author: AUGUSTUS N. HAND, District Judge ROGERS, Circuit Judge ROGERS, Circuit Judge.

text:
    In re HOLLYWOOD CABARET. In re SILVER SLIPPER CABARET.
    (Circuit Court of Appeals, Second Circuit.
    December 8, 1924.
    On Eeargument, March 2, 1925.)
    Nos. 57, 58.
    1. Intoxicating liquors <§=>249 — Warrant may issue for search of liquor unlawfully possessed, though unlawful possession is merely a misdemeanor.
    Under the National Prohibition Act, tit. 2, § 25 (Comp. St. Ann. Supp. 1923, § 10138y2m), making possession of liquor unlawful, and providing for. issuance of warrant for search of such liquor under Act June 15, 1917, tit. 11 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 10212Í, 10496t4a-1049614v), warrant could issue for search for unlawfully possessed liquor, though po/ssession is only a misdemeanor.
    2. Intoxicating liquors <§=>248 — Affidavits describing comparatively recent sales of whisky on premises used as cabarets with approval of management held to show probable cause.
    Affidavits describing comparatively recent sales of whisky on premises used as cabarets, by or with the approval of the management, held sufficient to show probable cause for issuance of search warrants under National Prohibition Act, tit. 2, § 25 (Comp. St. Ann. Supp. 1923, § 10138y>m), and Act June 15, 1917, tit. 11 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 10212i, 10496343-10496^).
    3. Searches and seizures <§=>3 — Description of places by'giving street number, sufficient.
    Description of places to be searched by giving street number held sufficient.
    4. Intoxicating liquors <§=>249 — Warrant for search of place need not describe individual or name owner.
    Warrant issued under Act June 15, 1917, tit. 11 (Comp. St. 1918, Comp. St. Ann. Supp. 1923, §§ 10212Í, 10496y,a-1049634v), and National Prohibition Act, tit. 2, § 25 (Comp. St. Ann. Supp. 1923, § 10138y>m), for search of a place and not an individual, need not describe any individual or name owner.
    5. Intoxicating liquors <§=>248 — Affidavits held not “positive” within statute prohibiting issuance of warrant for search during night unless affidavits are “positive” that property is on person or in place to be searched.
    Affidavits that, “from my observation, I am positive that liquor is kept on the premises for sale at night,” and that, “from my observations and purchases therein (previously alleged to have been made three weeks before affidavit was made), I am positive that liquor is possessed on said premises,” held not sufficient under Act June 15, 1917,. tit. 11, § 10 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 1049634]), prohibiting warrant for search at night, unless affidavits are “positive” that property is on person to be searched or in place to be searched.
    | Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Positive.]
    Eogers, Circuit Judge, dissenting.
    On Eeargument.
    6. Intoxicating liquors <@=>253 — Liquor seized under improperly issued warrant will not be ordered returned, where record does not disclose persons entitled thereto.
    Where record did not disclose persons from whom intoxicating liquor was taken under warrant improperly issued, nor persons in possession of premises when liquor was seized, but contained mere allegation that certain parties “owned” premises, without showing that they owned liquor, or even that they were in possession of premises, liquor will not be ordered returned under National Prohibition Act, tit. 2, § 25 (Comp. St. Ann. Supp. 1923, § 10138%m), and Act June 15, 1917, tit. 11, § 16 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 10496ytp).
    In Error to the District Court of the United States for the Southern District of New York.
    In the matter of the application for a search warrant affecting premises known as the Hollywood Cabaret, and in the matter of the application for a search warrant affecting premises known as the Silver Slipper Cabaret. Motions by George Hammond and others in the first proceeding, and by the Silver Slipper Corporation and others in the second proceeding, to vacate search warrants and for return of property seized thereunder, were denied, and movants bring error.
    Reversed and remanded.
    These appeals are from orders denying motions made by tbe respective plaintiffs in error to vacate search warrants and to direct the return of the property seized thereunder.
    In the first ease an employee of the Treasury Department who, on February 21, 1924, made the affidavit upon which the search warrant was issued, swore' that on January 30, 1924, about midnight, he entered the Hollywood Cabaret and was introduced to a man in charge named Bernstein, who called the waiter and told him to give the affiant anything he wanted; that the affiant ordered and paid for Scotch whisky and drank some of it and saw a great many people drinking whisky in the cabaret and various scenes of partial intoxication. The affiant also swore that:
    ' “This cabaret is open only at night. From observations and purchases therein I am positive that liquor is possessed on said premises.”
    The search warrant in the Hollywood ease issued on February 24th, three weeks and one-half after the affiant visited the cabaret.
    In the second case, an employee of the Treasury Department who, on February 18, 1924, made the affidavit upon which the search warrant was issued, swore that he entered the Silver Slipper Cabaret (without mentioning the date), asked for a pint bottle of whisky, which he paid for, and was served with several bottles of beer and drinks of whisky. He also said:
    “My information is that other government officers have made purchases of whisky in said cabaret within the past two weeks. This place is open for business only at night and it is impossible to obtain admission in the. daytime. From my observation I am positive that liquor is kept on the premises for sale at night.”
    The search warrant in the Silver Slipper case was issued on February 25, 1924. It nowhere appears when the employee of the Treasury Department visited the premises and saw the occurrences which he described.
    M. Michael Edelstein, of New York City, for plaintiffs in error.
    William Hayward, U. S. Atty., of New York City (Elmer H. Lemon, Sp. Asst. U. S. Atty., of Middletown, N. Y., of counsel), for the United States.
    Before ROGERS, Circuit Judge, and LEARNED HAND and AUGUSTUS N. HAND, District Judges.
   AUGUSTUS N. HAND, District Judge

(after stating the facts as above). The search warrants are first attacked on the ground that the possession of liquor in violation of the National Prohibition Act is only a misdemeanor punishable by a fine of not more than $500, and thaf a search warrant cannot issue in eases other than felonies. We find no sound basis for such a contention. Section 25, tit. 2, of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138%m) provides that:

“It shall be unlawful to have or possess any liquor or property designed for the manufacture of liquor intended for use in violating this title 'or which has been so used, and no property rights shall exist in any such liquor or pi'operty.
“A search warrant may issue as provided in title XI of public law numbered 24 of the Sixty-Fifth Congress, approved June 15, 1917, and such liquor, the containers thereof, and such property so seized shall be subject to such disposition as the court may make thereof.”

The law approved June 15, 1917, was the so-called Espionage Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 10212Í, 10496%a-10496%v).

The fact that the state of New York passed a special act to cover searches and seizures in eases under the Mullan-Gage Law, whether or not because the Legislature regarded the general search warrant statute of New York as limited to felonies, cannot determine the application of the Espionage Act.

Where section 25, tit. 2, of the National Prohibition Act declares it to be unlawful to possess any liquor “intended for use in violating this title or which has been so used,” and thereafter allows the issuance of search warrants “as provided” in the Espionage Act, there appears to be a clear inclusion of all liquors possessed in violation of law within the search warrant provisions. United States v. Friedman (D. C.) 267 F. 856.

The plaintiffs in error further contend that the warrants were issued without probable cause and do not sufficiently describe the persons, property, and premises to be searched. Probable cause would seem to be sufficiently shown when the affidavits described comparatively recent sales of whisky upon premises used as cabarets by, or with the approval of, the management itself. In re Search of No. 15 East Third Street (D. C.) 284 F. 914. There was plainly a sufficient description of the places to be searched by giving the street number. As no person was to be searched, no description of any individual was necessary. Where- the place is to be searched the statute does not call for the name of the owner. Petition of Barber (D. C.) 281 F. 550; Gandreau v. United States (C. C. A.) 300 F. 21.

The most serious objection to the validity of the search warrant is that it was to he executed at night and insufficient facts were shown in the moving papers to justify any positive allegations of knowledge.

The Espionage Act provides, in section 10, tit. 11 (Comp. St. 1918, Comp. St.' Ann. Supp. 1919, § lOéQQy^j), that:

“The judge or commissioner must insert a direction in the warrant that it be served in the daytime, unless the affidavits are positive that the property is on the person or in the place to be searched, in which case he may insert a direction that it be served' at any time of the day or night.”

In the Hollywood ease the positive-allegations are based upon the statement that “from my observations and purchases therein I am positive that liquor is possessed on said premises,” and in the Silver Slipper ease upon the statement that “from my observation I am positive that liquor is kept on the premises for sale at night.” In neither case does any basis appear for the word “positive” except purchases made in the first ease over three weeks before, and in the second case at an indefinite time before. To sustain the search warrant it is necessary to hold that sales made three weeks or an indefinite time before the' making of the affidavit amount to positive information of the presence of liquor at the time the affiant takes oath, or else that the requirement that the affidavits be “positive” is a matter left entirely to the conscience of the affiant'. Whichever view he taken, the adoption of it involves the conclusion that there is no difference between the requirement of section 3, tit. 11, of the Espionage Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 1049614c), that “a search warrant cannot be issued but upon probable cause,” and the requirement of section 10, tit. 11 (section 1049614)), that “the judge or commissioner must insert a direction in the warrant that it be served in the daytime unless the affidavits are positive that the property is on the person or in the place to be searched.”

If such a short time had elapsed between the purchase of liquor upon the premises and the making of the affidavit-and issue of the search warrant that it was quite certain that the liquor seen or tasted was from the same stock that would still naturally be upon the premises, it is unneeesary for us to determine that the averment of positive knowledge might hot be sufficient for a night search warrant. We do not pass upon such a situation as that. But where a number of weeks or an indefinite time has elapsed between the inspection of the premises and the making of the affidavit, there can be no positive knowledge unless the word /‘positive” is indistinguishable from “probable.”

In Gandreau v. United States, supra, though the warrant provided that it might be executed during the day or night, it was executed only in the daytime. Moreover, only two days elapsed in that case between the time when the officer visited the premises and the day when the warrant issued. That decision is, therefore, not in point.

Judge Tuttle’s decision in United States v. Edwards (D. C.) 296 F. 512, may also be distinguished from the present ease. There the affidavit of the prohibition agent after reciting purchases of intoxicating liquor on February 1, 1923, went on to say: “Deponent further states, upon his own knowledge, that in and upon the premises aforesaid ° * * occupied as a soft drink stand and cigar store, and used for the illegal sale of intoxicating liquors, * * * and particularly at the bar of the building aforesaid, * * * is now a certain quantity of intoxicating liquor fit for beverage purposes, * * * used in connection with the aforesaid violation of the National Prohibition Act; said intoxicating liquor consisting of whisky and certain other intoxicating liquors.” The affidavit was made on February 2, 1923, and the search warrant issued the same day. Not only did the smallest amount of time intervene between the visit to the premises, the making of the affidavit, and the issuance of the search warrant, but there was also a positive averment by the prohibition agent that intoxicating liquor was upon the premises “to his own knowledge.” If such a night search warrant could not be sustained, it is hardly possible to conceive of a ease where a valid one could be allowed.

The orders of the District Court are each reversed, and the proceedings are remanded, with directons to quash the warrants and restore the property seized under section 16, tit. 11, of the Espionage Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 10496^).

ROGERS, Circuit Judge

(dissenting). I concur in so much of the above opinion as relates to the right to issue a search warrant in cases arising under the Prohibition Act notwithstanding the violation of the act is only a misdemeanor and not a felony. I also concur in holding that the search warrants sufficiently described the persons, property, and premises to be searched. But I dissent from so much of the opinion as holds that the moving papers were insufficient to justify the issuance of a warrant to search the premises at' night and will proceed to state my views upon that question.

The Eighteenth Amendment prohibits the sale of intoxicating liquors within the United States and authorizes the Congress by appropriate legislation to enforce it. The National Prohibition Act was passed for the purpose of making prohibition effective. And section 3, tit. 2 of that act (Comp. St. Ann. Supp. 1923, § 10138%aa), provides that the act shall be liberally construed to the end that the use of intoxicating liquor as a beverage may be prevented. It is no doubt true that penal acts are construed strictly by the courts. It has been said that this rule is almost as old as construction itself. It is not necessary to inquire whether the above provision of the statute was beyond the constitutional power of the Congress to enact. Rose v. United States (C. C. A.) 274 F. 245, 250. It certainly is a cardinal rule of construction applicable to penal as to all other statutes that the true intent of the lawmaking body is to be ascertained and made effective,if possible, and the rule of strict construction is not applied with such technicality as to defeat the intent of the statute if legal. As was said in United States v. Hartwell, 6 Wall. (73 U. S.) 385, 396 (18 L. Ed. 830): “The words must not be narrowed to the exclusion of what the Legislature intended to embrace. * * * It must not be defeated by a forced and overstrict construction. The rule does not exclude the application of common sense to the terms made use of in the act in order to avoid an absurdity, which the Legislature ought not to be presumed to have intended.” See Bolles v. Outing Co., 175 U. S. 262, 265, 20 S. Ct. 94, 44 L. Ed. 156.

And it has been held that statutes which are both penal and remedial are to be construed strictly so far as they inflict punishment upon offenders, but that in their remedial features they are to be construed liberally throughout.

At any rate) the statute should be given a reasonable and common sense construction, and considered and interpreted in the light of the evils aimed at and the purposes clearly intended by the Congress in its enactment. United States v. Edwards (D. C.) 296 F. 512, 515. The maxim, “Ut res magis valeat quam pereat,” is to be kept in mind, and the statute, if reasonably possible, is to be so construed as to give foree and effect to its provisions. They should receive a construction which will advance the object which the law was intended to promote, which was the prevention of the unlawful sale of intoxicating liquors. The Eighteenth Amendment and the National Prohibition Act are a part of the law of the United States. As such this court has no eoneern with the wisdom or unwisdom of the law. But it is the duty of the court to give effect to it and to that end give such reasonable consruction to the provisions of the law as will promote and not hinder its administration.

Under the act of Congress the search warrant must contain a direction that it be served in the daytime unless the affidavit upon which it is obtained is positive that the property is on the person or in the place to be searched, in which case it may contain a direction to enter, to search, and to seize in the day or night.

The search warrant which was issued commanded the person to whom it was issued “in the day or night time” to enter and make the search.

After the search warrant was executed and a return made thereon, a motion was made in due course to vacate the warrant, and after a hearing regularly had, the motion was in all respects denied by Judge Knox in the District Court on March 21, 1924. On the same day a writ of error was sued out.

It was assigned for error that a search warrant could not issue under the laws of the United States in a case of misdemeanor.

Also, that the search warrant did- not attempt to describe the person and the property to be searched.

Also, that the search warrant at night time was illegally issued because the affidavit filed to obtain it did not contain any allegation of fact that the affiant was positive that the goods to be seized were on the premises.

Also, that no probable cause appeared in the affidavit filed for the warrant.

Also, that by reason of the length of time elapsing between the alleged violation constituting the alleged probable cause and the date upon which the affidavit was made for the search warrant, herein, the search and seizure was illegal and void.

To justify the issuance of a warrant directing a search at night, the affidavit must be “positive” in its allegations that the property to be seized is in the place to be searched. The Standard Dictionary defines a “positive allegation” as follows: “In law an allegation made without reserve as distinguished from an allegation made on information and belief or argumentatively.” That is exactly what the affidavit in this case did state.

But the allegation was as to the condition existing on January 30th, and it is said that a condition shown to exist on that- day does < not warrant the issuance of a search warrant on February 24th. In fact, that it must appear that the property to be seized was actually on the premises at the time the warrant issued. The answer to that is that the statute nowhere says any such thing. And no case has been decided which lays down any such proposition.

The National Prohibition Act, being the Act of October 28, 1919, tit. 2, § 25, provides as follows:

“It shall be unlawful to have or possess any liquor or property designed for the manufacture of liquor intended for use in violating this title or which has been so used, and no property rights shall exist in any such liquor or property. A search warrant may issue as provided in title SI of public law numbered 24 of the Sixty-Fifth Congress, approved June 15, 1917, and such liquor, the containers thereof, and such property so seized shall be subject to such disposition as the court may make thereof. If it is found that such liquor or property was so unlawfully held or possessed,’ or had been so unlawfully used, the liquor, and all property designed for the unlawful manufacture of liquor, shall be destroyed, unless the court shall otherwise order. No search warrant shall issue to search any private dwelling occupied as such unless it is being used for the unlawful sale of intoxicating liquor, or unless it is in part used for some business purpose such as a store, shop, saloon, restaurant, hotel, or boarding house. The term ‘private dwelling’ shall be construed to include the room or rooms used and occupied not transiently but solely as a residence in an apartment house, hotel, or boarding house. The property seized on any such warrant shall not be taken from the officer seizing the same on any writ of replevin or other like process.” 41 Stat. pt. 1, p. 315 (Comp. St. Ann. Supp. 1923, § 10138y2m).

And title 11 of the Espionage Act of June 15, 1917, § 3 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 10496%e), provides:

“A search warrant cannot be issued but upon probable cause, supported by affidavit, naming or describing the person and particularly describing the property and the place to be searched.”

And section 5 (section 10496%e) provides : “The affidavits or depositions must set forth the facts tending to establish the grounds of the application or probable cause for believing that they exist.”

And section 10 (section 10496%j) provides:

“The judge or commissioner must insert a direction in the warrant that it be served in the daytime, unless the affidavits are positive that the property is on the person or in the place to be searched, in which ease He may insert a direction that it be served at any time of the day or night.”

And section 11 (section 10496%k) provides :

“A search warrant must be executed and returned to the judge or commissioner who issued it within ten days after its date; after the expiration of this time the warrant, unless executed, is void.”

The search warrant which was issued recited as follows:

"Whereas, it appears from the affidavit of Frank Rickey, that certain intoxicating liquor containing more than % of 1 per cent, of alcohol by volume and fit for use for beverage purposes is unlawfully held and possessed in a certain cabaret known as Hollywood Cabaret, located in the bas.ement of the building at 203 West Forty-Ninth street, borough of Manhattan, city and Southern District of New York, and in any closet, vault, safe, cellar, subeellar, kitchen, ice box, room or rooms connected with or used in connection with said restaurant.
“And that said liquor is used and is intended for use and has been used in violating title 2 of the National Prohibition Act in that said liquor was and is willfully, knowingly and unlawfully held in said premises.”

The search of the premises was made on the night it was issued, and liquor was found on the premises and was seized. The return to the search reads as follows:

“Search warrant executed at 2:15 a. m. Feb. 24, 1924, at 203 West Forty-Ninth street, found the following liquor in pint in pitcher in kitchen, 4 oz. of Scotch in glass in kitchen and 6 oz. on table in (3) glasses on table near kitchen door.”

It thus appears that the affidavit stated that the person who made it based his statements on what he saw in a cabaret at about midnight on January 30,1924, or about three weeks prior to the application for the search warrant. Why this delay occurred is not explained. The affidavit, however, is positive in its allegations. The person who made it swears that he entered the premises; that he there ordered Scotch whisky and was furnished it; that he was familiar with the taste of whisky and knew that what he was furnished was whisky. And he stated further that a great many people were in the cabaret at the time drinking whisky and that there were various scenes of partial .intoxication. And then he added: “From my observations and purchases therein 1 am positive that liquor is possessed on said premises.”

These allegations were sufficient to have justified the issuance of a search warrant if application therefor had been made at once or within a few days thereafter.

In Gandreau v. United States (C. C. A.) 300 F. 21, the warrant was applied for on July 20, 1923. The affidavit on which the warrant issued stated that the liquor to be seized was on the premises two days before the application for the warrant was made; that the place was a saloon where liquor was then being kept and sold. This was held sufficient by the Circuit Court of Appeals for the First Circuit. But if the affidavit was sufficient to justify the issuance of the warrant, if applied for within two or three days, it must be because there is a presumption that the condition which existed two days before continued unchanged at the time the warrant was sued out. How long does that presumption continue? If it continues for' two or three days, the circumstances may be of such a character as makes it not unreasonable to say that it continues for a reasonable time thereafter.

There are certain rebuttable presumptions of fact in which the law indulges. In other words, it is a rule of law that from certain facts proven by direct evidence certain inferences are to be considered as prima facie established. Now it is a well-settled rule that where the existence at one time of a certain condition or state of things of a continuing nature is shown, the presumption arises that such condition or state continues so long as is usual with conditions or things of the particular nature. An illustration relates to the possession of property either real or personal. If it be shown that a person had certain property in his possession at a certain time not too remote, it would afford some degree of presumption, there being no evidence to-the contrary, that it-continued in his possession. Robson v. Rawlings, 79 Ga. 354, 7 S. E. 212. And where a person is shown to be a stockholder in a corporation at a particular time, it is presumed that the relation continued to exist. Montgomery, etc., Plank Road Co. v. Webb, 27 Ala. 618. And where it is shown that the relation of a man and woman cohabiting was in its origin meretricious, the presumption is that it continued to be of such a character. Thus in Smith v. Smith, 4 Paige (N. Y.) 432, 437 (27 Am. Dec. 75), the Chancellor said:

“And certainly, if courts of justice are to draw the same conclusions which everybody else would draw from the same facts, when it is once established that an adulterous intercourse has commenced between parties, and they are found living together, under circumstances which would induce every unprejudiced mind to conclude their inclinations had not changed, the fair presumption is that the illicit intercourse is still continued.”

To hold that it must positively appear that the liquor is on the premises at the time the warrant issues is to give to the statute a narrow and restricted construction which would make it valueless so far as “night” searches are concerned, and that in entire disregard of the express language of the statute that it is to be liberally construed to accomplish . its purpose. The construction which we are asked to give to the statute is not one which will accomplish the purpose of the statute, but will defeat it.

If the affidavit shows by positive allegations that intoxicating liquor was at a certain time on' the premises to be searched, and that the premises are used as a public restaurant in which food and liquor are sold and in which people are found who are in an intoxicated condition, the allegations in my opinion are sufficiently positive to meet the requirements of the statute. When these facts are shown, the legal presumption is that the condition shown to exist continues for a reasonable time thereafter; nothing to. the contrary appearing. What is a reasonable time in such eases is a question of law for the court depending upon all the circumstances of the particular ease. Quam longumt debet esse rationabile tempus non definitur in lege, sed pendet ex discretione justiciari-orum. Co. Litt. 50.

I am unable to see any reason for holding that the affidavit, upon which the search warrant in this case was issued, was not sufficiently positive in its allegations, or facts alleged to exist were so remote in time as not to justify the issuance of the warrant. The allegations contained in it made out probable cause. It described the person and the place: “The Hollywood Cabaret located in the basement of the building at 203 West Forty-Ninth street, borough of Manhattan, city and Southern District of New York.” The affiant added: “I was introduced to the man in charge of the cabaret, whose name is Leo Bernstein.”

But as the warrant directed that the search might be made at any time of the day or night, it was necessary that the affidavit should be positive that “the property is on the person or in the place to be searched.” The affiant in his affidavit stated that “from my observations and purchases therein I am positive that liquor is possessed on said premises.” That affidavit was made on February 21, 1924, and the warrant issued three days later. It is true that the facts upon which the officer seems to have based his positive allegation that “liquor is possessed on said premises” were the facts he sets forth as having been discovered by him on January 30th:

. “Leo Bernstein (the man in charge of the cabaret) called the waiter and told him to give us anything we wanted. * * * We ordered from the waiter drinks of Scotch whisky. * * * While drinking the Scotch whisky, Bernstein came to our table and asked us if everything was all right and we were all taken care of. He told us that we could have anything we wanted and later brought a girl to me and insisted that I dance with her. She claimed to be the 'hostess’ in the cabaret and ordered drinks of Scotch whisky for which we were compelled to pay $1.50 a drink. I drank some of the whisky, and as I am familiar with the taste of whisky I know that it was whisky.”

Under the circumstances of this ease, it was not, in my opinion, unreasonable to conclude that the condition of things shown by positive testimony to exist on January 30, 1924, in the Hollywood Cabaret, continued to exist for a reasonable time thereafter, and that the time which actually elapsed before the- warrant in this ease was issued was not so unreasonable a time under the circumstances shown as destroyed the presumption and invalidated the warrant.

The fact that when the search authorized by the warrant was made the officer found •liquor on the premises as alleged and took it into his possession shows that the presumption was not unfounded in fact.

The opinion of the majority rests on the asserted difference in meaning of the words “positive” and “probable.” Under the Fourth Amendment of the Constitution, no-warrant can issue but upon probable cause, and under the Prohibition Act no warrant can direct a search to be made at night unless, as before stated, the affidavit upon which it is obtained is positive that the -property is in the place to be searched.

“Probable” is defined in the New Standard Dictionary as: “Being so supported by evidence as to incline the mind to belief rather than to disbelief, yet leaving room for doubt; having more than half the chances favorable; apparently true, yet possibly false; likely.” And in defining “probable cause” in criminal law, the same authority defines it as “a state of facts to warrant a man of ordinary caution in believing that the accused had committed the crime' charged.”

The same authority defines “positive” as “not admitting of doubt or denial; incontestable; undeniable; certain; sure; as, proof positive.” And Bouvier’s Law Dictionary defines “positive” as “express; absolute; not doubtful.”

To say that something that existed at midnight of January 1st, because the affiant saw it, existed at 2 o’clock on the same night, although the affiant had not seen it in the meantime, is not “absolute” and “certain” proof of its existence at the latter hour. But the circumstances nevertheless may be of such a nature that the affiant is absolutely certain that the thing still exists. A. meets B. on the street and talks with him and sees that he is apparently well. If two hours later A. makes an affidavit to the fact that B. is alive, the affidavit is positive in character although the affiant cannot be indubitably certain that B. is still alive. He cannot be certain of the fact in the same way that he is certain that two and two make four. And the statute does not require that kind of certainty. To say about anything human and transitory that something which existed an hour ago, because one saw it then, is now although the party asserting it has not since seen it, is a mode of assertion impossible about anything human. And when the statute relating to search warrants requires positive knowledge of the existence of certain facts, it certainly cannot mean an absolute knowledge and certainty which is unattainable. To hold otherwise is to give to the statute an unreasonable construction.

And if A. enters the department store of John Wanamaker’s or of Maey’s and finds "them selling books on December 1st, he would be justified in making an affidavit two or three weeks later that both of those stores then had books on their premises. In the same way, if A. enters a night resort and there buys liquor and finds there persons who show plainly that they are under the influence of liquor, and the appearances all indicate that it is the business of that place to dispense liquor just as it is of Wanamaker’s or Macy’s to sell books, he is justified in being positive three weeks later that liquor is on the premises.

I think the order should be affirmed.

On Reargument.

ROGERS, Circuit Judge.

After the opinions were filed in the above eases an application for a reargument was made and granted. The reargument was allowed upon a single point. The decision of the majority of the court reversed the ease, and in remanding it to the court below it was with directions “to quash the warrants and restore the property seized under section 16 of the Espionage Act.” It is usual in cases of this nature, when property has been unlawfully seized under a void search warrant, 'to order it to be restored. And the question whether the property should be ordered restored was not considered at the argument in this court, which was confined to the legality of the seizure and the validity of the warrant. On the filing of the decision the United States asked a reargument upon the question whether the liquors should have been ordered restored. A reargument having been allowed, and counsel having been heard upon the question of the restoration of the liquors, we shall proceed now to dispose of the question.

In case No. 57 the transcript contains the amended notice of motion made in the District Court. It stated that a motion would be made in that court on the 18th day of March, 1924, at 10:30 o’clock in the forenoon of that day, or as soon thereafter as counsel could be heard, for an order to return the property seized under the search warrant, and to vacate and set aside the warrant and the seizure thereunder, for the reasons stated therein. The notice was signed by an attorney for the plaintiffs in error. The notice, after being properly entitled, began : “Please take notice that George Ham-, mond and Leo Bernstein, the owners of the premises above described” (Hollywood Cabaret), would move the court for .an order to return the property seized under- the search warrant and to vacate and set aside the' search ' and seizure thereunder.' It contains no allegation that the alleged owners of the premises were in possession of the premises at the time of the search and seizure, or that they were the owners of the liquors which were seized.

There is- nc thing to show what means of information the attorney has as to the ownership of the premises, and no information as to why there is no affidavit from any one who claims ownership or right of possession. The only sworn statement from any one on any subject, which the transcript contains, is the affidavit of an employee of the Treasury Department, and which was made by him in applying for a search warrant; and that affidavit does not disclose either who owned or was in possession, of the premises, which were searched, or who owned or was in possession of the liquors, which were seized. It does contain a statement concerning a visit which the employee had made to the cabaret and what he himself did there. He stated in his affidavit that while he was in the place he was introduced to the man “in charge of the cabaret, whose name is Leo Bernstein.” He adds that Bernstein called a waiter “and told him to give us anything we wanted.” This is not evidence that Bernstein either owned the cabaret or was in the possession of it. He may have been no more than a head waiter in charge of the other waiters. If a court is going to return property which has been unlawfully seized, it should be restored to the one from whose possession it was unlawfully taken, or to one who claims it as owner. There is "no sworn testimony in this ease which shows that these liquors were taken, from the possession of any of the parties to the suit, or that any one of them claims them as owner.

In case No. 58 the notice of the motion to be made in the District Court, which was also signed by the attorney for the defendants, there being five such defendants, simply states that “the owners of the premises above described” will move for' an order to return the property seized under said search warrant, and to vacate and set aside the search and seizure. There is no allegation whatever as to who the owners of the liquors are, or as to who owned or had possession of the premises at the time when the place was searched and the liquors were taken.

The only sworn statement in case No. 58 is the affidavit made in the application for the search warrant. That affidavit differs materially from the one already discussed in case No. 57. It contains no reference to any one of the parties who allege themselves to be the plaintiffs in error herein. The officer states that having entered, “and after being O. K.’d by the head waiter, Charles Erickson, I was turned over to a waiter whom Erickson told to take care of me.” He then goes on to tell what he did and what he saw. There is absolutely not a scintilla of proof, or even an unsworn specific allegation, as to who owned or had possession of the premises entered and searched, or the liquor that was seized. The National Prohibition Act (41 Stat. 305) provides that “a search warrant may issue as provided in title XI of public law numbered 24 of the Sixty-Fifth Congress, approved June 15, 1917, and such liquor, the containers thereof, and such property so seized shall be subject to such disposition as the court may make.” Title 2, § 25 (Comp. St. Ann. Supp. 1923, § 10138%m):

The act approved June 15, 1917 (40 Stat. 228) is the act known as the Espionage Law. And section 16 of title 11 of that act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 10496%p) reads as follows: “If it appears that the property or paper taken is not the same as that described in the warrant or that there is no probable cause for believing the existence of the grounds on which the warrant was issued, the judge or commissioner must cause it to be restored to the person from whom it was taken; but if it appears that the property or paper taken is the same as that described in the warrant and that there is probable cause for believing the existence of the grounds on which the warrant was issued, then the judge or commissioner shall order the same retained in the custody of the person seizing it or to be otherwise disposed of according to law.”

It is claimed that the provision above cited from the National Prohibition Act, declaring that a search warrant may issue as provided in the Espionage Act, makes the ultimate disposition of liquor, if improperly seized, subject to section 16 of the latter act. Assuming, for the purposes of the argument, that that claim is well founded, but not now deciding that it is well founded, it is sufficient to call attention to the fact that under section 16, if the warrant was improperly issued, the liquor is to be “restored to the person from whom it was taken.”

But the difficulty is that neither in case 57 nor in case No. 58 does the transcript of record disclose the person from whom the liquor was taken. There is no sworn 'statement from any one that the liquor was taken from his possession. There is no sworn statement showing who was in possession of the premises at the time the seizure was made. An unsworn statement in the course of the proceedings in case No. 57 that certain parties “owned” the premises upon which a part of the liquor was seized affords no evidence that they owned the liquor which was found thereon, or even that they, were in possession of the premises at the time of the seizure.

Upon such a state of facts we are satisfied that the inadvertent order contained in the opinion originally filed should be modified, by striking from the direction given to the court below the words “and restore the property seized under section 16 of the Espionage Act.” The liquor can only be restored, if it is to be restored, to one who at least claims to be the owner, or to have had it in his possession when it was wrongfully seized.

And it is so ordered.


source: Caselaw Access Project

author: ROGERS, Circuit Judge.

license: Public Domain

text:
    OLIVER AMERICAN TRADING CO., Inc., v. GOVERNMENT OF THE UNITED STATES OF MEXICO et al.
    (Circuit Court of Appeals, Second Circuit.
    December 15, 1924.)
    No. 96.
    1. International law <@=>10 — Suit against the United States of Mexico and government instrumentality held not maintainable, in view of defendant’s sovereignty.
    Suit against United States of Mexico and National Railways of Mexico, a government instrumentality, to recover for railroad property seized and retained by defendants, held not maintainable, in view of independent sovereignty of defendant notwithstanding it was instituted at time when diplomatic relation between United States of America and defendant sovereign had been interrupted; plaintiff’s rights being controlled by treaty proclaimed on March 3, 1924, arts. 1, 8.
    2. States <@=>191 (1) — United States <@=>125— Neither the United States nor any individual state can be sued In any state or federal court without its consent.
    Neither the United States nor any individual state can be sued in any state or federal court without its consent.
    3. States <§=>191 (I) — Consent of state to be sued may be withdrawn, even though pending suits are defeated thereby.
    Consent of state to be sued may be withdrawn, even though pending suits are defeated thereby.
    4. International law <@=>10 — Mexican government, operating National Railways of Mexico, is engagedjn governmental enterprise, as af-
    . fects its liability to suit.
    The Mexican government, operating National Railways of Mexico, is engaged in a governmental enterprise, as affects its liability to suit.
    5. Evidence <§=>26 — Courts take judicial notice that in leading countries of Europe and in Canada it is the practice of governments to own and operate railways.
    Courts take judicial notice that in leading countries of Europe and in Canada it is the practice of governments to own and operate railways.
    6. Appeal and e'rror <§=>714(1) — Facts not appearing of record, and not even alleged to be .true, held not entitled to consideration on appeal.
    On appeal from order, sustaining motion to vacate attachment and dismiss suit, facts not appearing in record, but which plaintiff thinks it can prove, if case goes to trial, and which it does not even allege to be true, must be disregarded.
    In Error to the District Court of the United States for the Southern District of New York.
    Action by the Oliver American Trading Company, Inc., against the Government of the United States of Mexico and the National Railways of Mexico. To review an order vacating- an attachment and dismissing suit, plaintiff brings error.
    Affirmed.
    Robert E. Greacen and Alfred Hayes, both of New York City, for plaintiff in error.
    Hardin & Hess, of New York City (Jerome S. Hess, Harold B. Elgar, and Ernest Angell, all of New York City, of counsel), for defendants in error.
    Before ROGERS, HOUGH, and MANTON, Circuit Judges.
   ROGERS, Circuit Judge.

This is an action at law for damages arising out of an alleged breach of contract in which the amount in controversy is $1,164,348.90. The suit was commenced on October 18, 1922, in the Supreme Court of New York. Service was made by attaching tangible personal property and credits within the state alleged to belong to the defendants and summons. Thereupon the government of Mexico appeared specially in the action and seasonably moved to vacate the attachment and to dismiss the suit. Before the motion was heard the case was removed by the defendants to the United States District Court for the Southern District of New York. Mexico then appeared in that court specially and procured a rule that the plaintiff show cause why the attachment should not be vacated and the suit dismissed, upon the ground that it is “an independent sovereign nation” and as such immune from process of the courts except upon its consent. Before this motion was decided the government of Mexico was duly recognized by the United States of America, and diplomatic relations between the two governments, which had been interrupted, and were interrupted at the time the suit was brought, had been resumed. The District Court, having these facts before it, vacated the attachment previously granted, vacated and set aside any levy made thereunder, and declined to exercise further jurisdiction of the suit and dismissed the action. This ruling was thereupon certified by the District Court to the Supreme Court of the United States. This certificate it granted, as it supposed, in conformity with section 238 of the Judicial Code (Comp. St. § 1215) which is set forth in the margin.

The Supreme Court, however, held the case was not one which was properly before it, and that the writ of error from that court had been improvidently allowed, and directed that the case should be transferred to this court. This it did in conformity with section 238 (a) of the Judicial Code, as added by Act Sept. 14, 1922, e. 305, 42 Stat. 837 (Comp. St. Ann. Supp. 1923, § 1215a), which may also be found in the margin.

The Supreme Court (Oliver American Trading Co. v. United States of Mexico, 264 U. S. 440, 44 S. Ct. 390, 68 L. Ed. 778), holding that the ease was improperly before it, said: “The fact that the District Judge issued the certificate does not relieve this court from the duty of determining for itself whether the question which was certified is in truth one of the jurisdiction of the lower court as a federal court. Bogart v. Southern Pacific Co., 228 U. S. 137, 144; Smith v. Apple, 264 U. S. 274. Such a question is presented whenever there is in controversy the power of the court, as defined or limited by the Constitution or statutes of the United States, to hear and determine the cause. The Pesaro, 255 U. S. 216, 218. It is not presented where the question of jurisdiction to be decided turns upon matters of general law, applicable alike to actions brought in other tribunals. De Rees v. Costaguta, 254 U. S. 166, 173. The question of sovereign immunity is such a question of general law, applicable as fully to suits in the state courts as to those prosecuted in the courts of the United States.”

The plaintiff is a Delaware corporation — all the stock of which is owned by H. F. Oliver, an American citizen. The action was commenced by attachment and the service of a summons by the sheriff of the county of New York, together with notice that judgment would be taken for $1,164,348.90, upon the defendant, the government of the United States of Mexico. The National Railways of Mexico was also made a party defendant. The summons and notice were served on the government of Mexico by service upon its managing agent transacting business at the office of the financial agency of Mexico in the city of New York, and they were served upon the National Railways of Mexico by service upon its managing agent, another individual, who it is alleged was regularly transacting business at the office of such railways, also in the city of New York.

While the action is nominally against both the government of Mexico and the National Railways of Mexico, it is in reality a suit only against the Mexican government. Por it appears that the National Railways of Mexico is “merely a name” for a system of railroads in the possession of the Mexican government, and has been controlled and operated by Mexico since 1914 for national purposes, just as it operates the Post Office, the Customs Service, or any other branch of the national government.

This, then, is an action in personam, directed against the United States of Mexico, to recover damages for acts committed by it in Mexico. Process was served upon certain representatives of that government in the United States, and attachment levied upon such of the public property of that nation as the plaintiff has been able to find in this country.

It appears that the plaintiff, an American corporation, since its organization in 1915, has been engaged in the transaction of business in the United States and in Mexico. It claims that in January, 1921, it entered into a written agreement with the defendants by which the latter agreed to pay it a certain amount of money for each 1,000 pounds of tractive, effort of each locomotive which the plaintiff then had or which it should thereafter place in service upon the railroad lines upon the National Railways of Mexico. The plaintiff also claims that it had in its possession in Mexico certain railway freight ears, which the defendants took possession of and used for military, freight, postal, express, and other similar purposes, and for which they became liable to pay to the plaintiff a reasonable rental. It also claims that the government of Mexico illegally placed an embargo upon all the plaintiff’s locomotives in Mexico, which prevented it from removing any of the locomotives from Mexico, and which the courts of Mexico held to be illegal, but which the government of that country has nevertheless refused to release from the embargo, and continues to hold to the plaintiff’s damage.

It further alleges that the defendants have wrongfully repudiated their contract with it, and have forced the plaintiff to discontinue the profitable business which it had theretofore conducted in Mexico, with a resulting loss of its clientéle, its credit, and good will; and it is alleged that on account of the defaults of the defendants they are justly indebted to the plaintiff in the sum of $1,164,-348.90.

It appears that the government of Mexico never appeared in this action either in the New York Supreme Court or in the United States District Court, but, on the contrary, has continually protested the jurisdiction of ,the said courts over its person and property. Such appearances as it has made have been special appearances, made to raise the sole question of jurisdiction.

At the time this' suit was commenced the government of Mexico was a de facto government, which had not been recognized by the United States of America. But before the final order of the United States District Court, which is the order complained of, was entered, the government of the United States had accorded complete and unconditional recognition to the government of Mexico. It is contended that, as the suit was commenced and the jurisdiction of the court fully attached prior to the recognition of Mexico, its jurisdiction was not divested by the occurrence of that event.

In this country it has always been held as an attribute of sovereignty that the United States cannot be sued without its consent. United States v. McLemore, 4 How. 286, 11 L. Ed. 977; Hill v. United States, 9 How. 386, 13 L. Ed. 185; United States v. Clarke, 8 Pet. 444, 8 L. Ed. 1001; United States v. Eckford, 6 Wall. 484, 18 L. Ed. 920; Case v. Terrell, 11 Wall. 199, 20 L. Ed. 134. It is also true that a state of the United States cannot be sued in its own courts, or in the courts of one of the other states, or in the federal courts, by an individual, without its consent. Beers v. Arkansas, 20 How. 527, 15 L. Ed. 991; McArthur Bros. Co. v. Commonwealth, 197 Mass. 137, 83 N. E. 334; Sanders v. Saxton, 182 N. Y. 477, 75 N. E. 529, 1 L. R. A. (N. S.) 727, 108 Am. St. Rep. 826. And it has been held that the consent of a state to be sued, being voluntary, may be withdrawn by the state whenever it sees fit, even though pending suits are thereby defeated. Beers v. Arkansas, supra; Railroad Company v. Alabama, 101 U. S. 832; Ex parte State, 52 Ala. 231, 23 Am. Rep. 567. Therefore, upon the repeal of a statute authorizing the suit, the court in which the suit is pending can proceed no further.

In Memphis & C. R. Co. v. Tennessee, 101 U. S. 337, 339 (25 L. Ed. 960), Chief Justice Waite declared that “the principle is elementary that a state cannot- be sued in its own courts without its consent. This is a privilege of sovereignty.” The court in that case held that if, at the time a contract is made, a statute gives the right to sue the state, the subsequent repeal of the statute is not unconstitutional, as impairing the obligation of the contract. This conclusion was reached in view of the fact that a statute which merely confers a right to sue the states does not- give a complete judicial remedy. It merely enables the claim to be judicially ascertained, and “there the power of the court ends.”

In 1794 the French Governor of Guadeloupe was arrested in the United States for an official act committed in his own country. The matter was referred to the Attorney General, who advised that the official ought not to answer in our courts and that the extent of his authority could be determined only by the constituted authorities of his own nation. 1 Op. Attys. Gen. 45, 46. And in 1797, in another ease, the Attorney General advised that “a person acting under a commission from the sovereign of a foreign state is not amenable for what he does, in pursuance of his commission, to any tribunal of the United States.” 1 Op. Attys. Gen. 81.

In such eases the presumption is that for illegal acts committed in a foreign state the judicial tribunals of that state will afford proper redress. If he applies for such redress, and it is improperly denied him, he may resort to the executive department, but not to the judicial department, of his own government for its aid. In 1871 the Attorney General advised the Secretary of State that “it has often been laid down that, before a citizen of one country is entitled to the aid of his government in obtaining redress for wrongs done him by another government, he must have sought redress in vain from the tribunals of the offending power.” 13 Op. Attys. Gen. 550.

In Underhill v. Hernandez, 65 F. 577, 13 C. C. A. 51, 38 L. R. A. 405, this court, in 1895, held in effect that the military or civil agents of foreign governments, whether such governments are de jure or de facto, cannot be held responsible in any court of the United States for acts done within their own states in the exercise of the sovereignty thereof. The plaintiff was a citizen of the United States, and he sued the defendant for false imprisonment and assault and battery committed by the defendant in Venezuela— the defendant being the civil and military chief of the revolutionary party which had taken possession of the capitel of that country. In the course of the opinion of the court, Judge Wallace stated:

“Considerations of comity, and of the highest expediency, require that the conduct of states, whether in transactions with other states or with individuals, their own citizens or foreign citizens, should not be called in question by the legal tribunals of another jurisdiction. The citizens of a state have an adequate redress for any grievances at its hands by an appeal to the courts or the other departments of their own government. Foreign citizens can rely upon the intervention of their respective governments to redress their wrongs, even by a resort, if necessary, to the arbitrament of war. It would be not only offensive and unnecessary, but it would imperil the amicable relations between governments and vex the peace of nations, to permit the sovereign acts or political transactions of states to be subjected to the examination of the legal tribunals of other states.”

The case was carried to the Supreme Court and was there affirmed. In the opinion in that court, Chief Justice Fuller said: “Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to bé availed of by sovereign powers as between themselves.” Underhill v. Hernandez, 168 U. S. 250, 252, 18 S. Ct. 83, 84, 43 L. Ed. 456.

And in Oetjen v. Central Leather Co., 246 U. S. 297, 303, 38 S. Ct. 309, 62 L. Ed. 726, the statement above quoted from the opinion in Underhill v. Hernandez, supra, was cited with approval. The same case was also approvingly cited in American Banana Co. v. United Fruit Co., 213 U. S. 347, 358, 29 S. Ct. 511, 512, 53 L. Ed. 826, 16 Ann. Cas. 1047. In the latter case the court declared (at page 356) that the general and almost universal rule is that the character of an act as lawful or unlawful must be determined wholly by the law of the country where the act is done. And the court added: “For another jurisdiction, if it should happen to lay hold of the actor, to treat him according to its own notions, rather than those of the place where he did the acts, not only would be unjust, but would be an interference with the authority of another sovereign, contrary to the comity of nations, which the other state, concerned justly might resent.”

In 1813 the Supreme Court, in The Exchange, 7 Cranch, 116, 3 L. Ed. 287, affirmed the action of the Circuit Court for the District of Pennsylvania, which dismissed a libel which had been filed against a government vessel which was claimed by the emperor of France. In that case Chief Justice Marshall, after saying that it involved a very delicate and'important inquiry, went on to discuss territorial jurisdiction and said:

“This full and absolute territorial jurisdiction being alike the attribute of every sovereign, and being incapable of conferring extraterritorial power, would not seem to contemplate foreign sovereigns nor their sovereign rights as its objects. One sovereign being in no respect amenable to another, and being bound by obligations of the highest character not to degrade the dignity of his nation, by placing himself or its sovereign rights within the jurisdiction of another, can be supposed to enter a foreign territory only under an express license, or in the confidence that the immunities belonging to his independent sovereign station, though not expressly stipulated, are reserved by implication, and will be extended to him. This perfect equality and absolute independence of sovereigns, and this common interest impelling them to mutual intercourse, and an interchange of good offices with each other, have given rise to a class of cases in which every sovereign is understood to waive the exercise of a part of that complete exclusive territorial jurisdiction, which has been stated to be the attribute of every nation.”

And in 1824, in Osborn v. U. S. Bank, 9 Wheat. 738, 869, 6 L. Ed. 204, Chief Justice Marshall assumed as an axiom that “an independent foreign sovereign cannot be sued.”

In Briggs v. Light Boat, 93 Mass. 157, the Supreme Court of Massachusetts in a very elaborate and learned opinion discussed the law relating to the jurisdiction of the courts over property held by the sovereign for public uses. It reviews the English and American • cases quite fully in an opinion which has been commented on favorably in the courts of this country and in England. In his opinion Justice Gray (afterwards of the Supreme Court of the United States) stated that a foreign sovereign is not subject to suit in England for acts done in his sovereign capacity in his own country, even though himself a bom subject of England and a peer of the realm, and having as such taken the oath of allegiance and sat in the House of Lords, though at the time of suit actually resident in England. He cited Duke of Brunswick v. King of Hanover, 6 Beav. 1; s. c., 2 H. L. Cas. 1.

In 1908 the Supreme Judicial Court of Massachusetts had before it Mason v. Intercolonial Railway of Canada, 197 Mass. 349, 83 N. E. 876, 16 L. R. A. (N. S.) 276, 125 Am. St. Rep. 371, 14 Ann. Cas. 574. The action was brought in a Massachusetts court to recover damages for personal injuries received by the plaintiff while a passenger on the railroad in Canada. The suit was begun by trustee process against certain persons who had in their possession effects and credits belonging to the railway. The defendant did not appear. But a member of the bar of Massachusetts, as a friend of the court, brought before it the suggestion that the action be dismissed on the ground that the railroad described in the writ of the defendant was the property of the king of the United Kingdom of Great Britain and Ireland, and that it was owned and operated by him through'his government of Canada for the public purposes of Canada. These facts being made to appear, the court below dismissed the suit, and this was affirmed by the Supreme Judicial Court of Massachusetts.

Chief Justice Knowlton, writing for the court, after stating the facts, said: “ * * * The question at once arises whether the court has jurisdiction of a suit which is virtually against the king of a foreign country. An answer in the negative comes almost as quickly.” After reviewing the authorities he stated the conclusion of the court as follows: “The principles which have long been recognized as applicable to the dealings of all nations with one another, as well as the formal decisions of the courts, make it plain that this action must be dismissed for want of jurisdiction. The plaintiff must seek her remedy in the courts of the country in which she received her injury, where there is a statutory provision for such eases.”

In the above ease the tort was committed in Canada and funds of the railway, and therefore of Canada, were attached in Massachusetts. In the instant ease the breach of contract was committed in Mexico, and property of the government of Mexico was attached in New York.

It also appears that the Court of Queen’s Bench has held that property of a foreign sovereign in England cannot be taken upon a process of foreign attachment. Wadsworth v. Queen of Spain and De Haber v. Queen of Portugal, 17 Q. B. 171.

In The Parlement Beige, L. R. (1879-80) 5 Prob. D. 197, the Court of Appeal in England had before it an appeal from a decision of Sir. R. J. Phillimore. Proceedings in rem had been instituted against the Parlement Beige to recover damages caused by a collision. The Attorney General filed a protest, asserting that the court had no jurisdiction to entertain the suit as the vessel was the property of the king of the Belgians. It appeared that the boat was a mail packet and was officered by officers of the Royal Belgian Navy, and that, besides carrying mail, she carried merchandise and passengers and their luggage for hire. In the court below Sir Robert Phillimore sustained the right of the court to exercise jurisdiction, being of opinion that neither upon principle, precedent, nor analogy of general international law would, he be warranted in holding the vessel exempt from process. The ease was taken to the Court of Appeal, where it was unanimously reversed.

In his opinion in the Court of Appeal, Brett, L. J., stated the first question raised as follows: “Whether part of the public property of every sovereign authority in use for national purposes is not as much exempt from the jurisdiction of every court as is the person of every sovereign.” He then .went on in a full and carefully prepared opinion to consider the matter. After calling attention to the fact that it is a part of the law of nations that the person of the sovereign is exempt from adverse suit, and that in the same way some property of every sovereign-is admitted to be a part of the law of nations he stated that “the universal agreement which has made these propositions part of the law of nations has been an implied agreement.” He then considered whether the law of nations exempts all the public property of a state which is destined to the use of the state, and declared that the answer depended on “whether the principle, on which the agreement has been implied, is as applicable to all that other public property of a sovereign or state as to the public property which is admitted to be exempt. If the principle be equally applicable to all public property used as such, then the agreement to exempt ought to be implied with regard to all such public property. If the principle only applies to the property which is admitted to be exempt, then, we have no right to extend the exemption.”

He reviewed at length the English and. American authorities and stated the conclusion of the Court of Appeal as follows: “The principle to be deduced from all these-cases is that, as a consequence of the absolute-independence of every sovereign authority,, and of the international comity which induces every sovereign state to respect the independence and dignity of every other sovereign state, each and every one declines to-exereise by means of its courts any of its-territorial jurisdiction over the person of' any sovereign or ambassador of any other-state, or over the public property of any state which is destined to public use, or over-the property of any ambassador, though such sovereign, ambassador, or property be-within its territory; and, therefore, but for-the common agreement, subject to its jurisdiction.”

And in the concluding portion of his opinion he said: “If the remedy sought by an action in rem against public property is, as. we think it is, an indirect mode of exercising • the authority of the court against the owner of the property, then the attempt to exercise such an authority is an attempt inconsistent with the independence and equality of the state which is represented by such owner.”

In The Porto Alexandre, [1920] L. R. Prob. 30; the Court of Appeal had before it - the question whether a vessel owned or requisitioned by a sovereign independent 'state • and earning freight for the state was thereby deprived of its right to claim immunity, because she was employed in ordinary trading - voyages carrying cargoes for private individuals. The court below granted the im--munity, although the judge stated that it was with the greatest reluctance, as the vessel was being used in ordinary commerce. In his view the law as laid down in The Parlement Beige, supra, was that a sovereign state could not be impleaded, either by being served in personam or indirectly by proceedings against its property; and if that were the principle, he added, “it mattered not how the property was being employed.” The Court of Appeal unanimously affirmed his decision, each of the judges writing a concurring opinion. In the course of his opinion in the above case, Warrington, L. J., in commenting approvingly on the decision of the Massachusetts court in Briggs v. Light Boats, supra, said:

“There is one passage in the judgment of Judge Brett, L. J., in The Parlement Beige, 5 P. D. 213, in which he is expressing what he considers to be the result of the judgment in Briggs v. Light Boats, 93 Mass. 157, an American ease, of which he obviously approves and on which he founds his own conclusion. He says: ‘The ground of that judgment is that the public property of a government, in use for public purposes, is beyond the jurisdiction of the eourts of either its own or any other state, and that ships of war are beyond such jurisdiction, not because they are ships of war, but because they are public property. It puts all the movable public property of a state, which is in its possession for public purposes in the same category of immunity from jurisdiction as the person of a sovereign, or of an ambassador, or of ships of war, and exempts it from the jurisdiction of all eourts for the same reason, viz. that the exercise of such .jurisdiction is inconsistent with the independence of the sovereign authority of the state.’ ”

In Luther v. James Sagor & Co., [1921] L. R. 3 K. B. 532, the plaintiff claimed title do certain property in England as the original owner of the property in Russia, where the plaintiff had a factory. The plaintiff claimed that in 1919. the Soviet government, without any light or title to do so, seized all the stock at the plaintiff’s mill in Russia and then sold it to the defendant. The Soviet .government at that time had not been recognized by England, and it was claimed the seizure was a pure robbery. The defendants, an English firm, claimed through purchase from the Russian Commercial Delegation in London, acting in behalf of Soviet Russia. In the court below the plaintiff obtained judgment on the ground that the English government did not recognize the Soviet government as the government of a sovereign state. Pending an appeal England recognized the Soviet government as a de facto state. The appellate court thereupon reversed the lower court. It was held to be all one, so far as the question involved was concerned, whether the foreign government was recognized as a government de jure or de fac-to. Warrington, L. J., in his opinion stated that, while the acts complained of were committed prior to recognition, the recognition subsequently accorded was to be treated as retroactive. He said that, if the act in question was an act of the state so recognized, “it must in my opinion, be entitled to the same respect as the act of a sovereign state, whether done before or after recognition. We have not been referred to, nor have I found, any authority in the English law on the point, but there are decisions of the Supreme Court of America directly supporting the view I have expressed.” In his opinion and in that of Serutton, L. J., the decisions of the Supreme Court are quoted approvingly.

It is said that the Mexican government, in operating the National Railways of Mexico, is engaged in trade and in a nongovernmental enterprise. This view of the matter we do not accept. It is a fact, of which we take judicial notice, that in the leading countries of Europe, as well as in Canada, it is the practice of governments to own and operate the railways. This is not regarded by them as engaging in trade, but as the performance of a fundamental governmental function.. It evidently is so regarded in Mexico, and while in the United States the railways are not owned and operated by either the state or federal governments, we are not justified, on that account, in holding .that the Mexican government is engaged in trade, and not performing a governmental function, in operating the National Railways of Mexico.

The plaintiff has urged upon our attention the recent decision of State of Georgia v. City of Chattanooga, 264 U. S. 472, 44 S. Ct. 369, 68 L. Ed. 796. That involved the question whether land acquired and held by the state of Georgia within the borders of Tennessee, with the consent of the latter state, remained subject to the eminent domain power of the state in which the land lay, and was subject to be condemned by that state, or her authorized municipality, for public purposes. The court simply held that the power of eminent domain is an attribute of sovereignty, and inheres in every independent state. It was said that power is deemed to be essential to the life of the state, and it was added: “It cannot be surrendered, and, if attempted to be contracted away, it may be resumed at will.” It was also declared that “land acquired by one state in another state is held subject to the laws of the latter and to all the incidents of private ownership.” We are unable to see the application of the principle laid down in that case to the facts of the ease now before the court. It fails to establish the proposition, for which the plaintiff contends, that the government of Mexico occupies the same position as does a private corporation when it engaged in the operation of a railway system.

In a reply brief submitted to this court the plaintiff stated: “It does not assert that Mexico operated its railways in the United States.” It later filed a “supplemental reply brief,” in which it declared that it withdrew the statement above quoted, and gave as its reason for doing so “that, while the facts do not appear in this record, the plaintiff believes that upon the trial of this action the following additional facts, showing that the government of the United States of Mexico is within the ruling of the State of Georgia Case, will be proved.”- But plainly the additional facts not in the record, but which the plaintiff thinks it can prove if the case goes to trial, and which it does not even allege to be true, we manifestly must disregard.

The question whether a vessel owned or requisitioned by a foreign government and engaged in trade, and which is within the United States, is subject to the jurisdiction of our courts has not been decided. The matter was referred to in Ex parte Muir, 254 U. S. 522, 531, 41 S. Ct. 185, 187, 65 L. Ed. 383 (1921), where it was said to be “one of obvious delicacy and importance. No decision by this court up to this time can be said to answer it.” And again in Ex parte Hussein Lutfi Bey, 256 U. S. 616, 41 S. Ct. 609, 65 L. Ed. 1122 (1921), it was alluded to as “important and also new.” The court added that its “proper solution is not plain, but debatable.” But the question which is now presented tq us is not the question adverted to above, and bears no analogy to it. This record does not disclose that Mexico is operating a railroad in the United States- or is here engaged in trade.

The United States of America and the United States of Mexico have entered into a convention which provides for the amicable settlement and adjustment of claims by the citizens of each country against the other. The convention was concluded and signed at Washington on September 8, 1923. It was ratified by this country on February 4, 1924, and by Mexico on February 16, 1924; and, ratifications having been exchanged by the two governments, it was proclaimed by the President of the United States on March 3, 1924. 43 Stat. pt. 2, p. 110. The treaty provides in article 1 as follows:

“All claims * * * against Mexico of citizens of the United States * * * for losses or damages suffered by persons or by their properties * * * and all claims for losses or damages originating from acts of ' officials or others acting for either government and resulting in injustice * * * as well as any other such claims which may be filed by either government * * * shall, be submitted to a commission.”

The claim involved here appears to he a claim for damages arising “from acts of officials or others” acting for the government of Mexico; and an examination of the treaty shows that the government .of the United States has agreed that the claims of its citizens against the government of Mexico are to be decided by a commission created for the .purpose of adjudicating such claims; and article 8 makes the decision of the commission final and conclusive. Treaties are made by the Constitution of each country the supreme law of the land. Nevertheless the plaintiff in error contends that the treaty cannot divest the courts of their constitutional jurisdiction, and it also contends that there is nothing in the treaty which indicates an intent to deprive one of his right to resort to the courts. This is to assume that the plaintiff has a cause of action which, irrespective of the treaty, it has a right to submit to the courts. It is enough to say that we do not agree that it had any such right after the government of the United States recognized the government of Mexico; and .the treaty shows that the two governments have not left their citizens remediless respecting such claims as those now before us. In our opinion, the treaty does not-deprive the plaintiff of any right or remedy, but it provides a remedy which the courts of the United States do not afford.

We are aware of the importance .of the question this ease raises. We have had the benefit of a full and able presentation of the case by counsel, and have examined the decided eases with care; and we are not in doubt as to what our decision should be. The District Court, in our opinion, was without jurisdiction, as the property involved was that of the government of Mexico, and was used by it in tbe performance of what it considers a governmental function. The property sought to be reached in this country is the public property of Mexico, and is movable property, which that government holds for public purposes, and, being such, it is entitled to the same immunity as a sovereign, or an ambassador, or a ship of war, and for the same reason. The exercise of such jurisdiction by the courts of this country is inconsistent with the independence and sovereignty of Mexico.

The order vacating the attachment and dismissing the suit is affirmed.

       “Sec. 238. Appeals and writs of error maybe taken from the District Courts, including the United States District Court for Hawaii, direct to the Supreme Court in the following cases: In any case in which the jurisdiction of the court is in issue, in which case the question of jurisdiction alone shall be certified to the Supreme Court from the court below for decision; from the final sentences and decrees in prize causes; in any case that involves the construction or application of the Constitution of the United States; in any ease in which the constitutionality of any law of the United States, or the validity or construction of any treaty made under its authority is drawn in question; and in any case in which the Constitution or law of a state is claimed to be in contravention of the Constitution of the United States.” 36 Stat. 1157.

       If an appeal or writ of error has been ’or shall be taken to, or issued out of, any Circuit Court of Appeals in a case wherein such appeal or writ of error should have been taken to or issued out of the Supreme Court; or if an appeal or writ of error has been or shall be taken to, or issued out of, the Supreme Court in a case wherein such appeal or writ of error should have been taken to, or issued out of, a Circuit Court of Appeals, such appeal or writ of error shall not for such reason be dismissed, but shall be transferred to the proper court, which shall thereupon be possessed of the same and shall proceed to the determination thereof, with the same force and effect as if such appeal or writ of error had been duly taken to, or issued out of, the court to which it is so transferred.”


author: ROSE, Circuit Judge.

text:
    RYAN v. UNITED STATES.
    (Circuit Court of Appeals, Fourth Circuit.
    April 24, 1925.)
    No. 2338.
    1. Indictment and information <§=>41 (5) — Where warrant was issued after accused’s arrest, information'need not be submitted to court for approval with sworn evidence of probable cause.
    Where warrant was sworn out against accused after his arrest, information need not be submitted to court for approval with sworn evidence to show probable cause; Fourth Amendment not being applicable.
    2. Indictment and information <§=52(I) — Defendant arrested on warrant, or voluntarily coming into court, may be put on trial on unverified information.
    Defendant arrested on proper warrant, or voluntarily coming into court, may be put on his trial on unverified information.
    3. Criminal law <§=>394 — Evidence of arrest and finding of liquor admissible when officer had probable cause.
    Evidence that officer without warrant arrested accused while he was in automobile or about to leave it, with intoxicating liquor in his possession, was admissible, where officer had probable cause for belief that intoxicating liquors were being transported.
    In Error to the District Court of the United States for the Southern District of West Virginia, at Huntington; George W. MeClintie, Judge.
    William T. Ryan was convicted of unlawfully selling and transporting intoxicating liquor, and he brings error.
    Affirmed.
    J. Raymond Gordon, of Charleston, W. Va., for plaintiff in error.
    Lawrence L. McClure, Asst. U. S. Atty., of Huntington, W. Va., and B. J. Petti-grew, Asst. U. S. Atty., of Charleston, W. Va. (Elliott Northcott U. S. Atty., of Huntington, W. Va., on the brief), for the United States.
    Before WOODS, WADDILL and ROSE, Circuit Judges.
   ROSE, Circuit Judge.

William T. Ryan, plaintiff in error, was the defendant below and will be so described here. He was convicted of transporting and selling intoxicating liquors as charged in the first and second of the three counts of an information exhibited against him by the United States ■ attorney. He makes in all 21 assignments of error. Little or no mention was made of most of them, either in the brief or in the oral argument of his counsel. As to nineteen of them, it is sufficient to say that no one of the number calls attention to any error which, under the circumstances, could have been prejudicial. The remaining two relate to the legality of the information and to the admission of evidence as to what was found on the defendant’s person at the time of his arrest.

He was first taken into custody without any warrant, but subsequently one in due form was sworn out against him. In ordinary course, he had his hearing before the United States commissioner. Witnesses were there sworn and examined. A finding of probable cause was made, and the defendant was held to bail for the action of the District Court. Thereupon, the United States attorney filed against him the information now assailed.

The learned counsel for the defendant argues that it is fatally defective because the United States attorney did not, before filing it, submit it to the court with sworn evidence to show that there was probable cause for believing the defendant guilty of the offenses charged in it. That contention is, however, inconsistent with the express decision of the Supreme Court that “the United States district attorney, in virtue of his official duty and to the extent that criminal charges are susceptible of being preferred by information, has the power to present such informations without the previous approval of the court.” United States v. Thompson, 251 U. S. 407, 413, 414, 40 S. Ct. 289, 292 (64 L. Ed. 333). There is no requirement, constitutional or statutory, that an information shall be verified or supported by the sworn statements of individuals having personal knowledge of facts which show the existence of probable cause, unless upon it there is to be issued a warrant for the arrest of the accused. Such support is then necessary, not to sustain the information as such, but because the Fourth Amendment provides that no warrants “shall issue, hut upon probable cause, supported by oath or affirmation, and particularly describing the * * * persons to be seized.” If the defendant has been arrested upon a proper warrant or voluntarily comes into court, he may be put upon his trial upon an unverified information. Weeks v. United States, 216 F. 292, 132 C. C. A. 436, L. R. A. 1915B, 651, Ann. Cas. 1917C, 524. See, also, Muncy v. United States (C. C. A.) 289 F. 780.

At the trial below, evidence was introduced by the government, over the objection of the defendant, that he was arrested in an automobile, or as he was about to leave it, and in which he had been carrying in his hand under his coat a paper bag containing two or three pint bottles of moonshine liquor. The officer who made the arrest was without a warrant. It is sufficient to say that the record discloses that there were facts and circumstances within the knowledge of the officer making the arrest, or, of which he had reasonably trustworthy information, sufficient in themselves to warrant a man of reasonable caution in the belief that intoxicating liquor was then being transported in defendant’s machine. Carroll v. United States, 45 S. Ct. 280, 69 L. Ed. -, decided by the Supreme Court March 2, 1925; Ash v. United States (C. C. A.) 299 F. 277; and Milam v. United States (C. C. A.) 296 F. 629.

Affirmed.


author: EYAN A. EYANS, Circuit Judge.

text:
    In re ESSENKAY PRODUCTS CO. CANNON v. McKEY.
    (Circuit Court of Appeals, Seventh Circuit.
    April 14, 1924.
    Rehearing Denied May 18, 1925.)
    No. 3249.)
    Bankruptcy ®=o346 — Tax claims against bankrupt have precedence over wage claims; “dividends to creditors.”
    Under Rev. St. §§ 3186, 3466 (Comp. St. §§ 5908, 6372), and Bankruptcy Act, §§ 64a, 64b (Comp. St. § 9648), tax claims against bankrupt’s estate have precedence over all other claims, including wag'e claims; “dividends to creditors,” as used in section 64a, not being limited to claims of general creditors, but including any dividend.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Dividend (in Bankruptcy).]
    Petition to Review and Revise the Order of the District Court of the United States for the Eastern Division of the Northern District of Illinois.
    In the matter of the Essenkay Products Company, bankrupt. On petition by John C. Cannon, Collector, to review and revise an adverse order of the District Court, opposed by Frank M. MeKey, trustee in bankruptcy.
    Order reversed, with directions.
    R. M. Shaw, of Chicago, Ill., for petitioner.
    Gilbert F. Wagner, of Chicago, Ill., for respondent.
    Before BAKER, EVAN A. EYANS, and PAGE, Circuit Judges.
   EYAN A. EYANS, Circuit Judge.

Does the claim of the government for taxes have priority, under the Bankruptcy Act, over wage claims? This is the sole question presented by the record before us.

Much refinement of distinction over “taxes” and “debts” might be attempted, and the purpose of legislation preferring taxes, could be pointed out; but, as we view this question, it is one of statutory construction, with recognized objects and purposes as a background. Considering sections 3466 and 3186 of the Revised Statutes (Comp. St. §§ 6372, 5908), as well as sections 64a and 64b of the Bankruptcy Act (Comp. St. § 9648), the conclusion that taxes were placed ahead of all other debts, seems unavoidable. The language of section 3466 admits of no exception : “Whenever any person indebted to the United States is insolvent, * * * the debts due to the United States shall be first satisfied.”

The Bankruptcy Act confirms this expression of public policy. (Section 64a provides: “The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, * * * in advance of the payment of dividends to creditors. * * * ” This provision not only is declarative of the policy of the government respecting taxes due it, but lays down a rule of practice governing the distribution of the assets of a bankrupt estate.' It provides the authority for those in charge to proceed, before questions of payment of dividends arise, to pay and to pay promptly the taxes due the sovereign.

The dividends referred to are not merely those payable to general creditors, but include any dividend. It is urged that a dividend is a partial payment of a claim, and does not contemplate á payment in full. Yet the Congress was speaking of dividends in the abstract, and the present ease is an illustration of the possibility of a dividend being paid to a wage earner preferred by section 64b.

Moreover, there is much of merit in Judge Gilbert’s observation in United States v. Oliver (C. C. A.) 290 F. 160: “It is true that the term ‘dividends to creditors’ ordinarily refers to dividends to general creditors. But it does not necessarily have that meaning. A dividend is that which is to be divided. In bankruptcy it is the sum of money which is to be divided among two or more creditors. It is not necessarily a partial payment. It is obvious that it may at times be a payment in full even as to general creditors.”

These conclusions find support in the language of various decisions; for example, in Guarantee Co. v. Title Guaranty Co., 224 U. S. 152, 32 S. Ct. 457, 56 L. Ed. 706, the court said: “Labor claims are given priority, and it is provided that debts having priority shall be paid in full. The only exception is ‘taxes legally due and owing by the bankrupt to the United States, state, county, district or municipality.’ ”

In In re Jacobson (C. C. A.) 263 F. 883, this court said: “Sections 64a and 64b of the Bankruptcy Act are in pari materia with section 3466. Debts due the United States, other than taxes, are not given the same protection in the two cited sections of the Bankruptcy Act as existed under the general statute, section 3466, or under the Bankruptcy Act of 1867.”

See, also, United States v. Oliver (C. C. A.) 290 F. 160; In re Kittenplan (D. C.) 285 F. 62; In re Weissman (D. C.) 178 F. 115; Remington on Bankruptcy (2d Ed.) § 2190; Black on Bankruptcy, § 621.

The order is reversed, with directions to enter a decree directing the payment of the taxes.

The conclusions herein reached were concurred in by Judge BAKER before his death.


author: SANBORN, Circuit Judge.

text:
    TANNER v. UNITED STATES.
    (Circuit Court of Appeals, Eighth Circuit.
    April 30, 1925.)
    No. 6743.
    Poisons <§=>9 — Evidence held to sustain finding defendant fraudulently'signed dentist’s name to order.
    In prosecution under Comp. St. § 6353, for having executed order form for opium and cocaine required by section 6287h and fraudulently signing thereto name of dentist registered Under section 6287g, evidence held to sustain finding that defendant had written order and signed thereto name alleged.
    In Error to the District Court of the United States for the Western District of Oklahoma; John H. Cotteral, Judge.
    R. S. Tanner was convicted of fraudulently signing name of dentist to and executing order form for opium and cocaine in violation of statute, and he brings error.
    Affirmed.
    J. Q. A. Harrod, of Oklahoma City, Okl., for plaintiff in error.
    W. A. Maurer, U. S. Atty., and James A. Ingraham, Asst. U. S. Atty., both of Oklahoma City, Okl.
    Before SANBORN and LEWIS, Circuit Judges, and POLLOCK, District Judge.
   SANBORN, Circuit Judge.

The defendant below was indicted, tried, and convicted of a violation of section 6353 of the United States Compiled Statutes 1918, in that he fraudulently signed the name of Dr. J. W. Eaton to and executed an order form for morphine and cocaine which was required by section 6287h, U. S. Compiled Statutes 1918, and which had been purchased from the collector of internal revenue by and was owned by Dr. Eaton, who was a dentist duly registered under section 6287g of the Compiled Statutes of 1918. The defendant sued out a writ of error, and his counsel has submitted his ease to this court on his brief, wherein he writes that the only question he sees in the ease worthy of consideration is whether or not the evidence was sufficient to show that Tanner wrote upon the order form an order directed to the McPike Drug Company for morphine and cocaine and signed the name of Dr. Eaton thereto. The record of the trial, however, discloses these 'facts: During the trial' counsel for the defendant admitted that Dr. Eaton was regularly and duly registered with the collector of internal revenue as a doctor of dental surgery, that the order form described in the indictment was purchased by him from the collector of internal revenue for the district of Oklahoma, that this order form was owned by him, and that it was taken from his office without his authority. Dr. Eaton testified that he did not fill out the blanks in the order form and that he did not sign it. The blanks were so filled as to order of the McPike Drug Company, Kansas City, Mo., to be sent to Dr. Eaton at Apperson, Okl., specified quantities of morphine and cocaine. Dr. Eaton lived at Soiling, Okl., but had formerly resided at Cheyenne, OH. About February 20, 1923, the MePike Drug Company received this order at Kansas City, Mo. When Dr. Eaton purchased the order form his name and address Cheyenne, Okl., was written upon it. When the filled order reached the MePike Drug Company, Cheyenne had been stricken out and Apperson had been ■written into the order and it purported to have -been signed by Dr. Eaton. The drug company delayed filling the order. On February 23, 1923, that company received this telegram:

“Burbank, OHa. 23, 7:45 p. m.
“M. C. Pile Drug Co., Kansas City, Mo.
“Wire me collect Apperson when my order wag sent. Dr. J. W. Eaton.”
On February 24, 1923, the drug company sent this answer:
“Dr. J. W. Eaton, Apperson, OHa.
“Answering shipping your order today express. MePike Drug Co.”

On February 26, 1923, the defendant Tanner called at the express office at Apperson and asked for the express for Eaton. He had called twice before the shipment arrived, and on the 26th some one had telephoned to the express company and had been informed that the shipment was there. Soon after this telephone, the defendant arrived, received the shipment, which consisted of. two packages, paid the charges for them, $52, and signed the delivery receipts therefor tendered him by the express company with the name J. W. Eaton.

There was no conflict of testimony in this case regarding the facts which have been stated, the position of counsel that they are as consistent with the innocence as with the guilt of the defendant of the charge of filling out the order and signing the order form with Dr. Eaton’s name to it is rendered clearly untenable by these facts, and the judgment below is affirmed.


author: WOODS, Circuit Judge.

text:
    EARLY & DANIEL CO. v. AMERICAN SURETY CO. OF NEW YORK.
    (Circuit Court of Appeals, Fourth Circuit.
    April 14, 1925.)
    No. 2325.
    I. Highways <®=»l 13(5) — Construction of contractor’s bond governed by law of state.
    In action on bond conditioned on contractor’s payment of persons furnishing “material” for construction of road, the question whether hay and stock feed consumed by live stock employed on the road contract were “materials,” within the contract, is governed by the state law.
    2. Highways 13(5)— Hay and stock feed, consumed by live stock used in construction of road, held “materials,” within contractor’s bond.
    Hay and stock feed, consumed by live stock employed in the construction of a road, held “materials,” within bond conditioned on contractor’s payment to all persons furnishing “materials” in or about construction of road.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Materials.]
    Appeal from the District Court of the United States for the Western District of North Carolina, at Asheville; Edwin Y. Webb, Judge.
    Suit by the American Surety Company of New York against the Early & Daniel Company and others. Judgment against the named defondant, and it appeals.
    Reversed.
    Clinton K. Hughes, of Asheville, N. C. (Frank Carter, of Asheville, N. C., on the brief), for appellant.
    Julius C. Martin, of Asheville, N. C. (Martin, Rollins & Wright, of Asheville, N. C., on the brief), for appellee.
    Before WOODS, WADDILL, and ROSE, Circuit Judges.
   WOODS, Circuit Judge.

In October, 1922, the Luck Company contracted with the state highway commission of North Carolina to furnish all labor and material and construct a road known as project No. 888. To secure the performance of the contract the contractor and the American Surety Company gave a bond which contained a provision that the contractor should “well and truly pay all and every person furnishing material or performing labor in and about the construction of said roadway all and every sum or sums of money due him, them, or any of them for all such labor and materials for which the contractor is liable.”

The American Surety Company on March 6, 1924, filed its complaint in the United States District Court for the Western District of North Carolina, alleging that several suits had been brought on the bond and that it was threatened with a multiplicity of suits. On these allegations it asked that all such suits be enjoined and that “the defendant and all persons claiming any sum or sums whatsoever to be due them on account of said work and labor done and material furnished be required to litigate and determine all their rights, if any they have, in this suit.” An order was made granting the relief asked. No objection was made to the jurisdiction of the court of equity.

The appellant, the Early & Daniel Company, set up a claim in the injunction suit for one ear of hay and one ear of mixed live stock feed sold to Luck Company at the price of $1,678.43. The hay and stock feed were consumed by live stock employed on the road contract covered by the bond. The District Court held that the Early & Daniel Company was not a “person furnishing materials * * in and about the construction of the said roadway” and rejected the claim for p a junen t under the bond.

The authorities are not in accord on the question whether coal, hay, oil, and other things consumed in the use are “material” used in the work or enterprise. The contract before us was made and was to be performed in North Carolina, and therefore the laws of that state govern. In Pocahontas Coal Co. v. Henderson Electric Light & Power Co., 118 N. C. 232, 24 S. E. 22, it was held that “material furnished” included coal consumed in running an engine used in the work. The same liberal meaning is given to material by the Supreme Court. Brogan v. National Surety Co., 246 U. S. 257, 261, 38 S. Ct. 250, 251 (62 L. Ed. 703, L. R. A. 1918D, 776). It was there said in reviewing the cases and considering the meaning of “materials [supplied] in the prosecution of the work” as used in federal statutes: “This court has repeatedly refused to limit the application of the act to labor and materials directly incorporated into the public work.”

These authorities are controlling, and it is therefore unnecessary to set out the sound reasoning, up on which they rest.

Reversed.