author: FOSTER, Circuit Judge.

text:
    FLORIDA GRAVEL CO. v. TAMPA SAND & SHELL CO. et al.
    No. 5939.
    Circuit Court of Appeals, Fifth Circuit.
    April 24, 1931.
    Hugh M. Taylor, of Quincy, Fla., W. J. Oven, of Tallahassee, Fla., and Y. L. Watson, of Quincy, Fla., for appellant.
    R. W. Shackleford and Morris E. White, both of Tampa, Fla., for 'appellee.
    Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.
   FOSTER, Circuit Judge.

Appellee filed a libel in personam against appellant to recover for- the loss of a barge alleged to have been caused by the negligence of appellant. A decree was entered in favor of appellee in the sum of $3,500. This appeal followed.

There was evidence tending to show the following state of facts: Both appellant and appellee were engaged in dredging sand and gravel in the Apalachicola and Chattahoochee rivers. Appellee was the owner of a barge known as No. 10. It was 90 feet long by 24 feet beam and 6 feet in depth. It was constructed of heavy timbers, with a rake at one end of about 13 feet forming the bow and with two bulkheads running lengthwise through the hull. A cargo bin was constructed on deck. Appellee had loaded the barge with sand and gravel, but it was tied up to the bank, as there was no place at which to unload. Appellant had entered into a contract with one F. M. Hendry by which he agreed to furnish barges and tugs for transporting appellant’s sand and gravel. On March 3, appellant received a telegram from Hendry, who was then at Tampa, advising, “Have arranged use three Thomas barges now in river.” Thomas was president of appellee and one of the barges referred to was No. 10. As a matter of fact, Hendry had not succeeded in making satisfactory arrangements for the use of the barges, although he had had some negotiations looking thereto. On receipt of the telegram, Lipscomb, who was vice president and manager of appellant, sent one of his men, Fisher, to take charge of barge No. 10. The gravel and sand then on board were unloaded. It was subsequently billed to the Florida Gravel Company, appellant, and was paid for. Appellant then proceeded to use the barge for its own purposes. Ob March 28, 1928, in loading her from a dredge she was hauled up at the stem of the dredge with the rake overhanging the after part of the dredge and she was loaded by a chute of the dredge. The capacity of the barge was about 210 tons of material when properly loaded. About 100 to 110 tons wer.e loaded on her but nearly all towards her after end, very little amidships, and hone at all at the bow. This caused her after end to sink so low in the water that she began to leak and filled up. It was then endeavored to swing her around so that the loading might be more evenly distributed, but she madei water rapidly and turned over, drifting down the river. She was later towed to a mud flat and several unsuccessful efforts were made to right her. Eventually she became a total loss. She was built in 1922 by appellee, and there was testimony tending to show that her cost was about $8,000. There was also testimony tending to show that she was in good condition when lost.

It is certain that the barge was appropriated by appellant either for its own use or acting as the agent for Hendry and without the consent of her owners. It is also reasonably certain that appellee had knowledge that she was being used and made no protest. However, it is not necessary to de-r termine whether there was a conversion of the property, as there was ample evidence to show that the barge was lost through negligence in loading, for which appellant was solely responsible. The District Court heard all the testimony in open court and no doubt reached the correct conclusion as to the liability of appellant and the value of the barge.

The record presents no reversible error.

Affirmed.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    DAVIS v. UNITED STATES.
    No. 3133.
    Circuit Court of Appeals, Fourth Circuit.
    April 18, 1931.
    Hiram P. Whitacre and Samuel E. Yest, both of Charlotte, N. C., for appellant.
    Chas. A. Jonas, U. S. Atty., of Lineolnton, N. C., and Frank C. Patton, Asst. U. S. Atty., of Morganton, N. C., and Thomas A. McCoy, Asst. U. S. Atty., of Asheville, N. C.
    Before PARKER and NORTHCOTT, Circuit Judges, and MeCLINTIC, District Judge.
   PER CURIAM.

Appellant, with others, was indicted in the District Court of the United States for the Western District of North Carolina, on a charge of violating the National Prohibition Act (27 USCA). On trial at Charlotte, N. C., at the October term, 1930, Davis was found guilty of unlawful sale of intoxicating liquors. On a count alleging unlawful possession on which the jury returned a verdict of guilty, judgment was suspended, and on a count alleging one of the unlawful sales on which the jury also returned a verdict of guilty prayer for judgment was continued, and on another count charging unlawful sale on which the jury returned a verdict of guilty the defendant was sentenced to serve five years in prison, from which judgment of the court this appeal was taken.

The principle question raised is as to sufficiency of the indictment, an examination of which leads us to the conclusion that the indictment was good. As was well said by Judge Parker in delivering the opinion of this court in the case of Hill v. United States, 42 F.(2d) 812) 814: "The time has passed' when convictions will be reversed in the courts of the United States for mere technical defects in pleading. As said by Judge Rose, speaking for this court in Martin v. United States, 299 F. 287, 288: ‘The sufficiency of a criminal pleading should be determined by' practical, as distinguished from purely technical, considerations. Does it, under all the circumstances of the case, tell the defendant all that he needs to know for his defense, and does it so specify that with which he is charged that he will be in no danger of being a second time put in jeopardy? If so, it should be held good.’ ” See, also, Martin v. United States (C. C. A.) 299 F. 287; Hovermale v. United States (C. C. A.) 5 F.(2d) 586; Malinow v. United States (C. C. A.) 42 F.(2d) 374, 375; Dunbar v. United States, 156 U. S. 185, 15 S. Ct. 325, 39 L. Ed. 390.

Measured by the standards laid down by this court and in the light of the tendency of the courts everywhere to disregard technicalities and to regard only essentials, the sale count in the indictment here is unquestionably good. The accused was informed of the particular violation with which he was charged, and had all necessary notice as to the charge. The indictment contains sufficient information upon which to base a plea of former conviction should it have been attempted to prosecute him again for the same offense. In addition to this, had the appellant felt that he should have additional information, a request for a bill of particulars made at the proper time would have unquestionably been granted by the court. No such request is shown in the record.

One of the assignments of error deals with a portion of the charge to the jury, but an examination of the charge shows that no error was committed. The charge pf the learned judge below was eminently fair, correctly stated the law, and there is no error in it.

The judgment of the court below is accordingly affirmed.


author: THOMSON, District Judge.

text:
    GRAHAM & NORTON CO. v. ELEVATOR SUPPLIES CO., Inc.
    No. 4480.
    Circuit Court of Appeals, Third Circuit.
    April 9, 1931.
    C. V. Edwards, Henry C. Townsend, and Virgil C. Kline, all of New York City, and Vm. G. Mahaffy, of Wilmington, Del., for -appellant.
    S. E. Darby, Jr., of New York City (E. Ennalls Berl, of Wilmington, Del., and Darby & Darby, of New York City, of counsel), for appellee.
    Before BUFFINGTON and THOMPSON, Circuit Judges, and THOMSON, District Judge.
   THOMSON, District Judge.

While suit was brought on three patents, the Bassett patent is the only one before us. This patent relates to signal systems for elevators. It is of the type where the passenger, on entering the car, announces his destination to the operator, who then presses the appropriate button of an annunciator on the ear. When the ear approaches the floor announced, a signal is automatically displayed in the ear, reminding the operator that he is expected to stop at that floor. At the end of the run in either direction, the signal mechanism is reset. There is a button-set mechanism for each floor, in combination with a ear controlled circuit completing apparatus, which causes the display of the signals at the proper points. A feature of the operation is that any number of the button-set mechanisms are operable together, so as to register in advance the number of stop signals to be displayed. A two-brake circuit controls the signal lamp. For the signal lamp to flash, it is necessary that both brakes in the circuit be closed. One brake is closed by the push button; the other is closed by the brushes carried by the “traveler,” which carries any desired number of bridging contacts, to bridge any number of normally open circuits with the travel of the ear. There are thus two essentials in a “pre-registering” system, namely, the closing of the first brush in the circuit by means of a push button, and the closing of the second brake of the circuit at the “commutator,” by the approach of the car to the signalled floor. In addition to these, there is provided means for restoring the button controlled switches, after they have served their purpose of flashing the signal to the operator. The conducting brush or traveler is so placed as to travel across the segment conducting the current, and is connected electrically to the switch controlled by the push button. The defendant’s apparatus is a “pre-registering” system. It has a car operator’s flash, and push buttons mounted in the car. A two-brake circuit is provided for each floor, with the operator’s flash signal connected to each of the circuits during the car’s progress, by means of the “selector.” The operation of the push button energizes a magnet, which closes the first brake of tbe circuit, and it remains closed until tbe car has passed beyond the signaled floor. Both important features of the Bassett patent, namely, the closing of the first brake by a push button on the car, and the closing of the second brake in the same circuit by the “traveler,” are present in the defendant’s apparatus. In Bassett, restoration is effected at the end of the travel of the elevator, while in defendant’s apparatus, restoration is effected at or after leaving each floor, after the signal has been given. Neither the invention, nor the claims of the patent, are limited to these details. The Bassett patent employs one bridging contact or brush to perform two functions, one closing the circuit to the signal lamp, and the other opening the button controlled switch. The defendant employs two bridging contacts or brushes, which are carried by a single traveler; the result being effected by the single brush of Bassett. There is no serious attack' on the validity of the patent. The patent being valid, we think infringement is established, as it appears that defendant has employed the same combination of elements, which operate the same way, producing the same result by substantially the same means.

The judgment is affirmed.


text:
    DAVIS et al. v. UNITED STATES.
    No. 3138.
    Circuit Court of Appeals, Fourth Circuit.
    April 18, 1931.
    Kenneth J. Kindley and Marvin L. Bitch, both of Charlotte, N. C., for appellants.
    Frank C. Patton, Ásst. U. S. Atty., of Morganton, N. C., and Charles A. Jonas, U. S. Atty., of Lincolnton, N. C. (Thomas A. McCoy, Asst. U. S. Atty., of Asheville, N. C., on the brief), for the United States.
    Before PARKER and NO'RTHCOTT, Circuit Judges, and MeCLINTIC, District Judge.
   PER CURIAM.

W. W. Davis and George Ferguson were indicted and convicted in the court below of • violations of the National Prohibition Act' (27 USCA); and from sentences of impris- ■ onment thereupon imposed, they have ap— pealed. The principal question presented by their assignments of error relates to the he- '< tion of the court in sustaining a demurrer to their plea in abatement, which alleged that seven of the jurors who joined in returning the bill of indictment had not paid their taxes for the preceding year.

It is provided by statute that jurors in a federal court shall have the same qualification as jurors in the highest courts of law of the state in which such federal court is held. Judicial Code, § 275, 28 USCA § 411. The North Carolina statutes applicable are sections 2312 and 2335 of the Consolidated Statutes. Section 2312 provides: “The board of county commissioners for the several counties at their regular meeting on the first Monday in June, in the year nineteen hundred five, and every two years thereafter, shall cause their clerks to lay before them the tax returns of the preceding year for their county, from which they shall proceed to select the names of all such persons as have paid all the taxes assessed against them for the preceding year and are of good moral character and of sufficient intelligence. A list of the names thus selected shall be made out by the clerk of the board of commission- . ers and shall constitute the jury list, and shall be preserved as such.”

Section 2335 provides: “All exceptions to grand jurors for and on account of their disqualifications shall be taken before the jury is sworn and impaneled to try the issue, by motion to quash the indictment, and if not so taken, the same shall be deemed to be waived. But no indictment shall be quashed, nor shall judgment thereon be arrested, by reason of the fact that any member of the grand jury finding such bills of indictment had not paid his taxes for the preceding year, or was a party to any suit pending and at issue.”

It is -contended by appellants that section 2312 prescribes the qualifications of jurors and that section 2335 merely lays down rules of practice for the courts of the state which have no application to proceedings in the federal courts. We think, however, that this gives too narrow a construction to the latter section. Its passage, immediately following the decision of this court in Breese v. U. S., 143 F. 250, was evidently for the purpose of removing the disqualification of grand jurors, based upon failure to pay taxes for the preceding year, in cases where they actually serve upon the grand jury and pass upon bills of indictment; and there is no reason why it should not be given this interpretation. To adopt the interpretation urged by appellants would lead to the absurd result that upon identical facts a bill of indictment would be good in the state court and bad in the federal court, notwith-v standing that the federal statute has adopted the standard prescribed by the state as to the qualification of jurors.

The exceptions relating to the sufficiency of the indictment and the admission of testimony are without substantial merit, and need not be discussed.

There was no error, and the judgment of the court below will be affirmed.

Affirmed.


text:
    GRAFFE v. UNITED STATES.
    No. 371.
    Circuit Court of Appeals, Tenth Circuit.
    April 23, 1931.
    F. W. James, of Salt Lake City, Utah, for appellant.
    Charles R. Hollingsworth, U. S. Atty., and George H. Lunt and Edgar C. Jensen, Asst. U. S. Attys., all "of Salt Lake City, Utah.
    Before LEWIS, PHILLIPS,, and Mc-DERMOTT, Circuit Judges.
   PER CURIAM.

On verdict appellant was adjudged guilty of transporting 300 gallons of whisky in an autotruck on and along a highway in Salt Lake county, Utah. On error assigned and specified he complains here: (1) That the court overruled his motion to suppress the evidence; and (2) overruled his motion to qqash the indictment — both on the ground that all the incriminating evidence before the grand jury and that to be offered at the trial had been obtained by officers of the law in violation of appellant’s rights guaranteed to him by the Constitution. Amendments 4 and 5, Constitution United States.

When the motion to quash came on, the appellant offered, and the court heard, the testimony of Roy Schweitzer, deputy sheriff for Salt Lake county. He testified: He received word (over telephone) that a truck was coming down Parley’s Canyon within a short time heavily loaded with whisky- He did not know the person speaking, but recognized the voice of a person who prior to this time had given him valuable information. He took Deputy Sheriff Fotis with him, and they drove immediately to Parley’s Canyon. Shortly after their arrival there, a Studebaker truck, recognized by him as the same truck which he had previously seized with 300 gallons of whisky in it, drove by. The way the truck was riding indicated it was heavily loaded. He recognized the license as being the same it had on when he seized it before, and he and Fotis followed it for a short distance, and could easily see through an opening in the back of the truck ten-gallon kegs stacked high in the back of the truck, forced it to the side of the road, and stopped it. Appellant was alone in the truck. On looking in, the deputy sheriff saw it was loaded with thirty ten-gallon kegs of whisky. They did not have a seareh warrant. They arrested appellant and seized the truck. After they had gone about one and a half miles toward the county jail with appellant and the truck, they met Nelson, prohibition agent, and a deputy sheriff. Until then Nelson knew nothing of the information received by Schweitzer over the phone, or of the arrest and seizure. Nelson testified that when he got there Deputy Sheriff Fotis was in the truck with appellant, and it had been searched. He followed the truck to the county jail, where Schweitzer booked appellant, “Hold for United States Government.” Nelson swore to the complaint charging appellant with the offense before the United States commissioner. This evidence and that of Fotis corroborating Schweitzer were offered on appellant’s motion to suppress.

Obviously the learned District Judge was of the opinion on the facts stated either that the deputy sheriffs in making the arrest had probable cause to believe the offense was being committed in their presence or that the issues raised by the motions were immaterial, or both. We are not advised that the court erred in either or both conclusions. As to the first, it is sufficient to cite Carroll v. United States, 267 U. S. 132, 45 S. Ct. 280, 69 L. Ed. 543, 39 A. L. R. 790; as to the second, the constitutional protection invoked is not a limitation on the powers of the states and its officers. Ohio ex rel. v. Dollison, 194 U. S. 445, 24 S. Ct. 703, 48 L. Ed. 1062; Robinson v. United States (C. C. A.) 292 F. 683; Landwirth v. United States (C. C. A.) 299 F. 281; Elam v. United States (C. C. A.) 7 F.(2d) 887; Nunn v. United States (C. C. A;) 4 F. (2d) 380; Byars v. United States, 273 U. S. 28, 47 S. Ct. 248, 71 L. Ed. 520.

The judgment is affirmed. The appeal is without merit, and mandate may issue on entry of judgment here.


text:
    COSTIN v. UNITED STATES.
    No. 370.
    Circuit Court of Appeals, Tenth Circuit.
    April 23, 1931.
    F. W. James, of Salt Lake City, Utah, for. appellant.
    Charles R. Hollingsworth, U. S. Atty., and George H. Lunt and Edgar C. Jensen, Asst. U. S. Attys., all of Salt Lake City, Utah.
    Before LEWIS, PHILLIPS, and MeDERMOTT, Circuit Judges.
   PER CURIAM.

Costin was convicted of the charge of transporting 150 gallons of whisky in an auto truck on and along a highway in Salt Lake county, Utah. Before trial he ásked that evidence obtained by United States prohibition enforcement officer and deputy sheriffs who were with him, in searching the truck without a warrant, be suppressed. He also moved to quash on the ground that the officers in making search without warrant acted without probable cause to believe that the crime was being committed and the grand jury based its finding on their testimony. Error is assigned that the court held on the proof adduced there was probable cause justifying the search, seizure, and arrest without warrant.

On hearing the motion to suppress defendant called the prohibition enforcement officer as a witness, and he testified on direct examination that he did not have a search warrant when he searched the truck. On cross-examination he testified further: A few days before he searched this truck he went to Evanston, Wyo., to make investigation as to so much liquor coming into Utah from Wyoming; he met Officer Buck, night marshal of Evanston; Buck said “there is considerable of it coming through, I will do all I possibly can for you in getting information, when it is coming”; five or six days later Buck telephoned to him at Salt Lake City at 11:15 p. m. that a Graham truck was on the way to the West with a load of liquor; that two men were in the truck and it was being led by a decoy ear painted green in which was a man and woman; Buck also told him the Wyoming license number on the truck. The enforcement officer on receiving this information went out on the highway in an auto with two deputy sheriffs and a prohibition agent and waited for the truck. About 2:45 a. m. the green-decoy ear came and a few seconds later the truck came. By throwing lights on the truck the enforcement officer saw the license number given him by Buck. Then a race ensued. The decoy car got in the way of the pursuing officers, but they finally passed it, stopped the truck, found it was carrying fifteen ten-gallon kegs of whisky, arrested Costin and the man with him, and returned to Salt Lake City. The information from Buck, its corroboration, and the circumstances immediately preceding the search, leave no doubt the enforcement officer had probable cause to make it. Carroll v. United States, 267 U. S. 132, 45 S. Ct. 280, 69 L. Ed. 543, 39 A. L. R. 790.

The judgment is affirmed. The appeal is without merit. Mandate may issue on entry of judgment here.


text:
    LEWIS v. UNITED STATES.
    No. 364.
    Circuit Court of Appeals, Tenth Circuit.
    April 24, 1931.
    A. R. Morrison, of Denver, Colo., for appellant.
    Jean S. Breitenstein, Asst. U. S. Atty., of Denver, Colo. (Ralph L. Carr, U. S. Atty., of Denver, Colo., on the brief), for the United States.
    Before LEWIS, PHILLIPS, and Mc-DERMOTT, Circuit Judges.
   PER CURIAM.

Appellant was convicted of three sales of whisky. The errors assigned and specified are directed to the court’s instructions to the jury. There was evidence, if believed, that would have supported the conclusion that appellant was not the principal in one or more of the transactions, but an aider and abetter. On that subject the court did not err in giving the jury the substance of section 550, tit. 18, U. S. Code (18 USCA § 550). The two other specifications cover excerpts from the instruction on entrapment, which was urged as a defense. The forepart of the instruction gave a correct definition of entrapment, and the excerpts which followed might have been omitted appropriately; but when the instruction as a whole is considered we áre of the opinion the excerpts could not have misled the jury as to the law on that subject. Moreover, there was no evidence that tended to support that defense, and the charge in that respect, if error, was brought about by the insistence of appellant on a false issue. If the contention he now makes is sound, he misled the court and cannot complain. Affirmed. Mandate to issue forthwith.


text:
    UNITED STATES v. RUBIN.
    No. 369.
    Circuit Court of Appeals, Second Circuit.
    April 20, 1931.
    Arthur A. Kestler, of Brooklyn, N. Y., for appellant.
    Howard W. Ameli, U, S. Atty., of Brooklyn, N. Y. (Herbert H. Kellogg, Asst. U. S. Atty., of Brooklyn, N. Y., of counsel), for the United States.
    Before L. HAND, SWAN, and CHASE, Circuit Judges.
   PER CURIAM.

The trial was upon the two counts together ; the evidence proved that the defendant had deputed two persons to carry the liquors from his malt shop to the place appointed for delivery by the decoy who arranged the sale. The points argued do not require discussion, since the persons deputed to carry the liquors testified to the facts upon their own defense and proved the case against Rubin beyond question.

It was, however, erroneous to convict upon both counts, because the possession was of the same liquors transported and was laid as being in the motor which did the transporting. Schroeder v. U. S., 7 F.(2d) 60 (C. C. A. 2); Schechter v. U. S., 7 F.(2d) 881 (C. C. A. 2); Friedman v. U. S., 13 F. (2d) 632 (C. C. A. 6); Segurola v. U. S., 16 F.(2d) 563 (C. C. A. 1); Brown v. U. S., 16 F.(2d) 682 (C. C. A. 1).

Conviction on first count reversed; conviction on second count affirmed.


text:
    O’BOYLE v. UNITED STATES.
    No. 139.
    Circuit Court of Appeals, Second Circuit.
    May 1, 1931.
    H. L. Cheyney, of New York City, for appellant.
    Howard W. Ameli, U. S. Atty., of Brooklyn, N. Y. (Herbert H. Kellogg, Asst. U. S. Atty., of Brooklyn, N. Y., of counsel), for the United States.
    Before MANTON, SWAN, and AUGUSTUS N. HAND, Circuit Judges.
   PER CURIAM.

This motion is to recall the mandate and strike out the allowance of costs granted against the United States. Costs may not be awarded against the United States in this form of action. Shewan & Sons v. United States, 267 U. S. 86, 45 S. Ct. 238, 69 L. Ed. 527; Pine River Co. v. United States, 186 U. S. 279, 22 S. Ct. 920, 46 L. Ed. 1164; Treat v. Farmers’ Loan & Trust Co., 185 F. 760 (C. C. A. 2); Carlisle v. Cooper, 64 F. 472 (C. C. A. 2); Rule 28, subd. 4, U. S. C. C. A. 2d Circuit. The mandate will be recalled and the motion granted unless the appellant stipulate to relinquish the costs awarded.

Motion granted accordingly.


author: WILBUR, Circuit Judge.

text:
    NORTHWESTERN NAT. INS. CO. OF MILWAUKEE, WIS., v. LEE, Insurance Com’r.
    District Court, D. Oregon.
    Feb. 12, 1931.
    Kelly & MaeMahon, of Tacoma, Wash., for plaintiff.
    I. H. Yan Winkle, Atty. Gen., of Oregon, and Willis S. Moore and Miles H. McKey, Asst. Attys. Gen., of Oregon, for defendant.
    Before RUDKIN and WILBUR, Circuit Judges, and MeNARY, District Judge.
   WILBUR, Circuit Judge.

The plaintiff invokes the authority of this court to secure a determination that a statute of the state of Oregon, regulating the number of insurance agents that may be appointed for the conduct of its business, is void because violative of the Fourteenth Amendment to the Constitution of the United States. It seeks a temporary injunction and invokes the jurisdiction of this court in a three-judge ease under section 266 of the Judicial Code (28 USCÁ § 380).

The complaint alleges that the plaintiff is organized under the laws of the state of Wisconsin and has complied with the requirements of the Oregon law relating to the right of a'foreign insurance company to do business in the state and has been licensed to transact insurance business within the state; that it has appointed two agents in the city of Portland, Or., who have been licensed by the state insurance commissioner, and appointed a third agent in such city who has applied for a license and tendered the statutory fee of $2, but that the insurance commissioner has refused to issue the third license for the transaction of insurance business in the city of Portland without the payment of a fee of $500, which is fixed by subdivision 8 of section 6388 of Olson’s Oregon Laws. Plaintiff alleges that the defendant insurance commissioner has threatened to revoke its lieénse .and exact other penalties affixed by the insurance law in the event that the third and newly appointed agent to transact insurance business for the plaintiff does so without the license which he declines to issue unless paid $500. The statute attacked is quoted in the complaint as follows:

“(1.) Foreign Fire Insurance Companies Not to Write Inswance Except Through Licensed Agent. It shall be unlawful for any fire insurance company doing business in the. state of Oregon to write, place or cause to be written or placed, any policy or contract for indemnity or insurance on property situated or located in the state of Oregon, except through or by the duly authorized agent or agents of such insurance company residing and doing business in this state, to whom the premium on such insurance shall be paid; provided, that this section shall not apply to direct insurance covering the rolling stock and other property belonging to and used in the operation and maintenance of plant and business of railroad corporations or other common carriers or property in transit while in the possession and custody of railroad corporations or other common carriers and mutual fire insurance companies. At the time of the filing of the annual statement of every such company with the insurance commissioner there shall be attached thereto the affidavit of the president, manager, or chief executive officer in the United States that this section has not been violated. This section shall not apply to policies issued directly from the home office of any company organized under the laws of this state or having its home office located in this state. * * *
“(4) License of Fire Insurance Agent— Certificate — License Fee. Every insurance company licensed to transact a fire insurance business in this state and lawfully doing such business therein, may, in respect thereof, establish agencies in this state, to consist of but one agent for each city, town or village in the state to represent the title registered, and additional agencies as hereinafter provided, and the name of every agent appointed, in accordance with the provisions of this section shall be filed with the insurance commissioner immediately upon the making of such appointment by any such company. The insurance commissioner shall thereupon issue to each such agent that [who] is qualified as provided in this act a certificate setting forth that such agent is entitled to act for the company appointing him for the balance of the current year ending March 31st following the date of such appointment. Every such agent now representing any such company, or who may hereafter be appointed to represent any such company, provided such agent is qualified as provided in this act, shall be relieensed during the month of March in each year for the ensuing year upon proper application to the insurance commissioner by the company appointing him. The fee fixed for issuing such certificate shall be $2 and shall be paid to the insurance commissioner; provided, that the certificate issued to an established agency of any company in any city, town or village in the state may be transferred to any agent or agency by the insurance commissioner upon proper application of any such company without exacting further fees. * * *
“(7) Additional Agent in Certain Cities. Any such insurance company which has qualified to transact a fire insurance business in this state and is lawfully doing such business therein may appoint one additional agent to represent such company transacting business in its own corporate name in any city of this state having a population of fifty thousand or more inhabitants according to the last federal census; provided, that any such insurance company doing business under an additional title shall be limited to one agency for each title.
“(8) Annual License Fee for Additional Agent. Any such insurance company may appoint an additional agent or agents to transact business in its own corporate name, or additional title, in any city of this state on application to the insurance commissioner and the payment of an annual license fee of five hundred dollars for each such agent.”

Upon the application for the temporary injunction the defendant appeared and moved to dismiss the action upon the ground that the complaint did not state facts sufficient to constitute a cause of action. Both motions were submitted. The defendant justifies the legislation in question solely on the ground that the provision under attack applies to foreign corporations and cites in support of its contention, among other cases, a decision by the Supreme Court of Oregon in Herbring v. Lee, 126 Or. 588, 269 P. 236, 237,. 60 A. L. R. 1165, in which the imposition of the $500 license fee was justified solely on the ground that the Northwestern National Insurance Company, who sought to appoint Carl Herbring its agent, was a foreign insurance company, and that the exaction of the $500 annual license fee for such appointment was therefore valid. That ease was taken to the Supreme Court of the United States (280 U. S. 111, 50 S. Ct. 49, 74 L. Ed. 217) by writ of error, and was sustained by that court solely on the ground that the legislation in question is a regulation solely of the right of the corporation and does not interfere with any constitutional right of the individual who applied to the insurance company for the license. The Supreme Court declined to pass upon the rights of the1 insurance company, and for that reason, no doubt, the company has brought this action. Quite aside from the constitutional question involved, the proper interpretation of the insurance laws of Oregon, of which the above-quoted section is but a small part, is not free from difficulty, and we are reluctant to undertake the interpretation thereof in the absence of an authoritative decision by the Supreme Court of that state. It is not clear that the above-mentioned decision of the Supreme Court of Oregon, Herbring v. Lee, supra, is such a decision. It was assumed in that case that the above-quoted section 6388 applied only to foreign insurance companies, and the defendant, in its brief here, makes the same assumption. The plaintiff, however, asserts in his reply brief:

“As we anticipated, the defendant does not attempt to justify this law upon the ground that it is a valid exercise of the police power, but merely argues that the law is a condition precedent to the right of a foreign fire insurance company to do business in the state, from which he concludes that the constitutionality of the law cannot be drawn into question.
“That provision which we are attacking in this case, which prohibits any fire insurance company from appointing more than one agent in .any city of the state, obviously applies both to domestic and foreign insurance companies and is not 'a condition at all. It is a mere prohibition, applicable alike to both foreign and domestic fire insurance companies.”

The defendant does not assert that the statute in question applies only to fore'gn insurance companies, but attempts to justify the imposition of the license fee solely upon the ground that the plaintiff is a foreign insurance company and for that reason the state has power to determine the conditions upon which such company shall transact business .therein. In its reply brief, after the hereinaboVe quoted statement to the effect that the law under attack applies equally to foreign and domestic corporations, plaintiff states his position as follows:

“The only question in this case is whether the state, after having granted us the privilege or franchise to do business in Oregoñ, may then take away our property right to make a lawful, private contract.
“The question of the amount of the license fee required to be paid for the license of an ‘additional agent,’ is only collaterally involved. If the state has not the power to enact the general rule, limiting the number of agents an insurance company may appoint, then the exceptions to the general rule must fall with the general rule.
“It is the general rule, quoted above, which we are particularly attacking. The provisions that in cities of over 50,000 inhabitants the company may appoint two .agents, and that by the payment of the exorbitant $500.00 annual license fee the company may appoint ‘additional agents’ in any city, are merely exceptions to the general statutory rule, and depend for their validity upon the general rule.”

If we assume that the plaintiff is complaining solely of the restrictions upon it which it claims limit the number of agents it may appoint in pursuance of its right to do business, and ‘that the question involved is not the payment of the license fee, there is, of course, no merit whatever in the plaintiff’s position because under the express provisions of the law (section 6388, subd. 8, supra) it can appoint as many agents as it sees fit, provided it is willing to make the payment of $500 in the ease of each “additional”. agent.

It is evident that the real controversy here is over the right of the state to exact so large a fee from the plaintiff as a condition precedent to the licensing of its agents. The embarrassment we suffer in disposing of the case arises from the fact that the question as to the power of a state to unjustly discriminate between persons within its jurisdiction and lawfully entitled to do business therein is quite distinct from the question as to the power of the state to impose onerous conditions upon the right to transact business therein, although the right to equal and just treatment, and the right to do business without undue restraint, are both assured by section 1 of the Fourteenth Amendment to the federal Constitution. The right of the state to limit the number of agents of all insurance companies and to exact license fees, large or small, from them or their agents as a condition to the transaction of that business is predicated upon either the police or taxing power of the state. The defendant does not claim that the law in question is a lawful exercise of either power. Plaintiff, in its opening brief, challenged the defendant to justify the legislation under the police power of the state and the defendant has made no effort to do so, but has defended the statute in question solely upon the ground that it was a justifiable imposition upon a foreign insurance company as a condition precedent to its right to transact business within the state. In taking this position the defendant does not make it clear whether or not he contends that the $500 license fee is applicable to both the foreign and domestic insurance companies. We are thus left in doubt as to whether or not the parties are agreed upon the proposition that section 6388, supra, applies to both foreign and domestic fire insurance companies. In this connection it should be observed that in the above-quoted section 6388 the title, “Foreign Fire Insurance Companies not to Write Insurance Except Through Licensed Agent,” is not a par.t of the legislative action, but has been inserted by the publisher of the Code. The statute in question was adopted in 1917 (General Laws of Oregon 1917, e. 203, pp. 312, 354, § 22-e). Section 22-c in the statute as originally enacted has the title “Fire Insurance Company” in lieu of the above-quoted title contained in section 6388. It is in a subheading of the original act entitled “General provisions relating to all fire insurance companies” (General Laws of Oregon 1917, c. 203, p. 352). This subheading also appears in the Code preceding section 6385, Olson’s Oregon Laws, supra. The only thing we find in section 22-c with reference to foreign and domestic corporations is the sentence at the end of subdivision 1, “This section shall not, apply to policies issued directly from the home office of any company organized under the laws of this State or having its home office located in this State.” This would seem merely to indicate that policies from the home office of an insurance company having such an office in the state might be issued without the .agent being licensed by the state as such an agent. We are in serious doubt as to whether or not section 6388 applies exclusively to foreign insurance companies. The plaintiff predicates its right to the issuance of the license in question to its agent upon the payment of a fee of $2, upon the ground that the state has no right to unreasonably limit the number 6f its agents for the reason that such a limitation is an interference with a property right guaranteed by the Fourteenth Amendment. In support of this position it relies upon two decisions to that effect which were based, not upon an unlawful exaction or restriction upon a foreign corporation, but upon a restriction equally applicable to all insurance corporations. The first of these decisions is that by the Supreme Court of the state of Washington, Northwestern Nat. Ins. Co. v. Fishback, 130 Wash. 490, 228 P. 516, 36 A. L. R. 1507. In that ease, where the statute was similar to that of Oregon here in question, the state Supreme Court held that the legislation in question was in conflict with the Fifth and Fourteenth amendments to the Constitution of the United States, in that it interfered with the property right of its citizens to engage in legitimate business. The other decision is a subsequent one by the Supreme Court of New Mexico, Franklin Fire Ins. Co. v. Montoya, 32 N. M. 88, 251 P. 390, holding that a similar provision of the statute of New Mexico which prohibited the appointment of more than one agent in a city was a violation of the federal Constitution. In these cases, the plaintiff in each instance was a foreign insurance company licensed to do business in the respective states. In neither case, however, was the decision based upon the fact that the plaintiff was a foreign instead of a domestic corporation. In both decisions the emphasis was upon the right of the agent to engage in the business rather than upon the right of the company to appoint agents to transact its business. A later decision by the Supreme Court of the United States in the Oregon ease (280 U. S. 111, 50 S. Ct. 49, 74 L. Ed. 217, supra) holds that the exaction of a $500 fee from the company as a condition of the appointment of an agent is not a violation of any right of the agent, and to that extent discounts somewhat the effect of the above-mentioned decisions of the Supreme Court of Washington and of the Supreme Court of New Mexico. However, in so far as the decision of the Supreme Court of the United States is based upon the theory that the insurance company' may have acquiesced in the imposition of the $500 license fee in the ease before it (Herbring v. Lee, 280 U. S. 111, 50 S. Ct. 49, 74 L. Ed. 217, supra), the decision of the New Mexico and Washington courts are differentiated from that of the Supreme Court.

However, we will consider the statute upon the only theory advanced by the defendant in its support, namely, that the statute in question is valid because the plaintiff is a foreign corporation. We are inclined to do this for the reason that this is the sole claim advanced by the defendant in support of the legislation and for the further reason that the Supreme Court of Oregon has assumed in the above-mentioned case of Herbring v. Lee, relied upon by the defendant, that the $500 fee exacted from plaintiff’s agents is justifiable solely upon the ground that it is a foreign corporation. In that case the Supreme Court of Oregon stated the question before it to be as follows: “Plaintiff, a resident and practicing attorney in the City of Portland, Or., made application to the defendant as insurance commissioner for a license to act as agent in that city for the Northwest National Fire Insurance Company, a foreign insurance corporation, which for several years had been qualified and doing insurance business in the state of Oregon. The application of the plaintiff was denied by the insurance commissioner for the reason that the Northwest National Fire Insurance Company is 'a foreign fire insurance corporation, and that it had already appointed two resident agents to act for it in the city of Portland under its corporate name, and that a third agent for said city to act under its corporate name could not be appointed except upon the payment of an additional fee of $500 by said insurance company. The refusal was based upon section 6388, Or. L., which relátes to the conditions upon which such companies may write insurance in the state of Oregon.”

The agent in that case justified his demand for a license upon the payment of a fee of $2 under section 6333, subd. 3, of Olson’s Oregon Laws (Id. e. 203, p. 322, of the General Laws of Oregon of 1917, § 4, subd. 3). That section contains the following provision: “(3) Every company duly authorized and licensed to transact insurance business, other than life insurance companies, in the state of Oregon, and lawfully doing such business therein, may in respect thereof appoint an agent or agents in each city,’ town or village in this state, and the name of every agent appointed in accordance with the provisions of this section, including the classes of business he is authorized to transact for such company, shall be filed with the insurance commissioner immediately upon the making of such appointment by any such company. The insurance commissioner, if he finds the agent qualified, shall thereupon issue to each such agent a license setting forth that such agent is entitled to act for the company appointing him for the balance of the current year ending April 1st, following the date of such appointment; provided, that the license issued to an established agency of any company in any city, town or village in this state may be transferred by the insurance commissioner to another agent or agency upon proper application of any such company, without exacting further fees. Every such license for each such agent representing any such company shall be renewed during the month of March in each year for the ensuing year upon proper application to the insurance commissioner by the company appointing him. The fee fixed for issuing such license shall be $2 and shall be paid to the insurance commissioner.”

The Supreme Court of Oregon, in the above-entitled ease, after quoting section 6333, supra, stated its conclusion as follows:

“The commissioner’s refusal to make the requested appointment was occasioned by the nonpayment of the fee of $500 required by section 6388, Or. L., as a condition precedent to the right of any fire insurance company to appoint such additional agent. The contention of respondent is that the license should issue upon compliance with the conditions prescribed by section 6333, Or. L., without the foreign insurance company complying with section 6388, Or. L., subd. 8, by paying the fee of $500 thereby required.
“Chapter 203, General Laws of Oregon-1917, which is practically a fire insurance code, is a general .act 'for the regulation and supervision of insurance in the state of Oregon.’ This act contains subdivision 8, § 6388, Or. L., and also subdivision 3, § 6333, Or. L.
“There is no reason suggested or conceived why a foreign insurance company .applying to do business in this state should not comply with both of the sections and subdivisions mentioned. Therefore, a foreign corporation being required to comply with the statute in order to be entitled to appoint agents and consummate its business in the state of Oregon, it follows, as the night follows the day, that in order for an agent to obtain a license to represent such a foreign corporation there must first be a compliance by the foreign corporation with the requirements of our state law.
“The power of the state to impose conditions upon which a foreign fire insurance company may be permitted to do business in this state is not subject to constitutional limitations, and the rights of one applying for a license, to .act as agent for such insurance company are contingent upon the compliance of the company with conditions precedent to its right to appoint such an agent. Section 6388, Or. L.; section 22c, c. 203, Gen. Laws of Oregon 1917. [Citing eases].”

It will be observed that the Supreme Court of Oregon does not expressly hold that section 6333 applies to domestic fire insurance corporations and that section 6388 applies solely to foreign fire insurance corporations. However, the decision of the court seems to be based upon the assumption that section 6388 applies solely to foreign fire insurance companies, and that section 6333 applies solely to domestic insurance corporations. While the situation is not as clear as we would like to have it in dealing with the constitutionality of a law of a state, we feel that we are justified in assuming that the Supreme Court of Oregon has held that the exaction of $500' license fee for its agents is applicable solely to foreign fire insurance ■corporations. The question presented for our decision is, not that stated by the appellant as quoted above, but it is .this, namely, can the state, after an insurance company has complied with all its regulations with reference to transacting business within the state and after being licensed so to do, require a foreign insurance corporation to pay $500 license fee for .additional agents necessary for the transaction of its business where a domestic insurance company transacting the same business can appoint as many .agents as it deems necessary upon the payment for each agent of the merely nominal fee of $2, a fee reasonably commensurate with the duties imposed upon public officers by the additional application in the examination of the application and the issuance of the license. The Fourteenth Amendment to the federal Constitution prohibits unjust discrimination as between persons under the jurisdiction of the state, and probably no one would question that a statute requiring from one domestic insurance company the payment of $500 and from another domestic insurance company the payment of $2 for the same service would be violative of that constitutional provision. It is equally clear that where a foreign corporation is lawfully within the state and authorized to do business therein, it is entitled to invoke the same constitutional provision and that a state cannot deprive such a. foreign corporation of that constitutional right to the equal protection of the law under the federal Constitution. This question is so well settled that we deem it unnecessary to do more than to cite some of the recent authorities in which it is announced. Liggett v. Baldridge, 278 U. S. 105, 110, 49 S. Ct. 57, 73 L. Ed. 204; Quaker City Cab Co. v. Commonwealth of Penn., 277 U. S. 389, 48 S. Ct. 553, 72 L. Ed. 927; Power Mfg. Co. v. Saunders, 274 U. S. 490, 47 S. Ct. 678, 71 L. Ed. 1165; So. Ry. v. Greene, 216 U. S. 400, 30 S. Ct. 287, 54 L. Ed. 536, 17 Ann. Cas. 1247; Hanover Fire Ins. Co. v. Harding, 272 U. S. 494, 47 S. Ct. 179, 71 L. Ed. 372, 49 A. L. B. 713; Deutsche Bank v. Humphrey, 272 U. S. 517, 47 S. Ct. 166, 71 L. Ed. 383.

It follows that unless the $500 license fee imposed as a condition precedent to the employment of additional agents for the foreign insurance company is a condition precedent of a permit to the insurance company to do business in the state, it is an unjust discrimination violative of the .Fourteenth Amendment to the federal Constitution. It is assumed by the Supreme Court of Oregon in its decision in Herbring v. Lee, supra, and .also by the defendant herein in its brief, that it is such a condition precedent, and therefore justified. No reason is advanced in support of this assumption, and the only basis for such an assumption which occurs to us is that the insurance company making application for license to transact insurance business in the state knows when it makes such application that the law under which the application is made does in fact provide that if it desires to appoint more than one agent in each city, or two in Portland, it must pay the additional license fee. But this is not sufficient to justify the discrimination against it and no ease has been cited which goes to that extent. On the contrary, the courts with practical unanimity, hold that a foreign corporation, once having been permitted to enter into a state and engage in business, has a right to invoke the Fourteenth Amendment against unjust discriminations whether they arise under legislation passed 'after its permit or before. We think this is settled by the decision in Liggett v. Baldridge, 278 U. S. 105, 110, 49 S. Ct. 57, 58, 73 L. Ed. 204, as .applied to legislation enacted subsequent to the admission of the foreign corporation to do business, and in the case of Quaker City Cab Co. v. Commonwealth, 277 U. S. 389, 48 S. Ct. 553, 554, 72 L. Ed. 927, as to legislation enacted before the foreign corporation was permitted to do business in the state. The rule is stated by the Supreme Court in Liggett v. Baldridge,. supra, as to subsequent discriminatory state legislation, as follows: “That appellant’s business is a property right (Duplex Co. v. Deering, 254 U. S. 443, 465, 41 S. Ct. 172, 65 L. Ed. 349. 16 A. L. R. 196; Truax v. Corrigan, 257 U. S. 312, 327, 42 S. Ct. 124, 66 L. Ed. 254, 27 A. L. B. 375), and as such entitled to protection against state legislation in contravention of the federal Constitution, is, of course, clear. That a corporation is a 'person’ within the meaning of the due process and. equal protection clauses of the Fourteenth Amendment, and that a foreign corporation permitted to do business in a state may not be subjected to state statutes in conflict with the federal Constitution, is equally well settled. Kentucky Co. v. Paramount Exch., 262 U. S. 544, 550, 43 S. Ct. 636, 67 L. Ed. 1112; Power Co. v. Saunders, 274 U. S. 490, 493, 496, 497, 47 S. Ct. 678, 71 L. Ed. 1165; Frost Trucking Co. v. R. R. Com., 271 U. S. 583, 594 et seq., 46 S. Ct. 605, 70 L. Ed. 1101, 47 A. L. R. 457. And, unless justified as a valid exercise of the police power, the act assailed must be declared unconstitutional because, the enforcement thereof will deprive appellant of its property without due process of law.”

In Quaker City Cab Co. v. Commonwealth, the Supreme Court stated the rule as to preexisting state legislation as follows: “The equal protection clause extends to foreign corporations within the jurisdiction of the state, and safeguards to them protection of laws applied equally to all in the same situation. Plaintiff -in error is entitled in Pennsylvania to the same protection of equal laws that natural persons within its jurisdiction have a right to demand under like circumstances. Kentucky Finance Corp’n v. Paramount Exch., 262 U. S. 544, 550, 43 S. Ct. 636, 67 L. Ed. 1112. The equal protection elause does not detract from the right of the state justly to exert its taxing power or prevent it from adjusting its legislation to differences in situation or forbid classification in that connection, ‘but it does require that the classification be not arbitrary, but based on a real and substantial difference having .a reasonable relation to the subject of the particular legislation.’ Power Co. v. Saunders, 274 U. S. 490, 493, 47 S. Ct. 678, 679, 71 L. Ed. 1165. It is established that a corporation, by seeking and obtaining permission to do business in a state, does not thereby become bound to comply with, or es-topped from objecting to, the enforcement of its enactments that conflict with the Constitution of the United States. The right to withhold from a foreign corporation permission to do local business therein does not enable the state to require such a corporation to surrender the protection of the federal Constitution. Power Co. v. Saunders, supra [274 U. S.] 497, 47 S. Ct. 680 [71 L. Ed. 1165]; Hanover Insurance Co. v. Harding, 272 U. S. 494, 507, 47 S. Ct. 179, 71 L. Ed. 372, 49 A. L. R. 713; Frost v. Railroad Commission, 271 U. S. 583, 593 et seq., 46 S. Ct. 605, 70 L. Ed. 1101,47 A. L. R. 457; Fidelity & Deposit Co. v. Tafoya, 270 U. S. 426, 434, 46 S. Ct. 331, 70 L. Ed. 664; Western Union Tel. Co. v. Foster, 247 U. S. 105, 114, 38 S. Ct. 438, 62 L. Ed. 1006, 1 A. L. R. 1278; Looney v. Crane Co., 245 U. S. 178, 188, 38 S. Ct. 85, 62 L. Ed. 230; Sioux Remedy Co. v. Cope, 235 U. S. 197, 203, 35 S. Ct. 57, 59 L. Ed. 193.”

We conclude then that the statute in question so far as it is an attempt to discriminate between a foreign and domestic insurance company as to the license fee for its agents is for that reason and to that extent void. As we have said, no attempt is made by the defendant to justify the imposition of the $500 license fee, as an exercise of the police or taxing power of the state as applied to all fire insurance companies.

Where the state Supreme Court has interpreted the state law, we are bound by their decision as to its proper interpretation; but we .are in such grave doubt as to the effect of the above-quoted decision of the Supreme Court in Hebring v. Lee, supra, that we must add that if section 6388, supra, does apply to all fire insurance companies, and there is no discrimination as between foreign and domestic fire insurance companies, the imposition of a license fee of $500 for each additional agent who participates in the effecting of insurance as a solicitor or broker, or otherwise, is an unreasonable and unconstitutional interference with the right of a fire insurance company to transact business.

The defendant should be permanently enjoined from enforcing the law in question, in so far as it requires a license fee of $500.

Motion for dismissal denied and temporary injunction granted as prayed. Leave to answer complaint within ten days granted, if desired.


author: ERNEST F. COCHRAN, District Judge.

text:
    UNITED STATES v. CHARLESTON LEAD WORKS et al.
    No. 1857.
    District Court, E. D. South Carolina.
    March 28, 1931.
    Henry E. Davis, U. S. Atty., of Florence, 5. C., and L. M. Shimeland S. H. Edmunds, Jr., Asst. U. S. Attys., both of Charleston, S. C.
    Hyde, Mann & Figg, of Charleston, S. ■C., for defendant Maryland Casualty Co.
   ERNEST F. COCHRAN, District Judge.

The United States brought this aetion against the Charleston Lead Works as principal and the Maryland Casualty Company as surety on a bond. The Charleston Lead Works has defaulted. The casualty company filed an answer. A jury trial was waived, and a written stipulation entered into, setting forth the facts. The facts essential to an understanding of the questions of law presented are briefly as follows:

There was assessed against the Charleston lead Works an additional income tax. The assessment was made within five years from the date of the filing of the return, but there were no other steps taken within the five-year period by distraint or otherwise. After five years had elapsed from the date of the return, the bond on which this aetion is brought was executed. The bond was made payable to the collector of internal revenue or his successors in office. It recites that the principal had made application for an extension of the perio’d for the payment of the income taxes in question, such extension postponing the date of payment until six months from the date of the bond. The bond is under seal. The condition of the bond is to “indemnify and save harmless” the collector or his successors “against all loss, costs, damage or expense to which he may be put by reason of having granted said extension of time.” The collector thereupon granted an extension of time of six months and during that time refrained from taking any aetion to enforce the collection of the taxes. After the six months’ extension had elapsed, the collector made demand upon the defendants for the payment of the tax; but no part of the same has been paid. There is no proof before the court that the collector could have collected the tax if the extension had not been granted, or that there has been any loss or damage suffered by reason of the extension.

The point was made that the United States could not sue on the bond because given to the collector; but the casualty company now concedes that the United States is the real party in interest and can maintain the aetion on the bond, or at least that the question is academic, in view of the decision of Judge Hale upon this same bond in the case of Maryland Casualty Co. v. Charleston Lead Works (D. C.) 24 F.(2d) 836.

It,is perfectly clear that at the time the' bond was given, both the collector and the United States were barred from collecting the tax by the five-year limitation provided in the Revenue Act of 1921, § 250' (d), 42 Stat. 265, either- by suit or distraint. Bowers v. N. Y. & Albany Lighterage Co., 273 U. S. 346, 47 S. Ct. 389, 71 L. Ed. 676.

But the suit here is not for the collection of the tax. This is a suit upon the bond. If there is any limitation applicable to the suit on the bond, it is conceded that it has not yet become effective. The five-year limitation provided in the Revenue Act of 1921, § 250 (d), does not apply to an action on a bond. U. S. v. John Barth Co., 279 U. S. 370, 49 S. Ct. 366, 73 L. Ed. 743.

The casualty company argues that there is no consideration for the bond, but I do not consider it necessary to decide that question, as, in my opinion, the action cannot be maintained for other reasons.

The bond here does not provide for the payment of the tax, but to indemnify against loss or damage. The distinction between bonds for absolute payment and bonds merely to indemnify against loss or damage has been clearly pointed out in a number of decisions. In the former ease, there is a breach of the bond from the mere failure of payment. In the latter case, in order to establish a breach of the bond, there must be allegation and proof of loss or damage. Wicker v. Hoppock, 6 Wall. 94, 18 L. Ed. 752; Mills v. Dow’s Adm’r, 133 U. S. 424, 10 S. Ct. 413, 33 L. Ed. 717; Johnson v. Risk, 137 U. S. 308, 11 S. Ct. 111, 34 L. Ed. 683; In re Lathrop, Haskins & Co. (C. C. A. 2d) 216 F. 102, 106, 107; Central Trust Co. v. Louisville Trust Co. (C. C. A. 6th) 100 P. 545, 547, 548.

The casualty company argues that it was legally impossible for the collector to suffer any damage by reason of the granting of the extension, because at the time the bond was given, neither the collector nor the United States could legally enforce the collection either by distraint or otherwise, and even if the1 collector had undertaken to enforce collection and had actually compelled the payment., the law would have compelled a refund. Such would appear to be the logical conclusion. But be that as it may, the inescapable f aet remains in this case that the government has not offered any proof that any loss or damage has been suffered by reason of the granting of the extension. The bond .being conditioned for the payment of such loss or damage as may be occasioned by the granting of the extension, the government has therefore failed to establish a breach of the bond, and cannot recover.

The cases of U. S. v. John Barth Co., supra, and U. S. v. E. Hogshire, Son & Co. (D. C.) 37 F.(2d) 720, are dearly distinguishable from the ease at bar. In those eases there was a bond conditioned to pay the tax and not merely to indemnify against loss or damage. Here the bond does not engage to pay the tax, but merely to indemnify against loss or damage.

The government having failed to establish a breach of the bond, the action must be dismissed as to the Maryland Casualty Company, and a proper order will be entered accordingly.


author: CAMPBELL, District Judge.

text:
    THE NEPTUNE. THE MARIE TURECAMO. C. F. HARMS CO. v. B. TURECAMO CONTRACTING CO.
    No. 11221.
    District Court, E. D. New York.
    Dec. 29, 1930.
    Maeklin, Brown, Lenahan & Speer, of New York City (J. Dudley Eggleston, of New York City, of counsel), for libelant.
    Single & Single, of New York City (Thomas H. Middleton, of New York City, of counsel), for claimant.
    William F. Purdy, of New York City, for respondent.
   CAMPBELL, District Judge.

This suit is brought by the libelant to recover for damage alleged to have been caused to the deck scow Neptune, by grounding at the dock of the respondent, B. Tureeamo Contracting Company, to which she had been towed by the steamtug Marie' Tureeamo.

On conflicting testimony, I find the facts as follows:

At all the times hereinafter mentioned, the libelant was and still is a corporation duly organized and existing under and by virtue of the laws of the state of New York, and managing owner of the deck scow Neptune, which up to the time of the happening hereinafter referred to was tight, staunch, strong, and in every respect seaworthy.

The steamtug Marie Tureeamo was at the commencement of this suit, or during the pendency of process hereunder, within this district and within the jurisdiction of this court, and this court has jurisdiction.

The respondent B. Tureeamo Contracting Company at all the times hereinafter mentioned was and now is a corporation organized and existing under and by virtue of the laws of the state of New York, with an office and place of business within 'this district and within the jurisdiction of this court, engaged in the business of handling building materials, and owner and/or lessee in control of a dock known as the B. Tureeamo Dock, located at the foot of Twenty-Fourth avenue, Gravesend Bay, Brooklyn, N. Y.

On the afternoon of August 16, 1928, the steamtug Marie Tureeamo picked up the scow Neptune, loaded with sand, at Pier 7, Staten Island, and with another scow, New York Trap Bock Westley Belle, loaded with stone, towed them to respondent B. Tureeamo Contracting Company’s dock, at Twenty-Fourth avenue, Gravesend Bay, Brooklyn, N.Y.

That dock was between 500 and 600 feet long, and at about 6:20 o’clock p. m., on a flood tide, the steamtug Marie Tureeamo landed the scows Neptune and Westley Belle on the end of the pier. The Westley Belle got a line out and the Marie Tureeamo let go the hawser and got back with her bow and pushed the boats around the end of the pier to the north side, so that the Neptune lay along the pier and about 250 feet in from the outer end of the pier, and the Westley Belle was alongside the north side of the pier near the outer end of the pier.

There was plenty of water in these berths for the Neptune and Westley Belle, and that was the customary berth in which to leave seows at that dock.

The captain of the Neptune made no complaint as to the method of berthing them, and did not ask the master of the steamtug Marie Tureeamo to take the Neptune back to Pier 7, Staten Island.

The delivery of the seows was accepted by B. Tureeamo Contracting Company, the respondent, through Mr. Matteiello, its yard sup erintendent.

On the orders of said Matteiello, the steamtug Marie Tureeamo tied up alongside the Westley Belle, and about 7 o’clock p. m., the master of the Marie Tureeamo went home.

Later that evening, about 7:30 o’clock p. m., the respondent B. Tureeamo Contracting Company, through its yard superintendent, on the rise of the tide, caused the Neptune to be pulled in by the usual method to a berth alongside the north side of said pier, further inshore, so that she would be in a position for the unloading of her cargo into one of the nine so-called silos on said dock, used for sand; that is, the one nearest the shore end of the dock.

The method pursued in moving in the Neptune was that the captain of the boat handed a line to the men in respondent’s employ, which they hooked onto a crane owned and operated by the respondent, which pulled the scow in to the position shown in the diagram made by Mr. Mayhew, to show the sounding made by him. The captain of the Neptune handed the lines to the respondent’s men, who put them on cleats on the dock, and he made them fast on the boat.

The captain of the Neptune made no request to have any cargo taken off, or to lighten his boat.

The lines as placed had plenty of slack to allow for the falling tide, and respondent’s representative did not, nor did any of its men, give any warning to the captain of the Neptune other than to watch his line.

The respondent B. Tureeamo Contracting Company does not work on that dock at night, and Mr. Matteiello, when the Neptune was tied up, left for home.

The steamtug Marie Tureeamo took no part in moving in the Neptune from a position about 250 feet in from the end of the pier.

Later, about 9:30 o’clock p. m., the captain of the Neptune sounded with a pipe pole, at a few places on the ends and on the outside of the said scow, and found that she would be aground at low water, but did not find any lump.

On August 16, 1928, the tide was higa, at Governors Island at 9:55 o’clock a. m., and at 10:04 o’clock p. m., Daylight Saving time, and the tide was low on August 17, 1928, at' 4:29 o’clock a. m., and was high at 10:49 o’clock p. m.

On August 16, 1928, it was high water at. Sandy Hook at 9:29 o’clock p. m., Daylight. Saving time, and low water at 3:53 o’clock a. m. on August 17th.

This was the first and only time that the captain of the Neptune had been at that dock.

About 11 o’clock p. m. the Neptune started to ground and started to leak, her seams opened up, she twisted, and the timbers started to crack. Under these conditions, there was nothing the Neptune could do, and she had to lie there until the next morning when she was unloaded. While she was in that berth the captain reported the damage, to the respondent’s office on the dock, and the yard superintendent for the respondent looked over the Neptune and noticed that she was damaged. After about two days, when the Neptune was light, she was towed to the Jersey City Dry Dock.

She sustained no damages other than those caused by the grounding.

On November 4, 1928, Mr. Price, a surveyor employed by the United States Engineers, took soundings at Turecamo’s Dock, at the berth which had been occupied by the Neptune on August 16, 1928, and in which she had been damaged, and found a hard lump formed of stones, gravel, or deposits of that sort, which lump was a competent producing cause for the twisting and damaging of the boat. On January 5, 1929, Mr. Mayhew, a United States Engineer, assisted by Mr. Hansen, also a United States Engineer, took soundings at Tureeamo’s Dock at the berth which had been occupied by the Neptune on August 16, 1928, and in which she had been damaged, and did not find the hard lump which had been- found by Mr. Price, but found a sandy, fine gravel, firm bottom, that was fairly even.

The yard superintendent of the respondent B. Tureeamo Contracting Company says that soundings were taken every week or two, but no records thereof were kept, and that the bottom was a sandy bottom, and was kept pretty even, as the soundings were taken so that it might scoop up whatever fell over in discharging boats. There is no evidence to show that the lump had not been scooped up between the times the soundings were made by Messrs. Price and Mayhew, respectively.

Upon the facts as found, it is apparent that the steamtug Marie Turecamo performed her towing service properly and landed the Neptune where directed by the consignee, in a safe berth on the north side of the dock, where the scow was properly tied up, and delivery was accepted on behalf of the respondent B. Turecamo Contracting Company, and the steamtug Marie Turecamo is without fault. The Stamford (D. C.) 35 F.(2d) 55; The Eastehester (C. C. A.) 20 F.(2d) 357; The Milton (C. C. A.) 235 F. 287. I have not overlooked the fact that the captain of the Neptune testified that the tug left the Neptune in the berth where she received the damage, but he is clearly in error, as the tug delivered the Neptune in the berth, about 250 feet in from the outer end of the pier, from which berth, without any assistance from the tug, the barge was pulled in by respondent’s moving crane, to the berth where the injury was received.

It is undoubtedly true that the testimony of the captain of the Neptune was not entirely accurate as to the place he was first landed, or as to the participation of the tug in the later landing, but there is no doubt that the Neptune was damaged in the berth to which she was moved by respondent’s representatives, after she had been safely landed by the tug where directed by the consignee, as the yard superintendent of the respondent testified that he saw damage to the knees when he looked over the boat still in the berth, on the next morning after the damage had been reported by the captain.

No citation of authority is necessary to show that vessels of this character are supposed to take ground at low tide, but that is on an even bottom, not on an uneven and lumpy one, which will cause a twist.

The testimony of the yard superintendent of the respondent B. Turecamo Contracting Company falls far short of showing that the Neptune was improperly constructed or unseaworthy.

Comment is made upon the fact that the captain made some soundings, and chose to leave his boat in the position in which she was, but the answer to that seems to be that his soundings were not made until an hour after his boat was put in the berth, and did not and could not disclose to him the lump which was underneath his boat, and he had no knowledge of the condition of any other berth. All that his soundings disclosed was that his boat would rest upon the bottom at low tide, and as I have found that vessels of this character are supposed to take ground at low tide, damage should not have been anticipated if the bottom was even. C. F. Harms Co. v. Upper Hudson Stone Co. (C. C. A.) 234 F. 859.

The respondent B. Turecamo Contracting Company, the consignee, designated the berth and placed the Neptune therein, and was legally bound to provide a reasonably safe berth; therefore the sole question remaining is: Was the berth a reasonably safe one?

Both Messrs. Price and Mayhew are careful, competent men, whose testimony I accept as true, and in view of the fact that there is no evidence to show that there was no dredging done between the dates of their surveys, it may well be that the lump that was found by Mr. Price was removed thereafter and before Mr. Mayhew made his survey, and this would seem to' be the fact because the yard superintendent of the respondent said that they sounded every week or two, and that when they are discharging a boat a little sand will fall over the side, and that is what they take the soundings for — to scoop that up again.

The berth was not reasonably safe, and because of the lump which made the bottom uneven, the Neptune was damaged.

I find as conclusions of law:

The steamtug Marie Turecamo delivered the Neptune at the berth designated by the consignee, which was a reasonably safe berth, where she was tied up and accepted by the consignee, and the said steamtug Marie Turecamo is without fault.

The respondent B. Turecamo Contracting Company was the owner or lessee and in control of the whole wharf and the consignee of the cargo of the Neptune, and legally bound to furnish her with a reasonably safe berth, and that it placed the said scow in a berth that was unsafe, without warning the captain of the scow of the nature of the berth, and that he was unable to ascertain the same by the soundings which he made, and that due to the unsafe character of the berth, the scow was damaged by grounding on an uneven bottom, at low tide, without any fault on the part of the libelant and the captain of the scow, and that the said respondent B. Turecamo Contracting Company was wholly at fault.

The libelant is entitled to a decree against the respondent B. Turecamo Contracting Company, with costs and the usual order of reference, and the steamtug Marie Turecamo to a dismissal of the libel, with costs against libelant.

A decree may be entered in favor of the libelant against the respondent B. Turecamo Contracting Company, with costs and the usual order of reference, and in favor of the steámtug Marie Turecamo, dismissing the libel, with costs against the libelant.

If this opinion is not considered to be a sufficient compliance with rule 46 % of the Rules in' Admiralty (28 USCA § 723), findings of fact and conclusions of law may be submitted.


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    HUMBLE OIL & REFINING CO v. LLOYD ROYAL BELGE SOCIETE ANONYME.
    No. 9366.
    District Court, E. D. New York.
    Jan. 9, 1931.
    Bigham, Englar, Jones & Houston, of New York City (C. W. Hagen, of New York City, of counsel), for libelant.
    Loomis & Ruebush, of New York City (Homer L. Loomis and Glenn W. Ruebush, both of New York City, of counsel), for respondent.
   CAMPBELL, District Judge.

This suit is brought by the libelant to recover damages alleged to have been caused to its Barge No. 1, by the steamship'Brazilier coming into contact with said barge, in Texas City channel.

It is to be noted that the libelant did not proceed against the tug Anita, which had the Barge No. 1 in tow at the time- in question, and it was not until after the first trial that it was learned that the tug Anita was owned by the libelant at the time of the happening of the event in question.

Judge Inch properly held that the local proctors were not subject to criticism because thereof, but, in approaching a decision of this case, in the light of the knowledge we now have of libelant’s ownership of the Anita, libelant’s position is necessarily somewhat changed, for the reason that it is no longer to be considered as the innocent owner of the Barge No. 1, entitled to recover from either or both the steamship Brazilier and the tug Anita, but, as the owner of the Anita, in order to recover from the respondent, is bound to show that the steamship Brazilier is to blame in whole or in part, and that the Anita is free from blame in whole or in part.

The libelant has produced no witnesses, although ample opportunity was afforded the libelant to locate and take the testimony of the bargee of Barge No. 1, and on this trial the advocate for the libelant said he was informed by their correspondent at Galveston that he could not locate their only witness; therefore he had no witnesses whatever.

The respondent nas produced the testimony of Morgan James Jones, the master of the Brazilier on the day in question, taken by commission in London, England, on. the 29th day of December, 1926, and the testimony of Capt. C. R. Megee, the pilot of the Brazilier, on the day in question, taken by deposition at Galveston, Tex., on the 26th day of October, 1927.

I find the facts as follows:

At all the times hereinafter mentioned the libelant was a Texas corporation, and the owner of the Barge No. 1 and the tug Anita, and up to the time of the collision hereinafter described the Barge No. 1 was seaworthy and in' all respects properly manned and equipped.

At all the times hereinafter mentioned the respondent, Lloyd Royal Beige Soeiete Anonyme, was a Belgian corporation, and the owner and operator of the steamship Brazilier.

The jurisdiction of this court is admitted.

On February 9, 1921, the Barge No. 1 was being towed, light, by the tug Anita, from the Texas City docks, and was proceeding down the Texas City channel on her starboard side, nearing a gradual bend in the channel, and the steamship Brazilier, lightly loaded, was coming up the channel, and because of her depth of 18 feet she was in midchannel, with the tug Propeller lashed on her starboard bow.

The tug Anita had the Barge No. 1 in tow on a single hawser, variously estimated as being of the length of from 40 to 100 feet.

Had the Anita sounded a one-blast signal and held her starboard side of the channel, she and her tow would have passed safely the Brazilier port to port, but the Anita, then distant 300 yards to a quarter of a mile from the steamship Brazilier, sounded a two-whistle signal indicating a desire for a starboard to starboard passage, which was answered by the steamship Brazilier with a two-whistle signal, and the Brazilier’s helm was put hard a starboard.

The wind, however, was blowing from the westward at a rate of 35 miles an hour, and the No. 1, light, and standing high out of the water, was blown over across the channel, and it being apparent that a collision would occur, the engine of the Brazilier, a single-screw vessel, was reversed and put full speed astern. In backing, the stem of the Brazilier went to port and her bow to starboard, where it came into contact with the bank.

The Texas City channel is a narrow dredged channel, and in speaking of the bank it is the side of the channel which is referred to, although there is a body of water beyond that bank of sufficient depth to float the Anita and the Barge No. 1 when light, but not the Brazilier.

With the Brazilier backing and her bow against the bank on her starboard side, the No. 1, by the force of the wind, was about amidships, on her starboard side, brought into contact with the stem of the Anita.

The proof of damage to the Barge No. 1 is slight, but I think sufficient to show some damage.

The Anita cut the hawser before the No. 1 came into contact with the Brazilier, and, when the vessels came into contact, the Anita was in the shallow water beyond the bank of the channel.

The Brazilier . continued backing and backed clear.

The collision occurred on February 9, 1921; the libel herein was filed July 19, 1926, more than five years and a half after the event; the respondent had notice of libelant’s claim of damagé in November, 1921.

On the facts as found, the fault of the libelant’s tug Anita seems to be clearly established.

The libelant called no witnesses, but contented itself' with introducing the testimony of pilot Megee, taken by deposition on notice by respondent, and with pointing out inconsistencies in the testimony given by the master on commission, introduced in evidence by libelant, and the testimony of the pilot of the Brazilier given more than five years after the event.

" The master was obliged to depend entirely on Ms recollection, but the pilot was assisted in refreshing his recollection by a sworn statement made by him on June 1, 1921, when Ms recollection was clearer than at the time his testimony was taken by deposition.

Respondent offered the affidavit,- the so-called sworn statement of June 1, 1921, in evidence, but it was not competent, and the objection of the libelant to its receipt in evidence is sustained, and I have not read or considered the said affidavit.

One thing, however, stands out prominently in this case, whether you accept the testimony of the master or the pilot, and that is the fact that the Anita violated the narrow channel rule, without any necessity for such violation being shown, when she gave the two-whistle signal and attempted to go to her port side of the channel and take the Barge No. 1 across the bow of the Brazilier.

This was a violation of the statutory requirement as to navigation in a narrow channel, and the burden resting on her is great. The Pennsylvania, 19 Wall. 125, 136, 22 L. Ed. 148; The No. 25 (C. C. A.) 266 F. 331, 335; The Charles R. McCormick (D. C.) 15 F.(2d) 386.

The fact that the Brazilier accepted the two-blast signal of the Anita does not make the Brazilier liable, because she did what she could with her helm to assist in carrying out the proposed maneuver, and the distance between the vessels was too short to have made it possible to accomplish anything by crossing the signal.

When the Brazilier saw, as she did, that by proceeding ahead a collision was inevitable, she quickly did what she was legally required to do, stopped and reversed her engines and attempted to prevent the collision. The New York, 175 U. S. 187, 207, 20 S. Ct. 67, 44 L. Ed. 126; Lehigh C. & Nav. Co. v. Compagnie Generals Transatlantique (C. C. A.) 12 F.(2d) 337.

There was not sufficient time to have twisted the Brazilier so as to pass the Anita and No. 1 to' starboard, and the Sammie (C. C.) 37 ,P. 907, is not in point.

The Adriatic (D. C.) 1 F. 349; The Australia (C. C. A.) 120 F. 220; The Sagua (D. C.) 42 F. 461; The Panther (C. C. A.) 5 F.(2d) 64; The La Bretagne (C. C. A.) 179 F. 286, cited by the libelant are not in point.

The Brazilier acted in extremis, and the fault of the Anita is so obvious and inexcusable that this court should not be astute to find fault on the part of the Brazilier. The Victory & The Plymothian, 168 U. S. 410, 18 S. Ct. 149, 42 L. Ed. 519; The City of New York, 147 U. S. 72, 13 S. Ct. 211, 37 L. Ed. 84.

I find as conclusions of law:

That the tug Anita, owned and operated by the libelant, was solely at fault for her violation of the narrow channel rule, and having initiated the maneuver of crossing the bow of the Brazilier with the No. 1, for not having kept the'No. 1 clear of the Brazilier.

That the Brazilier was without fault in accepting the two-blast signal of the Anita and heading to port, and in reversing her engine and backing to escape from the No. 1, which the wind was setting over on the Brazilier, notwithstanding that by backing the bow of the Brazilier went to starboard to the bank, and her stem went to port and out in the stream, and that said reversing and backing was an act in extremis.

That the libelant was not the innocent owner of the barge No. 1, but was the owner and operator of both Barge No. 1 and the tug Anita, which tug was solely at fault, and libelant is not entitled to recover any damages against the respondent.

The respondent is entitled to a decree dismissing the libel, with costs against the libelant.

A decree may be entered in favor of the respondent, dismissing the libel, with costs against the libelant. Settle decree on no-tice.

If it is not believed that .this opinion is a sufficient compliance with rule 46% of the Admiralty Rules (28 USCA § 723), findings of fact and conclusions of law may be submitted.


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    THE CELTIC. UNITED STATES v. OCEANIC STEAM NAV. CO., Limited. OCEANIC STEAM NAV. CO., Limited, v. UNITED STATES.
    Nos. 10028, 10527.
    District Court, E. D. New York.
    Jan. 15, 1931.

      Howard W. Ameli, U. S. Atty., of Brooklyn, 1ST. Y. (Charles E. Wythe, Sp. Asst, to U. S. Atty., of New York City, of counsel), for the -United Stafes.
    Burlingham, Veeder, Fearey, Clark & ■ Hupper, of New York City (Chauneey I. Clark and Adrian J. O’Kane, both of New York City, of counsel), for the Celtic.
   CAMPBELL, District Judge.

The delay in ascertaining the damages in these suits is not mine, as the stipulation and briefs in the above-entitled suits were not submitted to me until the last week.

Interlocutory decrees for one-half damages were entered in each of the above-entitled suits and the ascertainment of damages referred to a Commissioner, but, the parties having agreed to stipulate the facts, on their consent the decrees were amended as follows: “Ordered that the amount of damages sustained by the respective parties be ascertained and determined by the Court and that a final decree may be entered herein in accordance with such determination.”

A stipulation as to the damages of the respective parties has been presented, but with the exception “that the steamship Celtic as a result of the collision was necessarily out of service for a period of 26 days and that, by reason thereof, the Oceanic Steam Navigation Company, Ltd., her owner, sustained a daily net loss of £.315.2.8 (or $1528.1995), amounting to $39,733.19 with interest thereon to be calculated at 4 per cent from March 12, 1927, less such portion, if any, of passenger fares earned by the Baltic by carrying passengers booked on the Celtic for the voyage she lost by reason of the collision, as is determined by the court to be legally deductible from the Celtic’s aforesaid detention.”

The question, therefore, now presented to this court is whether any deduction should be made from this detention rate.

The contention of the government is that the passage money earned by the Baltic for carriage of passengers originally booked for the Celtic should be deducted from the Celtic’s detention rate of £315.2.8 because both vessels were owned by the Oceanic Steam Navigation Company, Limited.

In support of this contention the government claims that damages allowed to an injured vessel for detention by reason of a collision are confined to her actual pecuniary loss occasioned thereby, of which she has the entire burden of proof, and cites: The Conqueror, 166 U. S. 110, 125, 17 S. Ct. 510, 41 L. Ed. 937; The Potomac, 105 U. S. 630, 26 L. Ed. 1194; Cuyamel Fruit Co. v. Nedland (C. C. A.) 19 F.(2d) 489; Newtown Creek Towing Co. v. City of New York (C. C. A.) 23 F.(2d) 486; The North Star (C. C. A.) 151 F. 168; The Winfield S. Cahill (C. C. A.) 258 F. 318; Aktieselskapet Bonheur v. San Francisco & P. S. S. Co. (C. C. A.) 287 F. 679; The Nantasket (D. C.) 290 F. 813; The Wolsum (C. C. A.) 14 F.(2d) 371, 377; The Priscilla (D. C.) 27 F.(2d) 921, 923.

Undoubtedly the law has been correctly stated by the government, and has been so held in the cases cited.

In none of those eases, however, was the question here presented considered, and in the cases at bar the stipulation is sufficient to sustain the owner’s burden of proof, the only question being whether there shall be a deduction made from the stipulated amount by reason of the fact that certain passengers originally booked on the Celtic were subsequently carried on the Baltic, another vessel owned by the same owner.

It seems quite clear to me that the voyages of the Celtic and the Baltic were separate voyages, and that when the Celtic’s voyage was abandoned, the adventure was at an end, and the fruits of that adventure, the passage money of her passengers, lost for all time. .

If some of the passengers took passage on the Baltic, the passage money so earned by her had no relation to the Celtic, and, in ease of loss or damage caused by the Baltic and limitation of liability had been sought, the whole amount of the passage money of such passengers would have had to be accounted for. The Scotland, 105 U. S. 24) 26 L. Ed. 1001; Id., 118 U. S. 507, 6 S. Ct. 1174, 30 L. Ed. 153.

That the net profits on the passage money paid for passage on the Baltic, by passengers who were originally booked on the Celtic, is not deductible is clearly s shown by the decisions of the courts, which have held that the owner is entitled to damages for detention of the damaged.boat, even where it substitutes another boat owned by it.

In The Cayuga, 5 Fed. Cas. 329, at page 331, No. 2,537, affirmed 14 Wall. 270, 20 L. Ed. 828, the lower court said: “The principle of indemnity is uniformly recognized as just, and its measure must be the same, whether a substitute is furnished by the libellant or procured from another.”

in The Favorita, 18 Wall. 598, at pages 603, 604, 21 L. Ed. 856, the court said: “The appellants object to the allowance of demur-rage by the commissioner on the ground that the ferry company suffered nothing by the loss of the use of the Manhassett while undergoing repairs, because her place was supplied by a spare boat kept for emergencies, and which would otherwise have been idle. This subject was fully discussed in the ease of The Cayuga by the learned circuit judge of the second circuit, who sustained a similar allowance, and as that case was affirmed on argument in this court, and his views adopted, we must consider the question as no longer open to discussion.”

In Coffin v. The Osceola (D. C.) 34 F. 921, this court said: “The exceptions in this case cover two questions which deserve attention : First, whether the libelants can recover demurrage for the detention of their boat while undergoing repairs, when it appears that the work that the injured boat would have done but for the collision was done by another boat owned by the libelants, and which was at the time without other employment. The commissioner allowed demurrage, and I think he was right.”

In The Providence, 98 F. 133, at page 136 (C. C. A., 1st Cir.) the court said:- “The owners of the Providence kept another boat for winter service, with which they immediately replaced the Providence for the balance of her season. In this respect, the case at bar follows The Cayuga, where the fact that her owners substituted another ferryboat, which they kept for emergencies, did not defeat the allowance of demurrage.”

In The State of California (C. C. A.) 54 F. 404, at page 407, the court said: “The fact that another vessel belonging to the same owner was used as a substitute for the disabled steamer during the time of her detention should not militate against the right to compensation, nor afford just cause for awarding less than would be allowed if the owner, from laek of enterprise or inability,. failed to have an available substitute for use in such an emergency.”

In New Haven Steam-Boat Co. v. The Mayor (D. C.) 36 F. 716, at pages 717, 718, the court said: “The Continental being disabled by collision from continuing her trips, the Elm City, belonging to the same company, was substituted in her place. The latter was a 'sister-boat’ to the Continental, of the same size, but much older, slower, and of less value. She was kept by the' libelants as a spare boat, for the purpose, in part, as appears from the evidence, of continuing the trips of the line with regularity, in case of accident to one _o£ the regular boats, or during their repair. She was also occasionally let out for excursions, and upon special charters. Demurrage at $250 per day is allowed by the commissioner for 15 days, while the Continental was undergoing repairs. The respondent contends that this claim should have been wholly disallowed, on the ground that the running of the Elm City in the place of the Continental in reality cost the owners nothing, and that they consequently sustained no actual damage in this respect. * * * The owners were entitled to procure another boat to take the place of the Continental, while she was disabled through the collision. It is immaterial to the respondents whether the substitute was hired from other persons at market rates, or supplied by the libelants themselves. * * * They are entitled, therefore, to charge for the use of their own boat at the market value of its use, for the time being, precisely as if they had hired her from other owners.”

The ease at bar is much stronger in favor of the owner of the Celtic, for the reason that the Baltie was not a substitute, but sailed on a regularly scheduled voyage, separate from and unconnected with the sailing of or loss to the Celtic, and it is immaterial to the issue herein that both voyages were sponsored by libelant.

The libelant is entitled to damages for detention without any deduction of passenger fares earned by the Baltie, by carrying passengers booked on the Celtie, for the voyage she lost by reason of the collision.

A decree for half damages in accordance with the stipulation filed, with interest in each instance at the rate of 4 per cent, per annum from the stipulated dates, with one-half costs, may be entered.

Submit findings of fact and conclusions of law.

Settle decree on notice.