112,766, filed February 4, 1971, for “Release Finish for Yarns Containing Segmented Elastomers.” We affirm.

INVENTION

The invention involves a process for reducing tackiness of freshly spun filaments, composed at least partly of a segmented elastomeric polymer, by applying an aqueous, lubricating finish emulsion to such filaments, and the resulting lubricated filament. It is known that filaments of segmented elastomeric polymers are quite tacky upon extrusion, and there is a greater tendency (compared to relatively inelastic filaments) for adjacent filaments to cohere and for the yarn to adhere to other surfaces, resulting in erratic running tensions. Various lubricating finishes have been tried on segmented polymers but have not proved to be fully satisfactory. For example, textile oils are harmful to the physical properties of the segmented elastomeric polymers, and talc as a finishing agent has manufacturing disadvantages such as causing dust hazards. Process claim 1 and product claim 6 are illustrative of appellants’ invention:

1. A process for reducing tackiness in freshly spun filaments at least partly composed of a segmented elas-tomer, said process comprising:
a. forming said filaments;
b. applying to said filaments an aqueous emulsion containing by weight:
(1) between 1 and 15% emulsifiable wax selected from the group consisting of paraffin waxes, micro-crystalline waxes and polyethylene waxes,
(2) between 10 and 45% textile oil lubricant, and
(3) sufficient emulsifier to maintain said wax and said textile oil in suspension in said emulsion; and
c. collecting said filaments in an orderly fashion.

6. A lubricated filament composed at least partially of a segmented elas-tomeric polymer, said filament having deposited thereon between 1 and 5% based on the weight of said filament of a lubricant composition, said composition comprising based on the weight of said filament:

a. between 0.01 and 1.0% of an emulsifiable wax selected from the group consisting of paraffin waxes, mieroerystalline waxes, and polyethylene waxes;
b. between 0.5 and 3.5% of a textile oil; and
c. between 0.1 and 2.5% of an emulsifier.

PRIOR ART

Barrett discloses a method of applying an aqueous, lubricating finish emulsion to freshly spun filaments to prevent excessive yarn tension during drawing by minimizing friction between the filaments. Appellants have conceded for purposes of this appeal that the aqueous emulsion of Barrett may be considered the same as that of appellants. The tension problem caused by tackiness and the segmented elastomeric polymers are not mentioned in Barrett, but the aqueous emulsion is disclosed to be suitable for a wide variety of synthetic polymeric substances, including polyurethanes, hydrocarbon polymers, and polyesters, which can be used in making segmented elastomeric polymers.

Yuk discloses that the tackiness of segmented elastomeric polymers may be avoided by application of an anhydrous lubricating finish of textile oils and certain finely-divided soaps. Appellants rely heavily upon the following statement from Yuk (emphasis by appellant) :

I have discovered that textile oils make a satisfactory finish for elastic filaments from segmented copolymers only when there is dispersed in such oils essentially colorless, finely-divided soaps of certain metals of Groups I, II, and III of the periodic table.

REJECTIONS

Product claims 6-8 were rejected for obviousness under 35 U.S.C. § 103 over Barrett in view of Yuk or vice versa. The examiner reasoned that since the lubricating finish of Barrett can be used on a wide variety of polymers, including polyurethanes, and since the segmented elastomeric polymers of Yuk can be made from polyurethanes, it would be obvious to one of ordinary skill in the art to substitute Yuk’s filaments of the segmented elastomeric polymers for the synthetic filaments of Barrett. Conversely, it would be obvious to one of ordinary skill in the art to substitute the lubricating finish of Barrett for the lubricating finish of Yuk.

The examiner’s rejection of process claims 1-5 and 9 was simply stated in these words:

Claims 1-5 and 9 are rejected under 35 USC 103 [35 U.S.C. § 103] as obvious and unpatentable over Barrett et al. The claimed method is considered to define nothing more than an old and obvious method of applying a lubricating finish to synthetic polymeric filaments as evidenced by Barrett et al., Example I, VII, claims 3 and 5. Even if the final product were novel, this would not be controlling of obvious [ness] of the method. See in re Neugebauer et al. [330 F.2d 353, 51 CCPA 1138], 141 USPQ 205 and In re Jerome J. Kanter [399 F.2d 249, 55 CCPA 1395], 151 [158] USPQ 331.

In agreeing with the examiner, the board merely adopted the reasons of the examiner as its own and further stated that there was no reason to believe that the lubricating finish of Barrett could not be applied to the segmented elasto-meric polymer filaments of Yuk with the resultant reduction in tackiness of the treated filaments.

OPINION

Process Claims

Although the claimed method involves manipulative steps and a lubricating finish that are known, the examiner’s failure to cite a reference showing filaments composed at least partly of a segmented elastomeric polymer leaves us with a rejection which ignores a specific limitation of the claims. This court has stated that all limitations must be considered and that it is error to ignore specific limitations distinguishing over the references. In re Saether, 492 F.2d 849 (Cust. & Pat.App.1974); In re Glass, 472 F.2d 1388 (Cust. & Pat.App.1973). However, we do not regard this as reversible error here, since Barrett does disclose filaments made from polyurethanes, hydrocarbon polymers, and polyesters, which can be used to make the admittedly well-known filaments composed of a segmented elastomeric polymer. Cf. In re Schneider, 481 F.2d 1350 (Cust. & Pat.App.1973); In re Wadlinger, 496 F.2d 1200 (Cust. & Pat.App.1974).

The examiner’s failure to cite Yuk leaves us with only admitted prior art (segmented elastomeric polymers) and Barrett, which does not refer to the tension problem caused by tackiness or purport to solve the problem. However, the tension problem caused by friction with which Barrett is concerned is sufficiently analogous to suggest to one skilled in the art that the aqueous emulsion of Barrett would offer a solution to the tension problem caused by tackiness. Cf. In re Pye, 355 F.2d 641, 53 CCPA 877 (1966).

Accordingly, we hold the process claims to be obvious over Barrett and admitted prior art.

Product Claims

The main motivation for combining Barrett and Yuk is the similarity of the polymeric filaments treated with the lubricating finishes. Yuk discloses that the high-melting, crystalline segments may be made from a polyurethane, while the low-melting, amorphous segments may be derived from a polyester or a hydrocarbon polymer. In Barrett, a wide variety of polymers may be treated with the lubricating finish, including polyurethanes, hydrocarbon polymers, and polyesters.

Appellants argue that Yuk teaches one skilled in the art away from using the Barrett lubricating finish on segmented elastomeric polymers because of Yuk’s use of the word “only” in the statement quoted above (“PRIOR ART”) that textile oils result in a satisfactory finish for segmented elastomeric polymers “only” when employed with certain metal soaps. This argument is apparently based upon an exclusionary interpretation of the word “only” in that appellants would have one skilled in the art interpret “only” as excluding the use of other ingredients in the lubricating finish and other lubricating finish compositions for segmented elastomeric polymers. However, we believe that one skilled in the art would have interpreted the word “only” in light of the background of the above-quoted statement wherein Yuk declares that “it has been generally accepted that oils cannot be used to lubricate rubber filaments because of the harmful effect of such oils on physical properties.” This compels an interpretation that the textile oils may be used satisfactorily provided certain metal soaps are included in the lubricating finish. Yuk does not teach that more additives could not be used in the lubricating finish, or that other suitable lubricating finish compositions could not be employed for segmented elastomeric polymers.

In further seeking to overcome this rejection, appellants point to the alleged unexpected results in the suppression of tackiness. However, it appears that suppression of tackiness was an expected rather than an unexpected result inasmuch as Yuk was aware of the tackiness problem and noted in his examples that application of his lubricating finish resulted in an oiled elastic filament showing “substantially no tendency to stick.”

In view of the foregoing, we hold that it would have been obvious to one of ordinary skill in the art to substitute Yuk’s filaments of segmented elastomeric polymers for the filaments in Barrett or to substitute the lubricating finish of Barrett for that of Yuk. We agree with the board that the record provides no basis for believing that the lubricating finish of Barrett cannot be applied to the segmented elastomeric polymers of Yuk.

The decision of the board is affirmed.

Affirmed.

      . Segmented elastomeric polymers consist of segments of a high-melting, crystalline polymer, such as a polyurethane, alternating with segments of a low-melting, amorphous polymer, such as a polyester or hydrocarbon polymer. Illustrative of segmented elastomeric polymers are spandex fibers which employ a polyurethane as the crystalline, high-melting polymer.

      . United States Patent 3,113,369, issued December 10, 1963, on application serial No. 25,902, filed May 2, 1960, to Barrett, Estes, and Stow, Jr. for “Yarn Manufacture and Products Obtained Thereby.”

      . United States Patent 3,039,895, issued June 19, 1962, on application serial No. 18,264, filed March 29, 1960, for “Textile.”

      . Under the circumstances of this case, we do not regard use of appellants’ admission that such filaments are “well known” to constitute a new ground of rejection. But see In re Hunter, 286 F.2d 619, 48 CCPA 822 (1961).

      . Thus appellants’ product — a lubricated filament composed at least partly of a segmented elastomeric polymer with reduced tackiness — can be considered novel. In re Neu-gebauer, 330 F.2d 353, 51 CCPA 1138 (1964), cited by the examiner, which was deemed controlling in In re Kanter, 399 F.2d 249, 55 CCPA 1395 (1968), merely held that unobviousness of the final product was not determinative of unobviousness of the method. Nevertheless, it is clear that this is a significant factor to be considered in viewing “the claimed subject matter as a whole.” In re Naylor, 369 F.2d 765, 54 CCPA 902 (1966). See also In re Kuehl, 475 F.2d 658 (Cust. & Pat.App.1973).

      . Counsel for appellants emphasized at oral argument that the lubricating finish of Yuk is substantially anhydrous and that the soaps in Yuk are not used as emulsifiers in the lubricating finish. Appellants’ specification states that “[a]ny of the known emulsifying agents, which are capable of dispersing the wax and textile oil in an aqueous medium to form an emulsion which is stable over extended periods of time and at elevated temperatures, may be employed in the practice of this invention.” No argument was made that the soaps of Yuk are unsuitable as emulsifiers in the lubricating finish of Barrett or the present invention.

      . Although appellants argue that the teachings of Yuk would be interpreted by one skilled in the art to negative the use of the Barrett lubricating finish on segmented elas-tomeric polymers, it should be noted that Yuk actually issued before Barrett.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. CLEVELAND BROWNS, INC., Defendant-Appellant.
    No. 6-7.
    Temporary Emergency Court of Appeals.
    Sept. 13, 1974.
    Certiorari Denied Dec. 9, 1974.
    See 95 S.Ct. 640.
    Thomas P. Meaney, Jr., Burke, Haber & Berick, Cleveland, Ohio, for defendant-appellant.
    Carla A. Hills, Asst. Atty. Gen., Stanley D. Rose and Paul T. Michael, Dept. of Justice, Washington, D. C., for plaintiff-appellee.
    Before TAMM, Chief Judge, and ANDERSON and JOHNSON, Judges.
   ORDER OF AFFIRMANCE UNDER RULE 28

Upon consideration of Appellee’s Motion to Affirm and brief in support thereof and Appellant’s Answer,

It is ordered that the judgment of the District Court is affirmed on the authority of Oakland Raiders v. Office of Emergency Preparedness, No. 9-11 (T.E.C.A., July 10, 1974); DeRieux v. The Five Smiths, Inc., 499 F.2d 1321 (Em.App.1974) and University of Southern California v. C.O.L.C., Em.App.1972, 472 F.2d 1065, cert. denied, 410 U.S. 928, 93 S.Ct. 1364, 35 L.Ed.2d 590.


author: COLEMAN, Circuit Judge:

text:
    GENERAL MOTORS CORPORATION, Plaintiff-Appellant, v. DADE BONDED WAREHOUSE, INC., et al., Defendants-Appellees.
    No. 74-3647.
    United States Court of Appeals, Fifth Circuit.
    Jan. 8, 1975.
    Rehearing Denied Feb. 13, 1975.
    William G. Earle, Miami, Fla., for plaintiff-appellant.
    Dan G. Wheeler, Jr., Miami, Fla., for Blanche R. Bergin.
    Hugh L. Wood, Miami, Fla., for defendants-appellees.
    Gladson & Knecht, Coral Gables, Fla., for Moore Pipe & Sprinkler Co.
    Before THORNBERRY, COLEMAN and AINSWORTH, Circuit Judges.
   COLEMAN, Circuit Judge:

This diversity appeal presents the single question whether the district court correctly entered judgment notwithstanding the verdict in favor of Defendant-Appellee Dade Bonded Warehouse, Inc. In an earlier opinion, reported at 498 F.2d 327, we dismissed for lack of jurisdiction since Plaintiff-Appellant General Motors had failed to obtain the express findings and certification required by F.R.Civ.P. 54(b) in order to appeal a judgment which failed to dispose of all claims by all parties. In that opinion we invited the district court to enter a new interlocutory judgment conforming with Rule 54(b), whereupon we would consider the appeal on the record, briefs, and oral argument already submitted. The record now contains the proper certificate; hence we proceed to the merits of the cause.

Dade Bonded Warehouse, Inc. (“Bonded”) was organized sometime prior to 1951 as a closely-held enterprise of the Bergin family partnership, headed by Cecil Bergin. In 1954 it constructed, or together with the partnership authorized the construction of, certain warehouse facilities. In 1964 Bonded caused these facilities to be enlarged by additional construction, which resulted in some alteration of the drainage from the original roof. On May 19, 1968 there was a four-and-one-half inch rain. The roof of the original building collapsed, triggering the riser to the sprinkler system, thus effecting substantial water damage to the warehouse and its contents.

General Motors Corporation, through a subsidiary, had stored electrical appliances with Bonded. GM sued Bonded for its losses and joined Blanche Bergin, as personal representative of Cecil Ber-gin’s estate, as an additional defendant. Bonded cross-claimed against Bergin. In a trial concerned solely with the issue of liability, the jury returned the following general verdict:

We, the Jury, find for the Plaintiff, GENERAL MOTORS CORPORATION and against the Defendant, DADE BONDED WAREHOUSE INC. and against the Defendant, DADE BONDED WAREHOUSE INC. on its Cross Claim.

Thus, while the jury found for GM in the main suit against Bonded and against Bonded in the latter’s third-party action, its verdict failed to decide the dispute between GM and Bergin. In an order entered subsequent to our earlier opinion, the district court announced its intention to reset GM versus Bergin for a new trial. That controversy, of course, is not before us, and nothing we say herein should be construed as intimating any view concerning it.

Rather, the issue which we now face arose by virtue of the district court’s post-verdict rulings. In a situation such as this — involving a bifurcated trial— the jury might ordinarily have been permitted to proceed to the second stage: the determination of damages. Before this could happen, however, the district court set aside the jury’s verdict and granted Bonded a judgment n, o. v. We believe that this action was erroneous, that the judgment sub judice is due to be reversed, and that the jury’s verdict must be given effect.

On December 20, 1965 Dade Bonded and Frigidaire Sales Corporation entered into a contract by which the former was to furnish warehouse space for the electrical appliances of the latter. This contract contained the following provisio:

“First Party agrees to compensate the Second Party for damages sustained by any of its merchandise while in the possession of First Party, unless such damage or injury results from causes other than negligence of First Party or any of its employees or workmen.”

The complaint was grounded on negligence, in addition to bailment and warehouseman’s liability.

Our review of the case shows it to have fallen clearly within the prescriptions of Boeing Company v. Shipman, 5th Cir., 1969, 411 F.2d 365 (en banc):

“On motions for directed verdict and for judgment notwithstanding the verdict the Court should consider all of the evidence — not just that evidence which supports the non-mover’s case — but in the light and with all reasonable inferences most favorable to the party opposed to the motion. If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury. A mere scintilla of evidence is insufficient to present a question for the jury. The motions for directed verdict and judgment n. o. v. should not be decided by which side has the better of the case, nor should they be granted only when there is a complete absence of probative facts to support a jury verdict. There must be a conflict in substantial evidence to .create a jury question. However, it is the function of the jury as the traditional finder of the facts, and not the Court, to weigh conflicting evidence and inferences, and determine the credibility of witnesses.”

In granting the judgment notwithstanding the verdict, the trial court stated:

“The collapse of the roof was totally unexpected and unforeseeable; it had been inspected on numerous occasions without revealing any defect, and had withstood torrential rains and hurricanes for 15 years prior to its collapse. Plaintiff failed to prove any duty breached by Dade Bonded. The evidence at trial was totally unsuffi-cient to support the jury’s verdict.”

We note, however, evidence to the contrary, credited by the verdict, such as:

(1) The annex of 1964 was so constructed as to cause undue strain on the roof of the 1954 original building;

(2) The construction of the original and the annex was done with “day labor” and without the assistance of either an architect or a design engineer;

(3) The chief Dade County engineer testified that even if the roof had been filled to capacity with rain, it could not have overloaded a correctly constructed roof. He was of the opinion that there were seven possible structural failures which could have caused the collapse.

(4) A professional engineer who had evaluated the building on behalf of Dade Bonded testified that the roof could barely support its own weight; it collapsed because it was so constructed that the water could not properly drain off; certain beams were without adequate lateral support; and the higher annex blocked the flow of water off one side of the original structure, as indicated in sub-paragraph 1, supra.

The evaluation of this evidence, along with that offered in defense, together with the reasonable inferences to be drawn therefrom, about which reasonable men could certainly differ, was for the jury, and the jury acted on it. Its verdict should not have been set aside.

With directions to reinstate the verdict, and for further proceedings consistent herewith,

Reversed and remanded.

Each party shall be taxed with its own costs.

      . We do, however, note our belief that the district court’s contemplated action effectively moots GM’s request for a new trial against Bergin.

      . We do not find it necessary to reach or decide the two latter contentions.


author: THORNBERRY, Circuit Judge:

text:
    The UNITED STATES of America, Plaintiff-Appellee, v. Angel Luis OQUENDO, a/k/a Angel Luis Roldan, a/k/a Magoo, Defendant-Appellant.
    No. 74-2780
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Jan. 6, 1975.

      Frank Herrera, San Antonio, Tex. (Court-appointed), for defendant-appellant.
    William S. Sessions, U. S. Atty., John Pinckney, III, Asst. U. S. Atty., San Antonio, Tex., for plaintiff-appellee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

       Rule 18, 5th Cir., see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York, et al., 5th Cir. 1970, 431 F.2d 409, Part I.

   THORNBERRY, Circuit Judge:

Angel Luis Oquendo was indicted on three counts of distributing heroin in violation of 21 U.S.C. § 841(a)(1). The three counts were contained in two separate indictments. SA73CR40 charged Oquendo and one Jose Torres with distributing 0.84 grams of the drug on or about August 30, 1972. In SA73CR45 appellant alone was charged in two counts for separate transactions on August 29 and August 30, 1972. Oquendo pleaded not guilty as to each count, and the indictments were consolidated for trial. At the first trial a jury found Oquendo guilty on all three counts, but this court reversed the convictions because we found that the trial judge had given an improper Blue-type charge. United States v. Oquendo, 5th Cir. 1974, 490 F.2d 161. At the second trial a jury acquitted Oquendo as to both counts contained in SA73CR45, but found him guilty of the offense charged in SA73CR40. At this juncture appellant moved the district court for a directed verdict of acquittal as to the count of which he had been found guilty. It is from the district court’s denial of this motion that Oquendo now appeals. He alleges three grounds on which his motion should have been granted. First, he contends that since he offered an identical defense to both indictments no basis existed for a finding of guilty as to one and not guilty as to the other. Second, he urges that the evidence une-quivocably established that he acted as a “purchasing agent” and not as a principal in the transaction for which he was indicted in SA73CR40. Finally, he argues that the government paid its informant on a contingent fee basis in violation of Williamson v. United States, 5th Cir. 1962, 311 F.2d 441. Finding no merit in these contentions, we affirm.

We developed the factual background of this case in our earlier opinion and thus restate only the facts necessary to an understanding of the issues presently before us. As we noted earlier:

Appellant essentially admitted all of the elements of the crime charged resting his defense on our holding in United States v. Bueno, 5 Cir. 1971, 447 F.2d 903, that entrapment is established as a matter of law where a defendant is charged with possessing contraband or distributing it to a government agent if the contraband in question was supplied to the defendant by a government agent including a paid informer.

490 F.2d at 162 (footnote omitted). Thus, if the government introduced evidence legally insufficient to establish beyond a reasonable doubt that the heroin Oquendo allegedly distributed with Torres originated elsewhere than with the government informer that the jury apparently found had provided the drugs involved in the other two transactions, appellant’s request for a directed verdict of acquittal on SA73CR40 should have been granted. The record contains ample evidence, however, from which the jury could have concluded that the heroin involved in the SA73CR40 transaction came from a different source than the drugs involved in the SA73CR45 transactions. The government’s undercover agent testified that the drugs Oquendo sold in the latter transactions were, respectively 15% heroin/3.7% cocaine (A. at 35-36) and 15.5% heroin/5.4% cocaine (A. at 44). The substance obtained in the transaction charged in SA73CR40, however, the agent testified was 31.4% heroin/15.7% cocaine (A. at 40). The agent further stated that on August 30 Oquendo told him that one of his friends, which later turned out to be Jose Torres, could sell the agent better heroin than that offered by Oquendo himself. (A. at 38). Oquendo admitted that he could obtain heroin from persons other than the government informer. (A. at 164). Moreover, that Torres was involved in the SA73CR40 transaction at all could have led the jury to draw inferences adverse to appellant’s contention on this point. Considering the evidence in the light most favorable to the government, there was substantial evidence from which the jury could have concluded beyond a reasonable doubt that the government informer did not supply the heroin involved in the offense alleged in SA73CR40. Cf. United States v. Soto, 504 F.2d 557 (5th Cir. 1974).

Appellant also urges that he was entitled to a directed verdict of acquittal on SA73CR40 because his role in the transaction with Torres was that of a “purchasing agent” within the meaning of Adams v. United States, 5th Cir. 1955, 220 F.2d 297. The evidence shows that the undercover agent and the informer went to the Carosel Lounge in San Antonio to try to make a purchase from Torres. On arriving at the Lounge the informer went inside and soon returned, accompanied by appellant. Oquendo indicated that a friend inside the Lounge could sell the agent some heroin. The friend turned out to be Torres, and after some preliminary negotiations between Oquendo, Torres, and the agent, all three entered the men’s room where Torres gave the agent two grams of the drug. The agent testified that when he took money from his pocket to pay for the heroin, Torres told him to give the money to his “partner” Oqu-endo later. Adams and other cases relied upon by appellant involved statutes forbidding the sale of drugs. Appellant was indicted for “distribution”, not selling. 21 U.S.C. § 802(11) defines “distribute” as “to deliver . . . a controlled substance.” “Deliver” is defined as “the actual, constructed, or attempted transfer of a controlled substance, whether or not there exists an agency relationship.” Id. at § 802(8) (emphasis added). Hence, the fortuitous circumstance that appellant did not physically touch the drugs involved in the Torres transaction does not take him from within the statute’s coverage. Cf. United States v. Johnson, 5th Cir. 1973, 481 F.2d 645.

Finally, appellant contends that he was entitled to acquittal under Williamson v. United States, 5th Cir. 1962, 311 F.2d 441, where we reversed a conviction based on the testimony of an informer to whom the government paid a contingent fee for producing evidence against a particular named defendant. The informer in this case was paid $100 for successfully setting up a drug pur. chase by the undercover agent. No particular person was the target, however, and the informer did not make the buy. In fact, Oquendo became involved in the transaction for which he was ultimately convicted only by chance, for the undercover agent testified that on the day in question he hoped to make a buy from Torres and that he felt he had already made a case against Oquendo. (A. at 37). These facts take this case outside the Williamson doctrine. See United States v. Jenkins, 5th Cir. 1973, 480 F.2d 1198, cert. denied, 414 U.S. 913, 94 S.Ct. 256, 38 L.Ed.2d 151.

Appellant’s three contentions being meritless, the judgment is affirmed.

      . Appellant also contends that he should have been indicted as an “aider and abettor” rather than a principal. Clearly, Oguendo could have been indicted on this theory. See United States v. McCray, 5th Cir. 1973, 482 F.2d 286, cert. denied, 414 U.S. 978, 94 S.Ct. 300, 38 L.Ed.2d 222. Nevertheless, one who has been indicted as a principal may be convicted on evidence showing only that he aided and abetted the commission of the offense. United States v. Gower, 5th Cir., 447 F.2d 187, 193, cert. denied, 1971, 404 U.S. 850, 94 S.Ct. 84, 30 L.Ed.2d 88. Moreover, as noted in the text, we believe that the definition of “distribute” contained in the statute is broad enough to include acts that traditionally perhaps would have been defined as mere .aiding and abetting. Cf. United Stated v. Rose, 5th Cir. 1973, 484 F.2d 654. See also United States v. Felts, 5th Cir. 1974, 497 F.2d 80, 82; United States v. Alexander, 2nd Cir. 1974, 495 F.2d 552.

      . This point was raised, but not decided, in appellant’s first appeal. 490 F.2d at 166 n. 11.


author: COLEMAN, Circuit Judge.

text:
    Arthur L. TRAMEL et al., Plaintiffs-Appellants, v. George SCHRADER et al., Defendants-Appellees.
    No. 74-1096.
    United States Court of Appeals, Fifth Circuit.
    Jan. 6, 1975.

      John F. Jordan, F. Burns Vick, Jr., Edward B. Cloutman, III, Robert A. Bernstein, Dallas, Tex., for plaintiffs-appellants.
    N. Alex Bickley, City Atty., T. Alex Eastus, Carroll R. Graham, Mary Leigh Bartlett, Dallas, Tex., for Schrader and others.
    John L. Hill, Atty. Gen., Scott Garrison, Houghton Brownlee, Jr., Asst. At-tys. Gen., Austin, Tex., for State of Texas.
    Before RIVES, WISDOM and COLEMAN, Circuit Judges.
   COLEMAN, Circuit Judge.

This is a suit to enjoin the collection of special street improvements assessments by city officials. Plaintiffs (Arthur L. Tramel, et al.) are citizens of Dallas, Texas. They own land which abuts streets being improved by the City of Dallas. Defendants (George Schrader, et al.) are the Dallas City officials who ordered the streets improved and who levied the assessments against plaintiffs’ property to help pay the cost of the improvements.

Plaintiffs contend that in two respects the assessments violate their federal constitutional rights. First, Texas law provides for no pre-assessment hearing, thus, they say that the assessments constitute a taking of property without due process of law. Second, Texas law allows city governments, but not county governments, to charge to abutting property owners the cost of street improvements; hence, city property owners are being denied equal protection of the law.

The City Order which mandated the assessments is under attack. In addition, the Texas statute which empowers municipalities to order such assessments is under attack. Thus, this suit seeks to restrain the action of city officials and to declare invalid both a state statute and a municipal order made pursuant to that statute.

The District Court denied the request for the convention of a three judge court, demanded by plaintiffs. It dismissed the action for failure to state a claim upon which relief could be granted.

We affirm.

I. WAS THE DISTRICT COURT CORRECT AS TO THE NECESSITY FOR A THREE JUDGE COURT ?

The Three Judge Court Act, 28 U.S.C. § 2281, provides:

“An interlocutory or permanent injunction restraining the enforcement, operation or execution of any State statute by restraining the action of any officer of such State in the enforcement or execution of such statute or of an order made by an administra-five board or commission acting under State statutes, shall not be granted by any district court or judge thereof upon the ground of the unconstitutionality of such statute unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title.” [Emphasis supplied.]

The literal language of this statute requires the convention of a three judge court only when the defendants are state officers. It applies only when plaintiff seeks an injunction “restraining the enforcement, operation or execution of any State statute by restraining the action of any officer of such [s]tate”.

The Supreme Court has held that the language of this statute is to be literally followed. A three judge court is required only when state officers are defendants; a three judge court is not required where an action is brought against local officers who are enforcing a local ordinance.

A decision directly in point is Ex parte Collins, 277 U.S. 565, 48 S.Ct. 585, 72 L.Ed. 990 (1928). In that case, an Arizona statute provided that municipalities could finance improvements by issuing bonds to be paid off' by taxing owners of property abutting the improvements. The City of Phoenix, pursuant to the statute, assessed plaintiff’s property to pay for certain improvements. Plaintiff brought suit against Phoenix city officials. A district judge refused to request the convention of a three judge court. Plaintiff petitioned the Supreme Court for leave to file a writ of mandamus directing the district judge to appoint two additional judges to sit with him. The Supreme Court held the district judge’s refusal to convene the three judge court was correct since only the enforcement of municipal action by municipal officials was involved.

“This suit is not one to restrain ‘the enforcement, operation, or execution’ of a statute of a state within the meaning of section 266. That section was intended to embrace a limited class of cases of special importance and requiring special treatment in the interest of the public. The lower courts have held with substantial unanimity that the section does not govern all suits in which it is sought to restrain the enforcement of legislative action, but only those in which the object of the suit is to restrain the enforcement of a statute of general application or the order of a state board of commission. Thus, the section has long been held inapplicable to suits seeking to enjoin the execution of municipal ordinances, or the orders of a city board. And likewise it has been held that the section does not apply where, as here, although the constitutionality of a statute is challenged, the defendants are local officers and the suit involves matters of interest only to the particular municipality or district involved. Despite the generality of the language, we think the section must be so construed.
“Congress realized that, in requiring the presence of three judges, of whom one must be a Justice of this court or a Circuit Judge, it was imposing a severe burden upon the federal courts. The burden was imposed because Congress deemed it unseemly that a single District Judge should have power to suspend legislation enacted by a state. That the section was intended to apply only to cases of general importance is shown by the provision that notice of the hearing must be given to the Governor and the Attorney General — a precaution which would scarcely be deemed necessary in a suit of interest only to a single locality. Support for that view is found also in the provision for a stay of the suit in case there shall have been brought in a court of the state a suit to enforce the statute or order. That the provisions of section 266 applied to cases of unusual gravity was recognized by Congress in 1925, when, in limiting the right of direct appeal from the District Court to this court, it carefully preserved that right in cases falling within the section. Cases like the present are not of that character. If the temporary injunction had been issued, the result would have been merely to delay a municipal improvement. Though here the alleged unconstitutionality rests in the enabling statute, the case does not differ substantially from one where the sole claim is that a city ordinance is invalid. Moreover, the enabling act is not itself being enforced within the meaning of section 266. That act merely authorizes further legislative action to be taken by the city, as by the resolution here in question. It is that municipal action, not the statute of a state, whose ‘enforcement, operation, or execution’ the petitioner seeks to enjoin.” 48 S.Ct. at 585-586.

Ex parte Collins was followed in Petition of Public Nat. Bank of New York, 278 U.S. 101, 49 S.Ct. 43, 73 L.Ed. 202 (1928). New York City assessed taxes against a bank. The assessment was authorized by a New York statute which provided for a higher rate of tax on banks than on other businesses. Plaintiff bank brought a suit in federal court against city officials, asking that they be enjoined from levying the allegedly unconstitutional tax. A three judge court was convened; but dissolved itself, saying it had no jurisdiction. On mandamus, the Supreme Court held the three judge court was correct in dissolving itself. The Three Judge Court Act, the Court said, does not apply when defendants are city officials who are collecting taxes only for the use of the city.

The persons sued are municipal officers, having no state functions to perform, but charged only with the duty of collecting and receiving taxes assessed by other city officials in no respect for the use of the state but for and in behalf of the city alone. In effect, the contention for petitioner practically comes to this — that the general purpose of section 266 being to safeguard state legislation assailed as unconstitutional from the improvident action of federal courts, the words, “by restraining the action of any officer of such state in the enforcement ... of such statute” are without significance. In other words, we are asked to ignore the quoted words and read the section as though they were not there.
But we are not at liberty thus to deny effect to a part of a statute. No rule of statutory construction has been more definitely stated or more often repeated than the cardinal rule that “significance and effect shall, if possible, be accorded to every word. As early as in Bacon’s Abridgment, § 2, it was said that ‘a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant’.” Washington Market Co. v. Hoffman, 101 U.S. 112, 115, 25 L.Ed. 782. We are unable to perceive any ground for departing from the rule in the case before us. It follows that, giving effect to the phrase in question, section 266 requires the concurrence of two things in order to give the three-judge court jurisdiction: (1) The suit must seek to have a state statute declared unconstitutional, or that in effect; and (2) it must seek to restrain the action of an officer of the state in the enforcement of such statute. See Henrietta Mills Co. v. Rutherford County (D.C.) 26 F.(2d) 799, 800; Connor v. Board of Com’rs of Logan County, Ohio (D.C.) 12 F.(2d) 789, 790; Connecting Gas Co. v. Imes (D.C.), 11 F.2d 191, 194, 195. The second requisite here is lacking. 49 S.Ct. at 44.

The Collins and Public National Bank cases conclusively demonstrate that the District Court acted properly in refusing to request a three judge court. No such court is required when an action is brought only against local officials who are enforcing municipal orders.

II. WAS THE DISTRICT COURT CORRECT IN DISMISSING PLAINTIFFS’ ACTION FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF COULD BE GRANTED?

28 U.S.C. § 1341 provides:

“The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.”

Remedies in the Texas state courts are adequate.

Plaintiffs argue that the Tax Injunction Statute is inapplicable because a special assessment is not a “tax”. There is case authority to support plaintiffs’ position. Some courts have defined “tax” as including only those levies made to raise revenue for general governmental purposes, thereby excluding special assessments which are made for some specific purpose such as street improvements. See, e. g., City of Wichita Falls v. Williams, 26 S.W.2d 910 (Texas, 1930); and the comprehensive list of cases in Words and Phrases, “Tax; Taxation”.

Other courts have defined “tax” more broadly, indicating that the term embraces any extraction of property from a private person by a sovereign for its use, People ex rel. Du Page County v. Smith, 21 Ill.2d 572, 173 N.E.2d 485 (1961) and comprehensive list of cases in Words and Phrases, “Tax; Taxation”. Under this broad definition, special assessments are taxes, and one District Court has so held when considering the issue in the context of the Tax Injunction Statute; Chicago, St. P. M. & O. Ry. Co. v. City of Randolph, et al., 122 F.Supp. 302 (Nebraska, 1954).

In this posture, we examine Congressional intent when it enacted 28 U.S.C., Section 1341.

The purpose of Congress in enacting the Tax Injunction Statute has been explained by Judge Rives in Hargrave v. McKinney, 5 Cir., 1969, 413 F.2d 320:

There is a twofold purpose underlying Section 1341. First, it is directed at the elimination of unjust discrimination between citizens of the State and foreign corporations. As the Senate Judiciary Committee said in its report recommending adoption:
“If those to whom the federal courts are open may secure injunc-tive relief against the collection of taxes, the highly unfair picture is presented of the citizen of the State being required to pay first and then litigate, while those privileged to sue in the federal courts need only pay what they choose and withhold the balance during the period of litigation.”

And, second, it is directed at eliminating the practice whereby foreign corporations could disrupt State financing efforts. The Senate Report said that the system then in vogue:

“. . . makes it possible for foreign corporations doing business in such States to withhold from them and their governmental subdivisions taxes in such vast amounts and for such long periods of time as to seriously disrupt State and county finances. The pressing needs of these States for this tax money is so great that in many instances they have been compelled to compromise these suits, as a result of which substantial portions of the tax have been lost to the States without a judicial examination into the real merits of the controversy.”

413 F.2d at 325-326.

In other words, in passing the Tax Injunction Statute, Congress took aim at two evils.

First, Congress noted that some foreign corporations were in the habit of delaying the payment of taxes through an action in federal court since they could invoke diversity jurisdiction. State citizens, on the other hand, could not obtain a federal forum based on diversity jurisdiction. By passing the Tax Injunction Statute, Congress sought to treat the two classes, foreign corporations and resident citizens, alike.

Second, Congress noted that allowance of injunction suits in the federal courts inevitably resulted in delays in the collection of public revenues by the state and local governments. Because of pressing need for the money, the state and local governments often had to compromise the claims, taking less than what was, in fact, due. By closing the federal courthouse door to taxpayer claims, Congress sought to end this burdensome disruption of local financing.

All that remains is a determination of whether closing the federal judicial forum in this case would fulfill these dual purposes of the Tax Injunction Statute.

Turning first to the Congressional purpose of equating the foreign citizens with resident citizens, we find that for purposes of the federal statute the narrow “tax” definition suggested by plaintiffs does not fit the frame. If the special assessments here are not a “tax”, foreign citizens in diversity cases will be able to sue in federal courts to enjoin collection of special assessments, whereas resident citizens would have the benefit of no equivalent privilege. Equal treatment of the two classes would be frustrated.

On the other hand, if the federal statute was intended to include special assessments, as we are confident that it was, all taxpayers stand on an equal footing. They have the plain and adequate remedies available in the state courts.

Considering the second Congressional purpose — the desire to end the use of the federal courts to disrupt the collection of local revenues — the narrow definition proposed by the plaintiffs would be altogether inappropriate. Turning their backs on available state remedies, unwilling taxpayers who do not wish to pay for special assessment improvements, levied under state law and collectible accordingly, would be allowed to delay or otherwise frustrate the revenue collection process by resorting to the federal courts. We are certain that the Congress intended that the federal courts should not thereafter be used for this purpose.

We conclude that the suit should have been dismissed under the terms of 28 U.S.C., Section 1341 and, upon that ground, the judgment of the District Court is

Affirmed.

      . Federal jurisdiction is based upon 28 U.S. C. § 1343(3) which provides a federal forum :
      “To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States.”
      The law authorizing this action is 42 U.S. C. § 1983 which provides:
      “Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.”
      The decision in Lynch v. Household Finance Corp., 405 U.S. 538, 92 S.Ct. 1113, 31 L.Ed.2d 424 (1972) settled the longstanding debate on whether one can use 28 U.S.C. § 1343(3) as the basis of jurisdiction when only property rights are at stake. That case rejected the “distinction between personal liberties and proprietary rights as a guide to the contours of § 1343(3) jurisdiction”. Accordingly, federal jurisdiction may exist even if only property rights are involved.

      . Vernon’s Ann.Civ.St. art. 1105b, § 1.

      . Although the Collins and Public Nat. Bank cases were heard on mandamus to the Supreme Court, it is now established that the Court of Appeals does have jurisdiction to “review the actions of a one-judge district court in dismissing a complaint instead of taking appropriate steps to convene a three judge court”, Hargrave v. McKinney, 5 Cir., 1969, 413 F.2d 300, 323.

      . The District Judge acted on his belief that the complaint failed to state a substantial federal question. If the District Court was correct, its judgment stands, regardless of reasons erroneously assigned.

      . City of Houston v. Standard Triumph Motor Co., 5 Cir., 1965, 347 F.2d 194.

      . Occasionally, courts have said the essential difference between an assessment and tax is that assessments are made for the improvement of property in a local area whereas taxes are made for the support of the government in general. E. g., New Orleans v. Warner, 175 U.S. 120, 20 S.Ct. 44, 44 L.Ed. 96 (1899).
      This definition, like the one stated in the body of the opinion, emphasizes the difference in use to be made of government revenue.

      . In their brief, xdaintiffs cite numerous cases [e. g., City of Wichita Falls v. Williams, 119 Tex. 163 26 S.W.2d 910, 911 (1930); Payne v. City of Perryton, 48 S.W.2d 497 (Tex.Civ.App. Amarillo, 1932)] in which Texas courts have said that special assessments are not taxes. These decisions deal only with the meaning of the term “taxes” in the context of Texas statutes and the Texas Constitution. They are not controlling in determining what Congress meant by the term “taxes” when it prohibited federal courts from interfering in the collection of taxes. The proper question is not what the Texas courts have said the Texas legislature meant when it used the term but what Congress meant when it used the term.
      In any event, the Texas state decisions cited by plaintiffs hardly indicate that Texas courts, given a question like the present one, would stamp its approval on the proposition that federal courts, despite the Tax Injunction Statute, are free to intervene in local governmental assessments. The Texas decisions interpreted the meaning of “taxes” in a context wholly different from the present inquiry, which is whether this assessment is within the evils Congress meant to prohibit through the Tax Injunction Statute.