author: HUTCHESON, Circuit Judge.

text:
    LAKE et al. v. TEXAS NEWS CO. et al.
    No. 1075.
    District Court, S. D. Texas, Galveston Division.
    July 20, 1931.
    Rehearing Denied Sept. 18, 1931.
    Hart & Stiglich, of Galveston, Tex., for plaintiffs.
    King, Battaile & Dutton, of Houston, Tex., for defendants.
   HUTCHESON, Circuit Judge.

Plaintiffs filed this suit in the district court of Galveston county, 'Tex., against the Texas News Company, Inc. By amendment, plaintiffs joined the Home Indemnity Company, alleging that that company had by an insurance contract with the Texas News Company, its insured, obligated itself to pay to persons' injured by the negligence of that company all damages which they might sustain, and that it would satisfy and discharge any judgment rendered against the insured because of such injuries.

Upon this amended petition, which recited that John Suggs was the general agent, process issued to Dallas county, Tex., and the sheriff returned it, reciting that he had executed it by delivering to the Home Indemnity Company by delivering to Ben Harrison, its agent, in person.

The defendant Home Indemnity Company did not make answer to the term of court to which this citation was returnable, but later appearing, as it claimed, voluntarily filed its petition and bond for removal, asserting that plaintiff’s petition disclosed the existence of a separable controversy.

The motion to remand makes three points: (1) That the removing defendant did not give the preliminary notice of intention to remove as required by law. This point I find the facts do not sustain.

(2) That the motion was filed too late because filed after the time when defendant was required to answer. I find against this ground of the motion also.

It is plain, upon the authorities cited bj both plaintiff and defendant, that the sheriff’s return was not sufficient to support a default judgment, and therefore to compel the defendant to answer at the term to which it was returnable. It did not, as it, should have done to require answer, disclose that Harrison, the person served, was the character of agent upon whom service under the statutes would be effective. Standard Accident Ins. Co. v. Edwards (Tex. Civ. App.) 1 S.W.(2d) 321; Delaware Ins. Co. v. Hutto (Tex. Civ. App.) 159 S. W. 73; Latham Co. v. Radford Grocery Co., 54 Tex. Civ. App. 510, 117 S. W. 909.

The third point, that the petition does not assert a cause of action against the Home Indemnity Company separate and distinct from that asserted against the Texas News Company, which is capable of being finally determined as between plaintiff and the insurance company, and complete relief afforded without the presence of the other defendants, I think well taken, and the cause must be remanded. Torrence v. Shedd, 144 U. S. 530, 12 S. Ct. 726, 36 L. Ed. 528; Graves v. Corbin, 132 U. S. 571, 10 S. Ct. 196, 33 L. Ed. 462; Minar v. Sheehy, 56 App. D. C. 318, 13 F.(2d) 290.

The existence of a separable controversy is determined on the allegations alone of plaintiff’s pleading. The pleading in this case discloses an agreement on the part of the removing defendant to stand liable on any cause of aetion for damages arising against its insured, Texas News Company, and, further, to discharge any judgment which might be rendered against its insured. It is perfectly competent for an insurance company to make such agreement, and if it does so it puts itself in like case with the insured with whom it has agreed, and gives to any person injured a direct action against it and its insured on account of injuries received at the hands of the insured. In such ease, the one injured has one controversy against them both; not two controversies, one against each. The Texas courts have so held. Texas Landscape Co, v. Longoria (Tex. Civ. App.) 30 S.W.(2d) 423; American Automobile Ins. Co. v. Struwe (Tex. Civ. App.) 218 S. W. 534. See also Morrell v. Lalonde (D. C.) 271 F. 19.

It is not a theoretically separable, but an actually separate, and distinct controversy, as viewed by the courts of the state where the cause is pending, which determines its removability.

The motion is granted, and the cause is remanded.

On Motion for Rehearing of Motion to Remand.

The removing defendant in a vigorous motion for rehearing asserts that here are two causes of aetion, one ex contractu, against it, the other ex delicto, against its codefendant; and that while such actions may be properly joined in one suit under the state practice, this right of joinder does not make a joint aetion out of two' separate ones. It cites Stewart v. Tire & Rubber Co. (C. C. A.) 39 F.(2d) 309, 311, and Lynch v. Insurance Co. (D. C.) 15 F.(2d) 725, to the proposition that “the cause of action does not become joint, or joint and several, from the mere fact that the plaintiff elects to avail itself of the statutory permission and unite parties in the same action.”

It also cites in support of a rigid and precise common law determination of the joint and severable character of a cause of aetion Genuine Hat Works v. Webb (D. C.) 36 F.(2d) 265 which with Henderlong v. Standard Oil Co. (D. C.) 17 F.(2d) 184, and other District Court cases, persist in holding to the rule established in the Warax Case (C. C.) 72 F. 637, but long since discarded by the Supreme Court in Alabama Great So. Ry. v. Thompson, 200 U. S. 212, 26 S. Ct. 161, 50 L. Ed. 441, 4 Ann. Cas. 1147; Cincinnati, N. O. & T. P. Ry. v. Bohon, 200 U. S. 221, 26 S. Ct. 166, 50 L. Ed. 448, 4 Ann. Cas. 1152; Southern Ry. v. Miller, 217 U. S. 209, 30 S. Ct. 450, 54 L. Ed. 732; Chicago, R. I. & P. v. Schwyhart, 227 U. S. 193, 33 S. Ct. 250, 57 L. Ed. 473; Chesapeake & O. Ry. v. Cockrell, 232 U. S. 147, 34 S. Ct. 278, 58 L. Ed. 544; Southern Ry. v. Carson, 194 U. S. 139, 24 S. Ct. 609, 48 L. Ed. 907; 23 R. C. L. 686; Illinois Cent. R. Co. of State of Illinois v. Sheegog, 215 U. S. 308, 30 S. Ct. 101, 54 L. Ed. 208, that an action against a servant and his master, which predicates the liability of the master solely upon the relation, presents not joint and several, but only several causes of action.

I have long believed that it was meant to hold broadly, and that it was held in the Thompson and Bohon Cases and those which, followed, that where the matters in controversy in a suit are by the practice in the state where the suit is filed regarded as suable in one action, because relating to the same transaction or subject-matter, and therefore presenting one primary controversy between the parties to it, such suit does not present a separable controversy as to any of them, though at common law the causes of aetion would have been severable and not joint. 1 C. J. pp. 1073, 1074, p. 1082, § 239 et seq.; First Baptist Church v. So. Mortgage Co. (D. C.) 39 F.(2d) 246; Pabst v. Roxana Petroleum Co. (D. C.) 30 F.(2d) 953.

In Cincinnati, N. O. & T. P. v. Bohon, 200 U. S. 225, 26 S. Ct. 166, 168, 50 L. Ed. 448, 4 Ann. Cas. 1152, it was said: “If the action was properly joint in the forum in which it was being prosecuted, it could not be removed as a separable controversy under the act of Congress. We have under consideration an aetion for tort which, by the Constitution and laws of the state, as interpreted by the highest court in the state, gives a joint remedy against master and servant to recover for negligent injuries. * * * A state has an unquestionable right by its Constitution and laws to regulate actions for negligence, and where it has provided that the plaintiff in such eases may proceed jointly or severally against those liable for the injury, and the plaintiff, in due course of law and in good faith, has filed a petition electing to sue for a joint recovery given by the laws of the state, we know of nothing in the Federal removal statute which will convert such action into a separable controversy for the purpose of removal.” Quoting from Southern Ry. v. Carson, 194 U. S. 136, 24 S. Ct. 609, 610, 48 L. Ed. 907, the court in the same case said: “Reference was there made to the fact that many courts have held the identification of master and servant to be so complete that the liability of both may be enforced in the same action.”

Applying these principles to the facts of this ease, I think it inescapable that no separable controversy exists here. The courts of Texas have declared the liability of an insurance company in a ease like the one at bar to be direct, absolute, and primary, not derivative, secondary, and by way of indemnity. Texas Landscape Co. v. Longoria (Tex. Civ. App.) 30 S.W.(2d) 423; American Auto. Ins. Co. v. Struwe (Tex. Civ. App.) 218 S. W. 534; Monzingo v. Jones (Tex. Civ. App.) 34 S.W.(2d) 662.

While therefore it is perfectly clear that the insurance company in this ease was not a primary wrongdoer in the sense of having directed or authorized, or brought about the commission of the tort, and at common law the cause of aetion against it and its insured would not have been a joint one, it seems plain to me that there is only one primary controversy in this case, whether or not plaintiff has been injured by the culpable act of the insured, the determination of which fixes the liability at once against both defendants, the one because he did the act, the other because it agreed in advance that it would be absolutely, and at all events, liable to a third person, if such an act causing damage, occurred.

Here, as in the case of master and servant, “the identification (of the two obligors) is so complete that the liability of both may be enforced in the same aetion.”

Under these circumstances, it seems unreasonable to me to say that here is a separable controversy, wholly determinable as to the removing defendant, without the presence of the other party to the suit. For here, in fact and I think in law, is only one controversy, and plaintiff has elected to and may make his action joint against them, taking them as they have placed themselves, under one liability, the one by its act, the other by its agreement in advance to stand liable and sue them that way.

The removing defendant cites as of contrary purport Little Six Oil Co. v. Noble (C. C. A.) 17 F.(2d) 728, holding that where one has incurred a contractual liability and another has assumed the liability by a separate agreement, a separable controversy exists.

Conceding that that case was correctly decided, it presents a wholly different situation from this one. There the liability had been east on one of the defendants before the other had assumed it by contract; here the insurance company agreed in advance of any injury, that it would be primarily liable to any person culpably injured.

In. such situation a better analogy is the case of an insured and an insurer executing a fidelity bond, or one guaranteeing the public against liability. In such eases the suits have been held to be jointly maintainable upon the bond, Monzingo v. Jones (Tex. Civ. App.) 34 S.W.(2d) 662, and therefore not removable, Centerville State Bank v. National Surety Co. (C. C. A.) 37 F.(2d) 338.

The motion for rehearing is overruled.


source: Caselaw Access Project

author: NIELDS, District Judge.

license: Public Domain

text:
    UNITED STATES v. FLOOD et ux.
    No. 830.
    District Court, D. Delaware.
    Aug. 7, 1931.
    Leonard E. Wales, U. S. Atty., of Wilmington, Del., for plaintiff.
    P. Warren Green, of Wilmington, Del., for defendant Michael C. Flood.
   NIELDS, District Judge.

The United States has filed its bill of complaint against Michael C. Flood, as proprietor, and Anna M. Flood, as owner, of the property at the northeast comer of Seventh and Tatnall streets, in the city of Wilmington, in this district. Anna M. Flood, the owner, has appeared and answered. Michael C. Flood, proprietor, though served' with process, has not appeared nor answered.

- The bill charges in substance that intoxicating liquor was sold, kept, and bartered bn the saloon portion of the premises, that such premises were maintained as a common nuisance as defined by the National Prohibition Act (title 2, § 21 [27 USCA § 33]), and that such nuisance was a continuing one. It seeks an injunction with a closure provision.

Attached to the bill of complaint are affidavits showing sales of intoxicating liquor on September 20, 1930, September 22, 1930, September 25,1930, October 9,1930, October 27, 1930, and November 6, 1930, and the service of a search warrant on November 7, 1930. The bill was filed November 13, 193Ó. Anna M. Flood consented that a temporary injunction issue. The matter is now before the court after full hearing on bill, answer, and oral evidence. The owner resists the entry of a decree depriving her of the use of her property.

The evidence clearly establishes that the premises in question were a common nuisance within the meaning of the National Prohibition Act at and immediately before the filing of the bill of complaint. The sole question is whether the court has reasonable ground for apprehending the continuance or recurrence of such nuisance.

Anna M. Flood testified that she had owned the property since October 31, 1923, and that during that time a portion of it was equipped as a saloon. She was the wife of Michael C. Flood, her eodefendant, and they resided together on the premises. Michael-C. Flood acted as bartender. The saloon portion was divided by a partition. The front served as an anteroom with a'tobacco counter. The back room was a barroom with an old fashioned bar, back bar, tables, and chairs. Patrons entering the anteroom who desired admission to the barroom pressed a buzzer. The bartender moving from behind the bar to the cigar counter would inspect the patrons and if they appeared safe would admit them to the barroom by pressing a button behind the bar which unlocked the door leading to the barroom. The evidence clearly established the fact that intoxicating liquor was sold on the premises by the defendant Michael C. Flood, husband of the owner. At the time of the raid she was behind the bar with her husband where there was liquor. The evidence further established that the owner, Anna M. Flood, knew that liquor was being sold on the premises. She testified that she knew her husband had been convicted of selling liquor on these premises in this court on March 26,1926, and that he had been convicted of selling liquor on the same premises in the state courts of this state in 1928. Notwithstanding this knowledge, Mrs. Flood did nothing looking to a removal of the bar equipment or the adaptation of the saloon to a lawful use. In the absence of some step on her part to abate the nuisance, it is fair to assume that the same business will be carried on unless enjoined.' A nuisance.’once shown to exist will be presumed to continue, especially in the absence of change in environment. Engler v. United States (C. C. A.) 25 F.(2d) 37.

A decree may be submitted providing for a permanent injunction with a closure clause.


text:
    UNITED STATES v. CONNER.
    No. 826.
    District Court, D. Delaware.
    Aug. 7, 1931.
    Leonard E. Wales, U. S. Atty., of Wilmington, Del., for plaintiff.
    P. Warren Green, of Wilmington, Del., for defendant.
   NIELDS, District Judge.

The United States has filed its bill of complaint against Perris J. Conner, defendant, owner of a property in the city of Wilmington, in this district, known as “The Poplar Hotel,” at the southeast comer of Fifth and Poplar streets. On the ground floor, there was an old-fashioned saloon with a long bar and bar equipment. Conner was his own bartender. He used the second floor for living room, dining room, and kitchen, and one of the rooms- on the third floor as a bedroom.

The bill charges, in substance, that intoxicating liquor was sold, kept, and bartered in the saloon portion of the premises in question, that such premises were maintained as a common nuisance, as defined by the National Prohibition Act title 2, § 21 (27 USCA, § 33), and that such nuisance was a continuing one. It prays for an injunction with a closure provision. Attached to the bill are affidavits showing the sale of intoxicating liquor on October 15, 1930, October 17, 1930, and the service of a search warrant on November 7, 1930. The bill was filed November 13, 1930. Conner consented that a temporary injunction issue. The matter is now before the court after a full hearing in open court on bill, answer, and oral evidence. The defendant resists the entry of a decree depriving him of the use of his property.

The evidence clearly establishes that the premises in question were a common nuisance within the meaning of the National Prohibition Act (27 USCA § 33) at and immediately before the filing of the bill of complaint. The sole question is whether the court has reasonable ground for apprehending the continuance or recurrence of such nuisance. Conner conducted the saloon business on the premises long prior to the passage of the National Prohibition Act (27 USCA). He testified that the premises were “a regular saloon.” He was, not only the owner of the premises and proprietor of the business, but his own bartender. It is conclusively shown by the evidence that on three separate óeeasions he sold intoxicating liquor on the premises in violation of the National Prohibition Act. On the occasion of the raid Conner was found behind the bar holding a tray bearing three glasses of whisky, and sitting at a table were two men and a woman. He testified that one of the men had brought a bottle of whisky to the premises and was “setting up” drinks in honor of his own birthday. In the opinion of the court, this story was conceived after the occasion because no such explanation of the situation was offered at the time of the raid.

At no time has Conner done anything looking to a removal of the bar equipment or the adaptation of the saloon to a lawful use. In the absence of some step on his part to abate the nuisance, it is fair to assume that the same business will be carried on by him unless enjoined. A nuisance once shown to exist will be presumed to continue, especially in the absence of change of environment. Engler v. United States (C. C. A.) 25 F.(2d) 37.

A decree may be submitted providing for a permanent injunction with a closure clause.


text:
    DELAWARE TRUST CO. v. HANDY, Collector of Internal Revenue.
    No. 14.
    District Court, D. Delaware.
    Aug. 28, 1931.
    Ward & Gray, of Wilmington, Del., for plaintiff.
    Leonard E. Wales, U. S. Atty., of Wilmington, Del., and William T. Sabine, Jr., Sp. Atty., Bureau of Internal Revenue, of Washington, D. C., for defendant.
   NIELDS, District Judge.

This is an action of indebitatus assumpsit to recover federal estate taxes in the sum of $283,130.20 alleged to have been illegally collected. The matter is now before the court on a special demurrer to the first count of the declaration.

William Du Pont died January 20, 1928. The plaintiff on January 21, 1929, filed with defendant an estate tax return in accordance with the requirements of the Act of Congress of February 26, 1926, known as the Revenue Act of 1926 (44 Stat. 9). On May 26,1926, the decedent transferred property to a trustee for the benefit of his son, William Du Pont, Jr., and on the same day transferred other property to a trustee for the benefit of his daughter, Marion Du Pont Somerville, both of which transfers were one year, seven months, and twenty-six days before decedent’s death. July 12, 1927, decedent transferred property to a trustee for the benefit of his daughter-in-law, Jean Liseter Du Pont, six months and eight days before his death. September 1, 1927, decedent transferred property to a trustee for the benefit of his stepson, four months and nineteen days before his death. The Commissioner of Internal Revenue, on examination of the tax return, advised the plaintiff that there should have been included in the value of the gross estate the property transferred as above, and thereupon assessed against the plaintiff a deficiency tax.

The principal question raised by the demurrer is the constitutionality of the provision of section 302, (e) of the Revenue Act of 1926 (26 USCA § 1094(e), under and pursuant to which such assessment was based. The section provides that all transfers of property made within two years of death, in excess of $5,000 to any one person, and without full and adequate consideration, shall be included in the value of the gross estate of a taxable, and “shall be deemed and held to have been made in contemplation of death,” without regard to actualities and notwithstanding it may by admission or proof be established that such transfers were not in fact made in contemplation of or intended to take effect in possession or enjoyment at or after death.

This precise question has been recently decided in Hall et al. v. White, Collector, 48 F.(2d) 1060 (D. C. Mass.); Donnan et al. v. Heiner, Collector, 48 F.(2d) 1058 (D. C. W. D. Pa.); and Guinzburg et al. v. Anderson, Collector, 51 F.(2d) 592 (D. C. S. D. N. Y.). In eaeh of these cases this provision of the section has been held unconstitutional. The applicable principles of law and the authorities have been considered in those cases. I fully concur in the reasoning and conclusions expressed in those cases. It would serve no useful purpose to enter again upon a discussion of the matter.

In part, count 1 of the declaration is based upon the allegation of the unlawful collection from the plaintiff of a, deficiency tax by reason of the refusal of the Commissioner of Internal Revenue to allow a deduction in the tax return of the plaintiff of a certain bequest of $56,042.10, made in tbe will of the decedent to the vicar of Holy Trinity (Old Swedes) Church, Wilmington, Del. I am not satisfied that the allegations in this part of the count fail to set forth a cause of action. My opinion, however, is without prejudice to a determination of this matter after evidence taken.

The demurrer must be overruled.


author: HITZ, Associate Justice.

text:
    MOFFETT v. FISKE.
    No. 5061.
    Court of Appeals of District of Columbia.
    Argued March 9, 1931.
    Decided June 29, 1931.
    H. C. Workman, and C. B. Rugg, both of Washington, D. C., for appellant.
    Ernest Wilkinson and R. J. Mawhinney, both of Washington, D. C., for appellee.
    Before MARTIN, Chief Justice, and ROBB, HITZ, and GRONER, Associate Justices.
   HITZ, Associate Justice.

This is an appeal by William A. Moffett, one of the defendants in an action for damages in'the Supreme Court of the District of Columbia, from a judgment of $198,500, with interest and costs, for alleged infringement of a patent.

- Bradley A. Mske, appellee here, plaintiff there, .was in 1874 graduated from the United States Naval Academy and commissioned an officer of the line.

After various assignments of duty ashore and afloat he served for two years, commencing in the spring of 1900, as inspector of ordnanee at the Bliss Plant, in Brooklyn, where, as he admits and the court finds, “he acquired all the knowledge of torpedoes extant in this country, and he retained that knowledge and experience until the time he applied for his said patent.”

During the winter of 1910-1911, as captain, he was a member of the General Board of the Navy, and head of the Committee on War Plans. Most of his time in that post being spent in devising plans for recapturing the Philippine Islands, if captured by an enemy, it occurred to him that such capture might be avoided by airplanes equipped to carry and discharge torpedoes.

After much thought on this subject, and discussion with his associates of the board, he, then a rear admiral, went to duty as commander of a division of the Atlantic Fleet.

While so detailed, he applied for a patent for a “Method of and apparatus for delivering submarine torpedoes from airships.” This application, with drawings and specifications, being filed in April, 1912, a patent issued thereon July 16, 1912.

This patent covered a device for dropping automobile torpedoes from airships by gravity, with the principle and method of its operation.

For present purposes, the method and apparatus may be described as follows:

An airplane with a torpedo suspended therefrom was to fly at a comparatively high elevation to about 1,500 yards of" its target, swoop down as rapidly and as vertically as possible to within 10 or 15 feet of the water, and, with the bow of the torpedo bearing on the target, start the mechanism, and release the torpedo, to fall by gravity to the water, after which it was to perform its work by its own power and in the usual way.

For this purpose the airplane was to be equipped with chocks on its bottom or lower frame, in which the torpedo was to be held rigid by a strap under its middle connected at one .end with the ship and at the other by a ring with a pivoted latch disengaged by a hand lever to release the torpedo-.

The usual protruding lever for starting the propelling mechanism of the torpedo was to be first pressed forward by the toe of a lever connected by a link with the same hand lever.

Shortly after obtaining his patent, the plaintiff became aide for operations, and though it appears he tried, from time to time, to interest naval authorities in the subject of his patent, he met with little success.

Later, however, the Navy Department undertook experiments with torpedoes, together with airplanes, and, without plaintiff’s assistance, expended much time, energy, and money in obtaining planes which could successfully carry and discharge torpedoes as well as torpedoes which could suceessfuly be carried and discharged.

Those experiments met with some approval, and a number of torpedo planes were placed in service.

Plaintiff claiming infringement of his patent, sought compensation from the government, and, being denied, filed suit under Rev. St. § 4919 (35 USCA § 67) for damages for infringement against the then Secretary of the Navy, two officers alleged to have been concerned in torpedo plane experiments, and Rear Admiral Moffett, who for the greater part of the time of said experiments was chief of the Bureau of Aeronautics.

The suit was brought' against them personally, and as to all but defendant Moffett a voluntary nonsuit was taken before judgment.

It was by agreement tried to the court without a jury, and a judgment of $198,500, with interest and costs, rendered against Admiral Moffett.

.At the conclusion of the evidence, consistently with the manner of trial, the defendant, instead of the usual motion for a directed verdict, moved for judgment because of a shop right in the government, or actual ownership of the patent by the government, because the evidence showed no infringement of the patent, and for other reasons.

This motion was taken under advisement with the case, and denied when the cause was decided for the plaintiff.

In arriving at its judgment, the court found the right of an officer- in the army or navy to take out a patent of the class in suit, citing as one of the two cases United States v. Burns, 12 Wall. 246, 20 L. Ed. 388, and further upheld the right of such a patentee to sue an officer of the government personally for infringement in making use of his patent in government work, citing with another case U. S. v. Lee, 106 U. S. 196, 1 S. Ct. 240, 27 L. Ed. 171, and Crozier v. Fried Krupp Aktiengesellschaft, 224 U. S. 290, 32 S. Ct. 488, 56 L. Ed. 771.

We will first consider the refusal of the trial court to find the ownership of the patent or a shop right therein by the government, and its finding to the contrary, being assignments of error numbered 33, 34, and 35.

In Solomons v. United States, 137 U. S. 342, 11 S. Ct. 88, 34 L. Ed. 667, the chief of the Bureau of Engraving and Printing invented a self-canceling stamp which he thereafter patented, and assigned the patent to Solomons, who sued the government in the Court of Claims because of its use, and appealed from an adverse decision.

The Supreme Court, at page 346 of 137 U. S., 11 S. Ct. 88, 89, in affirming the Court of Claims, said: “An employee, performing all the duties assigned to him in his department of service, may exercise his inventive faculties in any direction he chooses, with the assurance that whatever invention he may thus eoneeive and perfect is his individual property. There is no difference between the government and any other employer in this respect. But this general rule is subject to these limitations: If one is employed to devise or perfect an instrument, or a means for accomplishing a prescribed result, he cannot, after successfully accomplishing the work for which he was employed, plead title thereto as against his employer. That which he has been employed and paid to accomplish becomes, when accomplished, the property of his employer. Whatever rights as an individual he may have had in and to his inventive powers, and that which they are able to accomplish, he has sold in advance to his employer. So, also, when one is in the employ of another in a certain line of work, and devises an improved method or instrument for doing that work, and uses the property of his employer and services of other employees to develop and put in practicable form his invention, and explicitly assents to the use by his employer of such invention, a jury, or a court, trying the facts, is warranted in finding that he has so far recognized the obligations of service flowing from his employment and the benefits resulting from his use of the property, and the assistance of the co-employees, of his employer, as to have given to such employer an irrevocable license to use such invention.”

In the later ease of Gill v. United States, 160 U. S. 426, 16 S. Ct. 322, 40 L. Ed. 480, Gill, a machinist in a government arsenal, patented certain inventions he made while there, and sought to recover for their use by the government.

The Supreme Court, in affirming the decision of the Court of Claims against Gill, said at page 434 of 160 U. S., 16 S. Ct. 322, 325: “Now, whether the property of the government and the services of its employees be used in the experiments neeessary to develop the invention, or in the preparation of patterns and working drawings, and the construction of the completed machines, is of no importance. We do not care, in this connection, to dwell upon the niceties of the several definitions of the word 'develop’ as applied to an invention. The material fact is that in both this and the Solomons Case the patentee made use of the labor and property of the government in putting his invention into the form of an operative machine; and whether such employment was in the preliminary stage of elaborating and experimenting upon the original idea, putting that idea into definite shape by patterns or working drawings, or finally embodying it in a completed machine, is of no consequence. In neither case did the patentee risk anything but the loss of his personal exertions in conceiving the invention. In both cases there was a question whether machines made after his idea would be successful or not, and, if such machines had proven to be impracticable, the loss would have fallen upon the government.”

In Houghton v. United States (C. C. A.) 23 F.(2d) 386, the same rule was applied in the ease of a government chemist claiming on a patent for a fumigant invented while in the service.

Did the trial court correctly apply this law to the facts of this ease?

The plaintiff, after receiving education at the Naval Academy fitting him for a career of naval service, was graduated and commissioned in 1874.

The record here shows little of his activities until 1900, when he went for two years as inspector of ordnance at the Bliss Plant in Brooklyn, where he testifies that he inspected all torpedoes manufactured, with their assembly, with shop tests and running tests at Sag Harbor, thus acquiring as an officer in the naval service all knowledge of automobile torpedoes then known, which knowledge and experience he retained until he applied for the patent in suit.

This was his duty, and in its discharge he acquired his knowledge, and the experience thus acquired belonged to the nation, from which he received the compensation providr ed for officers of his rank.

He displayed inventive ingenuity during his career, which added to* his qualifications as an officer, and, having reached the rank of captain by 1910, was then ordered to the important billet of member of the General Board of the Navy and head of the Committee on War Plans, all of which means that his employment was not'manual but intellectual, and that all the powers of his mind, including his inventive ingenuity, if exercised upon means'and instruments of naval warfare, belonged to the nation as his employer.

He testified that he spent most of his time at that period in devising plans for recapturing the Philippine Islands in ease of their capture by an ememy, and that it occurred to him that such capture might be prevented by airplanes equipped to drop bombs or discharge torpedoes.

That was a war plan, and he claims its origin, but it was none the less in line of his employment and the result of the training and education which he owed to the government.

The application of his idea was difficult, and he gave it much thought, testifying in effect that it took him two years to solve the difficulties to his satisfaction.

The record is not clear as to just when he completed his invention as patented.

According to his testimony, as read to the court from a prepared statement, it was sometime in March, or before April 12,1912, when the application for patent was filed, and while a rear admiral in command of a. division of the Atlantic Fleet.

But in his letter of February 5, 1926, to the Judge Advocate General of the Navy, he wrote: “In fact, I invented the torpedo plane before I was a Rear Admiral, though I did not patent it for sometime afterwards.”

He had already testified he was a captain on the General Board when head of the Committee on War Plans.

And in his article “The Future of the Torpedo Plane” he wrote: “I did not apply for a patent on this scheme for a year or more. * * * ”

That would place the time of invention as prior to April 12, 1911, and the record shows he was head of the Committee on War Plans 1910-1911.

It was his duty as head of that committee to devise plans to protect the Philippines, and he said most of his time there was so spent, and much thought during that time given to the utilization of torpedo planes in that connection.

Now, if he spent that time and thought, while in the service of the government, in endeavoring to find a method and apparatus for adapting torpedoes to airplanes, and finally conceived a way of doing so, it follows that the invention became his employer’s, that is to say, the government’s.

We cannot agree with the trial court that, when a member of the General Board of the Navy and head of the Committee on War Plans spends his time and ingenuity in devising a method and apparatus for discharging torpedoes from airplanes as a part of a scheme of naval defense, he is entitled to withhold the device from the government.

Nor does the fact, if it be a fact, that some details were not perfected to his satisfaction until shortly after he was transferred to command of a fleet, alter the situation.

Furthermore, the great expense and labor involved in experiments by others to- ultimately adapt torpedoes for discharge from airplanes were borne by the government and its agents other than the plaintiff, whose invention when, and as, patented was plainly inoperative for the purpose intended.

Much of this work and experimentation was done at, and all after, the earnest and frequent solicitation of the plaintiff, who made no claim for compensation until the efforts of others were well on the way to whatever success has been attained by the patented device.

“A patentee is bound to deal fairly with the government, and, if he has a claim against it, to make such claim known openly and frankly, and not endeavor silently to raise up a demand in his favor by entrapping ifs officers to make use of his inventions.” Gill v. United States, 160 U. S. at page 437, 16 S. Ct. 322, 327, 40 L. Ed. 480.

If ownership and license of the patents of government employees are to be decided by the general rules of master and servant governing patent rights, as the Supreme Court holds in the Solomons Case, the rule .applies to naval officers with even greater reason than to civil employees such as the machinist in the Gill Case on his per diem pay. For naval officers are educated at the expense of the government; paid during their academic career; have life tenure of office thereafter; subsistence allowances in addition to salary; retirement pay in old age; and pensions to dependents after death.

In our opinion, application of the law, as laid down by the eases decided to the facts recited, establish an irrevocable license in the government to the use of plaintiff’s invention and patent, even if that patent were not, as we think it is, invalid for inoperativeness.

Several assignments of error make this claim.

In Fowler v. Dodge, 14 App. D. C. at page 482, this court, on a question of oper-ativeness, said: “it is not usual for the courts to disturb the conclusions of the Patent Office upon any such question as that without very cogent proof of error.”

But this record presents cogent proof of error.

For Admiral Fiske testified that when he-applied for this patent he had never seen a seaplane, and but two airplanes in exhibition flight, which were flimsy affairs and purely experimental.

The verdict formally find's as facts that at the date of the patent'no airplane was in existence capable of carrying the torpedo required, that no torpedo was known able to sustain the shock of dropping from an airplane at the minimum speed of flight, that improved torpedoes were required for such use, that years of work and experimentation subsequent to the patent were required to produce such torpedoes and to make the conception of launching torpedoes from airplanes practical, while all labor, material, and money required for such experimentation had been furnished by the United States.

Yet, at a time when airplanes were hardly capable of rising from the ground, Admiral Fiske presumes a plane capable of carrying and discharging a torpedo weighing a ton.

This plane was to swoop down from a “comparatively high elevation,” as rapidly and as vertically as possible to within 10 or 15 feet of the water; then, to start the internal mechanism of the torpedo by the forward movement of a lever such as the inventor says he had never seen; and then drop the torpedo into the water in a condition to strike its target 1500 yards away.

To the development of such a plane, the plaintiff has contributed nothing, yet by this judgment he is given damages against a brother officer based upon the total cost of 397 such planes alleged to have been used with torpedo dropping devices infringing his patent.

The plaintiff testified that he was aware of these difficulties, but “felt sure that airplanes would rapidly grow bigger and stronger.”

While in the meantime his patent was a pioneer patent entitled to be liberally construed.

But this invention “does not belong to that class of simple inventions which require no other proof of their practicability than the construction of a model.” O’Connell v. Schmidt, 27 App. D. C. 81.

For the plaintiff’s invention not only-required a plane then unknown to the world, and a torpedo equally unknown, but subsequent experiments demonstrated the uncertainty or failure of several details of his device and his method of operation.

The plaintiff provides for the security of his torpedo in its chocks by a bellyband which was later found to be impracticable, because, among other reasons, the launching by release as contemplated could not be successfully accomplished. He provides for starting the internal mechanisms of the torpedo by a forward movement of a lever, while the testimony showed, and the verdict found, that up to the time of trial below, in July 1929, seventeen years after his patent, no torpedo was known with a starting lever actuated in the forward direction.

He provides for starting the mechanisms of the torpedo before its release from the plane, but later experiments of others demonstrated the compelling wisdom, if not the necessity, of doing this after its release, by use of a lanyard instead of a lever.

In fact, the plaintiff testified that his invention “was a pure dream embodied in the descriptions and drawings,” and that he was amazed at the facility with which a patent was obtained for a thing so obvious.

We think his amazement was justified; but a dream, like an idea, is not an invention, _ and cannot be patented until embodied in a physical contrivance making it practically useful.

And- the useful contrivance cannot be patented, even if new, unless its novelty amounts to discovery.

Until the inventor has done this as a matter of reasonable legal certainty, and not as a matter of mere conjecture or prophetical possibility, he has given nothing to the public in return for the monopoly which he seeks by letters patent. Le Roy v. Tatham, 14 How. 156, 14 L. Ed. 367; Thompson v. Boisselier, 114 U. S. 11, 5 S. Ct. 1042, 29 L. Ed. 76; Clark Thread Co. v. Willimantic Co., 140 U. S. 489, 11 S. Ct. 846, 35 L. Ed. 521; Coffin v. Ogden, 18 Wall. (85 U. S.) 120, 21 L. Ed. 821; De Forest Radio Co. v. Gen. Electric Co., 51 S. Ct. 563, 75 L. Ed. 1339, decided May 25, 1931; Columbia Motor Car Co. v. Duerr & Co. (C. C. A.) 184 F. 893, 908; In re Mattullath, 46 App. D. C. 143; Wickers v. McKee, 29 App. D. C. 13; Gilman v. Hinson, 26 App. D. C. 415.

As we are of opinion that the patent issued was invalid, for-inoperativeness, and, in any event, that the United States was entitled to an irrevocable, but nonexclusive, license therein, the judgment is reversed, without costs, and the cause remanded for further proceedings.


author: WILBUR, Circuit Judge:

text:
    SOUTHERN PAC. R. CO. et al. v. UNITED STATES.
    No. 6387.
    Circuit Court of Appeals, Ninth Circuit.
    July 29, 1931.
    Rehearing Denied Sept. 14, 1931.
    Frank Thunen, of San Francisco, Cal., for appellants.
    Samuel W. McNabb, U. S. Atty., and Ignatius F. Parker and Lewis M. Andrews, Asst. U. S. Attys., all of Los Angeles, Cal.
    Before WILBUR and SAWTELLE, Circuit Judges, and ST. SURE, District Judge.
   WILBUR, Circuit Judge:

This is an appeal from a deeree [ (D. C.) 43 F.(2d) 591] vacating a patent issued in January, ,1921, to the appellants by the United States government to the east one-half of the northeast one-quarter of section 35, Township 3 south, range 10 east, S. B. & M., an 80-acre tract in Riverside county, Cal. The trial eourt found that the patent therefor was issued inadvertently and through the error of a clerk,in the Land Office, who certified that the land was clear and subject to patent, whereas an appeal by the appellants herein, from a decision rendered by the register and receiver of the land office at El Centro, Cal., in February, 1920, that the land in question was in fact mineral land and therefore not subject to patent, was then pending before the Commissioner of the General Land Office. In April, 1921, after the issuance of the patent, the decision of the Land Office was affirmed by the Commissioner, and on appeal to the Secretary of the Interior was again affirmed. The decision of the trial court that the government has the right to maintain a suit to vacate a patent so issued is sustained in United States v. Stone, 14 Pet. (69 U. S.) 525, 10 L. Ed. 572, and Germania Iron Co. v. United States, 165 U. S. 379, 17 S. Ct. 337, 41 L. Ed. 754.

Although the appellants had denied the. allegations of the bill to the effect that the patent was issued by mistake and inadvertence, they do not now question the decision of the trial eourt on that issue, and for the purpose of this appeal concede that the patent was so issued. Appellants claim, however, that, inasmuch as the government has invoked the power of a court of equity to-cancel the patent, the eourt should determine whether or not appellants have an equitable-title in the land, and, if so, should deny the relief requested, thus affirming the legal title-vested in appellants by the inadvertently issued patent. Appellants base their claim to-an equitable title upon railroad land grants. 16 Stat. 382, and 16 Stat. 579, § 23; 14 Stat. 292, and section 3, pp. 294, 295. The land in question was selected as lieu land, and, if the land is. not- mineral land, the appellants are entitled to a patent therefor under the provisions of its land grant. Barden v. Northern Pacific R. R. Co., 154 U. S. 288, 312, 14 S. Ct. 1030, 38 L. Ed. 992.

It is also admitted that Congress has conferred upon the Department of Interior exclusive jurisdiction to determine whether or not land, otherwise subject to such grant,, shall be excluded because mineral'in character. Although the government alleged in its bill that the land in question is mineral land, and this was denied by the answer, appellants concede, as we understand it, that the eourt could not determine that question -upon evidence adduced before it. In order to make clear the position of the appellants in that regard, we quote the following excerpt from its brief: “It may be conceded, too, that if the record in the Department of Interior disclosed any substantial evidence that the land involved in this ease is mineral in character, the court might properly decree annullment of the patent. The court could not properly hear evidence dehors the record upon the character of the lands for minerals. The reason is that the issues of fact were fully tried in the Department of the Interior, and the question is whether upon that record of facts, there was any substantial support for a ruling adverse to the grantee. Determination of the question was, as we have seen, exclusively for the Secretary of the Interior, but his authority in that regard was not an arbitrary authority. His decision must be supported by substantial evidence.”

As we agree with the position of the appellants thus stated that the trial court could not properly base its decision as to the rights of appellants to the land upon evidence adduced before it as to the mineral character of the land, we will not pursue the subject further; although it should be stated in this connection that appellants cite and apparently rely upon a decision rendered May 2,1928, by the District Court for the Northern District of California in the ease of United States v. Central Pacific Railway, 52 F.(2d) 703. In that case the District Judge stated: “The issue is the character of the land, and this court is competent to and ought to decide it, without, for any irregularity, referring the matter back to the land department,— contrary to plaintiff’s contention.”

Appellants do not base their right to a patent upon evidence adduced before the trial court as to the nature and character of the land, but upon the claim that there was no evidence before the Land Department or the Secretary of the Interior which justified the conclusion that the land in controversy was mineral land. They do not seek to review that decision, or claim the right to have the court consider conflicting evidence adduced before the Department of Interior on that subject, but predicate their contention on the proposition that the decision of the Secretary of the Interior was purely arbitrary, for the reason, it is claimed, that there’ was no proof whatsoever to establish the fact that the land was mineral land. Perhaps appellants’ contention can be stated in this fashion: The decision of the Land Department as to whether or not the land in question was mineral land is conclusive upon the courts, but where that conclusion is arrived at by the Secretary of the Interior, without any evidence to support it, the decision is arbitrary and will be disregarded by the courts. That is to say, if the Secretary of the Interior, without any evidence to support a conclusion that land is mineral land, decides that it is such, a court of equity, without any evidence at all upon the subject of the mineral character of the land,will decide that it is not mineral, and that the decision of'the Secretary of the Interior is arbitrary, and will confirm a title in the appellants which is vested in them by mistake and inadvertence on the part of subordinates in the Department of Interior.

It is unnecessary, however, upon this appeal to determine what supervisory power courts may have in case of an arbitrary and erroneous decision by the Secretary of the Interior with reference to the mineral character of land otherwise covered by railroad grants. In the ease at bar the patent was issued before that question had been determined by the Secretary of the Interior in accordance with the rules and regulations of the Department. The issuance of the patent itself constituted a final determination by the Secretary of the Interior that the land was nonmineral in character. By its issuance the Secretary was deprived of jurisdiction to further consider the question of the character of the land. West v. Standard Oil Co., 278 U. S. 200, 210, 49 S. Ct. 138, 73 L. Ed. 265, citing Noble v. Union River Logging R. R. Co., 147 U. S. 165, 13 S. Ct. 271, 37 L. Ed. 123; Lane v. Watts, 234 U. S. 525, 34 S. Ct. 965, 58 L. Ed. 1440; Burke v. Southern Pacific R. R. Co., 234 U. S. 669, 686, 34 S. Ct. 907, 58 L. Ed. 1527. The effeet of vacating the patent is to restore to the Secretary of the Interior the jurisdiction conferred upon him by Congress to determine the character of' the land, of which he was deprived by mistake and inadvertence. These principles, we think, are fully established by the ease of Germania Iron Co. v. United States, 165 U. S. 379, 17 S. Ct. 337, 41 L. Ed. 754, supra.

Appellants seek to escape the force of this decision by pointing out that the Supreme Court in the Germania Case was considering a situation where there was pending an undetermined controversy between third persons as to the character of the land involved in the controversy, and that in such a case, as jurisdiction over the controversy -was vested by Congress in the Secretary of the Interior, it was proper and essential to restore that jurisdiction in order that the controversy might be decided by the proper tribunal. It is claimed that in the ease at bar the controversy is one between the United States and its grantee, and that it is therefore unnecessary to restore jurisdiction to the Secretary of the Interior to determine the character of the land where he has already determined it arbitrarily and without evidence. The difficulty with this contention, as we have already pointed out, is that the decision of the Commissioner of the Land Office and the Secretary of the Interior, after the issuance of the patent, were of no force and effect. If the patent had issued by inadvertence after the decision by the Commissioner and by the Secretary of the Interior that the land was in fact mineral land, the record would present the question which appellants seek to have determined here, namely, whether or not the court should determine in such a case whether the decision of the Secretary of the Interior was arbitrary and that the equitable title to the land was in the appellants. The question here is whether or not jurisdiction shall be restored to the Secretary of the Interior by the vacating of the patent inadvertently issued, so that he may proceed according to the rules and regulations of the Department to determine the question which was pending on the appeal of the appellants from the decision of the Register and Receiver of the Land Office.

The equitable title of the appellants in and to the land in question depends entirely upon whether or not the land in question is mineral land. If it is mineral land,, appellants have no right whatever thereto; but, if it is not mineral land, appellants’ equitable right was established by the selection of the land in accordance with the acts of Congress and the regulations of the Land Department. It seems to be conceded that the court cannot determine the question as to whether the land is mineral or nonmineral, and, if this is true, it is apparent that it cannot deeide whether the appellants are equita/-bly entitled thereto. Whatever may be the power of a court to correct an arbitrary and unwarranted decision of the Secretary of the Interior, it is clear that it cannot be invoked in this case, where, by reason of the inadvertent issuance of the patent, the question has not been authoritatively determined by the Department of the Interior. The court ought not to exercise jurisdiction, if any it has, to determine the rights of the parties in the land until a final determination by the Department with reference to the character of the land is rendered.

It has been held in deportation eases that, where parties have a right of appeal from a decision of the immigration authorities to the Secretary of Labor, that right must be exhausted before application is made to the courts for relief by habeas corpus upon the ground that the decision is arbitrary. By clear analogy, appellants ought not to be heard here to question the decision of the Register and Receiver of the Land Office upon the ground that such decision is arbitrary until they first have exhausted their remedies by appeal in the Department of Interior. See Brown v. Hitchcock, 173 U. S. 473, 19 S. Ct. 485, 43 L. Ed. 772; Sage v. United States (C. C. A.) 140 F. 65; United States v. Reese (C. C.) 166 F. 347; Central Union Trust Co. of N. Y. v. Martin (D. C.) 5 F.(2d) 116; Wilson v. Elk Coal Co. (C. C. A.) 7 F.(2d) 112, certiorari denied 269 U. S. 587, 46 S. Ct. 203, 70 L. Ed. 426; Read v. Work, 59 App. D. C. 22, 32 F.(2d) 413, certiorari denied 280 U. S. 570, 50 S. Ct. 27, 74 L. Ed. 622. The inadvertent issuance of a patent ought not to change that rule. See Germania Iron Co. v. United States, 165 U. S. 379, 17 S. Ct. 337, 41 L. Ed. 754. They were diligently pursuing that remedy at the time the patent was inadvertently issued, thqs depriving the Secretary of the Interior of the power to consider the pending appeal.

While this situation is not identical with that involved in Germania Iron Co. v. United States, supra, we think the principles therein enunciated require that the patent to the land in controversy be canceled.

It seems to be conceded by the parties hereto that the decree of the trial court is not inconsistent with further proceedings in the Department of Interior to determine the character of the land in question, and, in view of that concession, the decree is affirmed.


author: EVANS, Circuit Judge.

text:
    In re GELINO’S, Inc., LAMSON CO., Inc., v. WHITTEMORE.
    No. 4497.
    Circuit Court of Appeals, Seventh Circuit.
    June 30, 1931.

      • Cutting, Moore & Sidley, Charles S. Cutting, and John Paulding Brown, all of Chicago, 111., and E. Crosby Kindleberger, of New York City, for appellant.
    Walter T. Gunn and Harold F. Lindley, both of Danville, Ill., for appellee.
    Before ALSCHULER, EVANS, and SPARKS, Circuit Judges.
   EVANS, Circuit Judge.

Upon appellee’s motion to dismiss, it appeared that upon the adjudication of Geli-no’s, Inc., in bankruptcy, appellant filed its proof of a debt growing out of a lease contract somewhat like a conditional sales agreement. This lease ran for a period of ten years, and called for quarterly payments of $63. Clause 6 provided that, in case of the user’s bankruptcy, appellant should have the right to repossess the machine, and to recover a sum equal to all payments which would have been payable during the balance of the period, less 20 per cent. Adjudication occurred shortly after the installation of the cash conveyer system, and appellant repossessed the system. Thereafter, it filed its claim against the bankrupt estate for the sums accrued and to accrue until the end of the lease, less 20 per cent. The claim was disallowed by the referee, except for $100, which represented the reasonable rental which had accrued before the machine was reclaimed. The District Court approved this ruling, excepting that it fixed at $45, instead of $100, the rental which accrued prior to the date of the bankruptcy proceedings.

Appellant filed with the District Court a petition to set aside the order disallowing its claim, and prayed what appellee calls a rehearing of the cause. It supported this petition by affidavits which tended to show its claim was not one to collect a penalty, but rather one within the holding of Lamson Co. v. Elliott-Taylor-Woolfenden Co. (C. C. A.) 25 F.(2d) 4, 58 A. L. R. 296.

The court thereafter entered an order, the directing portions of which read: “Now, Therefore, it is hereby ordered that the petition for rehearing, be, and the same is hereby denied.”

The present appeal is taken from this last order, the so-called order denying the petition for rehearing. No appeal was taken from the judgment disallowing the claim. Appellee’s motion to dismiss is based upon the ground that the order appealed from is not appealable.

Appellant contends: (a) The order of this court allowing the appeal settles the question adversely to appellee, (b) The order appealed from is hot one which merely denies a petition for rehearing on a rejected claim exceeding $500. (e) The order properly construed is one from which the aggrieved party may appeal under 11 USCA § 47 (b), provided this court, or a judge thereof, allows the appeal.

(a) The effect of this court’s order allowing the appeal. We are well satisfied that the order allowing the appeal, either by this court or the District Court, cannot have the effect of enlarging orders or decrees which are appealable. Statutory provisions, which require the order of the District Court, or of this court, beforé appeal may be taken, apply only to appealable orders or decrees. The allowance of appeal is governed by statute. Appeals may be taken^only from such orders or decrees as the statute designates. An order or decree not so designated by statute as appealable may not be made so by an order of this court authorizing an appeal from it.

(b) Character of the order appealed from. The District Court characterized the application of appellant, which ripened into the order appealed from, as a “petition for rehearing.” To this designation, appellant excepts and alleges that its application was (1) to set aside the court’s order disallowing the greater part of appellant’s claim as a creditor .of the bankrupt; (2) to amend the findings of the referee in bankruptcy to include the facts set forth in the affiadvits filed in support of the application; and (3) to grant a rehearing by the District Court on the referee’s findings as so amended.

The order denying such an application, it is argued, was a final order, and, therefore, appealable. Viewing a petition for rehearing in equity as analogous to a motion for a new trial at law, Roemer v. Bernheim, 132 U. S. 103, 10 S. Ct. 12, 33 L. Ed. 277, we conclude that the court properly designated the application as a petition for rehearing. For authorities holding that such petitions for rehearing in equity and motions for a new trial in actions at law are not appealable, see Conboy v. First Nat. Bank of Jersey City, 203 U. S. 141, 27 S. Ct. 50, 51 L. Ed. 128; Roemer v. Bernheim, 132 U. S. 103, 10 S. Ct. 12, 33 L. Ed. 277; Ewing v. Russell Hardware Co. (C. C. A. 8) 287 F. 535; Morgan v. Benedum (C. C. A. 4) 157 F. 232; Foster v. McMasters (C. C. A. 8) 15 F.(2d) 751; Magnetic Mfg. Co. v. Dings Magnetic Separator Co. (C. C. A. 7) 37 F.(2d) 700; Liebing v. Matthews (C. C. A. 8) 216 F. 1.

(c) Appealable orders in bankruptcy. Appellant relies on two sections of the Bankruptcy Act [11 USCA §§ 47 (b), 48 (a)] to support its contention that the jurisdiction of this court in bankruptcy matters is 'not limited by the decisions applicable to appeal-able decrees in the ordinary equity suit. We think counsel makes a justifiable distinction between this court’s jurisdiction in bankruptcy matters and its jurisdiction over appeals from decrees in other equity suits. However, it is to the statute that we must turn to ascertain the appealability of an order, whether it be entered in a bankruptcy cause or in the ordinary equity suit. ' ■ ■

As the claim of appellant, which was rejected in this instance, exceeded $500, section 48 (a) governs. It is, we think, perfectly clear that the appellant’s right to appeal from a judgment disallowing it.was not' dependent upon an order of this court allowing this appeal (11 USCA § 48 (a). In re Cooperative League (C. C. A.) 22 F.(2d) 725. One class of appeals authorized by said section 48 (a) is “from a judgment allowing or rejecting a debt or claim of $500 or over.” The section does not, however, authorize an appeal from an order granting or denying a motion for a new trial, or from an order granting or denying a petition for rehearing of a judgment disallowing such a claim. If then an order denying such a motion is appealable, it must be by virtue of section 47 (b).

The argument that section 47 (b) gives to this court jurisdiction to superintend and revise the proceedings of a court of bankruptcy, and that, when authorized by this court, the aggrieved party may appeal from any order entered in any such proceeding is somewhat persuasive. As we understand this argument, it is that inasmuch as this court has jurisdiction to superintend and revise proceedings of the several courts of bankruptcy within its jurisdiction, it must, inasmuch as the revisory power is now exercised by appeal, entertain jurisdiction of this appeal because, through it, appellant is seeking to revise a ruling of the court of bankruptcy in respect to a proceeding had therein.

The force of this argument cannot be gainsaid, but we think it would be more persuasive were it not for the provision in section 48 (a), which defines the judgments entered in the courts of bankruptcy from which an appeal might be taken as a matter of right. The appeals authorized by Section 48 (a) are, among other matters,, from, judgments entered upon debts of $500 or over. It is specific, and would seem to require a eonstrue.tion which excludes by implication the application of section 47 (b), either to the said judgment allowing or rejecting said claim, and also to other orders entered in said court relating or pertaining to said judgment; be such order entered on a motion for a new trial or on an application to vacate the same. Gen-eraba speeialihus non derogant.

In other words, section 48 (a) gives the aggrieved party a right to appeal from a judgment allowing or disallowing his claim, if the claim be for $500 or over. Section 47 (b) gives an aggrieved party the right to appeal from an order entered in a proceeding in bankruptcy. Keeping in mind the above-cited holdings, to the effect that rulings on motions for a new trial in actions at law and petitions for rehearing of equity suits are not appealable, it is, we think, fair to assume that Congress, by section 48 (a), dealt inclusively with subjects there specifically mentioned, and they should be excluded from the scope of orders defined by section 47 (b).

We conclude that orders thus made ap-pealable by section 47 (b) did not include orders relating to a rehearing of a judgment disallowing a claim of $500 or over.

The appeal is dismissed.


author: McDERMOTT, Circuit Judge.

text:
    SHANNON v. SHAFFER OIL & REFINING CO. et al.
    No. 292.
    Circuit Court of Appeals, Tenth Circuit.
    July 13, 1931.
    J. M. Springer, of Tulsa, Okl., and C. G. Horner, of Guthrie, Okl., for appellant.
    Streeter B. Plynn, of Oklahoma City, Okl. (Prank G. Anderson, of Oklahoma City, Okl., G. Earl Shaffer, of Tulsa, Okl., and B. M. Bainey and Bainey, Plynn, Green & Anderson, all of Oklahoma City, Okl., on the brief), for appellees.
    Before LEWIS, PHILLIPS, and McDERMOTT, Circuit Judges.
   McDERMOTT, Circuit Judge.

The plaintiff (appellant) owned an eighty-acre tract of land in Oklahoma, upon which defendants held an oil and gas lease. Four wells were drilled thereon in 1925 and 1926 in an effort to produce oil. The land was underlain, in part at least, with two oil and gas bearing sands, the upper being known as the “Bartlesville” and the lower as the “Wilcox.” The Wilcox sand was supposedly the more valuable, and the wells were drilled through the Bartlesville sand to get to the Wilcox. This action is for damages for the value of gas which plaintiff alleges the defendants permitted to escape and waste. The jury returned a verdict for the defend-an(.g

. . ■ The lease is m ordinary form, granting the lessee the right to use gas produced for lts operations, and the lessee agreeing to pay to the lessor or his assigns one-eighth of the , ° i % j j net proceeds ox any gas produced and used -a ,f . nt ¿ m/7 o • r _ off the premises. Chapter 197, Session Laws n ji-in-tc ¿ of Oklahoma of 1915, prohibits waste; waste n ¿ i „ is defined to include “escape of natural gas *' * - into the open air”; and it is ftir- ,, , 1 , 9 j . ther provided that, when a gas sand is en- ¿ 3 -u n t. * n ai. ♦ countered, the gas shall be confined therein ., . ’ ., Tr. , n ., , until it is utilized, violations of the act are . . ,. , . . , mi, punishable by fine and imprisonment. The 7-, .. n__. . ¿ 3 , . Corporation Commission enacted certain reg-/r -i • 3 , _ , ,, , . . ° ulations designed to carry out these statutory , , n a eS'

In view of the narrow scope of the errors properly preserved for review, no extended analysis of the evidence is necessary.. The plaintiff testified he was about the wells frequently, but knew little of the business; he saw gas escaping into the air, but he did not know how much gas was produced as he “had a man hired to gauge those wells.” He knew large quantities of gas were saved and sold, for which he received his royalties; he testi-fled that “they might have attempted to shut in the gas by the mudding off or lubricating process but that they did not stop it.” There was a gas pipe line into the field, and the pressure of the wells was sufficient to overcome the pipe line pressure; there was no evidence of the amount of gas from this lease which the pipe line was in position to handle. A gauger testified be bad gauged tbe gas pressure on this lease, and that the company kept a record of the gauges so made. The defendants produced the record of such gang-es and tendered them to the plaintiff, who de-elined to use them. The gauger did testify to the pressure on certain dates, which would show what the well was capable of produe-iug. He testified that the gas from the Bartlesville sand was bradenheaded and allowed to flow into the slush pond; that, if oil and &as are coming from ,the same stratum, you cannot take the oil and save the gas; that defendants ran iron oxide and mud and slush tuto one well to stop the gas. Other witnesses testified that gas escaped, and no effort jyas made to stop it. ^ There was also evidence, introduced by plaintiff, of tests of one of the wells for its open flow on various dates; that ^is well No. 1 we [the defendants] held back pressure on the well putting a flow plu§ i*1 the well to hold this back pressure and conserve this gas and let it flow enough to produce its production and held the maximum pressure on the well. The gas escaped from the lead line to the well through what is ]jnown as bhe separator, and the oil stripped £rom tlle gas. The remainder of .the gas being goM as nmcb as W0 could possibly sell.” •

, . , „ , , , When the plaintiff rested, defendants’ motion for a directed verdict was denied thereupon defendants rested; the plaintiff did not ask that the court instruct the jury that the Plamtfft was entitled to recover in such amount as the jury might determine. In Gasoline Products Co. v. Champlin Refining Company, 283 U. S. 494, 51 S. Ct. 513, 75 L. Ed. 1188, it was held that all the issues, in a case need not be submitted to a jury, be- , , m. , , cause one must be. Thereupon the court sub- . ,, nutted the case to the jury, charging them, in substance, that, if they found that defendants had failed to use diligence in performing the obligations imposed upon them by and by their lease, the plaintiff should rec0ver; but 'that neither the law nor the lease required defendants to do the impossible, nor deprived them of the right to drill to fhe gand -which in their judgment justified the ¿billing operations; that if the defendants, in endeavoring to conserve the gas, used those means recognized as proper in modem oil and gag devel0pment, and exercised their best judgment ag to the method of conserving said gaS) they would not be liable if, nevertheless, some gag escaped,

Many errors are assigned, among them that tlle eóurt en’ed «eluding testimony ?ffered bJ sald Pla“tlff- Thls presents noth-^ort ^fview* -^u*e ^ this court provlde®" Wh® the error alleged is to the admisal0J1 or rejection of evidence the assignment sba11 9^® the.fu11 substance of evidence admitted or rejected.”

At the conclusion of the charge the plaintiff excepted to this instruction: “You are further instructed that in open court the defendant tendered the plaintiff all records relative to said wells, and if the plaintiff failed to avail himself of such records and such information as he could have produced from the records of the defendant, and you further find that from the evidence introdueed you are not able to arrive at an intelligent and logical conclusion, then your verdict must be for the defendant.”

__ ,. . The exception is without merit. The substance of the instruction is that if there is not sufficient^ evidence to enable the jury to arrive at an mtdligent conclusion, the plaintiff must fad. The objection stressed is not so much to this elementary statement, but to the reference to the records The reference to the record was not uncalled for. The records were in court. The ¡plaintiff was not required to use them; but if, without them, bis evidence was so sketchy that there was no reasonable basis for estimating his loss, he could not recover. The national courts are not foreclosed from any mention of evidence or lack of evidence, or incidents of the trial.

The plaintiff further excepted to the following instruction: “You are further in-strueted that the drilling of oil and gas wells is a hazardous enterprise; that there is much risk and chance involved; that there is dan-ge¡r of losing the hole and tools, and the defendant would have the right as a driller to go to the sand which in its judgment would justify the drilling operation which it had undertaken, and if gas escaped at a higher sand, the flow of which eould not be stopped and it could not complete the drilling of the well without permitting the gas to escape, then the defendant would not be chargeable for the gas so wasted.”

Considering this instruction with the rest of the charge, we see no objection to it. The statutes and the regulations of the Corporation Commission are not intended to stop exploration for oil, nor to require the abandonment of producing oil wells; neither do they require the operator to pay for gas that unavoidably escapes. The statutes and regulations are designed to stop the reckless waste of a natural resource formerly .incident to oil production, and to require operators to take every reasonable precaution known to the industry to prevent a wastage of gas when drilling for oil. They do not require the impossible. The charge of the court, considered in its entirety, is in accord with these views.

The plaintiff filed a motion for a new trial, which was denied. The first seven points are general — that the court erred in exelud-ing testimony, and in its instructions to the jury; that errors of law occurred at the trial; and that the verdiet and judgment are contrary to the law and evidence. The next twelve points are detailed exceptions to the charge. Much of the brief is devoted to points raised, for the first time, by the motion for new trial,

The Whle plT, °* ^ ^ tional courts •would be thwarted if points eould b0 reviewed wHeb &st raised a moti(m for a new faiaL Tbe underl^ng tb o£ . trials ig tbat etE0E8 must be sb j ealled to tbe attention 0f the court wbile tbe ^ ig in progress so that the trial eourfc bave tbe opportimity to correct the and gaye tbe ne0essity of a new trial, Tb0 burden ig g el laaed on eolmgel of deteeti errors promptly pointing them out, and ti to the ralings made. Errors in ^ admission or exelusion of evidence er_ rorg in submitti a case to the jur on ^ sllffieiellt eyid errorg in tbe eb to tbe • and aU errorg oeemTÍn at the trial, faU witMll the geope of tbis rule. And yet the major part of the motion for a new trial in this ease flies fairly in the face of these settled principles and also of Rule 10 of this court, which reads: “The party excepting to the charge of the court to the jury in trials at common law must state distinctly the several matters of law in sueh charge to which he excepts before the jury retires; and no other exceptions, nor general exceptions, to the charge shall be allowed by the district courts or inserted in a bill of exceptions.”

Tbig bag hgen tb0 law ginC0 a early day> In Pennsylvania R. R. Co. v. Minds, 250 U. S. 368, 375, 39 S Ct. 531, 533, 63 L. Ed. 1039, the court said: “This court has repeatedly held that objections to the charge 0f a trial judge must be specifically made in order that he may be given an opportunity to correct errors and omissions himself before the same are made the basis of error proeeedings; this is the only course fair to the court and the parties. McDermott v. Severe, 202 U. S. 600, 610, 26 S. Ct. 709, 50 L. Ed. 1162; Norfolk & Western Ry. Co. v. Earnest, 229 U. S. 114, 120, 33 S. Ct. 654, 57 L. Ed. 1096, Ann. Cas. 1914C, 172; United States v. U. S. Fidelity Co., 236 U. S. 512, 529, 35 S. Ct. 298, 59 L. Ed. 696; Jacobs v. Southern Ry. Co., 241 U. S. 229, 236, 36 S. Ct. 588, 60 L. Ed. 970; Guerini Stone Co. v. Carlin Construction Co., 248 U. S. 334, 338, 39 S. Ct. 102, 63 L. Ed. 275. Parties may not rest content with the procedure of a trial, saving general exceptions to be made the basis of error proceedings, when they might have had all they were entitled to hy the action of the trial court had its attention been seasonably called to the matter.”

There are instances, particularly in eriminal cases, where the error is so fundamental' and glaring that it may be noticed by the appellate court in the absence of exception. N. Y. Central R. R. Co. v. Johnson, 279 U. S. 310, 318, 49 S. Ct. 300, 73 L. Ed. 706; Bogileno v. United States (C. C. A. 10) 38 F.(2d) 584. But this is not one of those unusual cases. The exceptions to the charge eontained in the motion for new trial cannot therefore be noticed. Lewis v. United States, 146 U. S. 370, 379, 13 S. Ct. 136, 36 L. Ed. 1011; Reagan v. Aiken, 138 U. S. 109, 113, 11 S. Ct. 283, 34 L. Ed. 892.

One of the grounds for the motion for a new trial is that the verdict is contrary to the evidence. An order overruling a motion for a new trial is not an appealable order (Luckenbach S. S. Co. v. United States, 272 U. S. 533, 540, 47 S. Ct. 186, 71 L. Ed. 394; Reagan v. Aiken, 138 U. S. 109, 113, 11 S. Ct. 283, 34 L. Ed. 892; Railway Company v. Heck, 102 U. S. 120, 26 L. Ed. 58; Kansas City Southern Ry. v. Littlefield (C. C. A. 10) 37 F.(2d) 707), although time does not run on the right to appeal from the judgment until the motion is ruled on (United States v. Ellicott, 223 U. S. 524, 539, 32 S. Ct. 334, 56 L. Ed. 535; Luckenbach S. S. Co. v. United States, 272 U. S. 533, 540, 47 S. Ct. 186, 71 L. Ed. 394). When the appeal is from the judgment, error cannot ordinarily be assigned on the denial of a motion for a new trial; such motion is addressed to the discretion of the trial court, and his action thereon is not reviewable on appeal unless there has been a clear abuse of discretion. Maloney Tank Mfg. Co. v. Mid-Continent Petroleum Corp. (C. C. A. 10) 49 F.(2d) 146, 150; Bowman-Hicks Lumber Co. v. Robinson (C. C. A. 9) Glenwood Irr. Co. v. Vallery (C. C. A. 8) 248 F. 483; Pugh v. Bluff City Excursion Company (C. C. A. 6) 177 F. 399.

In the last two eases cited, the verdict in one was for nominal damages for the wrongful death of a wage-earner in sound health, and the sole support of the plaintiff; in the other, the verdict deducted an amount in express disregard of the_court’s_ instructions. From these two authorities, with which we are in accord, the plaintiff argues that some gas escaped; therefore he was entitled to some damages.

We recognize the rule contended for by plaintiff that, where there is proof, within the permissible range of certainty, that a right of a plaintiff has been invaded, he should not be denied a substantial recovery because of the difficulty in accurately measuring his damages. The later authorities recognize the distinction between the ease where uneertainV exists as to whether any substantial damage resulted, and the case where the uncertainty exists only as to the extent of such damage. In Hoffer Oil Corp. v. Carpenter, 34 F.(2d) 589, 592, we held that one who had broken his contract could not escape liability because of the lack of a perfect measure of damage. The Eighth Circuit had theretofore so held. Calkins v. Woolworth, 27 F.(2d) 314, 320. Williston, in his Work on Contracts, says: “Where it is clear that substantial damage has been suffered the impossibilj* f proving its precise limits is no reason tor denying substantial damages altogether, Williston on Contracts, Vol. III, p. 2401.

In 8 R. C. L. p. 441, the author states: “Formerly the tendency was to restrict the recovery to such matters as were susceptible of having attached to them an exact pecuniary value, but it is now generally held that the uncertainty referred to is uncertainty as to the fact of the damage and not as to its amount, and that, where it is certain that damage has resulted, mere uncertainty as to the amount will not preclude the right of recovery. This is particularly true where, from the nature of the case, the extent of the injury and the amount of damage is not capable of exact and accurate proof.”

. The Fifth circuit, in Wells v. National Life Ass>n> 99 222, 53 L. R. A. 33, cites many authorities to the same effect, inelud-jng Wakeman v. Manufacturing Co., 101 N. y. 205, 4 N. E. 264, 266, 54 Am. Rep. 676, wherein it is held: “But when it is certain that damages have been caused by a breach of contract, and the only uncertainty is as to-their amount, there can rarely be good reason for refusing, on account of such uncertainty, any damages whatever for the breach. A person violating his contract should not be permitted entirely to escape liability because the amount of the damage which he has caused is uncertain.”

The Second Circuit, in Crichfield v. Julia, 147 F. 65, 71, certiorari denied 203 U. S. 593) 27 S. Ct. 781, 51 L. Ed. 332, stated the rulé: “The rule against the recovery of uncertain damages has been generally directed against uncertainty as to cause rather than uncertainty as to measure or extent; that is, if it is uncertain whether the defendant’s act caused any damage, or whether the damage proved flowed from the defendant’s act, there may be no, recovery of such uncertain damages; whereas uncertainty which affects merdy the measure or extent of the injury suffered does not bar a recovery.

_ The same circuit, in Straus v. Victor Talking Mach. Co., 297 F. 791, 802, held: “The constant tendency of the courts is to find some way in which damages can be awarded where a wrong has been done. Difficulty of aseertainment is no longer confused with right of recovery.” See, also, Pierce v. Tenn. Coal, etc., R. R. Co., 173 U. S. 1,16,19 S. Ct. 335, 43 L. Ed. 591; Hetzel v. B. & O. R. R. Co., 169 U. S. 26, 38,18 S. Ct. 255, 42 L. Ed. 648.

But this rule does not mean there need be no proof of the amount of the damage. Obviously a plaintiff may not come into court and say no more than “the defendant stole some wheat” or that “a fire destroyed some of my goods,” and ask for substantial damages. The rule is that, if an injured plaintiff has produced the best evidence available, and if it is sufficient to afford a reasonable basis for estimating his loss, he is not to be denied a substantial recovery because the exact amount of the damage is incapable of ascertainment. In Eastman Co. v. Southern Photo Co., 273 U. S. 359, at page 379, 47 S. Ct. 400, 405, 71 L. Ed. 684, the court held: “ ‘Damages are not rendered uncertain because they cannot be calculated with absolute exactness. It is sufficient if a reasonable basis of computation is afforded, although the result be only approximate.’ This, we think, was a correct statement of the applicable rules of law. Furthermore, a defendant whose wrongful conduct has rendered dim cult the ascertainment of the precise damages suffered by the plaintiff, is not entitled to complain that they cannot be measured with the same exactness and precision as would otherwise be possible.”

In Anvil Min. Co. v. Humble, 153 U. S. 540, 14 S. Ct. 876, 38 L. Ed. 814, the Supreme Court held that mathematical certainty as to , , damage was not necessary, if the evidence furnished a basis upon which a reasonable estimate” of the elements entering into the damage might be made. In the Hoffer Case, supra, we held that “a reasonable basis for computation, and the best evidence which is obtainable under the circumstances of the case and which will enable the jury to aaprive at an approximate estimate of the loss, is sufficient.”

The plaintiff’s entire argument, on this point, is that beeause gome gag eseaped; be necessarily was entitled to his proportion of ^he value of all the gas the wells were capable 0f producing, less what he had been paid for. are two flaws jn this reasoning. In the £rst place, the burden was on plaintiff to s]low that defendants failed to exercise proper diligence, under their lease and the laws of Oklahoma, to prevent waste. The plaintiff’s witnesses testified that some effort was made to shut off the gas by a flow plug, with mud, by a bradenhead, and with oxide of iron, although these efforts were successful only in part. -One of his witnesses testified broadly that “the remainder of the gas being sold as much as we could.” Furthermore, it should not be assumed that defendants, owning seven-eighths of the gas, would have wasted it, if by reasonable diligence it could have been conserved. But, even if it be assumed that the evidence of defendants’ lack of diligence was undisputed, there is still the question of whether plaintiff afforded the jury any reasonable basis for computing his loss. The reeord discloses open-flow pressures at given ¿ates, which indicate the capacity of the well j£ p flows continuously and without hin¿ranee; but when the same reeord discloses £ow. pbjg^ mud, oxide, and other means wre uged obstruet and eontrol tbe fl wben fte reeord diseloses some avoidable w and wbeQ tbeir leage defendants the right to use gas for the operations being earned on when these factors are considered, there is no substantial basis left from ,. . . , 3 which a jury could make a rational estimate of the amoun of avoidable waste Certainly the plaintiff’s theory that he is entitled to pay upon the basis of the capacity of the wells is unfair. The members of this court have studied this record carefully and are unable to arrive at any rational estimate of the amount of gas, if any, which was wasted through the fault of defendants. We conclude that the trial court did not abuse its discretion m declining grant a new trial because the jury did not find evidence upon which to return an intelligent verdict.

The judgment is therefore affirmed.


author: COTTERAL Circuit Judge.

text:
    MURRAY CO. v. HARRILL et al.
    No. 429.
    Circuit Court of Appeals, Tenth Circuit.
    July 21, 1931.
    Appeal from the District Court of the United States for the Eastern District of Oklahoma; Robert L. Williams, Judge.
    Action by the Murray Company against T. C. Harrill and another. Judgment for defendants, and plaintiff appeals.
    S. P. Freeling of Oklahoma City, Okl. (Freeling &Box, of Oklahoma City, OH., on the brief), for appellant.
    Thos. H. Owen, of Oklahoma City, Okl., and John C. Graves, of Wagoner, Okl., for appellees.
    Before LEWIS and COTTERAL, Cir-euit Judges, and POLLOCK, District Judge,
   COTTERAL Circuit Judge.

The Murray Company brought this action against T. C. Harrill and J. A. Harris to recover upon two notes and an account, on which there was due $12,250.85, with interest and attorney’s fees. The defendants answered, admitting their liability, but pleaded set-offs of approximately $21,450, as commissions earned by them on sales of fifteen cotton gins for plaintiff, pursuant to a written contract; and they prayed a recovery of the excess of their demands. The plaintiff replied, admitting the contract, but denying ¡that defendants earned any commission ex-eept of 5 per cent, upon a sale to J. M. Hill, amounting to $1,350. The cause was tried to a jury, which returned a verdict in favor of the defendants for $108. Judgment was rendered on the verdict; and the plaintiff , appeals.

The contract set out in the answer consisted of a letter of the company, accepted by the defendants. It provides in substance: The company agreed that defendants might sell its products in Oklahoma east of the Santa Fe Railroad for a commission of 10 per een^ and a like discount on their own purchases of gin machinery and steam power, and 5 per cent, on the sale of motors, The company had an agreement with John A. Simpson, of the Farmers’ Educational and Co-Operative Union, to use his influence in promoting sales to members of the union and allied organizations. Where he had begun negotiations, the defendants were not to interfere, but would when called' upon co-ate in seeurj a sale for one_half tlle aW eommission> w. 0. Cauthon, a salesman of was to assist t]lem in any deal initiated by ^ but wbere be should initiate it they were to have no commission. Their expense of travel was to be paid by the company. The contract was subject to cancellation by either of the parties 0n 15 days’ written notice.

The defendants also allege in their answer what appears to be their views of the contract or modifications thereof to this effect: It was agreed and understood that their sfrvices c°fist of soliciting pur?tasers of Plamtlff s 8™ machinery, bnngmg'them and salesmen of the company together, assisting purchasers in securing gin permtts from the corporation commission of oHahoma by proof of their qualifications and £be necessity of the gins. They- faithfully and diligently rendered these services with the knowledge and consent of the company, that it accepted the services, and by their co-operation with the salesmen the gins were «old “d tlle commissions were thereby earned-

The defendants had the burden of proof, Their evidence was largely a departure from the contract terms. Its trend, instead of being adduced to show actual sales of gins, pursuant to the contract, showed oral negotiations and understandings, correspondenee with purchasers and the company, services rendered in aiding customers to obtain gin permits from the corporation eommission, and various conversations and acts relative to sales. In two instances, sales were claimed to patrons west of the railroad, with approval of the company.

There were objections at the outset, but they were soon abandoned. And both parties appear to have tried the ease as an inquiry into the part defendants had in the various sales made and the services they rendered, without due regard to the facts essential to the commissions under the written contract. Some of the alleged sales were not made. There were two concessions to defendants by the plaintiff, one in the reply of a sale to Hill, and another at the trial of a sale to Babson on which commissions were due defendants, aggregating $1,567.-89.

The court submitted, the issues to the jury mainly upon an instruction that if the defendants found the customers and brought the parties into contact, the commissions should be allowed. The jury was also instructed to consider oral communications between the parties. Plaintiff’s counsel appear to have acquiesced in these instructions. y?e do not review them or consider whether in most instances they were justified by sufficient evidence, for want of proper exceptions. The single assignment we .may consider arises upon the exception saved to the refusal by the court of a request tendered by plaintiff’s counseLat the close of the evidence as follows: “The jury are instructed that there is no evidence that the defendants made sales or were mstrumental m making sales to Ray Williams of Avant, to E. O. White of Bokchito, to Joe Abrham H. L. Minnick of Coyle, to J. J. Ryals of Hastings, or to Croisant & Son of Muskogee, and you cannot allow the defendants credits for commissions on said sales.”

While the request was refused, the court later took from the jury the claims to commissions on the sales to Williams and Abraham, amounting to $835. - The four other claims embraced ’in the request remain for consideration, on which commissions are claimed of $4,728.17.

• mt, . There was evidence to show some efforts by the defendants to induce the sales to White, Minniek, and Croisant & Son. Simpson promoted the sales- to White and Min-nick, but we find no evidence in the record that those sales were initiated by the defendants and that they were entitled to commissions under the contract. ^ And both those parties obtained their permits with the aid of Simpson. There was an absence of evidence to show the sale to Croisant & Son was initiated by the defendants. They obtained their permit with-the aid of their own at-tomey. Besides, the testimony is undenied that they refused to buy a gin if the defendants had anything to do with it. There was testimony that plaintiff’s sales manager orally agreed to allow defendants a commission on a sale to Ryals, located west of the railroad, in consideration of their assistance, but assuming the validity of the oral agreement there was no evidence that the as-sistanee was rendered,

It is obvious that there was no sufficient evidence on which to predicate a verdict which found commissions were earned by the defendants on these four sales.

The jury should not have been allowed to guess whether these commissions were earned. A scintilla or modicum of evidenee was insufficient to sustain them. A verdict should be directed when the evidence is undisputed, or when it is of such conclugiye character that a verdict to the contrary should be set aside, in the exercise of sound judicial discretion. Small Co. v. Lamborn, 267 U. S. 248, 45 S. Ct. 300, 69 L. Ed. 597; Slocum v. N. Y. Life Ins. Co., 228 U. S. 364, 33 S. Ct. 523, 57 L. Ed. 879; Gunning v. Cooley, 281 U. S. 90, 50 S. Ct. 231, 74 L. Ed. 720.

Witllout considering the four claims to cominmissions, the jury might have returned a verdict for the plaintiff. It is imposible to determine that some or all of them were not credited the defendants. For the error committed in refusing plaintiff's request excluding them, the judgment is reversed, with direetion to grant a new trial of the cause.

Reversed.