author: MORTON, District Judge.

text:
    BETHLEHEM SHIPBUILDING CORPORATION, Limited, et al. v. MONAHAN, Deputy Com’r, et al.
    No. 3281.
    District Court, D. Massachusetts.
    May 20, 1931.
    Elias Field and Brown, Field & McCarthy, all of Boston, Mass., for plaintiffs.
    Frederick H. Tarr, U. S. Atty., of Boston, Mass., for defendant Patrick J. Mona-han,
    Paul L. Kleenan, of Boston, Mass., for defendant Wm. English.
   MORTON, District Judge.

This is a suit to enjoin a compensation award under the Longshoremen’s and Harbor Workers’ Compensation Act of March 4, 1927 (33 USCA §§ 901-950). The proceeding is under section 21 (b) of the act (33 USCA § 921 (b). All parties agree that the facts are as stated in the plaintiff’s’ bill of complaint.

English, the injured man, was hurt by some molten metal getting into his ear. There followed ‘2&¥t weeks of total disability while he was recovering from the injury. The hearing in the injured ear was destroyed. The loss of it did not affect English’s ability to work; he has continued in the same employment and at the same wages. The Commissioner awarded compensation for temporary total disability under section 8 (b), 33 USCA § 908 (b), and also for permanent partial disability under section 8 (e) (13), 33 USCA § 908 (e) (13).

The question is whether a workman whose injury disables him totally for a time and partially thereafter is entitled to awards under both section 8 (b) and section 8 (e), or whether the award for permanent disability under the latter section includes all allowable compensation. On this question, District Judges have differed, Judge Hutcheson in Texas Employers’ Ins. Ass’n et al. v. Sheppeard, 32 F.(2d) 300, holding that the workman might have either total temporary or partial permanent, but could not have both, and Judge Dickinson, in Baltimore & Philadelphia Steamboat Co. et al. v. Norton et al., 40 F.(2d) 530, holding that the work-, man might have both.

The matter turns on the construction of section 8 of the statute (33 USCA § 908). This section divides disability into three principal classifications: (a) permanent total disability (b) temporary total disability (e) permanent partial disability. In the present case we are not at all concerned with the first classification. Subsection (e) contains the provisions relating to permanent partial disability which English sustained; its various clauses relate to different phases of this subject-matter. The first thirteen clauses constitute a schedule of injuries to each of which a stated compensation is assigned; the next six contain administrative directions for the application of the preceding clauses; clause 20 relates to disfigurement; 21 is the omnibus clause sweeping in all “other eases,” i. e., all injuries other than those previously scheduled which result in permanent partial disability. A good many common injuries, e. g., hernia, fall within this clause. Clause 22 provides a specified “healing-period” applicable to certain named injuries with additional compensation if it is exceeded in any given case. These injuries are all previously scheduled as compensated by a fixed amount; most of them are of serious character, and many involve amputations. It is common knowledge, I think, that there is a great difference in the healing of such wounds. Sometimes it occurs promptly by “first intention”; in other eases, if the injury becomes infected, there is a long and difficult convalescence. The idea underlying this clause appears to be that an injured man who has had a protracted convalescence exceeding the normal period of recovery should receive additional compensation. As to all eases falling within this clause, there is an explicit provision that the compensation therein awarded is complete.

The real question is whether this last provision was inserted to make clear that such injuries were to be dealt with in accordance with general principles on which subsection (e) is based, or whether it is intended to put the injuries covered by clause 22 on a different footing from all the others falling within this subsection. Ordinarily in cases of serious injury the workman is completely’ disabled for a period following it. This is so obvious that it must have been a basic intention of the statute to provide compensation during this healing period. Where the statute provides a stated sum for a stated injury, the amount named might or might not have been intended to cover the total disability immediately following the accident. This is expressly stated to be the ease as to the injuries specified' in the first twelve clauses of subsection (e), and the workman is allowed additional compensation if the normal healing period is exceeded in his particular case. Clause 13 covering loss of hearing provides a stated compensation for the permanent partial disability which English suffered. As to it, and as to all the unscheduled injuries covered by the omnibus clause 21, there is no explicit provision for any compensation whatever during the healing period. Injuries under the latter clause are compensated by two-thirds of the diminished earning power attributable to them, payable unless revised as long as the disability continues.

Under section 6 (33 USCA § 906), if the disability lasts more than seven weeks, compensation runs from the date of the injury. Many injuries are of this character. As to them, if compensation for the total disability immediately following the accident be allowed under subsection (b) and the explicit provision of section (c) be also followed, there would be double compensation during the healing period — something which, of course, was never intended. If no compensation is allowed for such injuries under subsection (b), there is no adequate provision for compensation during the healing period. If successive awards (under subsection (b) for to-' tal temporary disability and under subsection (e) for permanent partial disability) are permissible, there was no occasion for the elaborate provisions about the healing period in clause 22. The statute is plainly faulty.1

As to injuries under clause 21, the Commissioner’s practice seems to me to be the sensible one and the best construction of this very doubtful statute, viz., to award compensation for the temporary total disability under subsection (b), and to follow it with an award under clause 21 of subsection (e). This still leaves open the question whether loss of hearing for which a stated sum is awarded ought to be dealt with in the same way, or whether it ought to be assimilated in this respect to the twelve preceding clauses and the lump sum award of the statute held to cover the healing period. I have never seen a more closely balanced question. But if the statute be construed as permitting in some cases consecutive awards under subsection (b) for the total disability following the accident, and under subsection (c). for the resulting permanent effects, I think it should be further construed as meaning that the workman is entitled to awards under both sections, in the absence of an explicit provision that the stated sum constitutes the total allowable award. I am not oblivious of the weighty objections against this view, some of which have been referred to. All that can be said is that they are in my opinion overbalanced by the weightier objections which can be made against the opposite view. Judge Bourquin in Grays Harbor Stevedore Co. v. Marshall (D. C.) 36 F.(2d) 814, 816, says that this statute “involves more or less absurd possibilities.”

I, therefore, reach the conclusion that the Commissioner was right, and that the bill should be dismissed. I am aware that this statute was copied from the New York statute; and that it has been decided by the courts of that state that consecutive awards under subsections (b) and (e) are not permissible under it. Marhoffer v. Mar-hoffer, 220 N. Y. 543, 116 N. E. 379. The weight of that decision is diminished by the close division among the judges, four to three; and, as the opposite conclusion seems to me more in keeping with the general purpose of the statute, I have felt free to follow my own view,

Bill dismissed, with costs,


source: Caselaw Access Project

author: AVIS, District Judge.

license: Public Domain

text:
    PETERSON v. KEIFFER.
    District Court, D. New Jersey.
    May 21, 1931.

      Leslie P. Whelan, of Chicago, Ill., for petitioner.
    Phillip Forman, U. S. Atty., of Trenton, N. J., and Isador S. Worth, Asst. U. S. Atty., of Riverside, N. J., for respondent.
   AVIS, District Judge.

Petitioner applied for, and was allowed, a writ of habeas corpus.

An indictment was returned against petitioner by a grand jury in the United States District Court of the District of Minnesota, Fourth Division, on September 28, 1926. This indictment' charged petitioner with subornation of perjury, a crime under the provisions of the Criminal Code § 126 (18 USCA § 232). The petitioner made no contest, but pleaded guilty, and was sentenced by the court to la term of imprisonment, which is not an issue in this proceeding.

At the same time that petitioner was indicted, another indictment was returned, by the same grand jury, against Frank Dana-her, charging against him a similar offense, although involving different persons, but the language of the indictment being substantially identical with that in the Peterson indictment.

Dahaher pleaded not guilty, went to trial, and was convicted. An appeal was taken from this conviction, and the Circuit Court of Appeals [39 F.(2d) 325], by a divided court, set aside the conviction on two grounds: First, that the indictment was insufficient to charge the offense alleged to have been committed, and, second, that the evidence produced at the trial was not convincing, but was as consistent with innocence as with guilt.

Because of the reversal of this judgment, based upon the indictment, containing substantially the same allegations of fact as the indictment against the petitioner, he claims that the court should release him from imprisonment on habeas corpus.

There is no challenge to the jurisdiction of the court, or as to the constitutionality of the statute under which the indictment was found. No allegation is made that the sentence was in excess of that authorized by law.

When the writ was originally allowed, the court had some doubt as to its right to consider the application. I am now satisfied, however, that this court is invested with jurisdiction to hear and determine the issue raised.

I am impressed with the belief that the guilty plea waived all irregularities, but will consider the ease from the standpoint of the right of the petitioner to his release from custody under habeas corpus. The general rule of law is that the writ of habeas corpus may not be used to take the place of a writ of error or appeal.

Counsel, in his brief, cites the case of Ex parte Bain, 121 U. S. 1, 7 S. Ct. 781, 30 L. Ed. 849, as sustaining the contention that this court has power, authority, and jurisdiction, where an indictment charges no offense, to order the release of a prisoner on habeas corpus, and with this I agree, but in that ease the fact developed that the trial court by order had stricken out certain words in the indictment, and because of this action the Supreme Court held that the indictment on which the defendant was tried was “no indictment of a grand jury.” Upon this holding the trial court had no jurisdiction to try because no indictment was pending. This is quite different from saying that the trial court has no jurisdiction under an indictment, properly found and returned, even though it may not technically state an offense.

The other Supreme Court eases cited, to wit, Ex parte Lange, 18 Wall. (85 U. S.) 163, 21 L. Ed. 872; In re Snow, 120 U. S. 274, 7 S. Ct. 556, 30 L. Ed. 658; Hans Nielsen, Petitioner, 131 U. S. 176, 9 S. Ct. 672, 33 L. Ed. 118; In re Frederich, 149 U. S. 70, 13 S. Ct. 793, 37 L. Ed. 653; In re Swan, 150 U. S. 637; In re Bonner, 151 U. S. 242, 14 S. Ct. 323, 38 L. Ed. 149, and on which counsel for petitioner relies as supporting his theory, are all distinguished by the fact that they deal with the primary jurisdiction of the court, or the imposition of a sentence not authorized by law, or a violation of a right under the Constitution.

In the ease of Stevens v. McClaughry (C. C. A. 8) 207 F. 18, 51 L. R. A. (N. S.) 390, cited by counsel, the defendant had been convicted and sentenced, on separate counts of an indictment, alleging sundry offenses, which were committed at the same time and place, and as parts of a continuous criminal act. The court on habeas corpus properly held that the trial court’s jurisdiction did not extend to sentencing defendant on each count, and ordered his discharge after he had served the maximum punishment that could be imposed for a sihgle offense.

An examination of the cited ease, Mintie v. Biddle (C. C. A. 8) 15 F.(2d) 931, shows that the trial court there lost jurisdiction by •a long postponement of sentence.

I have examined carefully all of the cases submitted by counsel for petitioner, and in each ease there are facts and circumstances which distinguish them from the general rule. The instant case does not contain any of these characteristics, and decision is controlled by the doctrine set forth in numerous Supreme Court cases and followed in the various circuits.

The case of Glasgow v. Moyer, 225 U. S. 420, 32 S. Ct. 753, 56 L. Ed. 1147, in which the court reviews the prior cases, holds:

“The writ of habeas corpus cannot be made to perform the office of a writ of error. This has been decided many times, and, indeed, was the ground upon which a petition of appellant for habeas corpus to this court, before his trial, was decided. It is true, as we have said, that the ease had not then been tried, but the principle is as applicable and determinative after trial as before trial. This was decided in one of the eases cited, — In re Lincoln, 202 U. S. 178, 26 S. Ct. 602, 50 L. Ed. 984, which cited other eases to the saíne effect. Subsequent eases have made the principle especially pertinent to the case at bar. Harlan v. McGourin, 218 U. S. 442, 31 S. Ct. 44, 54 L. Ed. 1101, 21 Ann. Cas. 849, was an appeal from a judgment discharging a writ of habeas corpus petitioned for after conviction, and it was held that the writ could not be used for the purpose of proceedings in error, but was confined to a determination whether the restraint of liberty was without authority of law. In other words, as it was said, ‘Upon habeas corpus the court examines only the power and authority of the court to act, not the correctness of its conclusions.’ Matter of Gregory, 219 U. S. 210, 31 S. Ct. 143, 55 L. Ed. 184, was a writ of habeas corpus brought after conviction, and we said that we were not concerned with the question whether the information upon which the petitioner was prosecuted and convicted was sufficient or whether the case set forth in an agreed statement of facts constituted a crime —that is to say, whether the court properly applied the law — if it be found that the court had jurisdiction to try the issues and to render judgment. And for this many eases were cited.
“The principle is not the less applicable because the law which was the foundation of the indictment and trial is asserted to be ‘unconstitutional or uncertain in the description of the offense. Those questions, like other’s, the court is invested with jurisdiction to •try if raised, and its decision can be reviewed, like its decisions upon other questions, by writ of error. The -principle of the cases is the simple one that if a court has jurisdiction of the ease, the writ of habeas corpus cannot be employed to re-try the issues, whether of law, constitutional or other, or of fact.” Pages 428, 429 of 225 U. S., 32 S. Ct. 753, 755.

In Johnson v. Hoy, 227 U. S. 245, 33 S. Ct. 240, 57 L. Ed. 497, the court followed the Moyer Case, and held: “The writ of habeas corpus is not intended to serve the office of a writ of error even after verdict; and, for still stronger reasons, it is not available to a defendant before trial, except in rare and exceptional cases, as pointed out in Ex parte Royall, 117 U. S. 241, 6 S. Ct. 734, 29 L. Ed. 868. This is an effort to nullify that rule, and to depart from the regular course of criminal proceedings by securing from this court, in advance, a decision on an issue of law whieh the defendant can raise in the district court, with the right, if convicted, to a Writ of error on any ruling adverse to his contention. That the orderly course of a trial must be pursued and the usual remedies exhausted, even where the petitioner attacks on habeas corpus the constitutionality of the statute under which he was indicted, was decided in Glasgow v. Moyer, 225 U. S. 420, 32 S. Ct. 753, 56 L. Ed. 1147. That and other similar decisions have so definitely established the general principle as to leave no room for further discussion. Riggins v. United States, 199 U. S. 547, 26 S. Ct. 147, 50 L. Ed. 303.” Page 247 of 227 U. S., 33 S. Ct. 240, 241.

This doctrine was followed'in the case of Craig v. Hecht, 263 U. S. 255, 277, 44 S. Ct. 103, 106, 68 L. Ed. 293, wherein the court said: “The Circuit Court of Appeals correctly applied the well-established general rule that a writ of habeas corpus cannot be utilized for the purpose of proceedings in error. Harlan v. McGourin, 218 U. S. 442, 445, 31 S. Ct. 44, 54 L. Ed. 1101, 21 Ann. Cas. 849; Matter of Gregory, 219 U. S. 210, 213, 217, 31 S. Ct. 143, 55 L. Ed. 184; Glasgow v. Moyer, 225 U. S. 420, 428, 429, 32 S. Ct. 753, 56 L. Ed. 1147.”

The right of release on habeas corpus, because of defects in the indictment or information, was directly decided in Knewel v. Egan, 268 U. S. 442, 446, 45 S. Ct. 522, 69 L. Ed. 1036. Mr. J. Stone, delivering the opinion of the court, said: “It is fundamental that a court upon whieh is conferred jurisdiction to try an offense has jurisdiction to determine whether or not that offense is charged or proved. Otherwise every judgment of conviction would be subjeet to collateral attack and review on habeas corpus on the ground that no offense was charged or proved. It has been uniformly held by this court that the sufficiency of an indictment cannot be reviewed in habeas corpus proceedings. Ex parte Watkins, 3 Pet. 193, 7 L. Ed. 650; Ex parte Yarbrough, 110 U. S. 651, 4 S. Ct. 152, 28 L. Ed. 274; Ex parte Parks [93 U. S. 18, 23 L. Ed. 787], supra; In re Coy [127 U. S. 731, 8 S. Ct. 1263, 32 L. Ed. 274], supra; Bergemann v. Backer [157 U. S. 655, 15 S. Ct. 727, 39 L. Ed. 845], supra; Howard v. Fleming, 191 U. S. 126, 24 S. Ct. 49, 48 L. Ed. 121; Dimmick v. Tompkins, 194 U. S. 540, 24 S. Ct. 780, 48 L. Ed. 1110; In re Eckart, 166 U. S. 481, 17 S. Ct. 638, 41 L. Ed. 1085; Goto v. Lane, 265 U. S. 393, 44 S. Ct. 525, 68 L. Ed. 1070.” Page 446 of 268 U. S., 45 S. Ct. 522, 524.

This principle has not been altered or changed by any subsequent Supreme Court decision.

It was followed in the eases of Ex parte Brede (D. C. E. D. N. Y.) 279 F. 147, and Ex parte Craig (C. C. A. 2) 282 F. 138, 139.

The general doctrine expounded in these eases is: “After a judgment of conviction, the only question on habeas corpus is not whether the judgment was erroneous, but whether the court had jurisdiction to try the issue and render the judgment.”

In the case of Cardigan v. Biddle, Warden (C. C. A. 8) 10 F.(2d) 444, 447, the court said: “Where one seeks discharge from confinement after conviction for an- offense upon a petition for habeas corpus, the sole questions presented are whether petitioner was convicted by a court having jurisdiction of his person and the offense, and whether the sentence pronounced was one within the power of the court. Tullidge v. Biddle (C. C. A. 8) 4 F.(2d) 897; Franklin v. Biddle (C. C. A. 8) 5 F.(2d) 19; Knewel v. Egan, 268 U. S. 442, 445, 45 S. Ct. 522, 69 L. Ed. 1036.” Page 447 of 10 F.(2d).

Manning v. Biddle, Warden (C. C. A. 8) 14 F.(2d) 518, which is cited in petitioner’s • brief, seems to hold favorably to his contention, but the court there said that the indictment attempted to charge an impossible offense, and was “wholly void.” The principle of this case does not conflict with the general rule, but the court in that ease, without referring to any decisions, held the indictment void, and thereupon used the writ to discharge the defendant from custody. After a caresful reading of the opinion, I may say that I am not able to agree with that court’s reasoning, but whether or not the conclusion was justified in that case it has no controlling effect in the instant ease.

The ease of McIntosh v. White, Warden, 21 F.(2d) 934 (decided in the same circuit), follows the doctrine of the case of Cardigan v. Biddle, Warden, supra, and does not refer to the ease of Manning v. Biddle, Warden, supra.

The following cases in the Eighth Circuit, to wit, Brown v. White, Warden, 24 F.(2d) 392; Reese v. White, Warden, 25 F.(2d) 65, and Willis v. White, Warden, 31 F.(2d) 980, all adopt the doctrine in Knewel v. Egan, supra, and firmly establish the principle to be followed.

I am satisfied that the failure of the indictment in a technical respect did not make it void, and that the trial court had jurisdiction of the cause and the right to impose sentence. Under these circumstances, the writ of habeas corpus eannot be used to discharge the defendant from custody.

The prayer of the petition is denied, and the petitioner remanded to the custody of the Attorney General.


author: OTIS, District Judge.

text:
    PAPENDICK, Inc., v. JOPLIN-PURITY BAKING CO.
    No. 78.
    District Court, W. D. Missouri, S. W. D.
    Jan. 8, 1931.
    Wallace R. Lane, of Chicago, 111., Ralph Kalish, of St. Louis, Mo., Clarence J. Lof-tus, of Chicago, 111., and Grover'C. James, of Joplin, Mo., for plaintiff.
    George T. May, Jr., Frank Parker Davis, Raymond Eidler, and Rector, Hibben, Davis & Macauley, all of Chicago, 111., and Roy Coyne, of Joplin, Mo., for defendant.
   OTIS, District Judge.

On July 30, 1929, G. C. Papendick was granted patent No. 1,722,338 on what was by him claimed to be a certain new and useful improvement in “sliced baked loaf packages and packaging.” Plaintiff is now the owner of that patent, and brings this action to enjoin infringement thereof by the defendant and for damages. Defendant admits infringement of the patent if the patent is valid, but denies validity, leaving the matter of validity as the sole question in the case. Validity is assailed chiefly on the ground that Papendick was anticipated by one Rohwedder, from whom, it is claimed, he took the idea later patented by him. The validity of the patent is assailed also on the ground that it embraces no patentable novelty within the meaning of the patent laws.

The making and sale of bread in loaves is, of course, an ancient art and business. The loaves have always, until recently, been sold unslieed. The conception of slicing the loaf in advance of sale sprung no doubt from a consideration of certain disadvantages in the domestic slicing of the loaf — the irregularity in the size and form of slices, the possibility of cut fingers, some slight waste in hand slicing with its greater crumbling, the disadvantage of the actual labor involved in slicing bread. The conception, however, it appears, could not be carried into practice because of such problems remaining to be solved as the devising of workable slicing machines, and the devising of some such method of packaging sliced bread as would preserve its form and freshness.

The patent in suit covers a method of solving the second of the two problems mentioned. It presupposes a slicing machine. It secures the desired packaging thus: The still warm loaf sliced is set in an open, closely fitting, slightly gripping pastboard box, tray, or carton, about an inch in depth. The whole box and bread immediately then are wrapped in oiled paper.

Claim 4 in the application for this patent seems to be fairly inclusive of the several claims, and plaintiff now relies only on claims 2, 3, and 4. Claim 4 is as follows: “The method of packaging a baked loaf of bread of substantially rectangular form, which consists in cutting the loaf while warm and moist inside into substantially uniform slices, thereby providing a plurality of crust-less surfaces and permitting gas and moisture to be liberated from the interior of the loaf to circulate to the exterior, placing the sliced loaf into a tray of stiff, resilient material of substantially the rectangular dimensions of the baked loaf with its walls engaging the sliced loaf to maintain the sliees in compact loaf form with their crustless surfaces in contiguous relation, and then placing a wrapper of substantially moisture and air-proof material around and in contact with the tray and its contained sliced loaf, thereby retaining them in assembled condition and confining the liberated gas and moisture for utilizing the same in preserving the freshness of the loaf.”

The genesis of the patent includes certain history in which Rohwedder, above referred to, figures largely. For some years Rohwed-der had been engaged in developing a bread-slicing machine. Also he had conceived the idea of holding together the loaf after being sliced with long staple-shaped pins; had undertaken to build and had procured a patent on a machine designed automatically to insert pins into the sliced loaves. Eventually he began selling his machines (the bread-slicing and pin-inserting machines). Early in January, 1927, he contracted to sell one set of these machines to the Papendick Baking, Company of St. Louis which was not delivered until almost eighteen months afterwards. The bread-slicing machine sold to Papendick had a pin-inserting attachment, but Papen-dick did not use it. Instead he devised and used in the place of pins a collapsible form of carton. The pins proved unsatisfactory generally. The cartons proved successful. Papendick then obtained the patent now in suit.

1. Concerning the matters thus far stated, there is little, if any, controversy. There is controversy, however, concerning the origin of the idea of using a carton in holding a sliced loaf in form. But, while the evidence is conflicting, consideration of all of it convinces me that the idea of using a paper carton, box, or tray as an alternative for pins, while Rohwedder may have given it some passing consideration and even to some extent experimented with it, Papendick was the first seriously to work it out, to make it practical, and commercially to employ it. Papen-diek’s invention was not anticipated by Roh-wedder. Nor was it anticipated by a certain method for packaging doughnuts, referred to in the evidence, which, although of earlier use and bearing some resemblance to the method covered by this patent, was never designed for use in connection with loaves of bread, could not have been so used, if so used, would not have accomplished the same results, and involved entirely different principles.

2. The contention that this patent is invalid for that it involves no novelty and no new discovery also must be resolved in favor of the plaintiff and against defendant. The presumption of validity which attaches to every patent is especially potent as against this particular objection. Nor does the objection come with especially good grace from one who, like the defendant here, admits that after the patent was obtained it began to use the newly patented process which had never theretofore been used either by it or by any other. Indeed that fact seems to me to be the conclusive answer to this contention. To say that there is no novelty in a process which for thousands of years was unknown and unemployed in any country and which when patented suddenly was everywhere adopted and thereafter most extensively and widely used, obviously meeting a great need which existed in an important industry and which nothing had before satisfied, is to fail to understand the true meaning of-such words as novelty and discovery. It is not necessary to say that any single element in this new process was theretofore unknown. Perhaps none of them was theretofore unknown. The same thing may be said of almost any new invention, the' airplane, for example. But when one takes elements long known, but never before combined into useful discovery, and does for the first time so combine them as that a new and useful process comes into being, he has certainly done that which entitles him to the protection of the patent laws. That has been done here in this Papendiek invention.

The prayer of plaintiff’s bill is sustained. Appropriate findings of fact may be prepared.and submitted for approval and thereafter an appropriate decree. If other relief than the adjudication of the validity of the patent is desired, a motion for the appointment of a master to take evidence upon the subject of damages may be presented and will be sustained.


author: UNDERWOOD, District Judge.

text:
    In re PERRY.
    No. 15246.
    District Court, N. D. Georgia, Atlanta Division.
    June 3, 1931.
    W. 0. Slate and W. T. MeCollister, Jr., both of Atlanta, Ga., for objecting creditors.
    Ezra E. Phillips, of Atlanta, Ga., for bankrupt.
   UNDERWOOD, District Judge.

On September 20, 1924, the bankrupt in this ease filed a voluntary petition in bankruptcy, and was duly discharged December 13, 1924.

Subsequently, on March 8, 1928, within six years after his discharge in the first proceeding, he filed a second voluntary petition in bankruptcy.

The record in the second case consisted only of the petition and schedules in bankruptcy; order of adjudication; return of the referee recommending that petition be dismissed for want of prosecution, no application for discharge having been filed; notice, mailed to creditors, bankrupt, and bankrupt’s attorney of recommendation for dismissal and of hearing on same; and the order of the District Judge “that the voluntary petition and schedules in bankruptcy, as filed by the above named bankrupt, be and the same are hereby dismissed, and the clerk ordered to so enter of record.”

On January 15, 1930, a third voluntary petition was filed, which is the proceeding at bar.

In this case, the third proceeding, the bankrupt duly made application for discharge, and objections were filed thereto. These objections are based on the ground that the debts of the three objecting creditors were scheduled in the second proceeding, and that therefore no order in this proceeding discharging the bankrupt as to them would be proper.

If the proceedings in the second ease had not .been dismissed and the bankrupt had been denied a discharge, or had failed to apply for a discharge, then the grounds set out by the objecting creditors would be good, and no discharge could be granted in this case as to their debts. In re Bacon (C. C. A. 5th) 193 F. 34.

It appearing from the above, however, that the second case was dismissed, and that such dismissal carried the entire proceeding out of court, with the same effect as if same had not been filed, such dismissed proceedings could not constitute res adjudicata as to the debts scheduled therein, especially in view of the fact that, not only were all the proceedings dismissed, but that there were never any proceedings filed by the creditors in the nature of proofs of claims or otherwise.

This being true, and the application for discharge in this case having been filed more than six years after the order discharging the bankrupt was entered in the first proceeding, the objections to the discharge of the bankrupt filed by the creditors in this case are not good and are not sustained. In Re Skinner (D. C.) 298 F. 606. The recommendation of the referee that the bankrupt, upon the payment of costs and expenses due the clerk and referee, be discharged, is approved, and, the bankrupt having complied with all legal requirements, it is so ordered.


author: PRANK J. COLEMAN, District Judge.

text:
    UNITED STATES v. HANLEY.
    District Court, S. D. New York.
    June 1, 1931.
    George Z. Medalie, U. S. Atty., of New York City (William L. Taggart, Sp. Asst. U. S. Atty., of Washington, D. C., of counsel), for the United States.
    Blau Perlman & Polakoff, of New York City (Moses Polakoff, of New York City, of counsel), for defendant.
   PRANK J. COLEMAN, District Judge.

Motion to suppress evidence and for the return of an automobile truck and its contents. There can be no real doubt but that the search and seizure and the arrest were unlawful. Even assuming the truth of the agents’ version, I find that they without probable cause stopped the automobile, ordered its driver to pull up to the curb, and then boarded it. If thereafter the driver told them the truck contained beer, he did so under coercion and after the seareh and seizure had commenced. Since the agents had no warrant of any kind and no information in regard to the truck or its driver, their con-duet was entirely unjustified. The motion to suppress the evidence is therefore granted.

In so far as the motion asks for a direction to the Prohibition Administrator to return the truck and its contents, the Matter of Behrens (C. C. A.) 39 F.(2d) 561, concededly controls unless that ease has been overruled by the Supreme Court in Go-Bart Co. v. U. S., 282 U. S. 344, 51 S. Ct. 153, 157, 75 L. Ed. 374. The latter case involved only papers and documents which were under the control of the United States attorney in the care and custody of the special agent in charge for use in evidence. The Supreme Court said: “As the United States attorney had control of the prosecution before the commissioner, whether conducted by his.assistants or prohibition agents, the papers were held subject to his control and direction although in the immediate care and" custody of the prohibition officers. He and they voluntarily came before the court to defend the seizure, the retention and proposed use of the papers and so in effect became parties! to the proceeding. By making the papers a part of O’Brien’s affidavit they brought the papers within the power of the court and constructively into its possession, if indeed the papers had not already come within its reach.” That decision, therefore, is not inconsistent with the ruling in the Behrens Case.

The petitioner will therefore have to follow the procedure laid down in the latter case.


author: BOOTH, Chief Justice.

text:
    UNITED CIGAR STORES CO. OF AMERICA v. UNITED STATES.
    No. F-102.
    Court of Claims.
    June 1, 1931.
    v Edward F. Spitz, of New York City (Sol. M. Stroock, of New York City, and Carlin, Carlin & Hall, of Washington, D. C., on the brief), for plaintiff.
    Joseph H. Sheppard, of Washington, D. C., and Charles B. Rugg, Asst. Atty. Gen., for the United States.
    Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.
   BOOTH, Chief Justice.

This case, is before the court upon defendant’s demurrer to plaintiff’s petition. Plaintiff is a -New Jersey corporation engaged in selling, at retail, cigars, cigarettes, tobacco) and other merchandise through stores and agencies located in the principal cities of the United States. Between October 1,1920; and June 30, 1924, in its regular course of business, the plaintiff delivered to each of its customers purchasing articles of merchandise from it premium coupons or tokens which entitled the holder or holders thereof to secure certaih. premium articles listed in a premium catalogue issued by the plaintiff. The method pursued is alleged in the petition as follows:

Upon the making of all sales of eigars, cigarettes, tobacco, and other merchandise sold by plaintiff at retail and receipt of the price therefor by plaintiff, coupons and certificates in various denominations having an approximate relation to the amounts of such sales are offered by plaintiff to its customers, without charge, as an inducement to the purchase of its merchandise.

Upon presentation of, and in exchange for, said coupons and certificates accepted by its customers, plaintiff, during the period hereinbefore mentioned, delivered various articles of merchandise, in accordance with the terms of its catalogue. A portion of such premium articles, approximating 25 per cent, thereof, consisted of articles commonly or commercially known as jewelry. None of such articles listed in said premium cata-logue were sold or offered for sale by plaintiff, and they were and could only be obtained from plaintiff by its customers in exchange for its premium tokens, as hereinbe-fore stated.

The petition then continues to set forth in detail the imposition, collection, and payment under protest of excise taxes exacted by the Commissioner of Internal Revenue under section 905 of the Revenue Act of 1918 (40 Stat. 1124), and section 905 of the Revenue Act of 1921, both acts containing substantially similar terms. Section 905 of the revenue act of 1921 (42 Stat. 227, 293) provides as follows: “See. 905 (a) That on and after January 1, 1922, there shall be levied, assessed, collected, and paid (in lieu of the tax imposed by section 905 of the Revenue Act of 1918) upon all articles commonly or commercially known as jewelry, whether real or imitation; pearls, precious and semiprecious stones, and imitations thereof; articles made of, or ornamented, mounted or fitted with, precious metals or imitations thereof or ivory (not including surgical instruments, eyeglasses, and spectacles); watches; clocks; opera glasses; lorgnettes; marine glasses; field glasses; and binoculars; upon any of the above when sold by or for a dealer or his estate for consumption or use, a tax equivalent to 5 per centum of the price for which so sold.”

The adopted and promulgated regulations of the commissioner of May 5, 1919, approved by the Secretary of the Treasury, are set forth as follows: “Art. 5. Giving of premiums. — The giving of so-called 'premiums’ in return for wrappers, labels, coupons, trading stamps, or other scrip delivered or sold in connection with the sale of a commodity is a sale within the meaning of section 902 and section 905 if the premium is within the class of articles enumerated in those sections. In such cases the tax attaches at the time title in the premium passes to the person receiving it in exchange for such scrip, and is to be computed on the fair market value of the premium at such time.”

On or about July 17, 1919, said article 5 was amended by adding at the end thereof the following: “No tax attaches to the gift of an article which if sold would be taxable. Premiums given in return for wrappers, labels, coupons, trading stamps, or other scrip are not considered as gifts.”

Said regulation as amended was in force and effect until July 3, 1924, and during the period hereinbefore referred to.

Under the taxing acts and the regulations plaintiff paid on the dates stated a total excise tax of $135,384.83. Claims for refund of the taxes collected, accompanied by arguments therefor, were seasonably made and denied. No jurisdictional issue is involved. The remaining allegations of the petition set forth a contention that said taxes were illegally and erroneously collected by the commissioner without warrant or authority in law, and in violation of section 1 of article 1 and clause 1 of section 8 of article 1 of the Constitution of the United States, for the following reasons:

(a) In that the power of taxation being lodged solely in Congress by article 1 of the Constitution, the Commissioner of Internal Revenue had no power to supply by regulation the failure of Congress to provide or indicate, in section 905 or elsewhere, any manner or method of levying, assessing, or collecting the tax where jewelry articles are issued as premiums for coupons.

(b) In that said section of said acts imposed a tax upon said articles commonly or commercially known as jewelry, when sold by or for a dealer or his estate for consumption or use; and in that plaintiff was and is not a dealer, or the estate thereof, in said so-called jewelry articles, within the true intent and meaning of said acts.

(c) In that plaintiff’s issuance of said premium articles in exchange or return for said premium tokens, in pursuance of contracts previously entered into by plaintiff on its sales of tobacco products and other merchandise, frequently at intervals of a number of years prior to the presentation of said premium tokens for redemption, when plaintiff was compelled to pay said taxes thereon as aforesaid, were not sales by plaintiff of said so-ealled jewelry articles for consumption or use, within the true intent and mean-ring of said acts.

(d) In that when said jewelry or other premium articles were issued by plaintiff in exchange or return for said premium tokens, plaintiff was performing an obligation undertaken by it in connection with such contracts of sale previously entered into by it, on which all taxes required to be paid under said acts, had already been paid by it in full.

(e) In that said section of said acts did not fix or state the amount of the tax to be paid on transactions where said so-called jewelry articles are not sold for any price in money or otherwise but are delivered or issued in exchange or return for tokens only.

(f) In that the Commissioner of Internal Revenue, in promulgating the said regulation, pursuant to which plaintiff was compelled to pay said taxes as aforesaid, was not acting within the authority conferred by either section 1309 of said act of 1918 (40 Stat. 1143), or section 1303 of said act of 1921 (42 Stat. 309), to make all needful rules and regulations for the enforcement of the respective provisions thereof.

The conclusion prays for a judgment for $135,384.83 and interest thereon as provided for by law.

The plaintiff apparently concedes that, with the exception of noted differences, this case is similar to Colgate & Co. v. United States, 66 Ct. Cl. 510, and United Profit Sharing Corporation Case, dismissed by this court on June 16, 1930 (43 F.(2d) 266, 70 Ct. Cl. 788), petition for writ of certiorari denied by the Supreme Court October 27, 1930, 51 S. Ct. 84, 75 L. Ed. —. The differences relied upon from the standpoint of facts are said by the plaintiff to reside in the fact that in the United Profit Sharing Corporation Case, supra, the coupons were issued for manufacturers to which the corporation had contracted to furnish a premium service, and in the Colgate Case the plaintiff was likewise a manufacturer issuing coupons to ultimate consumers of the plaintiff’s merchandise sold by retailers to whom the plaintiff, a wholesaler, sold the merchandise. We cannot discover any vital distinction, in so far as the tax liability of the plaintiff is concerned, between this case and the Colgate and United Profit Sharing Cases. The new issue alleged to appear in the present ease finds expression in a contention that Congress did not in the revenue acts involved provide a tax with respect to jewelry issued for coupons; that the tax levied by section 905 of the Revenue Acts of 1918 and 1921 was fixed at the equivalent of 5 per centum of the'price for1 whieff said articles were sold, and that no such price is existent when jewelry is issued in return for coupons issued to customers of the plaintiff as alleged in the petition; and that the commissioner, in adopting and promulgating regulations by which the plaintiff’s tax liability in the premises is to be fixed in accord with the market value of the articles sold, invaded the domain and jurisdiction of Congress, which alone possesses power and authority to legislate and to lay and collect taxes. Section 1 of article 1,' and clause 1, section 8, of art. 1, of the Constitution.

One argument to sustain the above contention is predicated upon an allegation in the petition that the plaintiff’s coupons are offered to its customers “without charge” as an inducement to purchase its merchandise, and inasmuch as the demurrer admits .the allegations of the petition as true this is alone sufficient to warrant the court in overruling it. The gravamen of the case is, and the contentions advanced by the plaintiffs in all similar eases have been, that the issue and exchange of coupons for articles of jewelry did not comprise a sale. The allegation “without charge” is a conclusion, one vital factor to be determined from the facts alleged, and we need but state the rule that the demurrer admits only such facts as are well pleaded. The plaintiff’s ease is 'dependent upon a solution of the question as to whether the alleged transactions are sales for a price and the price is ascertainable and fixed, and seemingly no serious controversy may obtain that if they are, the taxing acts apply, and j£ they are not, the transaction does not fall within the acts. If the eommis'sioner’s regulations as to the ascertainment of the plaintiff’s tax liability impose a tax contrary to the revenue laws the plaintiff is entitled to relief. The defendant does not challenge the plaintiff’s contention in this respect, and it could not be challenged in any event. Morrill v. Jones, 106 U. S. 466, 1 S. Ct. 423, 27 L. Ed. 267. As we view it, the sole issue present and for determination in this ease is precisely similar to the issues presented upon a similar state of facts in both the Colgate and United Profit Sharing Cases, supra. In reference to the ascertainment of price by the commissioner, upon the basis of market value of the articles we found to be sold by a dealer in jewelry, this court said: “A final impediment to the collection of the tax is said by the plaintiff to reside in the fact that the price for which the articles of jewelry are exchanged for coupons is not ascertainable, and hence the regulations for the collection of the tax are contrary to the wording and intent of the law. To so contend is the equivalent of asserting that if a dealer in jewelry establishes a method of selling his merchandise, which method obscures the ready ascertainment of the selling price of the article sold, he may escape the revenue laws and carry on free from this burden. In other words, he may indirectly accomplish a result which he may not directly do. The statute uses the words ‘a tax equivalent to .5 per centum of the price for which so sold.’ Manifestly, the commissioner in the administration of the revenue laws is not bound to accept the return of the dealer as to price. Investigations and audit may be made of the dealer’s transactions to ascertain the verity of the returns, or reasonable regulations, ■lawful, of course, and conducive to the correct administration of the law, may be promulgated. Tested by the commissioner’s authority and the extent of his power under the statute, we are unable to find the difficulties which the plaintiff so vigorously protests as present. The plaintiff, in fixing the value of jewelry premiums, predicates their acquisition upon a sufficient number of redeemed coupons to cover not only the market value of the article transferred, but adds thereto the proportionate cost of overhead incurred in the conduct of the business, and thereby really obtains an estimated price somewhat in excess of the market value of the jewelry. The price thus fixed by the plaintiff embraces within its computation elements of uncertainty and estimates, and may or may not reflect stable and precise return for the articles sold. The commissioner, on the other hand, resorts to a basis easily ascertainable and obviously to the advantage of the taxpayer in that estimates and pro rata apportionments of overhead, ete., are absent.” Colgate & Co. v. United States, 66 Ct. Cl. 510, 524.

We think the demurrer’should be sustained and the petition dismissed. It is so ordered.


author: PER CURIAM.

text:
    WOMEN’S UNIVERSITY CLUB v. UNITED STATES.
    No. L-224.
    Court of Claims.
    June 1, 1931.

      Allen G. Gartner, of Washington, D. C., for plaintiff.
    Charles B. Rugg, Asst. Atty. Gen. (Fred K. Dyan, of Washington, D. C., on the brief), for the United States.
    Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.
   PER CURIAM.

This ease is controlled by the decisions of this court in William M. Abbott v. United States, 66 Ct. Cl. 603; John Fisler v. United States, 66 Ct. Cl. 220; Faculty Club of the University of California v. United States, 65 Ct. Cl. 754.


author: WILLIAMS, Judge.

text:
    BOWRING & CO. v. UNITED STATES.
    No. H-14.
    Court of Claims.
    June 1, 1931.

      Donald Home, of Washington, D. C., for plaintiff.
    George H. Foster, of Washington, D. C., and Chas. B. Rugg, Asst. Atty. Gen., for the United States.
    Before BOOTH, Chief Justice, and WILLIAMS, WHALEY, LITTLETON, and GREEN, Judges.
   WILLIAMS, Judge.

This is a case in which the plaintiff seeks a refund of income and excess profits taxes paid for the years 1918 and 1919, with interest thereon as provided by law.

The basis of the plaintiff’s elaim is that it was a personal service corporation during the years in question, as defined in section 200 of the Revenue Act of 1918 (40 Stat. 1058), and as such was exempt from income and profits taxes.

The case was referred by the court to a commissioner to take the testimony of the parties and report the facts. Neither the plaintiff nor the defendant has filed exceptions to the report of the commissioner, and the facts as reported by him have been adopted by the court as the facts herein. The findings disclose that the plaintiff was during the years in question a domestic corporation, and that its entire capital stock, which was $250,-' 000 for 1918, and $1,000,000 for the year 1919, was owned by C. T. Bowring & Co., a British corporation.

The plaintiff’s income upon which the taxes sought to be recovered were imposed was primarily ascribed to the activities of the principal owner, C. T. Bowring & Company, less than 50 per cent, of such income being derived from trading as a principal and none from government contracts.

The pertinent provisions of the Revenue Aet of 1918 as are follows:

“See. 200. That when used in this title— « » *
“The term ‘personal service corporation’ means a corporation whose income is to be ascribed primarily to the activities of the principal owners or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation and in which capital (whether invested or borrowed) is not a material income-producing factor; but does not include any foreign corporation, nor any corporation 50 per centum or more whose gross income consists either (1) of gains, profits or income derived from trading as a principal or (2) of gains, profits, commissions, or other income derived from a Government contract or contracts made between April 6,1917, and November 11,1918, both dates inclusive. * * * ”
“See. 218 * * * (e). Personal service corporations shall not be subject to taxation under this title, but the individual stockholders thereof shall be taxed in the same manner as the members of partnerships. All the provisions of this title relating to partnerships and the members thereof shall so far as practicable apply to personal service corporations and the stockholders thereof: Provided, That for the purpose of this subdivision amounts distributed by a personal service corporation during its taxable year shall be accounted for by the distributees; and any portion of the net income remaining undistributed at the close of its taxable year shall be accounted for by the stockholders of such corporation at the close of its taxable year in proportion to their respective shares.” 40 Stat. 1070.

Article 1524 of Regulations 45 and 62, as originally promulgated, provided:

“A corporation can not be considered a personal-service corporation when another corporation (not itself a personal-service corporation) owns or controls substantially all of its stock, or when substantially all of its stock and of the stock of another corporation (not itself a personal-service corporation) forming part of the same business enterprise is owned or controlled by the same interests. See section 240 of the statute (40 Stat. 1081), and articles 631-638.”

This language was subsequently, on April. 30, 1927, stricken from article 1524, and the following was substituted in lieu thereof:

“A corporation can not be considered a personal-service corporation when another corporation is one of its principal owners or stockholders. (See Cumulative Bulletin VII, p. 161.)”

The Commissioner of Internal Revenue, in denying to plaintiff a personal service classification, followed the foregoing regulation. We think the regulation is a reasonable interpretation of the provisions of the statutes above quoted defining personal service corporations and that the action of the commissioner was correct. Jute Industries v. United States, 44 F.(2d) 452, 70 Ct. Cl. 492.

The statute provides the term “personal-service corporation” means a corporation whose income is to be ascribed primarily to the activities of the principal owners, or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation. The sole owner and stockholder of the plaintiff was another corpora^ tion. From the very nature of the thing required by the statute — that the principal owners or stockholders “must be regularly engaged in the active conduct of the affairs of the corporation” — the British corporation could not and did not perform personal services for the plaintiff. The affairs of the plaintiff company'were conducted, not by persons owning stock in the plaintiff company, but by officers of another. corporation. The law clearly and unquestionably, we think, contemplates that the stockholders or owners of a corporation seeking a personal service classification must themselves have been actively engaged in conducting the affairs of sueh corporation. The character of services required cannot be performed by officers of another corporation which happens to bé the principal or the sole owner of the corporation asking for such classification.

Obviously, the plaintiff fails to bring itself within the requirements of the statute, and the petition must be dismissed. It is so ordered.


author: GREEN, Judge. LITTLETON, Judge WILLIAMS, Judge

text:
    MILLS NOVELTY CO. v. UNITED STATES.
    No. J-599.
    Court of Claims.
    June 1, 1931.
    WILLIAMS, Judge, dissenting.
    Dwight P. Green, of Chicago, HI. (Willis D. Nance, A. Leslie Hodson, and- Kirkland, Fleming, Green & Martin, all of Chicago, HI., on the brief), for plaintiff.
    . Joseph H. Sheppard, of Washington, D. C., and Charles B. Rugg, Asst. Atty. Gen., for the United States.
    Before BOOTH, Chief Justice, and GREEN, WHALEY, LITTLETON, and WILLIAMS, Judges.
   GREEN, Judge.

Plaintiff brings this suit to recover $92,-423.36 alleged to have been wrongfully assessed against it by reason of the manufacture and sale of certain coin-operated machines.

It appears that the Commissioner of Internal Revenue held that the machines were taxable as “games” within the meaning of section 900, subdivision (5), of the Revenue Act of 1918 (40 Stat. 1122), and the ease turns upon the construction of this provision which, in enumerating the articles taxable, includes a long list of articles used in sports and games, and separately as part of the taxable articles, “games and parts of games.”

The machines involved in the case were operated by placing a coin in a slot, and were so designed that the operators thereby obtained a chance as against the owner of the machine of winning or losing through the operation. The details of how this was accomplished are not material in deciding the case, and we have not considered it necessary to set them out very fully in the findings. These machines did not vend any merchandise, and were sold to persons who placed them in stores, restaurants, and other public places to be used by the public. They were not sold to stores and establishments which specialized in the sale of sporting goods, and were not commonly or commercially regarded as sporting goods.

It is contended on behalf of plaintiff that the machines in question were not “games or parts of games,” and are not made taxable by the statute. This renders it necessary to determine the meaning and construction of these words as used in the law.

At the outset it may be said that, these words being preceded by a long list of articles used in various sports and games, the connection shows that the tax was intended to be levied, not upon the act of playing the game, but upon the articles used in playing it. The word “games” in its commercial sense means the article, articles, or apparatus used in playing games. Thus stores often advertise for sale “games of all kinds,” referring to such articles. The connection also shows very plainly that Congress used the words “games and parts of games” as a sort of “catch-all” or “basket clause,” that is, it was intended to eateh and bring within the revenue net all kinds of articles used in playing games whether they were included in the list that preceded or not. With this in mind, we will next consider whether the word “games” was intended to apply to the particular kind of machines which were in this ease subjected to the tax.

At the outset it should be observed that these machines were a gambling device, and we do not understand that this is controverted by the plaintiff. The results obtained by the operators of the machine depended entirely upon chance; the operator being unable to influence or determine the outcome. The question therefore is ultimately whether a person that uses a gambling device of this kind in which he stakes the coin which he places in the machine against what chance may determine he will receive in return, if anything, is playing a game. It is obvious that the results are the same as they would be if the owner set in motion the machine upon receiving the eoin. If, instead of this automatic machine, the owner had had one of those gambling devices in which a wheel is used which revolves when set in motion by the owner, and by chance stops at a certain ■point, we think no one would contend that a game was not being played. We do not think it makes any difference under the law whether the one that takes the other side of the wager constructs a machine that will operate in his absence or operates it personally. Clearly the effect is the same.

In Desgain v. Wessner, 161 Ind. 205, 67 N. E. 991, 992, a wrestling match was held to be a game, and the court quoted with approval from People v. Weithoff, 51 Mich. 203, 16 N. W. 442, 47 Am. Rep. 557, a definition of the word “game” as follows:

“The word ‘game’ is very comprehensive, and embraces every contrivance or institution which has for its object to furnish sport, recreation, or amusement. Let a stake be laid upon the chances of the game, and we have gaming.”

So a horse race has been also held to be a game, and colloquially we have the expression in relation thereto of “playing the races.” In the case last named pool tickets were sold on baseball games, and this was held to be gaming, as money was put at stake on the chances of the games, although neither the buyers of pool tickets nor those who sold them took any part in the ball games. In the instant case the operator staked money on the result of the operation of the machine. The machine was supplied . with money by the owner, and, if the operator was fortunate enough to have its revolutions result in his favor, money of the owner was released and dropped into a receptacle where the party playing the machine eonld take it; otherwise the operator lost the coin which he had put in the machine. In operating the machine the user simply put up his money at long odds against the money of the owner of the machine. If we consider the shorter definition of the word “game” given in Webster — namely, a sport or diversion — we think it quite dear that those who operated the machines did so merely as a diversion. It is common knowledge that an element of chance has an attraction for many people who find a diversion in taking chances.

Counsel for plaintiff cite many cases with reference to the construction of the statute, none of which seem to us to be applicable. Courts have always held that, where some apparatus is used for gambling purposes, so that one party may stake his money against that of another, a game is played and gaming carried on, and the fact that the owner of the machine was not present to lay down his wager in person seems to us to be immaterial. We have already shown that the word “games,” as used in the statutes, referred not to the contests but to the articles used in carrying them on.

Counsel for plaintiff base part of their argument on the fact that section 900, subdivision (16), 40 Stat. 1122, imposes a tax upon “automatic slot-device vending machines * * * and * * * weighing machines.” Obviously plaintiff’s machines belong to neither class, and it is contended that, as two types of automatic slot-device machines are specified in subdivision (16) as subject to taxation, all other types of such machines are excluded. We do not think this follows where the machines under consideration, as in this ease, are constructed for an altogether different purpose and upon an altogether different plan, and, if taxed, are taxed upon an altogether different theory. Subdivision (16) imposes a tax upon the sale of a machine constructed for the purpose of automatically vending merchandise or ascertaining weight, and to the operation of which the element of chance does not enter. The .machines under consideration in the case at bar are so completely different as to belong, as we think, to an entirely different classification, although also operated by a coin in a slot.

It is also argued on behalf of plaintiff that the fact that the machines in question were not commonly or commercially regarded as sporting goods shows that the statute does not apply, but the provision in the statute with reference to sporting goods is" in addition to the list preceding it, which included games and parts of games, and which obviously was inserted, not for the purpose of defining the meaning of the list that had preceded, but to make subject to the tax articles which might not be included, in the language previously used, such as some kinds of fishing tackle, boxing gloves, etc. It is immaterial that stores that specialize in sporting goods do not advertise or carry such machines as are involved in this suit. Naturally the owners thereof who desired to carry on -a strictly legitimate business would have nothing to do with a machine constructed solely for gambling purposes.

In our opinion, the gambling machines involved in the ease were articles or apparatus used in playing a game as the word is used in the statute, and, if we are correct in this, it follows that the plaintiff was subject to the tax in controversy. It is accordingly ordered that plaintiff’s petition be dismissed.

LITTLETON, Judge

(concurring).

It appears that slot machines operated and intended to be operated entirely as a game of chance were intended to be included in the articles taxed under paragraph 5 of section 900 of the 1918 Revenue Act (40 Stat. 1122), when it is noticed that in paragraph 16 of the section slot-device vending machines and slot-device weighing machines are specifically taxed by name, the vending machines being taxed at 5 per cent, a'nd the weighing machines at 10 per cent.

The slot machines of chance serve no useful commercial purpose, and did no more than to provide for those so minded a means to play a game of chance, to take a gamble of losing all, or winning more than was staked on the chance. The fair inference is that Congress intended all slot machines to be taxed, but did not mention them along with slot-vending machines and slot-weighing machines, since under the term “games” in paragraph 5 of section 900 they were to be taxed at 10 per cent. The use of the slot machine in question was manifestly a game within the broad meaning of that term, and I think Congress used the words “games ana parts of games” in their broad sense, and intended to include in paragraph 5 all of those articles, such as this, commonly used for the purpose of sport, pastime, or gambling.

In this case we are not concerned with the question whether the slot machine here involved was included under the general concluding clause of section 900, “and all similar articles commonly or commercially known as sporting goods,” since the slot machine in question is taxable under the specific classification of “games and parts of games.” The general provision just referred to does not limit the classification of all which precedes it, but limits the articles that may be taxed under it in addition to those articles previously classified in the paragraph which are commonly and commercially known as sporting goods. In other words, the term “commonly or commercially known as sporting goods” would limit articles to be taxed under it, which had not been previously specifically designated, to those generally known as “sporting goods,” but it does not exclude from taxation an article which dearly comes within a specific classification previously made in this section.

The conclusion that this slot machine was taxable under paragraph 5 of section 900 is strengthened by the fact that in the Revenue Act of.1924, after the tax on the articles specified in paragraph 5 of section 900 of the Revenue Act of 1918 had been repealed, the. slot machine with which we are here concerned was included and taxed under subdivision 8 of section 600 (26 USCA § 881 note), along with coin-operated vending and weighing machines. In conference report No. 844, 68th Congress, 1st session, on the revenue bill of 1924, it was stated by the managers on the part of the House, on page 28, with reference to Senate amendment 187 to section 600 as follows: “The House bill imposed a tax upon the sale of automatic slot-device vending machines of 5 per cent, and a tax of 10 per cent upon the sale of automatic slot-device weighing machines. The Senate amendment strikes out this provision and inserts a tax of 10 per cent upon coin-operated devices, coin-operated machines, and devices and machines operated by any substitute for a coin, and also a tax of 10 per cent on mah-jongg and similar tile sets and component parts thereof. The House recedes with an amendment making the rate of tax 5 per cent upon the coin-operated devices,” etc. In other words, when it was observed that by repeal of the tax imposed by section 900 (5) of the Revenue Act of 1918 on games the slot machines with which we are here concerned were not taxed, the Congress proceeded to tax them along with slot-device vending and weighing machines.

WILLIAMS, Judge

(dissenting).

The taxes in controversy were imposed under section 900 (5) of the Revenue Aet of 1918 (40 Stat. 1122). Forty-two articles are enumerated in the statute as subject to the tax, thirty-one of which are paraphernalia used in outdoor sports or games, and eleven of which are used in indoor sports or games. All the enumerated articles are used in sports or games involving human skill, ability, endurance, and competition. Following the enumeration of specific articles subject to the tax is the generalizing phrase “games and parts of games (except playing cards and children’s toys and games) and all similar articles commonly or commercially known as sporting goods.”

Slot machines are not among the articles enumerated in the statute, but the defendant contends, and the prevailing opinion holds, they are taxable under the general phrase “games and parts of games.” It is said they are admittedly gambling devices, and as such are included within the meaning of the phrase “games and parts of games.”

It is a familiar and universally accepted rule of statutory construction that, where an enumeration of specific things is followed by some more general word or phrase, such word or phrase is held to refer only to things of the same kind. United States v. Phez Co. (C. C. A.) 28 F.(2d) 106; United States v. Nichols, 186 U. S. 298, 22 S. Ct. 918, 46 L. Ed. 1173; United States v. Chase, 135 U. S. 255, 10 S. Ct. 756, 34 L. Ed. 117; Monroe Cidar Vinegar & Fruit Co. v. Riordan (C. C. A.) 280 F. 624.

The phrase “games and parts of games” is immediately preceded by an enumeration of specific articles, every one of which is used in well-known sports and games. There is not the slightest similarity between the plaintiffs slot machine and any one of the articles enumerated. A slot machine is a gambling device pure and simple, and can be used for no other purpose. This is not true of any of the other articles named, all of which are used either in outdoor athletic sports and contests or in social games such as are found in homes or clubs. None of the articles in the preceding enumeration are used in “games” as that term is defined in statutes directed against gaming and gambling. No one thinks of tennis rackets, skates, snowshoes, golf clubs and balls, chess and checker boards and pieces, or of any of the articles named as being gambling devices, and by no stretch of imagination can a slot machine, such as we are dealing with here, be considered as being of the same class or kind of article as any of those specifically enumerated.

Applying the rule ejusdem generis, the generalizing phrase “games and parts of games,” following an enumeration of specific articles, can include only within its meaning like articles to those enumerated. Conceding that the plaintiff’s slot machines are “games” within the meaning of statutes directed against gambling, as contended by defendant, they are, under the rule, entirely outside the limitations imposed by the enumerated articles on the general phrase “games and parts of games,” and are not subject to the tax.

Another familiar rule of construction is that the meaning of a doubtful word or phrase appearing in a statute may he ascertained by reference to the associated words, those following as well as those which precede such word or phrase. United States v. Louisville & Nashville R. Co., 236 U. S. 318, 35 S. Ct. 363, 59 L. Ed. 598; Virginia v. Tennessee, 148 U. S. 503, 13 S. Ct. 728, 37 L. Ed. 537; Patton v. United States, 159 U. S. 500, 16 S. Ct. 89, 40 L. Ed. 233.

The phrase “games and parts of games” is immediately followed by “except playing cards and children’s toys and games, and all similar articles commonly or commercially known as sporting goods.” These words are explanatory of the intent and purpose of section 900 (5) to impose the tax only on such articles as are commonly or commercially known as sporting goods. In fact, this section of the Revenue Act of 1918 has been commonly known as the sporting goods section of the act. The articles made subject to the tax are referred to as “sporting goods” in the report (No. 767, p. 34) of the Ways and Means Committee of the House and in the report of the Senate Finance Committee (No. 617, p. 54) in connection with the consideration of the act by Congress at the time of its passage. The Committee on Finance of the Senate, in reporting the Revenue Act of 1921, said in reference to the change made in section 900 (5) of the Revenue Act of 1918 (S. Report No. 275, p. 28): “ * * * The reduction of the tax imposed by subdivision 5 upon sporting goods from 10 to 5 per cent.”

The Treasury Department in article 18 of Regulations 47, revised, enumerates nearly two hundred different articles as being subject to the tax imposed by section 900 (5) of the 1918 Revenue Act. All of the articles enumerated are such as are commonly used in athletic sports, and are of a like kind to those specifically named in the aet.1 None of the articles so enumerated are in any respect similar to the slot machines in question, and none of them are articles used in “games,” as that term is used in criminal statutes against gambling. It is quite clear from the regulations that the Treasury Department interpreted section 900 (5) as making sporting goods and nothing else subject to the tax, I think this interpretation of the law is correct. The phrase “games and parts of games” must be construed in connection with the phrase which follows, “and all similar articles commonly or commercially known as sporting goods.” No article other than those specifically enumerated in the act is subject to the tax, unless such article is of a similar kind to those named, and is one commonly and -commercially known as “sporting goods.”

The commissioner of the court to whom the instant case was referred to take the proof and report the facts included in his report the following:

“During the period involved herein coin-operated machines of the several types here-inabove referred to were not sold at representative stores and establishments which specialized in the sale of sporting goods, and they were not commonly or commercially regarded as sporting goods.”

The defendant filed no exceptions to this statement of fact. It is fully sustained by proof, is material to the issue presented, and I think should be incorporated in the court’s findings of fact.

It is my opinion that the Commissioner ' of Internal Revenue was without authority under the statute and the applicable regulations to impose and collect the taxes in question, and that the plaintiff should he given a judgment for the amount of sueh taxes, with interest thereon.

       Sec. 900. That there shall be levied, assessed, collected, and paid upon the following' articles sold or leased by the manufacturer, producer, or importer, a tax equivalent to the following percentages of the price for which so sold or leased— * * *
      (5) Tennis rackets, nets, racket covers and presses, skates, snowshoes, skis, toboggans, canoe paddles and cushions, polo mallets, baseball bats, gloves, masks, protectors, shoes and uniforms, football helmets, harness and goals, basket-ball goals and uniforms, golf bags and clubs, lacrosse sticks, balls of all kinds, including baseballs, footballs, tennis, golf, lacrosse, billiard and pool balls, fishing rods and reels, billiard and pool tables, chess and checker boards and pieces, dice, games and parts of games (except playing cards and children's toys and games), and all similar articles commonly or commercially known as sporting goods, 10 per centum.


author: GREEN, Judge.

text:
    BRYANT & DETWILER CO. v. UNITED STATES.
    No. J-389.
    Court of Claims.
    June 1, 1931.

      Thomas G. Haight, of Jersey City, N. J. (Robert H. Montgomery and J. Marvin Haynes, both of Washington, D. C., and Roswell F. Magill, of New York City, on the brief), for plaintiff.
    Ralph C. Williamson, of Washington, D. C., and Charles B. Rugg, Asst. Attv. Gen., for the United States.
    Before BOOTH, Chief Justice, and WHALEY, WILLIAMS, LITTLETON, and GREEN, Judges.
   GREEN, Judge.

This is an action to recover an alleged overpayment of income and excess profits taxes for the year 1918 in the amount of $26,-879.85. The action arises out of the refusal of the Commissioner of Internal Revenue to allow any déduction for the amortization of a building erected in 1918 as part of a plant for the manufacture of magazines for automatic pistols, pursuant to a contract made with the United States and used for that purpose until shortly after the Armistice. The building cost $77,362.13, of which the defendant contributed $6,009, paid to the company which used the building and turned over to the plaintiff. The contract was canceled after the Armistice and the building was then not worth to the plaintiff in excess of $30,-890. In an application for a refund of part of the taxes for said year, the plaintiff claimed to be entitled to a deduction of tbe difference between the net war-time cost, $71,362.13, and the net worth after the war, $30,890. The deduction claimed was therefore $40,472.13.

It is conceded by defendant that the building was erected for the production of articles contributing to the prosecution of the World War, and the decision to be rendered turns upon the construction of the statute with reference to the amortization of war facilities in the computation of income of a corporation as applied to the facts in the ease under consideration, whieh are practically undisputed.

This statute, among other things, provides in section 234 (a) of the Revenue Act of 1918 (40 Stat. 1078): “(8) In the case of buildings, machinery, equipment, or other facilities, constructed, erected, installed, or acquired, on or after April 6, 1917, for the production of articles contributing to the prosecution of the present war * * * there shall be allowed a reasonable deduction for the amortization of such part of the cost of such facilities * * * as has been borne by the taxpayer, but not again including any amount otherwise allowed under this title or previous Acts of Congress as a deduction in computing net income.”

More specifically the point is whether, under the statute, amortization can be granted to a corporation whieh constructs a building and does not use it for the production of war material, but leases it to another concern.

The evidence shows that the plaintiff constructed the building for another corporation, the Ferro Stamping & Manufacturing Company, whieh used it in the manner stated above. The Ferro Company had contracted with the government for the production of war material but had no building suitable for the performance of its contract with the government. It was therefore arranged between the Ferro Company and the plaintiff that plaintiff should construct a suitable building and lease it to the Ferro Company, whieh it did, the lease being for a period of five years and including two other buildings whieh had theretofore been used by the Ferro Company.

It is contended on behalf of plaintiff that the law does not require that the taxpayer who constructs the building shall personally have been engaged in the production of war material in order to be entitled to the benefit of the amortization provision, but that the only requirement is that the building shall have been constructed for such purpose. It is said also that no such requirement need be implied in order to protect the government. On behalf of the defendant, it is contended that the words “production of articles contributing to the prosecution of the present war” refer only to production by the taxpayer, and that unless the building was used by the taxpayer for such production no allowance can be made.

The language of the statute is ambiguous, and we shall have to look to the circumstances under which the statute was enacted and to which it was intended to apply in order to determine the intent of Congress in enacting it. The Revenue Act of 1918 was passed shortly after the Armistice had been declared. It is a matter of common knowledge that the war ended much sooner than was generally expected. As a consequence, a large number of contractors found themselves with buildings and machinery on hand acquired or constructed for the purpose of manufacturing war material, but whieh was of little value after the war. Under the law as it stood at the time of the Armistice, there was no provision for an allowance on account of this situation. The contractors were unable to use the property as they had expected and intended, and under the circumstances would sustain a loss against whieh the law had made no provision, although the act whieh brought about the loss was required by their contracts with the government. But it was the corporations whieh contracted to produce war material whieh as a rule sustained this loss. If they arranged with some other party to construct a building to be leased for the purpose of enabling them to perform their contracts, presumably the party that constructed the building would prescribe such terms in the lease as would protect him from loss. At least there was no reason why he should not do so, as he could construct a building or refuse to build it, at his pleasure, not having made any contract with the government. In this particular instance the lease was made for five years, and regardless of whether the contract of the Ferro Company was terminated by reason of the ending of the war the rent had to be paid. The plaintiff and other parties who constructed buildings to be so used took no risk upon the termination of the contract with the government or upon its being profitable or otherwise. It made no difference to them whether the war was terminated before their leases expired, except as it might make to the public generally. We can see no good reason why those Who merely constructed buildings and leased them should receive this allowance for amortization, and in view of the situation, as stated above, we do not think Congress intended that they should.

In this view we are supported by the opinion of the Board of Tax Appeals in Appeal of Bryant & Detwiler Co., 3 B. T. A. 15, being the same ease when it was heard before the board, and also by Appeal of Moore Investment Co., 2 B. T. A. 579, in which it was said: “The purpose of the taxpayer in erecting the building in question was not to produce articles contributing to the prosecution of the war, but to rent it to a concern which was engaged in manufacturing or producing such articles. In other words, it was an investment proposition.”

It was not only an investment proposition but one in which the profit could be clearly determined from the start. The plaintiff’s situation was very different from those who had made contracts with the government, and in order to perform them were obliged tq construct or acquire buildings upon which they sustained a loss. In such ease, the loss was sustained by reason of the contract to manufacture war material for the government. Even where the buildings were leased for this purpose, the loss, as a rule, would fall upon the lessee who used them, and not upon the lessor.

We do not find it necessary to determine whether the case of Belfast Investment Co. v. Commissioner, 17 B. T. A. 213, conflicts with the holding of the Board in the ease last cited and that of Bryant & Detwiler Co-., supra, as our conclusion in any event is that its decisions in the Bryant & Detwiler Co. Case and the Moore Investment Co. Case were correct.

We think that if a corporation constructed a building and sold it outright to another corporation, which used it to produce war material, no one would contend that the corporation constructing the building could be allowed amortization. On the contrary, it would be allowed to the corporation which purchased and used it. It is true that the statute is specific as applied to an instance of this kind, but we think .the principle is the same. It is the risk and expense resulting from taking a contract to produce war materials for which Congress intended to allow compensation when new buildings were required for the performance of the contract, and we do not think it intended to make allowances on account of matters which, although they may have resulted indirectly from the war, were not brought about by taking a contract to produce war materials.

Our conclusion is that the plaintiff’s petition must be dismissed, and it is so ordered.


author: GRONER, Associate Justice.

text:
    PITTS v. PEAK.
    No. 5351.
    Court of Appeals of District of Columbia.
    Argued April 6, 1931.
    Decided May 4, 1931.
    T. Morris Wampler, of Washington, D. C., for appellant.
    Nugent Dodds, Leo A. Rover, and Neil Burkenshaw, all of Washington, D. C., for appellee.
    Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, and GRONER, Associate Justices.
   GRONER, Associate Justice.

The petitioner Pitts was convicted in the Supreme Court of the District of Columbia on an indictment charging conspiracy under section 37 of the Federal Criminal Code (18 USCA § 88). After sentence, he filed a petition for a writ of habeas corpus, alleging that the Supreme Court of the District was without jurisdiction. On appeal to this court, petitioner correctly states that the only question for decision here is whether the Supreme Court of the District of Columhia, holding a criminal court, had jurisdiction to try him upon an indictment alleging’ a violation of section 88, title 18, USCA (Criminal Code, § 37). The statute in question makes it a crime to conspire to commit any offense against the United States, and a subsequent section (546) makes the offense triable in the District Court of the United States for the appropriate district. From this petitioner argues that since by statutory enactment the offense of conspiracy is triable in a district court of the United States, his indictment and trial in the Supreme Court of the District of Columbia was unlawful, and the sentence imposed wholly without effect. We think there is no merit in this contention.

Section 81 of title 18, D. C. Code, 1929, provides’: “Except as otherwise provided in section 258 of this title, the trial of crimes and misdemeanors committed in the District of Columbia shall be in the supreme court of the District of Columbia holding a special term as a criminal court.”

Section 258 referred to in the statute deals solely with the jurisdiction of the juvenile court, and therefore is without any significance so far as the question here is concerned. And section 43 of the same title provides: “The said court shall possess the same powers and exercise the same jurisdiction as the district courts of the United States, and shall he deemed a court of the United States.”

It is, of course, not contended that the act of Congress creating the offense of conspiracy and its punishment is not applicable to the District of Columbia, for section 21, title 1, D. C. Code 1929, provides: “The common law, the principles of equity and admiralty, all general acts of Congress not locally inapplicable in the District of Columbia, and all acts of Congress by their terms applicable to the District of Columbia and to other places under the jurisdiction of the United States, in force in the District of Columbia on March 3, 1901, shall remain in force except in so far as the same are inconsistent with, or are replaced by, subsequent legislation of Congress.”

But it is contended that because it is not specifically made an offense under the laws of the District, an indictment under it must be tried in a District Court of the. United States, and that since, under the provisions of the District law, section 56, title 18, D. C. Code 1929, providing for special terms. of the Supreme Court, one of said terms in designated as “the district court of the United States,” and by the act of April 19, 1920 (section 347, title 18, D. C. Code 1929), Congress has provided for the drawing of petit jurors for service in the various special terms, including inferentially said term as District Court of the United States, the trial of petitioner should have been had in a court so designated rather than in the Supreme Court of the District of Columbia holding a special term as a criminal , court, but we regard this as a play upon words, for, first of all, it overlooks section 58 of title 18, wherein it is provided that the several terms “are declared to be terms of the supreme court,” arid more particularly section 81 of title 18 which specifically provides that the trial of crimes and misdemeanors committed in the 'District shall be had in the Supreme Court holding a special term as a criminal court, and this we think means all crimes, and so we have already had occasion to hold in Arnstein v. U. S., 54 App. D. C. 199, 201, 296 F. 946, that offenses made such by a law of the United States, and which by their terms are not inapplicable in the District of Columbia, are triable in the Supreme Court of the District though by _ the terms of the act creating the offense it is made triable in a district court of the United States, and this not only because the statute so declares but because the Supreme Court of the District as such possess all the powers and exercises all the authority conferred by acts of Congress on the District Courts of the United States. The Supreme Court of the District is a court of the United States (section 43, title 18, D. C. Code 1929) for the administration of the laws of the United States. It is made such by enactment of Congress, and derives its jurisdiction and powers from the same source as, and in this respect is like, all other inferior law courts of the United States, for only the jurisdiction of the Supreme Court is derived directly from the Constitution. Every other court created by the general government derives its jurisdiction wholly from the authority of Congress. Kline v. Burke Const. Co., 260 U. S. 226 at page 234, 43 S. Ct. 79, 67 L. Ed. 226, 24 A. L. R. 1077. But Congress in turn derives its powers from the Constitution. It is therefore, we think, not precisely accurate to speak of the Supreme Court of the District as a legislative court, except in like manner as all other inferior courts of the United States are legislative courts, or to liken it to consular courts, or to that class of courts or tribunals created by Congress to perform some function primarily belonging to the Congress but which it may rightfully exercise or delegate, or to territorial courts, of which Chief Justice Marshall said, in American Ins. Co. v. Canter, 1 Pet. 511, 546, 7 L. Ed. 242, they “are not constitutional courts, in Which the judicial power conferred by the constitution on the general government, can be deposited. They are incapable of receiving it,” for this is not true of the Supreme Court of the District of Columbia because, as was said by the Supreme Court, speaking of that court, “We find here a court which by acts of Congress is to be treated as a District Court of the United States.” Federal Trade Commission v. Klesner, 274 U. S. 145, 158, 47 S. Ct. 557, 560, 71 L. Ed. 972, and which, by act of Congress, has had conferred upon it all the power and jurisdiction conferred by Congress upon the District Courts under article 3 of the Constitution. That Congress has also conferred upon the supreme court of the District jurisdiction in or powers beyond those designated eases and controversies prescribed by section 2 of article 3 does not, we think, change the nature or constitution of that court, but grows, rather, out of another constitutional provision found in section 8 of article 1 granting to Congress power to exereise exclusive legislation in all cases whatsoever over the District of Columbia, which, as the Supreme Court said in Keller v. Potomac Electric Power Co., 261 U. S. 428, 442, 43 S. Ct. 445, 448, 67 L. Ed. 731, means “that as to the District Congress possesses, not only the power which belongs to it in respect of territory within a state, but the power of the state as well. In other words, it possesses a dual authority over the District, and may clothe the courts of the District, not only with the jurisdiction and powers of federal courts in the several states, but with such authority as a state may confer on her courts,” and this latter authority, that is to say, the sovereign power of the state, as was held in Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 S. Ct. 67, 53 L. Ed. 150, may permit legislative and judicial powers to be united in a single hand. But it by no means follows that because Congress has seen fit, by virtue of its authority over the District of Columbia, to confer upon the courts of the District administrative functions, which outside the District it may not confer upon courts created solely under article 3, these courts are any the less created under that article of the Constitution, nor do we know of anything in the history of these courts or in the legislation with relation to them which would indicate the contrary. We think a reasonable and correct view of the subject would indicate that, in the creation and organization of the superior courts of the District of Columbia, Congress has availed of its dual constitutional right in the first place to establish courts of law and invest-.them, as it has; with power and jurisdiction over all eases and controversies which, under the authority of article 3, it has invested the district courts of the Uniied States, and, in the second place, in the exercise of the power of a sovereign state, under the provisions of section 8 of article 1, has further imposed upon them jurisdiction and power which it cannot impose upon other like courts functioning outside the District. There is no inhibition in the Constitution against the exercise by Congress of this dual power, arising as it does out of an express grant in the one case (article 3) and an implied grant in the other (article 1, § 8), nor does its exercise in the one case exhaust its power and prevent its exercise in the other, and therefore we assume, when Congress created the two courts — the District Courts of the United States and the Supreme Court of the District of Columbia! — and gave to each, within its own sphere, identical jurisdiction, that it drew its power from the same source, even though it was necessary it should have recourse to another provirion of the Constitution in order to clothe the courts at the seat of government with other and additional anthonty not permissible under article 3.

We therefore reach the conclusion that the Supreme Court of the District of Columbia, by that name, is the proper tribunal, under the acts of Congress, for the trial of offenses which outside the District would be triable in a District Court, and that therefore the denial of the habeas corpus and the dismissal of the writ was in all respects correct and should be and is affirmed.

Affirmed.