author: DAWSON, District Judge.

text:
    In re CHAPMAN et al.
    District Court, W. D. Kentucky.
    Feb. 26, 1931.
    F. M. Drake, Jno. K. Skaggs, and Gordon, Laurent & Ogden, all of Louisville, Ky., for insurance companies.
    Woodward, Hamilton & Hobson, of Louisville, Ky., for bankrupts.
   DAWSON, District Judge.

In this proceeding seven fire insurance companies are seeking an order of this court directing the bankrupts, who for many years 'have conducted a general fire insurance agency business in the city of Louisville, to turn over to the respective companies all their office copies of the so-called daily reports of the policies issued by the respective companies through said bankrupts as agents. This demand is made on the theory that these daily reports were required to be kept by the agent, for the reason that they were absolutely essential to the conduct of the business of the claimant company, and that, being a record absolutely essential to the proper conduct of the principal's business, such daily reports were at all times, and now are, the property of the companies issuing the policies covered by the reports. It appears from the evidence that it is the universal practice in the fire insurance agency business for the agent, at the time the policy is written, to attach one of these reports to the policy, mail one to the company issuing the policy, and retain one in his own office.

The proof heard on this motion wholly fails to establish any specific agreement between the insurance companies and the bankrupts that the copies kept by the bankrupts in their office shall be considered the property of the companies issuing the policies covered by the reports. Neither is there any satisfactory proof of any such universal practice or custom in the insurance business as to warrant me in holding that, when the relationship of principal and agent was established between the insurance companies involved here and the bankrupts, it was an implied part of the contract that the copies of the daily reports retained by the agent were the property of the insurance companies.

The companies rely on several authorities which hold, or tend to hold, that these reports are the property of the insurance companies issuing the policies covered by same, and that, when the agent for any cause severs his connection with the company, the company is entitled to possession of the agent’s .copies of the daily reports. These authorities, however, and the reasoning upon which they are based, do not seem to me to be at all persuasive. They nearly all have proceeded upon the theory .that the information embraced in these reports is in the nature of confidential information or trade secrets. Some of these cases not only adjudge that the insurance company is entitled to possession of these reports, but that the former agent can be enjoined from using copies of them for the purpose of competing with his former principal, or for the purpose of injuring in any way the business of his former principal. Other authorities upon the theory that the information is confidential have even gone to the extent of enjoining a former agent from in any way soliciting the customers with whom he dealt in behalf of his former principal. Most of these authorities, however, while holding that the agent can be enjoined from the use of such a record itself, or copies thereof, for the purpose of competing with his former principal, have declined to enjoin the agent from using such information about the business of his former principal as he could retain in his memory. The courts were driven to this latter conclusion largely because of the impracticability of enjoining a person from the use of his memory. However, if the premise of these cases, to the effect that the information is confidential, is sound, a court of equity, it seems to me, would have the power to effectively control even the memory of the former agent by enjoining him from in any way soliciting the'business of the customers of his former principal with whom he dealt while representing said principal.

I am persuaded, however, that the information obtained by a general insurance agent, while representing an insurance company, of the character contained in the so-called daily reports, cannot possibly be classed as confidential information. It has been developed in this ease — and it is a matter of common knowledge — that a general fire insurance agent, in soliciting fire insurance business, makes such solicitation, not in behalf of any particular company, but in reality in behalf of the agency, and, after the business has been secured, the agent then allots the business to such one of the companies represented by him as he may determine. The name of the insured, the character and description of the property to be insured, the amount of the insurance, and the character of the policy, are all information gathered by the agent at his own expense and before the insurance company to which the business is subsequently allotted ever comes into the picture. It is true that, as a matter of legal fiction as between the company to whom the policy is allotted and the insured, the agent, within the scope of his authority, is deemed to represent the company with whom the poliey is ultimately placed; but, as between the agent and the insurance company, this cannot very well be said to be true — certainly not to the extent of enabling a court to hold that the information thus obtained is the private and exclusive property of the insurance company with whom the poliey is ultimately written.

Therefore it seems to me that we must determine the relative rights of the company and of the agent to the agent’s office copies of the daily reports upon a broad survey of all the facts relating to the conduct of a fire insurance agency business, rather than by an application of the principles of law which apply to those cases where the records involved are records made for and kept, actually or constructively, in the possession of the principal, and based upon facts and information gathered at the principal’s expense. Having in mind the distinctive manner in which the fire insurance agency business is conducted, it is readily apparent that no such agency could conduct its business in a safe or systematic way, unless it kept for its own use records containing the very information embodied in the so-called daily reports. Indeed, such information always at hand is absolutely essential to the business of such an agency. If such an agent knew that these records were the property of the company, with the 'right in the company to take them out of his possession whenever it so desired, he would certainly keep a duplicate of that information as his own property, and the very fact that such is not done is one of the strongest arguments in support of the contention of the agents that their office copies of the daily reports are their own property, kept for their own business purposes. The fact that the insurance companies are in the habit, either direetly or through a distributing printer, of furnishing to their agents blank forms of the daily reports of itself, affords no support to the claim of the companies that the agent’s copy of this report, when filled out from information gathered by the agent at his own expense, becomes the property of the company. It is but natural that fire insurance companies, in their desire to secure satisfactory agents, strive to make agency connection with them attractive. Furnishing agents blank forms, by which a record of their business may be conveniently kept, is one way by which insurance companies can make connection with them attractive to agents, and I think under, all the evidence in this case it is fair to say that the copy furnished for the agent’s file is furnished primarily to serve the agent’s convenience, and not to meet the business necessity of the company.

Some suggestion has been thrown out in this ease that a different rule should obtain in those eases where the agency relationship is terminated while the agent is in arrears to Ms principal than is otherwise applicable, but there is no evidence in this case that there was any specific agreement between the companies involved here and the bankrupts that their office copies of the daily reports would become the property of the insurance companies if they should sever their connection with the companies while in arrears to them; nor is there any satisfactory proof of any such universal custom in the trade. Therefore the rights of the parties must be determined by a determination of the ownership of these agents’ copies of the daily reports at the time they were made and placed in the agent’s files. If they were the agent’s property, then I know of no rule of law which would automatically transform them into company property upon the agent quitting the company’s service while in arrears to it.

In view of what I have said, I feel constrained to hold that the records sought to be recovered here are the property of the bankrupts, and the motion of the claimants must therefore be deMed.


source: Caselaw Access Project

author: SIMONS, District Judge.

license: Public Domain

text:
    In re LOUIS WOHL, Inc.
    No. 10006.
    District Court, E. D. Michigan, S. D.
    May 27, 1931.
    Finkelston, Lovejoy & Kaplan, of Detroit, Mich. (Henry Glicman, of Detroit, Mich., of counsel), for trustee.
    Stevenson, Butzel, Eaman & Long and Butzel, Levin & Winston, all of Detroit, Mich., for claimants.
   SIMONS, District Judge.

TMs cause is now before the court upon exceptions to the report of the referees in bankruptcy disallowing the set-offs claimed by the trustee for the above-named bankrupt against proofs of claim filed by the claimants. The trustee’s claimed set-offs arise out of the following state of facts: Louis WoM, the principal stockholder of the bankrupt corporation, owning all of the stock except qualifying shares, and being its president and general manager, was formerly one of the principal stockholders and an executive of Fine-stine & Wohl, another corporation in the same line of business anc( at the same location, doing business under the style of the “Ames Company.” The latter corporation became a bankrupt prior to the organization of Louis Wohl, Incorporated, and all of its assets were acquired by the present bankrupt. At the time of the bankruptcy of Finestine & WoM that company owed the Detroit News and the Detroit Times each a substantial sum of money; the Detroit News- after crediting dividends of the bankrupt’s estate suffering a loss of $6,300, and the Detroit Times, after similar credit, a loss of $720. Upon the organization of the present bankrupt company both of the claimants herein were approached by Louis WoM, its president, with a view to entering into a contract for advertising in the newspapers published by the claimants. The claimants refused to enter into such contract unless the bankrupt would first obligate itself to make good the losses suffered by the claimants in the prior bankruptcy. To this WoM consented. The agreement with respect to payment of past losses was oral, but was fully carried out. The agreements for future advertising were the usual written contracts. In the present proceeding both claimants filed their proofs of claim for amounts due for advertising, and the trustee sought to set off against such amounts the payments made by the bankrupt to each of the claimants on the oral agreements referred to. The referee disallowed the set-off in each ease, and approved the claims. The court is now asked to review the referees’ findings.

The legal grounds upon which the trustee’s contentions are based are: (1) That the business of the Detroit News and the Detroit Times being the publication of newspapers of general circulation is so affected with a public interest that the claimants are under a. legal obligation to sell advertising to all merchants upon equal terms without discrimination, and this regardless of the absence of any legislation regulating the business of newspaper publishers; and (2) that the payment by the bankrupt of the debts of Finestine & Wohl discharged by the adjudication of that company in bankruptcy, were payments of illegal exactions constrained by business exigency, and therefore entitled to be recovered back by the Trustee. In so far as the second ■ contention is concerned, it is manifest that it is based on and subordinate to the first contention, so that the important and the only question to be here decided is whether the business of publishing newspapers is at the common law a business affected with a public interest.

The reasoning upon which trustee’s contention is based is interesting, and is substantially as follows: The United States Supreme Court in Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77, charted a new course with respect to certain businesses which, originally private enterprises and under no duty to serve for a reasonable compensation, became by reason of special elements dothed ¡with a public interest and under a duty to serve the public without discrimination. In Munn v. Illinois, two elements were relied upon: First, that the business was of great public importance; and, second, that' it was of a monopolistic character. It is here claimed that the newspaper business has become of such great public importance as to warrant the conclusion arrived at in the Munn case with respect to grain warehousemen, that the owners have granted to the public an interest in the property, and, further, that under the facts herein disclosed the Detroit News and the Detroit Times exercise what is virtually a monopoly in the evening newspaper field.

The doctrine of the Munn Case was later reaffirmed in the case of Budd v. New York, 143 U. S. 517, 12 S. Ct. 468, 36 L. Ed. 247, upon a similar state of facts, but in Brass v. North Dakota, 153 U. S. 391, 14 S. Ct. 857, 38 L. Ed. 757, the requirement of monopoly as a justification for regulation of private business was abandoned, and thereafter but one test remained as to when business became clothed with a public interest, and that was the importance of the' particular business. In the case of German Alliance Insurance Company v. Lewis, 233 U. S. 389, 34 S. Ct. 612, 58 L. Ed. 1011, L. R. A. 1915C, 1189, the Supreme Court extended the doctrine to cover not only property but personal contracts, and it is here urged that for every reason existing for declaring a fire insurance company as being affected with, a public interest there are many reasons which apply to a metropolitan newspaper. For specific application of what is claimed to be a general doetrine there is cited the case of Uhlman v. Sherman, 22 Ohio N. P. (N. S.) 225, a decision of a court of common pleas of Ohio, wherein it was specifically held that because of the great importance of the newspaper, the favors extended to it by the law in providing for the publication of official notices, and the general dependence, interest, and concern of the public therein, the newspaper has become clothed with a public interest, and that it therefore must be classed with warehouses, public wharves, inns, and many kindred lines of business which have been held so clothed.

There is next urged the ease of the Inter-Ocean Publishing Company v. Associated Press, 184 Ill. 448, 56 N. E. 822, 48 L. R. A. 568, 75 Am. St. Rep. 184, in which a large news association, whose business it was to-furnish telegraphic news .to its subscribers or members, was held to be a business upon which a public interest was engrafted, so that all newspaper publishers who desire to purchase the services of such association were entitled to do so without discrimination. The Inter-Ocean Case was followed and approved in the ease of News Publishing Company v. Associated Press, 114 Ill. App. 241. Finally there is urged a- consideration of the case-of Tyson v. Banton, 273 U. S. 418, 47 S. Ct. 426, 434, 71 L. Ed. 718, 58 A. L. R. 1236 (the theater ticket broker ease), and the case of Ribnik v. McBride, 277 U. S. 350, 48 S. Ct. 545, 72 L. Ed. 913, 56 A. L. R. 1327 (the-employment agency ease). These two latter eases are urged as authority, first, on the contention that the metropolitan newspaper meets the tests there indicated as to when a business is clothed with a publie interest, even though the specific business considered in each of - those eases did not meet such test, and, secondly, that the dissenting opinions read in the light pf the majority opinions indicate that where the publie importance and necessity should more clearly appear than they did in the cases cited, that it would be safe to conclude that the Supreme Court would arrive at a different conclusion with respeet to newspapers than it did with respect to theatre ticket brokers and employment agencies.

To claimants’ contention that in nearly all of the eases cited the courts were called upon to determine the validity of a price fixing statute, and that since here there exists, no regulatory act of the Legislature, they are not controlling, the answer is made, and apparently with some logic, that the validity of price fixing statutes depends upon whether or not the business sought to be regulated is at the common law a business clothed with a public interest, and that it is the nature of the business and its importance to the publie that determines its publie character, and not the fiat of the Legislature, and that in the instant case, while there is no state statute regulating the price which shall be charged by newspapers for advertising, yet in the absence of such legislation the newspaper, if clothed with a publie interest, is bound by the common law to serve without discrimination. Wolff Packing Co. v. Industrial Court, 262 U. S. 522, 43 S. Ct. 630, 67 L. Ed. 1103, 27 A. L. R. 1280.

Interesting as the foregoing argument is, it is not convincing. Amplifying the discussions in the eases cited as to when a business is affected with a publie interest, the United States Supreme Court, in Williams v. Standard Oil Company of Louisiana, 278 U. S. 235, 49 S. Ct. 115, 116, 73 L. Ed. 287, 60 A. L. R. 596, said of the doctrine of Munn v. Illinois, supra: “As applied in particular instances, its meaning may be considered both from an affirmative and a negative point of view. Affirmatively, it means that a business or property, in order to be affected with a publie interest, must be such or be so employed as to justify the conclusion that it has been devoted to a publie use and its use thereby in effect granted to the public [citing Tyson v. Banton, supra]. Negatively, it does not mean that a business is affected with a public interest merely because it is large or because the public are warranted in having a feeling of concern in respeet of its maintenance.” The. Tyson and the Ribnik Cases, far from showing that the trend of decision is as urged by the trustee, indicate rather that the Supreme Court has gone as far as it proposes to go in declaring private business to be affected with a public interest. The German Alliance Insurance Company Case goes as far in that direction as the Supreme Court is likely to go. As was said by Mr. Chief Justice Taft in National Union Fire Insurance Company v. Wanberg, 260 U. S. 71, 43 S. Ct. 32, 33, 67 L. Ed. 136, in upholding the regulation of hail insurance rates: “We agree that this legislation approaches closely the limit of legislative power, but not that it transcends it.” Certainly a newspaper published locally is not in any respeet to be compared in its public importance with an insurance company whose rates are determined by averages computed on losses suffered throughout the country.

Nor can any comfort be derived by the trustee from the dissenting opinion in the Tyson and the Ribnik Cases. Mr. Justice Holmes, with Mr. Justice Brandéis concurring, expressly, and Mr. Justice Stone with Mr. Justice Sanford concurring, inferentially, considered the whole matter as a question of legislative power: “The notion • that a business is clothed with a public interest,” said Mr. Justice Holmes, “and has been devoted to the publie use is little more than a fiction intended to beautify what is disagreeable to the sufferers.” There being here no state statute regulating the business of newspapers, no question of legislative power is involved.

Coming to the specific application of the doctrine invoked, the only case specifically holding a newspaper to be clothed with a pub-lie interest is the decision of the nisi prius court of Ohio in the case of Uhlman v. Sherman, supra. It is interesting to note that there the nisi prius judge frankly admitted that learned and diligent counsel on both sides were unable to find a parallel case, and that he himself had been unable to find one. It is also interesting to note that while it may be true that legislation declaring businesses affected with a publie interest as a. ground for regulating such businesses may be merely declaratory of the common law, that it has not been pointed out that any state has ever attempted to regulate the business of a newspaper on the ground that such business is one clothed with a public interest. The regulation of businesses generally under the police power is, of course, not here involved.

In the Inter-Ocean Case, it appears that the Associated Press had voluntarily sought corporate, existence to engage in an enterprise which invested it with among others the power of eminent domain. It was organized to purchase, erect, lease, operate, and sell telegraph and telephone lines, a business which is essentially public in its nature, and which renders a corporation so engaged amenable to public control. While the corporation never exercised the public powers thus conferred upon it, the court held that such powers were important in determining the character of the corporation under its charter, and the business in which it was actually engaged. It is quite true, as claimed, that the opinion in the Inter-Ocean Case is much broader than the decision, but it can only be read in the light of the facts there disclosed. Moreover, whatever may be urged in support of the reasoning of the Inter-Ocean Case as distinguished from what was there decided upon the facts, that reasoning has not been followed. It was specifically rejected in a similar ease by the Supreme Court of Missouri in State v. Associated Press, 159 Mo. 410, 60 S. W. 91, 51 L. R. A. 151, 81 Am. St. Rep. 368, and was rather curtly dismissed by the Circuit Court of Appeals for the Seventh Circuit in Journal of Commerce Publishing Company v. Tribune Company, 286 F. 111. In Commonwealth of Massachusetts v. Boston Transcript Company, 249 Mass. 477, 144 N. E. 400, 402, 35 A. L. R. 1, the Massachusetts Supreme Judicial Court refused to sustain a statute imposing a penalty on the publisher of any newspaper who refused to publish on request at regular rates for space taken the findings of the Minimum Wage Commission, on the ground that it impaired the publisher’s constitutional right of contract. The court there said: “It cannot be said on this record that newspapers are affected with a public interest so as to stand on a less favorable ground with respeet to legislative regulation like the present than the ordinary person.” It has similarly been held that newspapers are not obliged to publish delinquent tax lists, Lake County v. Lake County Publishing & Printing Company, 280 Ill. 243, 117 N. E. 452; Belleville Printing Company v. St. Clair County, 336 Ill. 359, 168 N. E. 312; Wooster v. Mahaska County, 122 Iowa, 300, 98 N. W. 103. It will be remembered that receiving favors from local governments in designating the newspaper as the medium for publication of government notices was regarded by the court in Uhlman v. Sherman, supra, as a warrant for the holding there made.

I find 'from the foregoing that there is no . such trend of decision as the trustee urges. A newspaper is not at the common law a business clothed with a public interest. Objections to the Referees’ findings of fact and conclusions of law are overruled, and the report of the referee is confirmed. An order may be entered accordingly.


author: ERVIN, District Judge.

text:
    BALTIC COTTON CO., Inc., v. UNITED STATES.
    No. 2063.
    District Court, S. D. Alabama, S. D.
    May 16, 1931.

      Harry T. Smith & Caffey, of Mobile, Ala., for libelant.
    Wm. B. Inge, C. C. Inge and Alex C. Birch, U. S. Dist. Atty., all of Mobile, Ala., for the United States.
   ERVIN, District Judge.

This matter comes on to be heard on exceptions to the master’s report. The facts are that Weil Bros, sold a lot of 300 bales of cotton to the Baltic Cotton Company, and undertook to ship the same from Mobile by one of the Shipping Board vessels. When the cotton was tendered to the vessel for shipment, objection was made to the issuance of clear bills of lading because the' bales were wet; the vessel claiming that they must note this fact upon the bills. Weil’s, agent then agreed that, if they would issue clear bills, Weil Bros, would indemnify them against any loss or claim of damage by reason of the issuance of the dear bills, and, under this agreement, dear bills were issued. Weil delivered these bills and was paid the purchase price on the faith of the bills. When the cotton reached Copenhagen, it was discovered by the purchaser that it was damaged by water, and they, assuming that this water damage was suffered while in transit, asked for an adjustment of this damage by the Sea and Commerce Court, which appointed appraisers to ascertain the damage. No notice was given to Weil Bros, of this examination. The appraisers examined the cotton, divided it into a number of dasses according to the extent of the damage, and ultimately selected three of the damaged classes, estimating the extent of the damage in each of these dasses. They then took the average of these three dasses of damaged cotton and applied this average to the whole lot of 300 bales and found in this way the damage to be 14.5 per cent, of damage.

It appears that the Baltic Cotton Company, the libelant, separated the damaged cotton, or pickings, from that which was good, and sold the good cotton to some one of their customers. What they did with the pickings is not shown; one of the witnesses stating that they were thrown away, but that must be an error, for, even though damaged, it had some value. When the ’libelant discovered that their claim was not against the insurance company, but that the cotton was wet when shipped, they notified Weil Bros., who immediately asked that the pickings be kept for examination by a member of their firm, who would shortly come over, and who would undertake to adjust the loss with them. This was not done, and, when a member of the firm called on them, one exhibited to him a sample taken from one bale and said they could not find the balance of the damaged cotton. After the libel was filed, interrogatories were filed to libelant’s seeking to ascertain who the purchaser of the good cotton was, and the weight of the cotton which was ascertained to be good, and the weight of that portion of the cotton which was ascertained to be bad. The libelants first declined to answer these interrogatories because that was a trade secret. The court overruled that contention and required an answer. In the meanwhile, the testimony of the libelant’s auditor was taken, and he was asked if it could be ascertained from their books who was the purchaser of the cotton, and the number of pounds of cotton sold" to the purchaser, and his reply was it could be done, but that it would take considerable labor to work it out from the books. After the libelants were re- • quired to answer the question as to the name and address of the purchaser of the good cotton and of the bad, they then answered that they did not know who it was, and were unable to give this information. This is manifestly untrue. Any business concern, dealing in a commodity such as cotton, who buys it and sells it for a profit in these days of accurate bookkeeping, are necessarily able to trace any particular bale or lot of cotton so as to show, not only who they bought it from, but who they sold it to. There is a good deal of discussion in the testimony about whether or not the marks on the bales were destroyed, and some of the testimony shows that the marks on the bales were destroyed, and some of the testimony shows that the marks on the bales that were picked were not destroyed, so that the cotton could have .been traced in that way, but, whether this was true or not, the lot of 300 bales could undoubtedly have been traced, and the purchaser of this lot of cotton could have been given, and then an examination of that purchaser could have been had so as to show the number of pounds of good cotton he bought from these libelants, and also their books should have shown who was the purchaser of the lot of damaged cotton taken out of these 300 bales. In that way the evidence could have been furnished to the court showing the total amount of good cotton, and the total amount of damaged cotton, so we could have had definite information as to the amount of cotton that was in fact damaged. Instead of doing that, libelants have relied solely upon the testimony of the two appraisers appointed by the Sea and Commerce Court, who give their estimate of the amount of damage.

There was produced to the court on the original hearing, the testimony of the libel-ant, of their auditor, and of these two examiners, appointed by the Sea and Commerce Court. The court being satisfied that libelant was entitled to some damage, but being uncertain as to the amount of damage because of this failure on the part of libelant to furnish definite information, ordered a reference instead of ascertaining the damage itself, and stated at the time that the court was uncertain from the evidence then introduced to it as to the amount of the damage, and that reference was ordered so that the libelant could secure and offer evidence showing definitely the amount of damage they had sustained. There was also offered before the court on this hearing oral testimony which showed that the cotton was wet when tendered to the steamer, and the facts as to what induced the steamer to issue clear bills of lading, and some testimony also as to the extent of the water damage, which showed that the water marks on one end of these bales were from an inch to an inch and a half deep. The cotton was all compressed. It also showed that for some week or ten days prior to the tender to the steamer the cotton was examined by the agent of Weil Bros., who made the agreement to indemnify the ship if they would issue dear bills, and that he took off the bagging from the wet end, exposing it to the air for the purpose of drying it out, and that he examined it each day to see how the drying was coming on. There could be no doubt, therefore, from this testimony that Weil Bros, knew the cotton was wet, and that they were not entitled to a clear bill of lading for it. So that, when they shipped it and induced the steamer to give a clear bill of lading, it was wrongfully done, and, when they collected the purchase price for this cotton on a clear bill of lading, which they knew they had no right to, that was wrongfully done. When the ship issued a clear bill of lading, knowing that the cotton was wet, and taking Weil Bros.’ agreement to indemnify them against any wrong they might suffer by reason of issuing the clear bill, that was wrongfully •done, so there can be no doubt that libelant was entitled to recover some damages in this ease. On the other hand, when libelant, knowing what the estimate of the two examiners of the Sea and Commerce Court was, and knowing also that they had sold the cotton, they must have known also the weight of this good cotton, so that the difference between the weight of the good cotton and the weight of the bales as originally ascertained would show the amount of the damaged cotton. They must also have known that the estimate by these estimators gave them more than they were entitled to, or they would have furnished the other evidence. It is recognized by all courts that, when a party conceals evidence which is not accessible to his opponent, all adverse inferences are drawn because of that fact.

It is urged upon me in this ease, however, that I must give weight to the master’s report.- This is ordinarily true, and it is usually put on the ground that the master has evidence taken before him which enables him to judge'of the weight and sufficiency of this evidence from hearing it given, while the court only has the written copy testimony. In this ease, the court was really in a better, position in that respect than the master, because the only oral testimony offered was before the court, and the master had only written report of the oral testimony taken before the court. It has also been held that, while the testimony offered before the master was •written, and the same testimony was offered before the court, the force of the above rule is largely destroyed. Under the circumstances of this ease, I do not feel that I am called on to give any special weight to the findings of the master. Further, because of the very fact that, when the order of reference was made, I called attention of counsel to the failure to disclose the name and address of the purchaser, and my confusion and uncertainty as to the amount of the damage because of the way the case was presented, and because of the further fact that on the hearing before the master no additional testimony was offered before him. So for these reasons I decline to gjve any weight to the report of the master, but will proceed to find an amount which at best will be only an approximation of the damages libelant is entitled to. I feel that in this case I should treat it as though it were a suit by libelant against Weil Bros., because the Shipping Board vessel made itself a party to Weil Bros.’ wrongdoing by issuing, at their request, a clear bill of lading when they were not entitled to it. I can well conceive that cotton which had been standing in the water and was wet at least a week before it was shipped, and which was then packed tightly in the hold of the vessel, would, by reason of that fact, suffer considerably more damage by the time it reached Copenhagen than it had at the time of shipment. The bales were fifty-two inches long. The testimony of Mr. Sadler was that the water marks on these bales were from one inch to one and a half inches. Now if the water mark showed that the cotton had stood in water one inch or one and a half inches deep, naturally the absorption would go beyond water mark, so I fix libelant’s damage at approximately 4 per cent, of the amount of cotton sold by Weil Bros, to the libelant. Of course, it would cost libelant something to have the cotton reconditioned, but also, the damaged cotton which they took out in order to recondition the bales would be worth something, and I estimate would be about worth what the cost of reconditioning the lot would be. The master who heard this ease had no knowledge of the announcement the court made to counsel about the condition of the evidence showing damage, so in hearing the ease he did not have the benefit of the court’s expressions of doubt, and the court’s request that additional evidence be furnished to clear up this doubt. The master erred in calculating the statutory interest in the state of Alabama, without noticing or having his attention called to the statute which makes the federal government liable for only 4 per cent, interest. 46 USCA § 743,

A decree will therefore be entered in favor of the libelant for 4 per cent, of the amount of the purchase priee shown to have been paid by libelant to Weil Bros, for this cotton, plus 4 per cent, interest, amounting to $1,831.83,

If libelants recover less damages than they should, they have no one to blame but themselves, for, in an effort to speculate on the findings of the commission, they suppressed evidence that would have definitely ascertained the amount of their damage.


author: WOOLSEY, District Judge.

text:
    In re STARK.
    District Court, S. D. New York.
    May 29, 1931.

      Sylvester & Harris, of New York City (Charles L. Sylvester and Sidney Harris, both of New York City, of counsel), for the motion.
    Martin Conboy, of New York City (Martin Conboy and David Asch, both of New York City, of counsel), for Charlotte A. .Hopper, opposed.
   WOOLSEY, District Judge.

This motion is in all respects denied.

I. On April 28,1931, the bankrupt Stark was committed to and is now in the county jail, New York county, at 434 Thirty-Seventh street, New York City, under a body execution issued under section 826, subdivision 10, of the New York Civil Practice Act, on a judgment secured against him by default in the sum of $107,064.59, with interest from May 2, 1930.

On April 30, 1931, apparently, partly at least, in order to escape this durance, he filed a voluntary petition in bankruptcy in this court and on the same day was adjudicated a bankrupt.

He now seeks an order of release under section 9 of the Bankruptcy Act (11 USCA § 27) on the ground that the cause of action on which the judgment and consequent execution under which he is held in jail by the sheriff of New York County is dischargeable in bankruptcy.

II. The complaint in the Supreme Court of New York County under which the judgment was had on which the body execution, resulting in the bankrupt’s present incarceration, was issued, alleges that in January, February, and March, 1929, the bankrupt, defendant herein, by false and fraudulent representations induced the plaintiff to lend him $100,000, for which she was given a memorandum reading as follows:

“Received .this day from Mrs. Charlotte A. Hopper, Hartford, Conn, the amount of $100,000 (One hundred thousand dollars) which I promise to pay back on April 1st, 1931 with interest. New York, March 8th, 1929. . C. M. Stark”

The complaint further alleges that so soon as the plaintiff learned that the defendant’s representations were false she rescinded the above loan agreement and brought suit for the money with which she had thus been fraudulently induced to part.

Allegations of fraud were obviously necessary in this situation to the maintenanct of the plaintiff’s cause of action for money had and received. Otherwise, when the action was commenced in April, 1929, it would have been clear on the face of the complaint that the period of credit, which by the receipt extended to April 1, 1931, had not expired.

In fact, therefore, although the plaintiff has brought a suit for money had and received, her action might have been defeated as premature, if the bankrupt had challenged the fraud by answer and successfully supported his challenge by proof. But the bankrupt did not do this. He let a default go against him and implicitly admitted the plaintiff’s allegations.

III. The modem principle of the common money counts in indebitatus assumpsit was borrowed from equity by the common law, and, in most cases, they are merely convenient substitutes for a bill in equity when money alone is sought to be recovered, and the claim therefor is based on the fact that the defendant ex aequo et bono should return the money to the plaintiff.

For, as Chancellor Walworth happily expressed it in Hunt v. Amidon, 4 Hill (N. Y.) 345, 349, 40 Am. Dec. 283: “Courts of law, a long time since, fell in love with a part of the jurisdiction of the court of chancery, and substituted the equitable remedy of an action of assumpsit upon the common money counts, for the more dilatory and expensive proceeding by a bill in equity in certain cases.”

Under the old practice the plaintiff in the state court would have filed a bill to rescind the contract of loan because of fraud, and, in his prayer for relief, would have asked incidental relief in the form of a return of the money so fraudulently secured. A situation somewhat analogous to the old practice is found in the Matter of Bullis, 68 App. Div. 508, 73 N. Y. S. 1047, affirmed not only in 171 N. Y. 689, 64 N. E. 1119, but also in the Supreme Court sub nomine Bullis v. O’Beirne, 195 U. S. 606, 25 S. Ct. 118, 49 L. Ed. 340.

The fact, however, that now we may bring an action at law for money had and received based on the fiction of a contract implied in law to repay the money, merely gives us a less technical form of remedy at law, and does not alter in any respect the underlying principle on which the remedy is based— in the case under discussion the fraud by which the bankrupt has befen unjustly enriched.

TMs is shown by the fact that the measure of the recovery in such eases is not the damages of the plaintiff but the amount of the unjust enrichment to the defendant which he cannot in conscience keep. Cf. Bayne v. United States, 93 U. S. 642, 23 L. Ed. 997; United States v. State Nat. Bank, 96 U. S. 30, 24 L. Ed. 647; Atlantic Cotton Mills v. Indian Orchard Mills, 147 Mass. 268, 17 N. E. 496, 9 Am. St. Rep. 698; Mason v. Prendergast, 120 N. Y. 536, 24 N. E. 806; Hindemarch v. Hoffman, 127 Pa. 284, 18 A. 14, 4 L. R. A. 368, 14 Am. St. Rep. 842; Keener on Quasi Contracts, pp. 183-187.

IV. Furthermore, the fact the bankrupt is now in jail on body execution under a state court judgment, and has by this motion indirectly to apply to a federal court to extricate him, js the best possible proof that, under the law of New York state— whatever may have been the obiter dicta of the judges who heard the motion to dismiss the complaint — the bankrupt is properly held in the sheriff’s custody on a judgment involving fraud within the meaning of section 823, subdivision 10, of the New York Civil Practice Act. Otherwise he has a remedy in the state court by writ of habeas corpus.

V. The bankrupt’s case, consequently, falls within the principle of the decisions cited by Mr. Conboy in behalf of the state court judgment creditor. Bullis v. O’Beirne, 195 U. S. 606, 620, 25 S. Ct. 118, 49 L. Ed. 340, affirming Matter of Bullis, 68 App. Div. 508, 517, 73 N. Y. S. 1047; 171 N. Y. 689, 64 N. E. 1119; In re Reinhoudt, 21 F.(2d) 590 (D. C. W. D. N. Y.); Bloemecke v. Applegate, 271 F. 595 (C. C. A. 3); In re Kalk, 270 F. 627 (D. C. N. D. N. Y.); Mackel v. Rochester, 135 F. 904, 908 (D. C. Mont.).

Judge Learned Hand’s decision in Re Ennis & Stoppani (D. C.) 171 F. 755, does not stand in my way, for, as he points out, at 171 F. 757, in the case before him the suit was not brought in the state court, as here, on the theory of a rescission of a contract for fraud, but — in affirmance of the contract — “for conversion of a title obtained through the' very fraud on which the victim now seeks to rely.” The same answer is to be made in respeet of the case of In re Nuttall (D. C.) 201 F. 577.

My own decision in Re Bancunity Corporation (D. C.) 36 F.(2d) 595, is not in any way inconsistent with my holding here, for there I held that defrauded stockholders could change their status to that of creditors by a decree of rescission in the bankruptcy proceeding, and that their claims for money paid to bankrupt would then be provable in bankruptcy. The question whether «a claim is provable, however, does not determine whether it is .dischargeable, for a defrauded creditor may get on account, what he can in the bankruptcy proceeding by dividends or payment on composition without having' barred by the discharge of his debtor any deficiency balance due on his nondisehargeable cause of action for fraud. Cf. Friend v. Talcott, 228 U. S. 27, 33-36, 39, 40, 33 S. Ct. 505, 57 L. Ed. 718.

VI. I hold, therefore, that the judgment against the bankrupt under which he is now held in the New York county jail is not dischargeable in bankruptcy owing to the provisions of section 17a (2) of -the Bankruptcy Act, 11 USCA § 35 (2), and that, consequently, the bankrupt has not any right to be released under section 9 thereof.

Settle order on two days’ notice.


text:
    UNITED STATES v. DIAMOND et al.
    District Court, S. D. New York.
    June 1, 1931.
    George Z. Medalie, U. S. Atty., of New York City (Ernest Lappano, of New York City, of counsel), for the United States.
    Walter & Wolff, of New York City (Alfred A. Walter, of New York City, of counsel), for defendant surety.
   WOOLSEY, District Judge.

The motion for judgment on the pleadings is denied, but the lesser relief is granted of striking out the alleged separate defenses.

This is a motion by the United States for judgment on the pleadings in a seire facias proceeding against the surety on an undertaking in the sum of $15,000 for the defendant John Diamond to appear before Garrett W. Cotter, Esq., one of the United States commissioners, appointed by this court, on an information charging defendant Diamond with violation of the Harrison Narcotic Act (26 USCA §§ 211, 691-707).

On the question of jurisdiction and procedure on writ of scire facias, the cases of Universal Transportation Co., Inc. v. National Surety Co. (D. C.) 252 F. 293, appeal denied 256 F. 450 (C. C. A. 2); Hollister v. United States, 145 F. 773 (C. C. A. 8), axe of value.

I. On sueh a motion as this in a scire facias, I think it clear that the court may look not only at the pleadings but at any other papers in the case on file as part of the records of the clerk of this court, or its commissioners, for of sueh papers this. Court may take judicial notice.

But even on a scire facias, to which the defenses necessarily and properly must be few, the court may not gratuitously assume the truth of challenged returns of its officers or decide questions raised as to the actual service of notices or process.

II. Here the writ alleges, in paragraph 3, that the defendant Diamond was duly and solemnly called before Garrett W. Cotter, Esq., United States commissioner for this district, on September 10, 1929, and in parágraph 4, that the defendant Diamond made default in his said demanded appearance and that the undertaking, which is the subject-matter of the writ, was thereupon declared by Commissioner Cotter to be forfeited.

These allegations which underlie the writ are denied by the surety company defendant.

On these denials it is entitled to have a trial. Hollister v. United States, 145 F. 773, at page 781.

III. The separate defenses pleaded by the surety company are, however, stricken "out, for they do not, as pleaded, constitute defenses of which the surety may avail itself.

The fact that, for some inscrutable reason, the undertaking given was stated to be for appearance before Commissioner Cotter, mentioned in the first alleged defense, is the only defense which has any plausibility but that is shown to be without avail under-the persuasive reasoning of the opinion of the Circuit Court of Appeals for the Eighth Circuit in Hollister v. United States, 145 F. 773, at page 781, in which Adams, Circuit Judge, said:

“It is nest contended that there was no breach of the recognizance stated in the decía-ration. The recognizance required Waugh to appear before the court ‘at the next term * * * to be held in the court room in the federal building at Sioux Falls, South Dakota, to wit, on Tuesday, October 18, 1904, and from time to time at said term and all subsequent terms of said court when required by the order of said court * * * to answer,’ etc. It is averred that on October 18, 1904, the case was duly called for trial, both sides appealing, when it was ordered by the court to be set down for trial at the November term, 1904, of the court to be held at Aberdeen, S. D., and that Waugh appear at that time and place for trial. It is averred that Waugh failed to appear at Aberdeen according to'the order made, and that as a result thereof the recognizance was forfeited. The contention is that the failure to appear at Aberdeen constituted no breach of defendants’ undertaking. Is this correct? By the provisions of the act of November 3, 1893 (chapter 10, 28 Stat. 5), the state of South Dakota, which before that time had constituted one judicial district, with the United States courts held only at the capital (Act Feb. 22,1889, e. 180, 25 Stat. 676, 682), was declared to constitute one judicial district only, blit ‘for the purpose of holding terms of the District Co.urt’ the district was divided into four divisions, the Northern, Southern, Central, and Western. The act required the courts to be held at Aberdeen for the Northern Division, at Sioux Falls for the Southern, at Pierre for the Central, and at Deadwood for the Western Division. By section 3, Act Nov. 3, 1893, e. 10, 28 Stat. 5, it was provided:
“■‘That the terms of the Circuit and District Courts of the United States in and for the state of South Dakota shall be as follows : At Sioux Falls on the first Tuesday in April and the third Tuesday in October * * * at Aberdeen on the first Tuesday of May and the third Tuesday of November.’-
“No other legislation affecting the terms or sessions or character of the United States courts in South Dakota has been called to our attention or discovered by us in our investigation.
“From the foregoing statutes it appears that South Dakota constituted one judicial district only, and that the sessions of the courts for that district were not all held at one place, but at four different places. Whether at Aberdeen, Sioux Falls, Pierre, or Deadwood, the court was one and the same> and the times and places fixed by law for different sessions in any place were successive terms of one and the same court.
“Accordingly we are of opinion that the . recognizance in question binding Waugh to appear at the next term of court to be held at Sioux Falls and from time to time at said term, and all subsequent terms of said court whenever ordered so to do, bound him to appear, not only at Sioux Falls during the term held there, but at Aberdeen during any subsequent term as and when ordered by the court so to do, and that Waugh’s failure to appear pursuant to the order of the court made upon him at Sioux Falls constituted a breach of the condition of the recognizance for which the defendants, as sureties, are liable.”

Cf. Southern Surety Co. v. United States, 23 F.(2d) 55, 57 (C. C. A. 8).

The second, third, fourth, and fifth alleged defenses are without merit and do not constitute defenses to a scire facias on such an undertaking as this, in view of the principles laid down in Southern Surety Co. v. United States (C. C. A.) 23 F.(2d) 55, 57; United States v. Davenport (D. C.) 266 F. 425, 428; United States v. Du Faur, 187 F. 812, 813 (C. C. A. 7); United States v. Graner (C. C.) 155 F. 679; United States v. Dunbar, 83 F. 151, 154 (C. C. A. 9); Hardy v. United States, 71 F. 158, 159 (C. C. A. 8).

' [5] IV. One fact, however, which emerges from' these papers very clearly is that such undertakings as that under eonsidefation should run to the United States and should provide for appearance of the defendant bound over before “any of the Commissioners of this Court.” The forms for such undertakings should be amended accordingly.


author: HUTCHESON, District Judge.

text:
    In re GRAND LEADER, Inc.
    No. 1399.
    District Court, S. D. Texas, at Houston.
    Dec. 26, 1930.

      Campbell, Myer & Poster, of Houston, Tex., for petitioning creditors.
    Boyles, Brown & Scott, of Houston, Tex., for bankrupt.
    W. P. Hamblen, of Houston, Tex., for Mrs. Ella Koehler.
    W. Carter Grinstead, of Houston, Tex., Referee.
    H. L. Fortinberry, of Houston, Tex., Trustee.
   HUTCHESON, District Judge.

Grand Leader, Inc., having been adjudged bankrupt on December 31,1929, on a petition filed December 16, 1929, a receiver was on that day appointed to take charge of the premises.

Within a reasonable time thereafter the trustee notified the landlord, claimant herein, that he would not accept the lease, nor be bound by any of its terms or provisions.

Mrs. Koehler having filed her claim not only for the rent accrued to December 31, 1929, but for the rents to accrue from January 1, 1930, to December 31, 1930, the same was by the referee allowed as to the rent accrued, but disallowed as to those to accrue. To review the order of disallowance this petition was filed.

Both trustee and petitioner rely upon the same authorities, Martin v. Orgain (C. C. A.) 174 F. 772; Lontos v. Coppard (C. C. A.) 246 F. 803, while the trustee cites the opinion of the referee'in. Re Sterne & Levi 26 A. B. R. 435.

All of these cases are concerned with the question of the provability of the landlord’s claim, holding in effect that though the rent to accrue in the current year for which a lien is given by the Texas statute (Rev. St. Texas art. 5238) is not a fixed liability and provable generally in bankruptcy, it is yet such an obligation and so secured as that it may be proved against and collected out of the property charged with the lien.

Petitioner claims that since the bankruptcy does not of itself affect the relation between the bankrupt and his landlord, and, if the trustee does not accept the leasehold estate of the bankrupt the obligation to pay the rent in future is not discharged [In re Tidus (D. C.) 4 F.(2d) 558; Rosenblum v. Uber (C. C. A.) 256 F. 584], the relation of tenancy continued into the 1930 contract year and under the Texas statute a lien arose for that current contract year.

Assuming, without deciding, that the act of the landlord in retaking and releasing the premises did not affect the termination of the rental contract. (Rosenblum v. Uber [C. C. A.] 256 F. 584), I think it plain that the claim of the landlord for rents to aeerue is wholly without basis, and this because of the result, apparently overlooked by petitioner, of the equitable execution of the bankruptcy in sequestrating the goods and property of the bankrupt in 1929 for the benefit of the general creditors, before the 1930 year had commenced.

That bankruptcy does so operate is settled by the authorities. Longstreth v. Pennock, 20 Wall. (87 U. S.) 575, 22 L. Ed. 451; International Bank v. Sherman, 101 U. S. 403, 25 L. Ed. 866; Mueller v. Nugent, 184 U. S. 1, 22 S. Ct. 269, 46 L. Ed. 405; Rosenblum v. Uber (C. C. A.) 256 F. 584.

To give effect to the landlord’s contention would be to displace the lien of the general creditors already matured in favor of an after accruing lien. Had the trustee accepted the lease, it would have operated as an assignment to him and he would have taken it eum ¡ onere; the terms and burdens of the lease including the obligation for the rent. In re Tidus (D. C.) 4 F.(2d) 558; English v. Richardson, 80 N. H. 364, 117 A. 287, 22 A. L. R. 1302.

On the other hand, if he rejects it, as he did here, the estate is relieved of all of the burdens of it except those which have already accrued, in this case, only the rents for 1929.

Finding no error in the action of the referee, the petition to review his order will be denied.


author: COXE, District Judge.

text:
    QUITTNER et al. v. MOTION PICTURE PRODUCERS & DISTRIBUTORS OF AMERICA, Inc., et al.
    District Court, S. D. New York.
    March 17, 1931.
    Graham & Reynolds, of New York City, for plaintiffs.
    Elek John Ludvigh, of New York City, for defendants, other than Motion Picture Producers & Distributors of America, Inc.
    Gabriel L. Hess, of New York City, for defendant Motion Picture Producers & Distributors of America, Ine.
    Louis Phillips, of New York City, on the brief, for defendants.'
   COXE, District Judge.

This is an application by the defendants to strike out paragraphs fifteenth, sixteenth, seventeenth to twenty-third, inclusive, and thirty-eighth, of the complaint, on the ground the allegations are repetitious and irrevelant. The motion is made under rule 103 of the New York Rules of Civil. Practice; and it is not resisted by the plaintiffs in so far as directed against paragraphs fifteenth and thirty-eighth. It is insisted, however, by the plaintiffs, that paragraphs sixteenth to twenty-third, inclusive, relating to the uniform exhibition contract and the litigation with the government culminating in the Supreme Court decisions in Paramount v. U. S., 282 U. S. 30, 51 S. Ct. 42, 75 L. Ed. 145, and U. S. v. First National, 282 U. S. 44, 51 S. Ct. 45, 75 L. Ed. 151, decided November 24, 1930, are germane to the issues and should be permitted to stand. The . allegations with respect to block booking, as appearing in these disputed paragraphs, are fully covered by paragraph fourteenth, and, to that extent, are plainly repetitious and unnecessary. The same is true also of the allegations in paragraph sixteenth with respect to the building and acquisition of theaters for the purpose of intimidating exhibitors. These are covered by the 'allegations in paragraphs twenty-sixth to twenty-eighth, inclusive. I think, therefore, that the motion, in so far as it concerns paragraph sixteenth, should be granted.

The remainder of paragraphs seventeenth to twenty-third, inclusive, is in no way connected with any injury to the plaintiffs. The action is for damages sustained as a result of violations of the Sherman Act (15 USCA §§ 1-7, 15), and obviously there must be some causal connection between the violation charged and the injury alleged to have been sustained. In the allegations under attack in paragraphs seventeenth to twenty-third, inclusive, there is nothing to show that the rules and regulations of the uniform contract were in any way invoked against the plaintiffs; nor is there any allegation indicating that the plaintiffs suffered any injury or sustained any damage as the result of the adoption or use of the contract, or the rules and regulations involved in th6 (Paramount and First National Cases. In the absence of such allegations, these paragraphs have no proper place in the complaint. Keogh v. Chicago & N. W. R. Co., 260 U. S. 156, 164, 43 S. Ct. 47, 67 L. Ed. 183; Locker v. American Tobacco Co. (C. C. A.) 218 F. 447, 448; Sullivan v. Associated Billposters & Distributors of U. S. (D. C.) 272 F. 323, 328; Jack v. Armour & Co. (C. C. A.) 291 F. 741; Hart v. B. F. Keith Vaudeville Exchange (C. C. A.) 12 F.(2d) 341, 345, 47 A. L. R. 775.

The motion is therefore granted, striking out the paragraphs of the complaint numbered fifteenth, sixteenth, seventeenth to twenty-third, inclusive, and thirty-eighth.


author: KNOX, District Judge.

text:
    THE PRESIDENTE WILSON.
    District Court, S. D. New York.
    March 16, 1931.
    Robert E. Manley, Acting U. S. Atty., of New York City (Mary R. Towle, Asst. U. S. Atty., of New York City, of counsel), for the United States.
    Kirlin, Campbell, Hickox, Keating & Me-Grann, of New York City (D. M. Tibbetts, of New York City, of counsel), for claimant.
   KNOX, District Judge.

Libelant may have the decree that is here sought. As I recall the ease, the Assistant United States Attorney who tried the ease offered proof that the Secretary of Labor had formed the opinion that it was impracticable and inconvenient to prosecute the person, owner, master, officer, or agent of the Presi-dente Wilson who was responsible for the failure to prevent the landing in the United States of the aliens mentioned in the libel. It is my view that on the showing now made this court has no right to inquire into the reasons which gave rise to the Secretary's opinion in the premises. Aside from the fact that the agents of the vessel, or some o>f them, are within the jurisdiction of the court, and have been here at all times since the landing of the aliens, there is no proof which tends to indicate a lack of good faith on the part of the Secretary in reaching the opinion which has resulted in the filing of the instant libel. This, certainly, is not enough to justify withholding the decree asked by the government. Prom the standpoint of the United States, a proceeding in rem against the vessel whose master, owner, agent, or officer permits an alien to land in the United States at a time and place other than as designated by the immigration officials, is, for obvious reasons, much more practical and convenient'than the prosecution of the individual who actually permitted the aliens to escape into the country. There is, therefore, no fault to be found with the procedure that has here been followed. ' See The Bremen (D. C.) 18 F.(2d) 960; The Nanking (C. C. A.) 290 F. 769, and The Coamo, 267 U. S. 220, 45 S. Ct. 237, 69 L. Ed. 582. My remarks to the contrary, made at the conclusion of the trial, were due to the fact that I momentarily overlooked the provision of the statute that, aside from this proceeding, the persons responsible for the landing of the aliens would have to be subjected to liability on the eriminal side of the court.


author: AKERMAN, District Judge.

text:
    CITY OF MIAMI v. FIRST NAT. BANK OF ST. PETERSBURG et al. SEABOARD AIR LINE RY. CO. v. DUDLEY et al.
    Nos. 970, 861.
    District Court, S. D. Florida.
    April 2, 1931.
    No. 970 Equity-Tampa:
    Carey & Askew, of St. Petersburg, Fla., for complainant.
    A. R. Thompson, of St. Petersburg, Fla., for defendants.
    No. 861 Equity-Tampa:
    Knight, Thompson & Turner, of Tampa, Fla., for complainant.

      McKay, Withers & Ramsey, of Tampa, Fla., for defendants.
   AKERMAN, District Judge.

Each of the above eases is a bill to establish a preference in the distribution of the assets of an insolvent national bank, and in each case a check was drawn on the closed bank by a depositor in said bank in favor of the complainant, which cheek was transmitted through collecting banks in the ordinary course of business, and reached the payee bank prior to the closing thereof, and was charged to the account of the drawer of the cheek, and a remittance attempted by the drawing of a cheek by the payee bank on its correspondent, the payment of which cheek-was refused by the correspondent, for the reason that the payee bank had been closed by order of the comptroller prior to the presentation of such check.

A state of facts is thus presented which is identical with the facts presented in the ease,of Edwards v. Lewis, 98 Fla. 956, •124 So. page 746, and, if this court is controlled by the decisions of the Supreme Court of this state, the bills present cases- where a preferential claim must be decreed, but these are national banks, and in the opinion of the court in a case for the winding up of the affairs of a national bank I am bound by the decisions of the federal courts and not by the decisions of the Supreme Court of this state, and an unbroken line of authorities in the federal court hold that such a daim is not entitled to preferential payment, for the reason that the assets in the insolvent bank, which went into the hands of the receiver appointed by the comptroller, are not augmented by such a transaction. Larabee Flour Mills v. First National Bank (C. C. A., 8th Circuit) 13 F.(2d) 330, certiorari denied by U. S. Supreme Court, 273 U. S. 727, 47 S. Ct. 238, 71 L. Ed. 861; Rorebeck v. Benedict Flour & Feed Co. (C. C. A. 8th Circuit) 26 F.(2d) 440; Ellerbe v. Studebaker Corporation (C. C. A., 4th Circuit) 21 F.(2d) 993; Burnes National Bank v. Spurway (D. C.) 28 F.(2d) 40; Farmers’ National Bank v. Pribble (C. C. A.) 15 F.(2d) 175.

My individual opinion is that the view expressed by the Supreme Court of Florida in the ease of Edwards v. Lewis is the better rule, and I am very much impressed by the reasoning of District Judge Farris in the ease of Larabee Flour Mills v. First National Bank, but, as the majority opinion in that ease was in effect affirmed by the Supreme Court of the United States by a denial of writ of certiorari, 273 U. S. page 727, 47 S. Ct. 238, 71 L. Ed. 861, I feel that I am bound by the decisions of the federal court, and must regretfully rule in accordance therewith.

It does not follow, however, that the bills must be dismissed, for in the companion case to the Larabee Flour Mills Case, which was decided by the Circuit Court of Appeals of the Eighth Circuit, in the same opinion the court below was reversed for dismissing the suit, with the statement that the claim should have been allowed as a general claim without a preference.

. Orders may be taken in each of these cases in accordance with the foregoing opinion.


author: SCHOONMAKER, District Judge.

text:
    ANDERSON v. UNITED STATES.
    No. 5962.
    District Court, W. D. Pennsylvania.
    Feb. 25, 1930.
    Charles M. Donley, of Pittsburgh, Pa., and Challen W. Waychoff and Roy J. Waychoff, both of Waynesburg, Pa., for plaintiff.
    Louis E. Graham, of Pittsburgh, Pa., for the United States.
   SCHOONMAKER, District Judge.

This is an action to recover permanent disabilities under a war risk insurance policy issued to the plaintiff in the sum of $10,000. Plaintiff enlisted in the United States Army for military service on October 5, 1918, and was discharged on April 5,1919. His premiums on his policy of war risk insurance were paid up to and including the month of April, 1919. He contends that he was permanently and totally disabled at a time prior to his discharge from the military service, and that therefore he is entitled to recover under the total disability provisions of the policy at the rate of $57.50 a month from April 5, 1919, to April 11, 1929, the date of the beginning of the suit in the instant ease.

The case was submitted to the jury, and they found in favor of the plaintiff for the total amount of the monthly disability for the period from April 5,1919, to the date of the suit, April 11, 1929.

The defendant has moved for a new tyial, urging that the court erred in admitting improper evidence on the trial and in refusing the defendant’s motion for binding instructions.

We have carefully reviewed the evidence in this case and have come to the conclusion that there is evidence in the ease from which the jury might properly find that the plaintiff was permanently disabled prior to the time of his discharge from the military service, and that that disability has continued down to the date of the beginning of this suit. It appears that he suffered from bronchial pneumonia and pleurisy while in the military service, and continued in one hospital after another during all the time that he was in France. On returning to the United States after the armistice, he was discharged on April 5, 1919, going then to his home; and the testimony shows that from the time of his arrival home, he was sick and unable to perform continuously any gainful occupation. There is some evidence that he did earn some money after his discharge, but that mere fact would not prevent him from recovering the total disability fixed by the policy. The evidence showed that the work he did was intermittent and continued only for brief periods.

The courts have held that within the meaning of the war risk insurance policy, total disability results when there is any impairment of mind or body which renders it impossible for the disabled person to follow continuously any substantial gainful occupation; and the fact that the assured may be able to perform some simple kind of physical labor intermittently does not change the total disability status. Eliasson v. U. S. (C. C. A.) 20 F.(2d) 821; Starnes v. U. S. (D. C.) 13 F.(2d) 212; Jagodnigg v. U. S. (D. C.) 295 F. 916.

We therefore conclude that we committed no error in submitting this case to the jury, and that the motion for a new trial must be denied.


author: CAMPBELL, District Judge.

text:
    THE F. G. M. NO. 22. FLANNERY, GUINAN & MORAN, Inc., v. NEW YORK CENT. R. CO.
    District Court, E. D. New York.
    Oct. 29, 1928.
    See, also, 40 F.(2d) 507.
    William F. Purdy, of New York City, for libelant.
    Bigham, Englar & Jones, of New York City (A. J. McElhinney, of New York City, of counsel), for respondent.
   CAMPBELL, District Judge.

Hearing on exceptions to interrogatories propounded by respondent and addressed to libelant.

Respondent had the barge in question on charter, and an issue is raised as to the character of the charter, but, even if the allegations of the libel as to the character of the charter be accepted as true, the fact remains that the libelant chartered the barge, with a captain on board, and some liability rested on libelant for the acts of the captain.

If a prima facie ease is made out by libelant, respondent has the burden of showing how the damage occurred.

If "one. of the purposes of allowing interrogatories is to limit the issues and the amount of proof, and it is (The Mexican Prince [D. C.] 70 F. 246, at page 248), then / certainly respondent should not be required to prove everything that transpired with reference to the barge during the whole period of the charter, but the' libelant, whose representative the captain was, in charge of the boat, should give the date when and the place where the damages were received.

This I think is in accord with the decision in Prince Line, Limited, v. Mayer & Lage, Inc. (D. C.) 264 F. 856.

In giving the date, libelant is not limited to one day, if the captain was absent from the boat for any length of time, but it will be sufficient to fix it between the time of his leaving and returning to the boat, and, if the damages were received when he was aboard, then it will be sufficient to show whether it was in the day or night time.

In-giving the place it will be sufficient to generally fix the place, not necessarily to fix the particular berth, and the exception to the answer to the first interrogatory, as thus limited, will be sustained; but the exception to so much thereof as refuses the giving of the circumstances under which the damages were received will be Overruled.

The exceptions to the answers to the second, third, and fourth interrogatories will be overruled.


author: PATTERSON, District Judge.

text:
    DEXTER-CARPENTER COAL CO. v. NEW YORK, O. & W. RY. CO. et al.
    District Court, S. D. New York.
    April 15, 1931.
    Bigham, Englar & Jones, of New York City (R. F. Shaw, of New York City, of counsel), for libelant.
    Alexander & Ash, of New York City (Edward Ash, of New York City, of counsel), for claimant.
    Kirlin, Campbell, Hickox, Keating & McGrann, of New York City (Robert S. Erskine, of New York City, of counsel), for respondent.
   PATTERSON, District Judge.

At the close of the trial I made findings that the O. & W. 23 was unseaworthy, that her sinking on September 17, 1927, was due to such unseaworthy condition, and that no fault was attributable to the towing company. The case against the towing company was dismissed. As between the cargo owner and the carrier, I indicated that the former was entitled to a deeree against the latter to cover loss of the cargo, but I reserved decision on whether the carrier was entitled to limitation of liability.

It is my opinion that there should be no limitation of liability in this case. Limitation is permissible only where the owner can show lack of knowledge or privity of the unseaworthy condition. The burden of proving such lack of knowledge or privity is on the owner. In re P. Sanford Ross, Inc., (C. C. A.) 204 F. 248; In re Reichert Towing Line (C. C. A.) 251 F. 214. Where the unseaworthiness is due to a generally decayed condition of the vessel whieh renders it unable to withstand the ordinary wear- and tear of service, as was the ease with this old barge, the owner’s lack of knowledge can only mean that the owner did not inspect the vessel or provide a regular system of inspection. The Republic (C. C. A.) 61 F. 109; In re P. Sanford Ross, Inc., supra. The evidence here establishes that the barge had seen its best days long before the commencement of this disastrous trip. Its unfitness would be visible to any one on careful inspection. Under such circumstances, proof by the owner.that repairs had been made to the barge several months before the sinking and that a carpenter in its employ went over its boats and did minor jobs on them, does not suffice to bring the case within the limitation act. The Loyal (C. C. A.) 204 F. 930, 933. The carrier’s claim of limitation of liability will therefore be denied.

The Harter Act (46 USCA §§ 190-195) does not help the carrier. The sinking of this barge was due, not to any fault in navigation or management during the voyage, but to lack of seaworthiness existing when the barge broke ground at Cornwall. International Navigation Co. v. Farr & Bailey Mfg. Co., 181 U. S. 218, 21 S. Ct. 591, 45 L. Ed. 830.

There will be a decree in favor of the li-belant against the New York, Ontario & Western Railway Company for the full amount of the loss.


author: ADLER, District Judge.

text:
    In re VASQUES.
    No. 13078.
    District Court, W. D. New York.
    June 11, 1931.
    Ueck, Manchester & Carriero, of Buffalo, N. Y. (John S. Carriero, of Buffalo, N. Y., of coúnsel), for bankrupt.
    F. M. Joslyn, of Buffalo, N. Y., for contestant.
   ADLER, District Judge.

This is a motion to confirm the report of the special master herein that the bankrupt be permitted to file his petition for discharge in bankruptcy nunc pro tune as of January 30, 1928.

The bankrupt filed a voluntary petition in bankruptcy in November, 1927. The special master found that on January 30, 1928, the bankrupt signed and acknowledged a petition for his discharge in bankruptcy at the office of his Attorney in the Ellicott Square Building in the city of Buffalo, N. Y. That the attorney thereupon instructed his clerk to mail the petition to the clerk of the United States District Court in the Federal Building at Buffalo. That the petition for the discharge was duly mailed.

There is no record of the petition ever having been received by the clerk of the District Court, and consequently no notice to creditors or order to show cause was mailed or published. The attorney for the bankrupt did no act in connection with the proceeding after the mailing of the petition on January 30,1928, and paid no further attention to it until this motion to permit the bankrupt to file the petition nunc pro tune was made in January, 1931, about three years later.

The special master has found as a conclusion of law that the bankrupt is entitled to refile his petition nunc pro tunc as of the 30th day of January, 1928, the date of the mailing of his original petition. I do not agree with that conclusion. The court is without jurisdiction to permit the filing of a petition for discharge after the extreme period of eighteen months provided in the statute. The court cannot by a nunc pro tune order extend the statutory period. In re Fahy (D. C.) 116 F. 239; Taunton (D. C.) 216 F. 987.

In view of my conclusion that the court has no jurisdiction after the expiration of the statutory time limit, it is unnecessary to consider the other questions raised upon the motion.

The report of the special master herein is not confirmed, and the application of the bankrupt to file his petition nunc pro tunc is denied.


text:
    KNAPP et al. v. HYDE, Secretary of Agriculture, et al.
    District Court, S. D. New York.
    May 27, 1931.
    Blackwell Brothers, of New York City (James Madison Blackwell and E. B. Bellinger, both of New York City, of counsel), for plaintiffs.
    George Z. Medalie, U. S. Atty., of New York City (Ernest Lappano, of New York City, of counsel), for defendants Callaway, Swan, and Elting.
   WOOLSEY, District Judge.

This motion is denied.

I. The Secreta^ of the Treasury and the Secretary of Agriculture have not been served or appeared herein.

The United States attorney has appeared only for the defendants Callaway and Swan, of the Department of Agriculture, and for the defendant Elting, collector of customs. They are properly made defendants herein because the defendant Callaway, as Chief of the New York Station of the Department of Agriculture, and the defendant Swan, as Acting Chief thereof, instigated, by their tests and findings, the exclusion of the egg yolk, and the defendant Elting, as collector of customs, is holding it under the provisions of section 11 of the Food and Drug Act of June 30, 1906 (21 USCA § 15).

II. In my opinion the bill of complaint states a cause of action.

It is alleged in the complaint, paragraphs 16 and 17 thereof — and on this motion necessarily must be deemed admitted — that the egg yolk in question here was when tested, and still is, of good quality, and in fact fit for food under the provisions of the Food and Drug Act of June 30, 1906, § 7, subd. 6 (21 USCA § 8, subd. 6).

It is also alleged, paragraphs 11-15 and 18, that the' condemnation of the egg yolk was due to the imposition by the Department of Agriculture of a test — a description of which is annexed to the complaint as Exhibit A— which is not a fair or true test of the condition of the egg yolk as food within the meaning of .the Food and Drug Act, § 7, subd. 6, but on the contrary is an unreasonable test which results in establishing a standard for the admission of egg yolk which transcends the scope of the act under which only the Department of Agriculture has authority to act.

Whether these statements be true or not, I do not know; but if they are established the case would come within the decision of the Supreme Court in Waite v. Macy, 246 U. S. 606, 609, 38 S. Ct. 395, 62 L. Ed. 892, and. the plaintiff would be entitled to the relief here sought.

The question of the reasonableness of an executive act of this kind is a question of fact and not a question-of law. North German Lloyd v. Elting (C. C. A. 2, April 6, 1931) 48 F.(2d) 547, reversing (D. C.) 43 F.(2d) 203.

It follows that the complaint should not be dismissed, but that the defendants must challenge these allegations of fact in the complaint by answer and contest them by evidence.

Settle order on two days’ notice.


author: GRAHAM, Presiding Judge.

text:
    In re STUCKEY.
    Patent Appeal No. 2644.
    Court of Customs and Patent Appeals.
    May 27, 1931.
    Byron B. Collings, of Washington, D. C. (E. E. Longan, of St. Louis, Mo., and John S. Barker, of Washington, D. C., of counsel), for appellant.
    T. A. Hostetler, of Washington, D. C. (Howard S. Miller, of Washington, D. C., of counsel), for the Commissioner of Patents.
    Before GRAHAM, Presiding Judge, and BLAND, HATFIELD, GARRETT, and LENROOT, Associate Judges.
   GRAHAM, Presiding Judge.

The appellant has filed an application for a patent on a process for feeding molten glass into molds. His application had attached thereto an unreasonably large number of claims, amounting to thirty-three in all, the last nine of which were entered for consideration on appeal to the Board of Appeals of the United States Patent Office. The Examiner rejected all the claims, which decision was affirmed by the Board of Appeals. On the appeal, claims 5, 9,11, 12, 13,14, 24, 26, 27, 28, 29, 32, and 33 were withdrawn, and the appeal as to them was dismissed.

The Examiner filed a very comprehensive and illuminating decision in the matter, which has assisted the court a great deal in the consideration of the case.

It was stated by the Board of Appeals, and is conceded to be true by the parties on the oral argument, that claim 1 is representative of the claims at issue here. Said claim is as follows:

“1. The method of feeding molten glass into molds which consist in alternately imparting extrusive and intrusive movements to a body of molten glass by means of air pressure above and below normal thereon, restoring atmospheric pressure at the extreme end of each movement automatically, and severing a predetermined quantity of glass from said body at the end of the extrusive movement.”

The claims were rejected by the Board of Appeals on reference to Peiler, 1,405,936, of February 7, 1922.

The appellant’s process is carried out by means of an apparatus upon which a patent has been issued to him, and which apparatus, in brief, consists of a well for containing molten glass, and which well is in communication with the molten glass in a furnace. A bell extends downward through the top of the container surrounding said well, into the molten glass and over an outlet from said well. Through this outlet, by force of gravity, and by the process hereinafter mentioned, molten glass passes and is forced in gobs of desired weights and sizes. The bell is connected by an air pipe with a cylinder, which cylinder contains a piston, and by means of the operation of which piston air is alternately forced into the top of said bell and withdrawn therefrom. In this way, as the successive impulses of air enter the bell and impinge upon the surface of the molten glass therein, quantities, or gobs, of said molten glass are caused to be extruded through an opening in the bottom of said well, which has been heretofore referred to. When air is withdrawn from said bell, an opposite effect is produced, having a tendency to impede or even stop the flow of said molten glass through said opening. Automatic shears are also properly located below said opening to cut said portions of glass off at the proper time. The bottom of said bell is adjustable during the operation, to increase or decrease the amount of glass to pass through said opening. The length of the stroke in said piston is also adjustable during operation, by proper mechanical means. The piston is arranged with two poppet valves so that, when it arrives near the top of the cylinder, one valve is opened which releases the pressure in the well. The other valve is so arranged that, when the piston reaches its lowest point in the cylinder, this valve is opened permitting air to enter into the top portion of the cylinder; a vacuum, or partial vacuum, in the well being created on the down stroke of the piston.

The reference Peiler is a device patent, and has no process claims. This reference shows a similar well and bell over the opening through which molten glass is extruded. Air is alternately forced into said well and drawn therefrom by means of a piston operating within a cylinder. Shears are also provided for cutting off the required quantity of material. The forcing of air into' said bell and the withdrawal of air therefrom is effected by means of two pipes and two valves; the air entering through one pipe and valve and being withdrawn through the other pipe and valve. The operation of these valves and the injection and Withdrawal of the air from said bell is controlled by cams, which may be set, as required, to operate at any time.

We agree with the Board of Appeals that the Peiler reférenee anticipates appellant’s application. Appellant relies almost entirely upon the one feature of his claims, namely, that portion stating “restoring atmospheric pressure at the extreme end of each movement automatically.” Peiler’s device has inherently the same functions. He states in his specification:

“ * * * Thus by turning the hand wheels controlling the valves, the cams may be positioned to open the air system to atmosphere at any desired time, and thus vary the duration of both compression and vacuum.”

. [2] It is obvious from this excerpt, and from a consideration of the entire specification of Peiler, that his device is capable of adjustment in its ordinary operation so that atmospheric pressure will be restored at the extreme ends of the movement of his piston in the pressure cylinder automatically. If the function is inherent in this device patent, it is an anticipation of the present application for a process patent. In re Watson, 44 F. (2d) 868,18 C. C. P. A.-; Century Electric Co. v. Wagner Electric Mfg. Co. (C. C. A.) 192 F. 564; In re Aekenbaeh, 45 F.(2d) 437, 18 C. C. P. A.-.

Peiler is entitled to any use of his device to which his disclosure shows it may be put. Braren v. Horner, 47 F.(2d) 358, 18 C. C. P. A.-; In re Smith, 36 F.(2d) 302, 17 C. C. P. A. 644; In re Downs et al., 45 F.(2d) 251, 18 C. C. P. A.-; In re Metzger, 45 F.(2d) 918, 18 C. C. P. A.-.

Our attention has been called to an opinion of Judge Davis, filed in the United States District Court for the Eastern Division of the Eastern District of Missouri, on February 24, 1931, in which the Peiler patentee brought infringement suit against Obear Nes-ter Glass Company and the appellant here, 51 F.(2d) 85. Several patents were involved in this litigation, including the reference relied upon here and a patent, No. 1,-677,436, granted to one Enoch T. Femgren. The only question involved in that case was whether the sale and use of the Stuckey device was an infringement upon the rights secured principally under the Peiler patent referred to herein, No. 1,405,936. While other matters incidentally arose in the ease, this was the principal issue. The court held, after discussing the mechanical operation and construction of the various devices, that there was no infringement, and that the devices were unlike in many essential particulars. Weight was also given by Judge Davis to the circumstance that a patent had been granted to Stuckey subsequent to the Peiler patents, which circumstance was taken as some indication, at least, that the devices were considered to be different by the Patent-Office. No question of process claims arose in that case. It might well be that this court would find itself in agreement with the opinion of the court just cited, were the question here, one of conflict between the patentability of the devices there in question. We have, however, no such question before us for consideration.

We are of opinion the decision of the Board of Appeals in rejecting appellant’s claims was correct, and the decision is affirmed.

Affirmed.


author: GREEN, Judge.

text:
    WRIGHT & GRAHAM CO. v. UNITED STATES.
    No. J-615.
    Court of Claims.
    June 1, 1931.

      Harry S. Hall, of New York City, for plaintiff.
    George H. Poster, of Washington, D. G., and Charles B. Rugg, Asst. Atty. Gen., for the United States.
    Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.
   GREEN, Judge.

The petition alleges that plaintiff is a corporation, and that it paid income and excess profits taxes for -the fiscal year ending May 31, 1920, in the amount of $143,493.45. It is further alleged that on February 21, 1924, plaintiff filed a claim for refund, the material part of which is hereinafter set out. By its second amended' petition, plaintiff claims that neither its invested capital, its inventory, nor its net income for the fiscal year 1920 was properly computed, and alleges that, had proper computations thereof been made, it would be entitled to a refund of $132,494.19 for which it prays judgment.

Defendant demurs on the ground that no claim for refund was filed which complied with the statute. This presents the sole issue to be determined on the demurrer. .

The material portion of the claim which the petition shows plaintiff filed, and which defendant contends to be insufficient is as follows:

“6. Amount to be refunded (or such greater amount as is legally refundable), $254,745.48. '
“7. Dates of payment: s * * Regular payment dates during term.
“8. District in which return (if any) was. filed: Second district, New York, N. Y. • * *
“The item No. 6 above is the total tax as paid upon the income of the years 1917,1918, 1919, and 1920, and inasmuch as the undersigned taxpayer’s returns for those years are before the special assessment section of the commissioner’s office, it is not possible to determine beforehand the exact amount refundable, but the difference between that so finally determined and that as paid shall be the amount claimed.
“There were further amended or duplicate returns filed for the years 1917, 1918, and 1919, upon which the taxpayer was not billed, but it wishes that any amounts assessed thereon shall be abated. The reasons for this claim are those specifically set out in the taxpayer’s brief now on file in the commissioner’s office and such any and all other facts that may be developed and this claim duplicates original claim as filed with said brief in December, 1922.”
In United States v. Felt & Tarrant Mfg. Co., 283 U. S.-, 51 S. Ct. 376, 377, 75 L. Ed.-, decided by the Supreme Court April 13, 1931, after referring to the necessity of filing a claim or demand as a prerequisite' to a suit to recover taxes paid, the Supreme Court said: “One object of such requirements is to advise the appropriate officials of the demands or claims intended to be asserted, so as to insure an orderly administration of the revenue. *' * ** ”

In the same ease, after referring to Treasury Regulations 62, which provided that “all the facts relied upon in support of the claim should be clearly set forth under oath,” the court went on to say: “The claim for refund, which section 1318 makes prerequisite to suit, obviously relates to the claim which may be asserted by the suit. Hence, quite apart from the provisions of the regulation, the statute is not satisfied by the filing of a paper which gives no notice of the amount or nature of the claim for which the suit is brought, and refers to no facts upon which it may be founded.” (Italics ours.)

It has been uniformly held by this court and the Supreme Court that the nature of the claim upon which the taxpayer demanded a refund must be set out in order to make the claim sufficient under the statute. In Feather River Lumber Co. v. United States, 66 Ct. Cl. 54, 57, it is said, in substance, that it is a well-established rule that the taxpayer cannot maintain an action to recover a refund until he has filed an application to the Commissioner containing the grounds upon which he relies for such recovery.

We think it needs neither argument nor discussion to show that the part quoted from the claim which plaintiff filed and set out above would not give the appropriate officials any information whatever as to the nature of the demand or claim intended to be asserted. The grounds thereof are not even mentioned, and the claim “refers to no facts upon which it [the suit] may be founded.” Plaintiff appears to rely especially upon the last sentence of the part of its claim quoted above. This states that the reasons for the claim are set out in the taxpayer’s brief now on file in the Commissioner’s office, but there is no allegation as to what the brief contained beyond this general statement, which is a mere conclusion and not a statement of fact. The claim is further based on “any and all other facts that may be developed,” but general statements of this kind give no informa^ tion to the government officials with reference to the nature of the claim.

It is quite clear that the claim for refund was insufficient. The demurrer must therefore be sustained and plaintiff’s petition dismissed. It is so ordered.