author: L. HAND, Circuit Judge. MANTON, Circuit Judge.

text:
    A. SCHRADER’S SON, Inc., v. UNITED STATES.
    No. 403.
    Circuit Court of Appeals, Second Circuit.
    Argued May 15, 1931.
    Decided July 7, 1931.
    MANTON, Circuit Judge, dissenting.
    Howard W. Ameli, U. S. Atty., and Albert D. Smith, Asst. U. S. Atty., both of Brooklyn, N. Y. (C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, and Otta-mar Hamele, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., of counsel), for the United States.
    Phillips & Avery, of New York City (John B. Sullivan, Jr., of Boston, Mass., and C. Royall Frazer, of New York City, of counsel), for appellee.
    Before MANTON, L. HAND, and AUGUSTUS N. HAND, Circuit Judges.
   L. HAND, Circuit Judge.

The plaintiff, a New York corporation, was the owner of a number of patents, some acquired before March 1, 1913, which alone are involved here. In its tax returns for 1913 to 1919 inclusive it did not deduct anything from its gross income for the depreciation of these, but on March 13, 1925, recognizing its error, it filed a claim for a refund upon its tax for 1919. The Commissioner recalculated the whole tax for that year, income, war and excess profits, and made a refund. In so doing he found both the original cost of the patents and their value on March 1, 1913, and in assessing the income tax deducted from the gross income an amount calculated as the depreciation for the year 1919, based upon value. In assessing the war and excess profits tax, he was obliged to fix the invested capital, in which he included the cost of the patents, deducting, however, a total depreciation from that cost, by aggregating the depreciations, also based on cost, for each of the preceding years. This resulted in increasing the plaintiff’s war and excess profits tax for 1919. But by virtue of section 284 (c) of the Revenue Act of 1926 (26 USCA § 1065 (e) (of which section 252 of the Revenue Act of 1921 [42 Stat. 268] and section 281 (e) of the Revenue Act of 1924 [26 USCA § 1065 note] were the precursors), he was also obliged to make a refund upon the plaintiff’s taxes in the earlier years for that depreciation by which he had reduced its invested capital. This he did, recomputing the income tax for each of the years, 1913 to 1918 inclusive, by deducting from gross income the same yearly depreciation upon the patents, which went into the aggregate he had used in determining the invested capital for 1919. That is to say, he allowed a yearly deduction based upon their cost. Similarly for the years 1917 and 1918 he recomputed the invested capital by using the cost of the patents, as he had done for the year 1919. As a result the plaintiff has received a refund of its income tax for the year 1919, on the depreciation, occurring in that year, of the patents, based upon their value on March 1,1913; but for the preceding years upon their cost. Its position is that it was entitled to deductions in those years, based upon the value of the patents on March 1, 1913; that is, to a consistent application of the rule which the Commissioner recognized for 1919, and which, we may assume, the law required. The judge took this view of the statute, and gave judgment for the plaintiff.

The section in question does no more than .lift the bar of the statute of limitations; how far it does so must be determined by its language and its obvious purpose. It provided against a situation in which the taxpayer might find himself concluded by the lapse of time from taking those very deductions from his gross income, which the Treasury was using against him in a later year. This could arise only because in fixing the war and excess profits tax, the statute used the taxpayer’s invested capital, which in turn could not be determined without going back into earlier years, and ascertaining what in those years should have been subtracted from income. The Commissioner might decrease the invested capital for 1919, by charging to income in the year 1918 a sum which the taxpayer had credited to capital in that year, and the taxpayer have no means of using that deduction in his favor. If so, he was at once obliged to pay a larger war and excess profits tax for 1919, because of a smaller invested capital; and he was held to the larger taxes which he had erroneously paid in 1918, because he could not use the same deduction against his gross income in that year. The Treasury in this indirect way could reopen past years and charge him because of his omissions, while he had no corresponding privilege because the statute had run against him. Against that injustice and that alone, Congress meant to relieve him.

The limit of his ^privilege is entirely clear. It is confined to those deductions which the Commissioner in fact uses to decrease his invested capital and thus raise his war and excess profits tax in the later year. Once he has got the benefit in his earlier taxes of those same deductions, he has not suffered from the action of the Treasury; as to all else he stands charged with his laches, like any other taxpayer. In the case at bar the plaintiff has received a refund for the earlier years, measured by precisely those deductions which the Commissioner took against it in 1919. Its claim to more, if the language of the sections compels its recognition, will result in an unfair discrimination in its favor against other taxpayers who may have made similar mistakes, but whose invested capital has not been reassessed. As to them the statute has barred any reconsideration; section 284 (e) gives them no relief, nor should it give any to those whose invested capital has been corrected, except in so far as consistency requires. While the situation was somewhat different in Southwestern Oil & Gas Co. v. U. S. (D. C.) 29 F.(2d) 404, affirmed 34 F.(2d) 446 (C. C. A. 3), much of the ratio decidendi was the same, as the discussion discloses.

The argument based upon the language of the section leads to no different result. It is true that the decrease in invested capital is presupposed to arise from the taxpayer’s failure to take “adequate deductions,” and “adequate” must mean such as the law required. The Commissioner in fixing what he deemed -adequate must tax all that the law demanded. To be sure, it does not inevitably follow that what may be adequate in fixing invested capital is adequate for other purposes; but, be that as it may, whatever he does take in order to fix the invested capital of the later year is determined for that purpose between the parties, unless it is reviewed. Right or wrong it becomes adequate for invested capital in that year; indeed in the case at bar there is no effort to challenge the tax for 1919. But the overpayment as to which the bar is lifted is the result of taking those deductions which are in this sense “adequate”; nothing more is intended. Thus the adequacy of the deductions cannot be challenged except by challenging the propriety of the reassessment of the invested capital; that once settled, the overpayments are automatically fixed; they are the deductions actually taken, “adequate” because unim-peached.

The second argument is that to take deductions from invested capital in a later year cannot “result” in an overpayment in earlier years. Results must follow causes, not precede them. Surely this is the extremity of verbalism. It is of course true that “taking” the deductions does not create the overpayment; but it is equally true that they demonstrate that there has been an overpayment; and the meaning is apparent, whether or not the diction is perfect. The section ties the overpayments as to which the bar is lifted to the deductions themselves; the decrease in capital depends upon the deductions, and these in turn make the overpayments. The sequence is logical, not causal. Besides, the statute does not in any case impose a tax, but is akin to an exemption; it grants a privilege to certain classes of taxpayers. We are not therefore charged with the duty of finding its warrant straitly within its four corners; intendments are to be taken in favor of tbe Treasury. •

We hold that the section merely requires the Commissioner in reassessing the taxes in the earlier years, to allow as overpayments the same figures which he takes as deductions for those years in fixing invested capital. If further deductions are sought, they are subject to the statutes of limitation properly applicable; as to them the taxpayer can have no recourse to section 284 (c). Hence it becomes unnecessary to decide what was the proper basis at which to take deductions from gross income in the earlier years. Even though the plaintiff may have suffered by this, it is no more than any other taxpayer must endure, who, having made a mistake, does not discover it and seek redress within the prescribed periods.

Judgment reversed; cause remanded with instructions to dismiss the petition.. ■

MANTON, Circuit Judge, dissents with memorandum.

MANTON, Circuit Judge.

I dissent. The reasons therefor are well expressed in Judge Byers’ opinion below. 43 F.(2d) 619. I think the decree should be affirmed upon his opinion.

       Sec. 284(c). If the invested capital of a taxpayer is decreased’ by the commissioner, and such decrease is due to the fact that the taxpayer failed to take adequate deductions in previous years, with the result that there has been an overpayment of income, war-profits, or excess-profits taxes in any previous year or years,, then the amount of such overpayment shall be credited or refunded, without the filing of a claim therefor, notwithstanding the period of limitation provided for in subdivision (b) or (g) has expired.


source: Caselaw Access Project

author: L. HAND, Circuit Judge.

license: Public Domain

text:
    In re THOMASHEFSKY. Ex parte BLOCK.
    No. 426.
    Circuit Court of Appeals, Second Circuit.
    July 8, 1931.
    Abner Greenberg, of New York City, for appellant.
    Abraham H. Sanasohn, of New York City, for appellee.
    Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
   L. HAND, Circuit Judge.

Thomashefsky, the bankrupt, employed Block, the appellee, on July 11,1923, as box office manager in a theatre operated by him. Block deposited $1,000’ with him as a guaranty against defalcation, under a written contract by which it was to be held “as security and for no other purpose and shall be returned * * at the termination of the said employment.” Block left Thoma-shefsky’s employ on March 2, 1924, and got a judgment against him, for $365 on April twenty-fifth of that year in an action, the nature of which does not appear. Thomashef-sky then left the United States, and during his absence Block filed an involuntary petition in bankruptcy against him, which resulted in his adjudication on June 4, 1924. A trustee was appointed who took possession of Thomashe-fsky’s property, and presumably distributed it, but Thomashefsky never applied for a discharge. On his return Block sued him in another action for his failure to return the deposit, and got judgment on May 29, 1929. The complaint alleged that Thom-ashefsky had received the money in a fiduciary capacity, solely as a deposit, and had converted it to his use, and the judgment provided for execution against his body. Thereafter Block procured an order for the examination of Thomashefsky in proceedings supplementary to execution upon the earlier judgment, and Thomashefsky defaulted in appearance; on January 13, 1931, the court entered an order fining Thomashefsky for this contempt. Thereupon Thomashefsky filed a petition for voluntary adjudication on January 27, 1931, was adjudicated on the same day, and procured from the District-Court an ex parte stay of -all proceedings upon the judgment in the second action, and upon the order fining Thomashefsky for contempt in the first. Block then applied to the District Court by rule nisi for a vacation of the stay, which the judge granted. Thoma-shefsky appealed.

The second judgment was clearly not dischargeable in bankruptcy, section 17a (6), 11 US.CA § 35(6); indeed we do not understand that the contrary is argued. The same is true of the fine for contempt, since the order imposing it antedated the bankruptcy. In re Koronsky, 170 F. 719 (C. C. A. 2); In re Hall (D. C.) 170 F. 721; People ex rel. Otterstedt v. Sheriff of Kings County (D. C.) 206 F. 566; In re Francisco (D. C.) 245 F. 216. Only two questions arise, (1) whether Block’s petition for involuntary adjudication in 1924 was an election to proceed only in contract, (2) whether the bankrupt was in any event entitled to immunity from arrest under section 9a (2), 11 USCA § 27 (a) (2), until the determination of ,his application for discharge.

Upon the first point the argument is that, as Bloek was the sole petitioner in 1924, and thus necessarily elected to sue in contract, he could not thereafter sue in conversion. This would have been a bad plea in the state action in any ease (Friend v. Talcott, 228 U. S. 27, 33 S. Ct. 505, 57 L. Ed. 718), but we need not consider that.. The claim is now in judgment, and cannot be impeached; it is not dischargeable in this bankruptcy proceeding, and for that matter, was equally undisehargeable in the earlier one. It may not therefore be stayed. Apparently the first judgment might have been discharged in the 1924 proceeding, but no discharge was obtained, and the time has long since passed when any application is possible. Section 14 (a), 11 US CA § 32 (a). While it is also dischargeable in this proceeding, the liability for the fine is not, and may not be stayed. Recurring to the second judgment, Block’s position, as petitioning creditor, was no different from that of any other creditor who proved a claim; filing a petition is no more an election than filing a claim, and if it were, it would not be material in the face of the judgment. Thus there is no force in the first point in any aspect.

Coming to the second point, the relevant section is 9a (2), 11 USCA § 27 (a) (2), the last clause of which provides that when a debt is not dischargeable in bankruptcy the bankrupt “shall be exempt from * * * arrest when in attendance upon a court of bankruptcy or engaged in the performance of a duty imposed by the provisions of this title.” Of the General Orders, No. XII (11 USCA § 53) gives to referees the power tQ issue an order of general protection to a bankrupt, which however the court may “vacate or suspend”; No. XXX provides that if already imprisoned, the bankrupt may be produced on habeas corpus to testify before the referee, and if arrested pending the proceedings upon “a claim provable in bankruptcy,’! “if so provable he shall be discharged; if not, he shall be remanded.” The question arose in Re Baker (D. C.) 96 F. 954, whether a bankrupt, imprisoned on a provable, but not dischargeable, claim, should be released, in the face of the language of Order XXX (11 USCA § 53) Judge Hook thought that “provable,” as there used, must be understood as equivalent to “dischargea-ble,” and remanded the bankrupt, without considering the last clause of section 9a (2), 11 USCA § 27 (a) (2). In Re Lewensohn (D. C.) 99 F. 73, certain creditors had secured judgments for fraud against the bankrupt and were about to arrest him. Judge Brown stayed these executions until the determination of the bankrupt’s discharge, upon his giving security to obey all orders of the bankruptcy court, and not to leave the jurisdiction; and we affirmed his decision on his own opinion. 104 F. 1006. Judge Adams followed this in Re Dresser (D. C.) 124 F. 915, though in Re Kane (C. C. A.) 48 F.(2d) 96, we said that the granting of any immunity under Order XII (11 USCA § 53) and § 9a (2), 11 USCA § 27 (a) (2), rested in the discretion of the District Court.

Order XII (11 USCA § 53) in permitting the referee to give a general protection to the bankrupt, meant no more than that prima facie he might be entitled to as much; as ta dischargeable debts, because he was so entitled without condition; as to those not dis-chargeable, because specific claims could be dealt with by the District Court. We agree that in general under Order XXX (11 USCA § 53) he must be remanded in all cases in which the debt is not “provable,” which, with Judge Hook, we read as meaning discharge-able; but attendance upon his duties as bankrupt may require his temporary freedom at times when he is not in aetual attendance upon the court, and it may be inconvenient repeatedly to bring him from custody by habeas corpus.

Under the last clause of section 9a (2), 11 USCA § 27 (a) (2) this convenience will justify his release for limited periods to perform his duties as a bankrupt; it is hard to believe that Order XXX (11 USCA § 53) was meant to forbid as much, and Order XII (11 USCA § 53) seems to countenance it. We adhere to so much of our decision in Re Lewensohn. On the other hand we cannot agree with the specific application of this doctrine there made, unless it rested upon circumstances not disclosed in the record. The length of the release and its occasion are no doubt for the District Court to determine; but it is very hard to imagine circumstances requiring the bankrupt’s freedom during the whole proceeding, or even until his discharge is determined. We can see no relation between the necessities of his attendance to his duties, and the interval until he is discharged. He will not ordinarily be required for much of the period before that is decided, and he may be required thereafter. Certainly he has no right to a release because of a possible discharge, which will not affect the claim. While therefore the matter is discretionary we cannot agree that the discharge is at all relevant in the decision.

In the ease at bar the bankrupt suggested nothing making necessary his attendance in the proceedings; the judge was therefore right in vacating the order. It will be affirmed, but without prejudice to any application by a creditor, and possibly by the bankrupt himself [In re Kane (C. C. A.) 48 F.(2d) 96], for a release for such limited periods as may be found to be necessary in the administration of the estate. In so far as this conflicts with In Re Lewensohn, that decision is to be deemed overruled.

Order affirmed.


author: STONE, Circuit Judge.

text:
    STERN BROS. & CO. v. BURNET, Commissioner of Internal Revenue.
    No. 9046.
    Circuit Court of Appeals, Eighth Circuit.
    July 13, 1931.

      Paul R. Stinson, of Kansas City, Mo. (I. P. Ryland, Arthur Mag, Roy B. Thomson, and Leslie C. Thurman, all of Kansas City, Mo., on the brief), for petitioner.
    A. G. Divet, Sp. Asst. to Atty. Gen. (G. A. Youngquist, Asst. Atty. Gen., Sewall Key, and S. Dee Hanson, Sp. Assts. to Atty. Gen., and C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, and Stanley A. Suydam, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., on the brief), for repondent.
    Before STONE and GARDNER, Circuit Judges, and MARTINEAU, District Judge.
   STONE, Circuit Judge.

This is a petition to review a decision of the Board of Tax Appeals affirming á deficiency redetermination of taxes of the petitioner. There is no dispute that the amount of taxes claimed by the Government is proper. The only controversy is whether the assessment and collection of this deficiency is barred by limitations. It is conceded that it is so barred unless extended by two waivers. Therefore the real issues are as to the term of extension by these two waivers and as to the validity and binding effect of the waivers themselves.

Petitioner contends that the waivers are invalid for various reasons to be hereinafter noted, but that, even if valid, they do not suffice to extend the term to include the assessment and collection. Whether they do so extend the term or not depends upon the construction of the last sentence of the second-waiver. The first waiver is as follows:

“ January 9,1924
(Date)
“Received
“Feb. 19 1924
“Special Assessment Section
“Income and Profits Tax Waiver.
“In pursuance of the provisions of subdivision (d) of Section 250 of the Revenue Act of 1921, Stern Bros. & Co. of Kansas City, Mo. and the Commissioner of Internal Revenue, hereby consent to a determination, assessment, and collection of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of the said corporation for the year 1918 under the Revenue Act of 1921, or under prior income, excess-profits, or war-profits tax Acts, of under Section 38 of the Act entitled ‘An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes’, approved August 5,1909. This waiver is in effect from one year from the date it is signed by the taxpayer.
“Stem Brothers & Company,
“[Corporate Seal] Taxpayer,
“By Sigmund Stern, Pres.
“By Morris Stern, Y. P.
“D. H. Blair, Commissioner.
“If this waiver is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed.”

The second waiver is as follows:

“January 19,1924
(Date)
“Received .
“Feb. 19 1924
“Special Assessment Section
“Income and Profits Tax Waiver.
“In pursuance of the provisions of subdivision (d) of Section 259 of the Revenue' Act of 1921, Stem Brothers and Company of Kansas City, Mo., and the Commissioner of Internal Revenue, hereby consent to a determination, assessment, and collection of the amount of income, excess-profits, or war-profits taxes due under any return by or on behalf of the said Stern Brothers and Co. for the year 1918 under the Revenue Act of 1921, or under prior income, excess-profits, or war-profits tax Acts, or under Section 38 of the Act entitled ‘An act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes’, approved August 5, 1999. This waiver is in effect from the date it is signed by the taxpayer and will remain in effect for a period of one year after the expiration of the statutory period of limitation, or the statutory period of limitation as extended by any waivers already on file with the Bureau, within which assessments of taxes may be made for the year or years mentioned.
“Stern Brothers & Company,
“[Corporate Seal] Taxpayer,
“By Sigmund Stem, Pres.
“By M. Stem, Y. P.
“D. H. Blair, Commissioner MB
“Distribution Center “Jan. 22, 1924
“P. U. & P. S. Section
“If this waiver is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed.”

The controverted question as to the prop'er construction of the last sentence of the second waiver is whether it served to extend the time for one year after the expiration of the statutory period, as extended by the first waiver. The argument is that the five-year limitation period had not expired at the time the second waiver was made, and therefore there was no need nor occasion for a further extension of that period hy any previous or existing waiver, and that it was not the intention of the parties to make such additional extension, but that the sentence should be understood as meaning only that the assessment and collection “may still be made ‘within’ the period as extended by any waivers then on file.” Such a construction as contended for does obvious violence to the language here used and to the application of that language to the situation. Taking the language alone, of the above sentence, it is clearly in the alternative, one of which is that it shall remain in effect “for a period of one year after * * * the statutory period of limitation as extended by any waivers already on file with the Bureau.” No other meaning can be given this language except that the above waiver not only extended the period for one year after the statutory period of limitation, but for one year after any existing extension of the statutory period by waiver on file with the Bureau. "When the application of this wording to the situation is considered, the meaning of the above sentence is further sustained. This situation is that there was actually on file with the Bureau a waiver which extended the period for one year after the statutory limitation. Not only is it significant that the language of the first and second waivers are different in this particular, but there could be no possible purpose in the second waiver if given the meaning contended for by the petitioner, since it would make the extension only the same as the' first waiver had already done.

The petitioner’s main contention is that the waivers are not effective, as such, and several grounds are urged in support of this view. The first of these grounds is that the Commissioner never notified the taxpayer that he had signed or accepted the first waiver or even that he had received it. The theory as to this is that the waiver is a bilateral contract and that it is a condition of such contracts that an acceptance of an offer must be communicated. This view is met by decisions of the Supreme Court which hold that such a waiver is not a contract, Aiken v. Burnet, 282 U. S. 277, 281, 51 S. Ct. 148, 75 L. Ed. -; Florsheim Bros. Co. v. U. S., 280 U. S., 453, 466, 50 S. Ct. 215, 74 L. Ed. 542, and it has been directly decided by the Court of Appeals for the Second Circuit that no such notice is required in connection with waivers of this character, Greylock Mills v. Commissioner, 31 F.(2d) 655, 657.

Another ground is that the demand of the second waiver operated as an affirmative rejection of the first waiver. The language of the last sentence of the second waiver conclusively meets such a contention.

Another ground is that the waivers were made in consideration of the hearing of an .appeal which the Commissioner later refused to hear, and, as the consideration for the contract thus failed, therefore, the contract represented by the waiver was ineffective. This contention is met by the above citations to the effect that such waivers are not contracts, and, as to the matter of consideration, more particularly, by two decisions of the Second •Circuit directly holding that no consideration is necessary to support such a waiver. Loewer Realty Co. v. Anderson, 31 F.(2d) 268, 270; Greylock Mills v. Commissioner, 31 F.(2d) 655, 657.

A further ground is that whether the first waiver be construed as a bilateral contract, or merely as a one-sided instrument to be signed by the taxpayer alone, it never became effective, for the reason that it was conditionally delivered by the taxpayer, and the condition upon which it was to take effect, if at all, never happened; the condition being that the Commissioner would hear the taxpayer’s first appeal. The evidence clearly shows that no such condition was attached to the waiver. The facts as shown by the evidence and clearly understood by both parties at the time are shown in an extract from a letter of the Commissioner transmitting the form of the first waiver to petitioner. That extract shows that the petitioner had, of its ■own volition, submitted an appeal to the Commissioner; that this created a situation in 'which the delay incident to giving consideration to the appeal might jeopardize the assessment and that the waiver was to protect this situation. This cannot be tortured into a promise by the Commissioner that he would hear the appeal if the waiver were made. The •evidence shows that the appeal then on file was not considered because not in proper form, but that the defects therein were called to the attention of petitioner in the letter transmitting the second waiver, and that, in compliance with the suggestions in that letter, another appeal was prepared by petitioner and transmitted to the Commissioner, and that conferences later took place, in connection therewith, between petitioner and officials of the Bureau. With this revelation from the record, there is no basis for any claim that this first extension should be held invalid because that particular appeal was not passed upon.

It is contended by petitioner that the burden is on the Commissioner to show the validity of the two waivers and that the Commissioner has failed to show that the first waiver was on file in the Bureau at the time the second waiver was executed, or that either waiver was properly signed by the Commissioner, or under his authority. Since the Commissioner relies upon a waiver to avoid the statutory limitations, it may be assumed that the burden is upon him to show a waiver which could have that effect, and that this requirement could be met only by the showing of a waiver properly executed by the Commissioner, and, in ihis instance, that the first waiver was on file in the office of the Bureau at the time the second was executed, since the second refers only to a waiver then on file. While this burden' is upon the Commissioner, the character or amount of proof necessary to satisfy this burden is another matter. Here the proof is sufficient to make out, at least, a prima facie ease of the receipt of the first waiver before the letter containing the form for the second waiver was mailed by the Commissioner. This • prima facie ease is made out by two matters, one a presumption, and the other affirmative evidence. The presumption intended is that the evidence shows both that the first waiver was mailed from Kansas City to the Commissioner, at Washington, five days before the Commissioner mailed the second waiver, and that it required no more than that time for the transmission of mail between those two points. Therefore the presumption would be that the first waiver had been received in due course of mail. The affirmative evidence intended is that the second waiver, differing in this respect from the first waiver, refers to an existing waiver “already on file with the Bureau,” and this first waiver is the only one which could possibly have been on file. It is difficult to explain this difference in the two waivers except on the basis of the presence of the first waiver in the files of the Bureau at the time the. second waiver was sent by the Commissioner.

The contention as to the proper signature is met by the waiver itself, which contains the signature “D. H. Blair, Commissioner,” and the presumption of the verity of the acts of public officials. United Thacker Coal Co. v. Commissioner, 46 F.(2d) 231, 233 (C. C. A. 1); Trustees for Ohio & Big Sandy Coal Co. v. Commissioner, 43 F.(2d) 782, 784 (C. C. A. 4).

In general, it may be said as to this controversy and those of a related character that a waiver of this kind is “essentially a voluntary,-unilateral waiver of a defense by the taxpayer,” as stated in Stange v. Burnet, 282 U. S. 270, 276, 51 S. Ct. 145, 75 L. Ed. 335; also see Florsheim Bros. Drygoods Co. v. U. S., 280 U. S. 453, 466, 50 S. Ct. 215, 74 L. Ed. 542; that the signature by the Commissioner is a statutory requirement made, not for contract purposes, but “to meet exigencies of administration,” as said in Aiken v. Burnet, 282 U. S. 277, 281, 51 S. Ct. 148, 75 L. Ed. 339; also see Stange v. Burnet, 282 U. S. 270, 276, 51 S. Ct. 145, 75 L. Ed. 335; Burnet v. Railway Equipment Co., 282 U. S. 295, 298, 51 S. Ct. 137, 75 L. Ed. 349; Florsheim Bros. Co. v. U. S., 280 U. S. 453, 466, 50 S. Ct. 215, 74 L. Ed. 542; Greylock Mills v. Commissioner, 31 F.(2d) 655, 657 (C. C. A. 2); and where the taxpayer, by the execution of the waiver, has obtained delay in the assessment of additional taxes, and a more deliberate and thorough consideration of the questions involved, and where the waiver is regular in form and in the possession of the proper governmental bureau, every presumption should be taken in favor of its validity and binding effect, and the burden is upon the taxpayer to show such invalidity or ineffectiveness, see Trustees for Ohio & Big Sandy Coal Co. v. Commissioner, 43 F.(2d) 782, 784 (C. C. A. 4).

The decision of the Board of Tax Appeals was in all respects correct, and the petition for review should be, and is, dismissed.


text:
    HADLEY v. CONTINENTAL CASUALTY CO.
    No. 9054.
    Circuit Court of Appeals, Eighth Circuit.
    July 13, 1931.
    George D. McClintock, of Minneapolis, Minn. (George Hoke and Cobb, Hoke, Benson, Krause & Faegre, all of Minneapolis, Minn., on the brief), for appellant.
    Fred N. Furber, of Minneapolis, Minn. (Fowler, Carlson, Furber & Johnson, of Minneapolis, Minn., on the brief), for ap-pellee.
    Before STONE and GARDNER, Circuit Judges, and MARTINEAU, District Judge.
   STONE, Circuit Judge.

This is an appeal from 'a judgment entered upon a verdict directed in favor of defendant in a suit for double indemnity under an accident policy.

The policy was issued upon Clarence G. Hadley, husband of the plaintiff. It covered death by accident to the amount of $3,-000, with a double indemnity clause providing that the amount of the policy should be doubled if the accident was in consequence of certain specified causes, among which was that the injuries should be “caused by the explosion of a steam boiler.” There is no dispute as to the character of the accident or as to the death of Hadley being caused thereby, and the company confesses liability as to the amount of the single indemnity ($3,000). The sole contention is whether the double indemnity is recoverable because the death was occasioned by the explosion of a steam boiler, and the determination of that issue rests .upon whether a “feed water heater,” which was the part of the heating plant which exploded, is to be construed as a steam boiler, within the meaning of the policy.

The deceased was employed in connection with a very large plant furnishing heat and power to the Mayo industries at Rochester, Minn. This plant generates steam which is passed out into pipes running throughout the hospital, and other buildings. The method of generating this steam is as follows: Water is introduced into what is known as a “surge tank” from which it flows, by gravity, into a tank or receptacle known as the “feed water heater.” From thence it passes, by gravity, through twenty-seven feet of piping to a boiler feed pump, which forces it up through about the same length of pipe to the steam boiler proper where the heat is first applied to it for the immediate purpose of creating steam. The place of the “feed water heater” in the scheme is to warm the water before it enters the boiler proper to which the heat of the furnace is applied. This device is useful, if not necessary, because experience has demonstrated that the introduction of cold water into a hot boiler results in ^expansion and contraction detrimental to the boiler and sometimes weakens its strength. The preheating of this water in the “feed water heater” is caused by introduction of steam to the cool water, which is caused to fall through punctured plates. It is not intended that this water shall be turned into steam in the “feed water heater,” but the normal effect is that the. steam, which is introduced to heat the water, is condensed. The “feed water heater,” therefore, is not constructed to resist the force of active steam expansion, its sole function, as said above, being to provide a place where the cool water can be warmed so that it may later be introduced into the boiler without injury to the latter.

The statement in the policy as to double indemnity is as follows:

“The amounts specified in Parts I and 33 shall be doubled if the insured is injured under the following circumstances, to wit:
“While a passenger in or on a public conveyance provided by a common carrier for passenger service (including the platform, steps or running board of railway or street railway cars, or while boarding or alighting therefrom) or while in a passenger elevator (elevators in mines excepted) ; (2) •or, caused by a stroke of lightning; (3) or, caused by the burning of a building while the Insured is therein; (4) or, caused by the collapse of a building while the Insured is therein; (5) or, caused by the explosion of a steam boiler; (6) or, caused by a ■cyclone or tornado. * * * ”

The above quotation reveals that the double indemnity is confined to certain rather narrow and definitely stated causes. This policy was written to be understood by laymen. It seems to be clear in meaning. It states that double indemnity shall be allowed, if, among other causes, death results from “the explosion of a steam boiler.” A steam boiler means a boiler,in which steam is generated, and this meaning is further fortified by the fact that the indemnity is against the explosion of such a boiler. The entire expression seems to have in mind, not only a boiler, but a boiler in which steam is generated and which, therefore, may explode. It is not an indemnity from a steam explosion, no matter when or how caused.

It is argued that the “feed water heater” is a necessary and important part and connection in the generation of the steam at this plant, and therefore is a part of the “steam boiler” here, within the meaning of the policy. It may be conceded that the heater is a necessary and important part and connection in the generation of steam at this plant, but so is the surge tank; so is the gravity pipe between the surge tank and the “feed water heater”; so is the boiler feed pump and its connected pipes, and so, also, are the furnaces and the smokestack. No steam could be generated in this plant without the immediate use of all of these connected parts. They, with the boiler, make up the heating plant proper, but this insurance is not for the explosion of any part of a steam plant but of a particular, designated and named element of that plant, to wit, a “steam boiler,” and the steam boiler of this plant did not explode. There is no room for any liberality of construction which might broaden the meaning of the term used in the policy, because there is no ambiguity in the term used in the policy and no difficulty in applying that term to the undisputed facts shown here.

The judgment should be and is affirmed.


text:
    MISSISSIPPI VALLEY TRUST CO. v. FRANZ. FRANZ v. MISSISSIPPI VALLEY TRUST CO.
    Nos. 9142, 9143.
    Circuit Court of Appeals, Eighth Circuit.
    July 13, 1931.

      Samuel H. Liberman, of St. Louis, Mo. (T. M. Pierce, of St. Louis, Mo., on the brief), for Mississippi Valley Trust Co.
    Walter R. Mayne, of St. Louis, Mo. (Edwin W. Lee, Campbell Cummings, and For-dyce, Holliday & White, all of St. Louis, Mo., on the brief), for Gustavus A. Franz, Jr.
    Before STONE and GARDNER, Circuit Judges, and MARTINEAU, District Judge.
   STONE, Circuit Judge.

This is another phase of the frequently appearing Franz-Buder litigation. Franz v. Buder (C. C. A.) 11 F.(2d) 854; Franz v. Buder (C. C. A.) 11 F.(2d) 858; Franz v. Franz (C. C. A.) 15 F.(2d) 797; Buder v. Franz (C. C. A.) 27 F.(2d) 101; Franz v. Buder (C. C. A.) 34 F.(2d) 353; Franz v. Buder (C. C. A.) 38 F.(2d) 605; Mississippi Valley Trust Company v. Buder (C. C. A.) 47 F.(2d) 507. On September 17, 1924, the Mississippi Valley Trust Company was appointed local administrator for Missouri for the heirs of Walter G. Franz. As such, it has represented those heirs in this extended litigation without question of the legality of its appointment as administrator or its right to act as such in this litigation. On December 17, 1930, Gustavus A. Franz, Jr., filed, in the probate court of the city of St. Louis, Mo. (wherein the company had been appointed administrator), an application for appointment as administrator of the heirs of Walter G. Franz and for the removal of the company, alleging that the appointment by the probate court of the company was “illegal, null and void ab initio” for reasons set out therein. Thereupon the company filed in this litigation its ancillary bill setting out its appointment, a pleaded admission of Gustavus in this litigation that it had been properly appointed and was the acting administrator, and sketching the course of the litigation. It then alleges that this latest move is designed to and will impair the sole and exclusive jurisdiction of this court over the subject-matter of this entire litigation, and prejudicially affect, impair, and defeat the integrity of the decrees of the court therein and render nugatory its action. Therefore it seeks an injunction against Gustavus from further prosecuting his above application in the probate court. After issue joined, the court entered a decree enjoining Gustavus from further prosecuting his application in the probate court, or from instituting and maintaining any suit, proceeding, or application in that court having as its object the removal of the company as administrator or in any way attacking the validity of the appointment of the company as such “till such time as that the main eause herein shall have been concluded finally, and said Mississippi Valley Trust Company shall have received through this court or its order, the said one-tenth interest in and to said estate.” From this decree, Gustavus has appealed because it enjoins him from prosecuting his proceeding in the probate court, and the company has brought a cross-appeal because the injunction was to continue only until it had received the interest in the trust estate due the heirs of Walter Franz.

The trial court was right in the decree as made. The injunction against Gustavus was obviously proper. He has been a party to this litigation from the first. Not only has he raised no question as to the validity of the appointment of the company as administrator of the estate of his uncle, Walter, but his pleadings formally admit those matters, and there was never any contested issue of that character thought of in the ease. According to the first opinion handed down by this court, as a result of which the amended bill was filed bringing in all of the heirs of Ehr-hardt D. Franz, the necessary parties to this litigation were such heirs and devisees. The estate of Walter Franz came within this classification. That estate was represented in this litigation by the company. It might throw some doubt upon the entire course and the results of this litigation if any question could now be tolerated in the federal courts and for the purposes of this litigation which would affect the standing of the company as administrator. Because of the above situation, it cannot be tolerated that Gustavus can come in at this late date and undertake in any way to undo or muddle up this present situation which is, apparently, near to being closed. Therefore the court was entirely right in enjoining him from proceeding with his application in the probate court.

While it is more doubtful as to the limitation of the injunction, attacked in the cross-appeal, we are inclined to think that it is proper. Obviously, the federal courts perform none of the functions of a probate court, and the probate court of St. Louis should be permitted to proceed with the administration of this estate in accordance with the laws of the state of Missouri. The sole interest of the federal court, brought about by this litigation, is to protect its jurisdiction, action, and decrees in this litigation. While it has the power and the duty to do this, it seems obvious that it should go no further in interfering or controlling (indirectly) any proceedings in the probate court than is necessary to accomplish the above purposes and ends. How far it is thus necessary to go must depend upon the character and purposes of this litigation and the effects designed to be brought about by the decrees of the federal court therein. The purpose of this litigation was to declare and preserve the interests of the heirs and devisees of Ehrhardt D. Franz in and to the trust fund created by Sophie Franz. To bring about this purpose legally, it was necessary for all of those heirs and devisees to be represented in this litiga^ tion so that their rights might be declared and they might be bound by the results thereof. This litigation has resulted in declaring the rights of these parties to this trust fund, and all of the purposes of the litigation will be served when that trust fund is paid over by the trustees to the proper parties and the trustees released. There can be no doubt that the federal court can and will protect the trustees, the heirs, and the Mississippi Valley Trust Company, as administrator, in the payment to it of the portion of the trust fund due the estate of Walter G. Franz. Also the federal court can and should provide for and see paid to the Mississippi Valley Trust Company a proper allowance and compensation for its participation in this litigation as administrator. The above will fully serve all the purposes of this action and protect all parties in every way connected with this litigation. Whether the probate court later may appoint another administrator and require the company to turn over to hini the funds and the further administration of the estate is a matter which cannot affect this litigation. Therefore we think that this limitation is proper.

The decree should be, and is, affirmed.


author: KENYON, Circuit Judge.

text:
    WILLIAMS BROS., Inc., v. HEINEMANN.
    No. 9021.
    Circuit Court of Appeals, Eighth Circuit.
    Aug. 11, 1931.
    H. T. Harrison, of Little Rock, Ark. (Thomas S. Buzbee, George B. Pugh and A. S. Buzbee, all of Little Rock, Ark., on the brief), for appellant.
    J. Hugh Wharton, of Newport, Ark. (G. L. Grant, of Ft. Smith, Ark., and Gustave Jones, of Newport, Ark., on the brief), for appellee.
    Before KENYON and BOOTH, Circuit Judges, and OTIS, District Judge.
   KENYON, Circuit Judge.

This is an appeal from a judgment based on the verdict of a jury. Appellee leased to appellant two motorboats, a barge, and machinery known as a “drag line” or “claim shell” to be used in lowering a river bank on the White river in Arkansas, to enable appellant to lay a gas pipe line across the river. Appellant, having taken possession of the barge, loaded the drag line thereon, and after the barge had been towed down the river a considerable distance by a motorboat the drag line rolled off into the river and was lost. A pump and motor which appellant had borrowed from appel-lee were never returned. The loss of the drag line, pump, and motor is unquestioned. Appellee claimed the loss was due to appellant’s negligence in loading the drag line on the barge or in handling after it was loaded, while appellant’s claim is that the loss was due to the defective condition of the barge. Straight-eut issues of negligence were presented, and the court’s instructions to the jury were exceedingly clear.

The jury returned a verdict for appellee in the sum of $4,000. Appellant took no exceptions to the court’s charge, nor were any instructions requested on either side. At the close of the evidence counsel for appellant stated: “I want the record to show that the defendant, at the conclusion of the testimony, asked the Court to direct a verdict for the defendant.” The court said, .“Let the record show that the motion is denied.” In the brief of counsel for appellant it is stated: “The appellant will raise only one point on this appeal upon which it will rely for a reversal of the judgment, and that is that the District Court erred in overruling the defendant’s motion, made at the conclusion of all the testimony, to direct al verdict for the defendant.” Counsel for appellant discusses no question but the insufficiency of the evidence to show negligence on the part of appellant.

The settled holdings 'of this court are that a general motion for an instructed verdict stating no grounds therefor is not sufficient to raise the question of whether the evidence was sufficient to- warrant submitting the ease to the jury. Therefore the only point raised by counsel is not before us for determination. Denver Live Stock Commission Co. et al. v. Lee et al. (C. C. A.) 20 F.(2d) 531; Mansfield Hardwood Lumber Co. v. Horton (C. C. A.) 32 F.(2d) 851; Public Utilities Corp. of Arkansas v. McNaughton (C. C. A.) 39 F.(2d) 7. We may say, however, that we have examined the evidence, and, were the question argued properly before us,, we would have no hesitancy in holding that there was abundance of evidence to warrant submitting the case to the jury. Appellee asks that we assess 10, per. cent, penalty upon the judgment as damages under the rule for a frivolous appeal. We do not feel warranted in so doing.

The judgment of the trial court is affirmed.


author: BUFFINGTON, Circuit Judge.

text:
    AMERICAN SURETY CO. OF NEW YORK et al. v. GREEK CATHOLIC UNION.
    No. 4537.
    Circuit Court of Appeals, Third Circuit.
    Aug. 14, 1931.
    Edmund W. Arthur and James M. Magee, both of Pittsburgh, Pa., for appellants.
    Ralph C. Davis and T. S. & O. W. Brown, all of Pittsburgh, Pa., for appellee.
    Before BUFFINGTON and THOMPSON, Circuit Judges, and THOMSON, District Judge.
   BUFFINGTON, Circuit Judge.

This case was heretofore before this court. Reference to 25 F.(2d) 31, will explain its facts and obviate present repetition. Suffice to say the suit was by the Greek Catholic Union, here referred to as the Union, against George Kondor and the American Surety Company, hereafter called the surety, on its fidelity bond for Kondor. In that case the judgment in favor of the defendants was reversed and a new trial ordered. On the retrial a verdict was found in favor of the Union and, on entry of judgment thereon, defendants took this appeal.

The former opinion fully discussed the alleged facts and set forth the legal principles to be applied in the case on retrial. We assume, as did the court below, that decision settled the law of the case. So regarding it, we decline to review such decision, and limit ourselves to inquiring whether the rulings of the trial judge were in accord with our former decision.

Naturally, the first and basic question to be determined by the jury was whether Kondor had, prior to April 4, 1924, breached the provisions of the surety bond. This issue of fact was so explained at length and in. detail to the jury in the judge’s charge that when the court, at its close, inquired whether “there had been any omission to which counsel- for either side desires the attention of the jury be called,” there was no complaint. We therefore accept the finding of the jury that the bond was breached.

Such being the case, the next question was whether, after such breach, the Union released the surety by making the arrangement with the Trust Company of Johnstown. That depended on the answer to the further question whether the arrangement worked any injury to the surety or made its loss greater than it would have been if. the arrangement had not been made. In that respect the court, in accordance with our holding when the case was here before, charged: “8. If the jury believe from the evidence that the American Surety Company was liable to the Greek Catholic Union, under its surety contract for the loss suffered by the default of its Treasurer, the agreement entered into between the Greek Catholic Union and the United States Trust Company of Johnstown, Pennsylvania, did not relieve or release the American Surety Company from such liability, untes the jury find that the latter agreement created a material variation, or was a substantial change of said surety contract which change made the Surety Company’s risk of loss greater than it would have been if said agreement had not been made. That is affirmed.”

On these questions the jury found for the Union. Such being the course of the trial, the trial judge following the principles laid, down by this court and the jury finding all the pertinent issues of fact for the plaintiff,” we are of opinion no error is shown, and the judgment below is affirmed.


text:
    GREAT ATLANTIC & PACIFIC TEA CO. v. WEBER.
    No. 4556.
    Circuit Court of Appeals, Third Circuit.
    Aug. 4, 1931.
    Robert C. Walden, of Philadelphia, Pa. (Walter R. Carroll, of Camden, N, J., of counsel), for appellant.
    Lester B. Johnson, of Philadelphia, Pa., for appellee.
    Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
   BUFFINGTON, Circuit Judge.

In the court below Lizzie K. Weber brought suit and recovered a verdict against the Great Atlantic & Pacific Tea Company for personal injury sustained by her through the alleged negligence of said company. On the court’s refusal to grant a new trial and entry of judgment against it the defendant took this appeal. In accordance.with our rule, the appellant’s brief states the sole question involved in the ease is: “Was the evidence offered with respect to defendant’s negligence sufficient in law to warrant the submission of that question -to the jury?” Accordingly we confine ourselves to this single question.

The facts are the defendant kept a grocery and provision store, and plaintiff entered with a view to buying lettuce. She inquired if they had lettuce, and, being told they had, she crossed the store and walked toward the lettuce counter. As she neared it, her right foot slipped forward, she fell, and between the fall and her effort to save herself she sustained injuries of so serious a character as to compel her to lie on her back for weeks in plaster easts enveloping her entire body, during which time she was unable to even turn. The proofs tended to show that in ordinary course lettuce was brought to the store daily packed in ice and put on the lettuce counter; that melting water dripped from time to time to the floor from which it had to be mopped. Moreover, there was proof that the floor had been recently oiled; that water accumulating on such oiled floor made the floor even more slippery. One witness testified the puddle was such that when she neared it she had to walk around it. It was also proved that when the plaintiff fell she laid in a puddle of water. In view of the duty of the defendant to keep its store floor in such condition as to be reasonably safe for customers to walk thereon, we think there was sufficient evidence of proof in this ease to constrain the trial judge to submit to the jury the question whether the defendant was negligent. We accordingly affirm the judgment.


author: BUFFINGTON, J.

text:
    FIRST NAT. BANK OF PEDRICKTOWN et al. v. WADDINGTON. WADDINGTON v. PEDRICK.
    Nos. 4504, 4505.
    Circuit Court of Appeals, Third Circuit.
    Aug. 18, 1931.
    T. G. Hilliard and H. B. Ware, both of Salem, N. J., for appellants First Nat. Bank of Pedricktown, and another.
    Frank A. Mathews, Jr., of Camden, N. J., for appellant E. C. Waddington.
    James Mercer Davis, of Camden, N. J., for appellee Hamilton G. Pedrick.
    Before BUFFINGTON, WOOLLEY, and THOMPSON, Circuit Judges.
   BUFFINGTON, J.

In the court below E. C. Waddington, trustee in bankruptcy of Preston P. Sweeten, filed a bill in equity against Hamilton G. Pe-driek, the First National Bajnk of Pedrick-town, and the People’s Bank of Pennsgrove. On final hearing that court dismissed the bill as to Pedriek and sustained it as to the two banks, holding that certain payments made to them by the bankrupt were unlawful preferences which they should return to the trustee. From a decree so holding, the banks took this appeal, and the trustee took an appeal in so far as the bill was dismissed as to Pedriek. The two appeals were heard, and will be here considered, as one.

The facts of the ease, about which there is no dispute, are as follows: On October 12, 1927, Sweeten arranged with his brother-in-law, Pedriek, to convey to him certain real estate for the sum of $11,000, with the understanding that Sweeten might redeem the real estate if he paid back the purchase money. On the same day deeds in due form were executed and delivered and the money was paid to Sweeten. The price paid was fair, and Sweeten told Pedriek he needed the money on certain notes the banks had been carrying. Sweeten was reputed to be a wealthy man, and on numerous occasions Pedriek had made him loans on security, which loans he had always repaid. The consideration was paid in cheeks which Sweeten later transferred to the defendant banks. Several weeks thereafter Sweeten went into bankruptcy, whereupon his trustee brought this bill, claiming the banks should pay him the money thus received and that Pedriek should transfer to the trustee the real estate for which he paid the $11,000. The whole matter is set forth in the opinion of the trial judge, which is printed in the margin.

After careful study of the proofs, and on consideration of the contentions of counsel, we find no error in the decree of the court. As between Sweeten and the banks, the $11,000 paid by him was his money and was clearly preferential. As between Sweeten and Pedrick, however, the advance by Pedrick of his $11,000 and the pledge by Sweeten of his real estate therefor was, as held by the court, under the proofs, nothing “further in the conduct of the parties than one would anticipate from the usual business judgment which, is exercised by business men generally in the transaction of business.”

The decree is therefore affirmed, and the appeal of the banks is dismissed at their cost, and that of the trustee at his cost.

       Oral Opinion from the Bench.
      I am quite convinced from the testimony in this case that all the witnesses and parties in interest who appear here are men of the highest degree of integrity and honor. There has been no attempt to conceal any evidence that ought properly to come before the Court*, and the attitude of the witnesses has been open and frank.
      This is not such a case as is sometimes met with in attempts to set aside preferential payments, where there has been a preconceived plan and scheme for the purpose of fraudulently preferring one creditor against another, nor can I see in the testimony anything further in the conduct of the parties than one would anticipate from the usual business judgment which is exercised by business men generally in the transaction of business.
      I find that the conveyances mentioned in the bill of complaint made by Preston P. Sweeten to Hamilton G-. Pedrick on the twelfth day of October, 1927, were made under such circumstances as not to bring the transaction within what is termed a fraudulent transfer or conveyance. It appears that there was a then present passing consideration for the so-called conveyances, the amount of which is evidenced by the two checks which aggregate approximately $11,000.00. It appears that the money obligation was secured by conveyances. The evidence, however, is that the conveyances were not absolute conveyances but were made upon an expressed agreement between the parties, to the effect that Preston P. Sweeten might at any time subsequently redeem the premises upon the payment to Pedrick of the amount advanced.
      I, therefore, find that these conveyances were in effect mortgages, and I further find that the equity of redemption covering the premises in question is vested in the Trustee in Bankruptcy, the plaintiff in this suit.
      It appears that the payments made to the two defendant banks, the National Bank of Pedricktown. and the Peoples’ Bank of Pennsgrove, were made at a time when the paper which was taken up had been for some years criticized, and which in the ordinary course of banking should have been long since paid off. No new consideration passed between the banks and Preston P. Sweeten, nor between the bank and Mr. Pedrick. These payments, then, to the banks are, in my opinion, clearly preferential payments such as are contemplated and dealt with in the bankruptcy act.
      It is my opinion, therefore, that the moneys so received from Mr. Pedrick by these two banks should be paid over to the Trustee in Bankruptcy; to be more specific, the sum of $8,100.00 from the First National Bank of Pedricktown, and the sum of $4,-944.17 from the Peoples’ Bank of Pennsgrove.
      The bill as against Hamilton G. Pedrick is dismissed.
      A decree will accordingly be signed.


author: AUGUSTUS N. HAND, Circuit Judge.

text:
    COMPAGNIE GENERALE TRANSATLANTIQUE v. UNITED STATES (three cases). INTERNATIONAL MERCANTILE MARINE CO., Inc., v. UNITED STATES.
    Nos. 181-184.
    Circuit Court of Appeals, Second Circuit.
    July 7, 1931.

      Robert E. Manley, Acting U. S. Atty., of New York City (George B. Schoonmaker, Asst. U. S. Atty., of New York City, of counsel), for the United States.
    Joseph P. Nolan, of New York City, and Roger O’Donnell, of Washington, D. C., for appellee Compagnie Generale Transatlantique.
    John M. Lyons, of New York City, and Roger O’Donnell, of Washington, D. C., for appellee International Mercantile Marine Co., Inc.
    Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
   AUGUSTUS N. HAND, Circuit Judge.

The foregoing actions were brought by the respective steamship companies to recover sums of money paid by them as fines imposed by the Secretary of Labor under the provisions of section 9 of the Immigration Act of 1917 (39 Stat. 880). During the period from June 8,1920, to December 22,1921, inclusive, the plaintiffs brought to the United States eighty aliens, all except one of whom were found to be illiterate; the remaining one having been found to be an idiot. At the time of arrival all the aliens were applying for permanent admission to this country. They were all ordered excluded by the immigration authorities under section 3 of the Immigration Act of 1917 (8 USCA § 136), and the orders of exclusion were affirmed by the Secretary of Labor. Thereafter he saw fit to change his mind, and -each of the illiterate aliens was admitted to the United States temporarily under bond.

Pines for bringing the illiterate aliens to the United States were imposed upon the plaintiffs under section 9 of the Immigration Act at the rate of $200 per alien and in addition a sum representing the return passage money for each alien. These fines were paid to the collector of customs by the plaintiffs under protest. The passage moneys were repaid to the plaintiffs by the collector because they were not needed by the aliens for their return passage after they had been temporarily admitted. The return of the balance was refused because it had been “covered into the Treasury of the United States.” Thereafter the plaintiffs brought these actions under the Tucker Act (24 Stat. 505) to recover the various fines of $200 which had been imposed. Judge McCormick, who conducted the trial of the four actions, directed judgments in favor of the plaintiffs for the recovery of the fines imposed upon the steamship companies for bringing in the seventy-nine aliens found to be illiterate.

The United States has appealed. It seeks a reversal on the ground that fines could be lawfully imposed for bringing to this country illiterate aliens seeking permanent admission, even though they were admitted temporarily, so long as their disabilities might have been detected prior to their departure from foreign ports by the exercise of reasonable precautions. The United States further objects to repayment of the fines assessed against some of the aliens because they were imposed and the money was covered into the Treasury more than six years prior to the commencement of the actions, and recovery was thereby barred.

Section 3 of the Immigration Act of 1917 (8 USCA § 136) provides for the exclusion of various aliens from the country, including idiots and illiterates. But it contains various provisos, one of which is the following: “Provided * * * That the Commissioner General of Immigration with the approval of the Secretary of Labor shall issue rules and prescribe conditions, including exaction of such bonds as may be necessary, to control and regulate the admission and return of otherwise inadmissible aliens applying for temporary admission.” (8 USCA § 136 (q).

Section 9 of the Immigration Act of 1917 (39 Stat. 880) made it unlawful for a transportation company to bring to any port of the United States any alien who is excluded by section 3 because unable to read, and provided that, “if it shall appear to the satisfaction of the Secretary of Labor that these disabilities might have been detected by the exercise of reasonable precaution prior to the departure of such aliens from a foreign port, such person shall pay to the collector of customs of the customs district in which the port of arrival is located the sum of $200, and in addition a sum equal to that paid by such alien for his transportation from the initial point of departure, indicated in his ticket, to the port of arrival, for each and every violation of this provision, such latter sum to be delivered by the collector of customs to the alien on whose account assessed. • * *»

Section 9 also contained the proviso: “That nothing contained in this section shall be construed to subject transportation companies to a fine for bringing to ports of the United States aliens who are by any of the provisos or exceptions to section three hereof exempted from the excluding provisions of said section.”

During the time when these aliens were being brought to the United States, the following rule had been issued by the Commissioner General of Immigration with the approval of the Secretary of Labor. It will be found in Rules of May 1, 1917, fourth edition, February, 1920, fifth edition, December, 1920, and sixth edition, September, 1921.

Rule 16, subdivision 2, provides: “Temporary admission of otherwise inadmissible aliens. — The ninth proviso to Section 3 authorizes the Bureau and the Department to issue rules and prescribe conditions to control and regulate the admission and return of otherwise inadmissible aliens applying for temporary admission. In cases in which aliens who are mandatorily excluded from permanent entry apply for the privilege of entering the United States temporarily, they shall be required to. show that their temporary entry is an urgent necessity or that unusual and grave hardship would result from a denial of their request. * * * ”

The principal question before us is whether a carrier is relieved from the penalties imposed under section 9 where it brings aliens who 'are temporarily admitted under the proviso of section 3 which we have quoted. A strong reason for holding that a fine should not be imposed for bringing to the United States an alien who, though excludable under the statute, is temporarily admitted, is because the portions of the fine, namely, the $200 and the return passage money, are, as Judge Patterson said in Lloyd Sa-baudo Societa v. Elting (D. C.) 45 F.(2d) at page 409, indivisible. The carrier is required to pay the return purchase money to the collector in order to insure the alien against having to pay it, and section 9 provides that it shall be “delivered by the collector of customs to the alien on whose account assessed” in aid of that object. It is impossible to suppose that a carrier is required to pay the return passage money for the benefit of an alien who is not excluded. Because the Department recognized the absurdity of such a supposition, it repaid the return purchase money deposited by the plaintiffs in this case.

Moreover, where fines are imposed under section 16 of the Immigration Act of 1924 (8 USCA § 216) for bringing to the United States aliens having a wrong type of visa, the Secretary of Labor may admit them under the discretion given him by section 13 (d) of that act, 8 USCA § 213(d). But section 13 (f), 8 USCA § 213(f) provides that nothing therein shall “authorize the remission or refunding of a fine, liability to which has accrued. * * * ” It is plain that, where Congress has wished to preclude the remission of fines imposed for bringing excludable aliens, who have been admitted under the discretion lodged in the Secretary of Labor, the matter has not been left to inference, but remission has been expressly prohibited.

It is said that, when a steamship company transports an alien, it ought to be able to know at the outset whether the transportation is lawful or not. But a fair answer to this contention is that a earner would probably prefer uncertainty to paying fines. It cannot be maintained that the aliens were sent on a needless trip. They sought temporary admission and got it after first trying for permanent admission and failing to obtain it. We may assume that, if they had started out with the purpose of gaining only temporary admission and had first applied for that privilege, they would have obtained it just as they, did in the present case. We cannot see why a change of intention should involve the payment of a fine.

In North German Lloyd v. Elting, 48 F.(2d) 547, where aliens liable to exclusion because of physical disability were in fact excluded, we held that a fine was properly imposed for bringing them. While we did not decide that it might not have been imposed, if the aliens had been admitted under the discretion vested in the Secretary of Labor, we cited Lloyd Sabaudo Societa, etc., v. Elting (D. C.) 45 F.(2d) 405, and Norddeutscher Lloyd v. United States (C. C. A.) 213 F. 10, in support of the conclusion that .the carrier would incur no penalty under such circumstances.

In Lloyd Sabaudo Societa, etc., v. Elting (D. C.) 45 F.(2d) at page 409, Judge Patterson held that, where an alien was admitted in spite of physical defects for which he might have been excluded, a fine should not be imposed for bringing him to the United States. . In Norddeutseher Lloyd v. United States, 213 F. at page 14, we held that fines could not be imposed for bringing aliens to the United States in violation of law and charging them for round trip tickets, if the aliens, though physically defective, were admitted under bond. These decisions are persuasive precedents in support of the result reached by the court below and they accord with the rule that a penalty ought pot to be imposed where the statutory warrant is not clear.

In the present ease not only is all statutory warrant for the imposition of fines lacking', but the proviso of section 9, which we have quoted, specifically states that transportation companies shall not be subjected to fines for bringing aliens to ports of the United States where they are exempted from the excluding provisions of section 3. The illiterate aliens who were temporarily admitted were thus exempted by the ninth proviso of section 3 (8 USCA § 136 (q), which left their admission to the regulation of the Secretary of Labor. The fines were therefore properly held recoverable except in the causes of action where recovery was barred because the fines were imposed and the money covered into the Treasury of the United States more than six years prior to the commencement of the actions.

The remaining question for consideration is whether section 1 of the Tucker Act, United States Code 28, section 41 (20), 28 USCA § 41(20), precludes recovery by the plaintiffs upon the causes of action where fines have been imposed and the money has been ■covered into the Treasury of the United States more than six years prior to the commencement of the actions. Section 1, so far as it applies to this situation, reads as follows : “ * * * No suit against the Government of the United States shall be allowed under this paragraph unless the same shall have been brought within six years after the right accrued for which the claim is made. •* * * »

In Compagnie Generale Transatlantique v. United States, L 41/166, cause of action No. 1, where the immigrant was found to be .an idiot, recovery of the fine was not allowed hy the trial court, and the plaintiff took no appeal. In causes of action Nos. 2, 3, 4, 5, 6, 7, 8, 9,11,12,13,14, and 15, the fines were not only imposed, but were covered into the Treasury of the United States more than six years prior to the commencement of the suit. In cause of action No. 10, the fine was ordered imposed and was covered .into the Treasury less than six years prior. to the •commencement of the action. The plaintiff in the foregoing cause was held entitled to have judgment for $200 in each of the fourteen causes of action Nos. 2 to 15, both inclusive. If section 1 of the Tucker Act, supra, applies, recovery of all the fines, except the one sought to be recovered under cause of action No. 10, is precluded.

In Compagnie Generale Transatlantique v. United States, L 39/201, in causes of action Nos. 10, 11, 12, 13, 20, 21, 22, 23, 31, 32, 33, and 34, the fines were not only imposed, but were covered into the Treasury of the United States .more than six years prior to the commencement of the action, but recovery of these fines as well as fines paid less than six years prior to the commencement of the action were allowed by the trial court. If section 1 of the Tucker Act, supra, applies, recovery of the fines sought to be recovered under causes of action Nos. 10, 11, 12, 13, 20, 21, 22, 23, 31, 32, 33, and 34 is precluded.

In Compagnie Generale Transatlantique v. United States, L 35/310, there was but one cause of action, and the fine was imposed and was covered into the Treasury of the United States less than six years prior to the commencement of the suit, so that section l.of the Tucker Act has no application.

In International Mercantile Marine Co. v. United States, in causes of action Nos. 1, 2, 3, 6, 9, 10, 11, 12, 13, 18, 25, and 26, the fines were not only imposed, but were covered into the Treasury of the United States more than six years prior to the commencement of the action. If section 1, supra, of the Tucker Act applies, recovery of the fines sought to be recovered under causes of action Nos. 1, 2, 3, 6, 9, 10, 11, 12, 13, 18, 25, and 26 is precluded.

In all the causes of action where fines were imposed and covered into the Treasury more than six years before the commencement of action, the return passage money deposited as a part of the fine was returned to the carrier within six years prior to such time. It is contended by the plaintiffs that because of these returns there was a payment on account of each fine that prevented the six-year provision of the Tucker Act from running.

But section 1 of that act (28 USCA § 41 (20) is not a statute of limitations. The provision that no suit shall be brought against the United States unless “within six years after the right accrued for which the claim is made” is a jurisdictional requirement, compliance with which is necessary to enable suit to be maintained against the sovereign.

It has long been held that failure to bring action against the United States within six years after such rights have accrued is a bar to recovery. Ford v. United States, 116 U. S. 213, 6 S. Ct. 360, 29 L. Ed. 608; Finn v. United States, 123 U. S. 227, 8 S. Ct. 82, 31 L. Ed. 128; United States v. Wardwell, 172 U. S. 48, 19 S. Ct. 86, 43 L. Ed. 360; Louisville Cement Co. v. Int. Com. Comm., 246 U. S. at page 642, 38 S. Ct. 408, 62 L. Ed. 914. The statutory provisions under which recovery may be had are clear and mandatory, and no official has been authorized by repaying a portion of the fines or otherwise to waive the limitations enacted for the protection of the United States. Finn v. United States, 123 U. S. at page 233, 8 S. Ct. 82, 31 L. Ed. 128; Utah Power & Light Co. v. United States, 243 U. S. at page 408, 37 S. Ct. 387, 61 L. Ed. 791; Tucker v. Alexander, 275 U. S. at page 231, 48 S. Ct. 45, 72 L. Ed. 253; Ritter v. United States (D. C.) 19 F.(2d) at page 252.

It follows from, the foregoing that the judgment in Compagnie Generale Transatlantique v. United States, L 41/166, should be modified so as to dismiss the complaint as to causes of action Nos. 2, 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14, and 15, and to allow only recovery of a fine of $200 upon cause of action No. 10, with $5 costs, instead of $2,800 and costs as heretofore allowed; that the judgment in Compagnie Generale Transatlantique v. United States, L 39/201, should be modified so as to dismiss the complaint as to causes of action Nos. 10, 11, 12, 13, 20, 21, 22, 23, 31, 32, 33, and 34, and to allow only recovery of fines of $200 upon each of the remaining causes of action, that is to say, of $4,400, and $5 costs, instead of $6,800 and costs, as heretofore allowed; that the judgment in Compagnie Generale Transatlantique v. United States, L 35/310, should be affirmed; that the judgment in International Mercantile Marine Co. v. United States, should be modified so as to dismiss the complaint as to causes of action Nos. 1, 2, 3, 6, 9, 10, 11, 12, 13, 18, 25, and 26, and to allow only recovery of fines of $200 upon each of the remaining causes of action, that is to say, of $3,600 and $5 costs, instead of $6,000 and costs as heretofore allowed.

It is unnecessary to order a new trial in any of the eases for they were all tried without a jury and there were special findings of fact. Ft. Scott v. Hickman, 112 U. S. 150, 5 S. Ct. 56, 28 L. Ed. 636; Howbert v. Penrose (C. C. A.) 38 F.(2d) at page 581, 68 A. L. R. 820; Churchill v. Buck (C. C. A.) 102 F. at page 44; Routzahn v. Mason (C. C. A.) 13 F.(2d) 702.

Judgment is affirmed in Compagnie Gen-erale Transatlantique v. United- States, L 35/310, and in the other eases the judgments should be modified in accordance with the views above set forth and, as modified, affirmed.


author: GODDARD, District Judge.

text:
    LAMPORT & HOLT, Limited, v. ELTING, Collector of Customs.
    District Court, S. D. New York.
    July 22, 1931.
    John M. Lyons, of New York City, for plaintiff.
    George Z. Medalie, U. S. Atty., and George B. Schoonmaker, Asst. U. S. Atty., both of New York City, for defendant.
   GODDARD, District Judge.

This is a motion by the plaintiff for summary judgment in a ease which alleges three causes of action arising under the immigration laws. Fines were imposed and paid under protest in each instance, and plaintiff now seeks to recover them. The first cause of action is brought for the recovery of a fine of $1,058 imposed upon Lamport & Holt, Limited, the plaintiff, under section 9 of the Immigration Act of 1917 as amended by section 26 of the Immigration Act of 1924 (8 USC § 145 [8 USCA § 145]), incident to the arrival of the alien, Ena Watson, upon the plaintiff’s steamship Van Dyke which arrived in New York on May 5, 1926. Under a recent decision of the Circuit Court of this circuit, the plaintiff is entitled to- judgment in its favor upon this cause of action. See Compagnie Generale Transatlantique v. United States of America (C. C. A.) 51 F.(2d) 1053, filed July 7, 1931.

The second cause of aetion relates to a fine of $1,132 imposed upon the plaintiff for bringing to this country the alien Ramon Hermida who arrived here on April 22, 1927, on the plaintiff’s steamship Vestris, and who was excluded by the Secretary of Labor as a nonquota immigrant not in possession of any immigration visa.

The third cause of aetion relates to a fine of $1,208, which was imposed upon the plaintiff steamship company for bringing to this country the alien Alfonso Chechia who arrived here on the plaintiff’s steamship Vauban on May 31, 1927, and who was excluded by the Secretary of Labor on the ground that he was a quota immigrant not in possession of any immigration visa.

The fines referred to in the secopd and third causes of aetion were imposed under section 16 of the Immigration Act of 1924 (8 USC § 216 [8 USCA § 216]), the pertinent parts of which read as follows:

“Section 16.(a) It shall be unlawful for any person, including any transportation company or the owner, master, agent, charterer, or consignee of any vessel to bring to the United States by water from any place outside thereof * * * (1) any immigrant who does not have an unexpired immigration visa, or (2) any quota immigrant having an immigration visa the visa in which specifies him as a nonquota immigrant.
“(b) If it appears to the satisfaction of the Secretary of Labor that any immigrant has been so brought, such person or transportation company, or the master, agent, owner, charterer, or consignee of any such vessel, shall pay to the collector of customs of the customs district in which the port of arrival is located the sum of $1,000 for each immigrant so brought, and in addition a sum equal to that paid by such immigrant for his transportation from the initial point of departure. * * *
“(e) Such sums shall not be remitted or refunded, unless it appears to the satisfaction of the Secretary of Labor that such person, and-the owner, master, agent, charterer, and consignee of the vessel, prior to the departure of the vessel from the last port outside the United States, did not know, and could not have ascertained by the exercise of reasonable diligence, (1) that the individual transported was an immigrant, if the fine was imposed for bringing an immigrant without an unexpired immigration visa, or (2) that the individual transported was a quota immigrant, if the fine was imposed for bringing a quota immigrant the visa in whose immigration visa specified him as being a nonquota immigrant.”

The contention of counsel for plaintiff seems to be that, as Hermida had satisfied the American consul at Buenos Aires that he was going to the United States as a temporary visitor, and the consul had granted him a nonimmigration visa, and that Chechia had satisfied the American consul at Santos that he was coming here as a temporary visitor, and had been granted a nonimmigration visa, the steamship company was not subject to a fine of $1,000 and to return the passage money in either instance.

Paragraph (e) of section 16, 8 USCA § 216(c), provides that the fine shall not be remitted unless it appears to the satisfaction of the Secretary of Labor that the owner of the vessel, master, etc., did not know, and could not have ascertained by the exercise of reasonable diligence, prior to the departure of the vessel, that the individual transported was a quota immigrant if the fine was imposed for bringing a quota immigrant, the visa in whose immigration visa specified him as being a nonquota immigrant.

With respect to the alien Hermida, when he testified before the board of special inquiry, he said he had resided in Buenos Aires for eighteen months previous to coming to the United States, and had worked there as a carpenter; that he was planning to stay here for six months and earn some money; that he had only $40, and no return ticket; and that this $40 would not be sufficient to maintain him in this country for the six months.

Chechia stated, when he was examined by the board of special inquiry at Ellis Island, he had only $50, no return ticket, and no job in view, but that he expected that his friends would secure him a job as a mason, and that he intended to remain six months; also that he was not a native of Brazil but a native of Italy.

The foregoing indicates that neither Her-mida nor Chechia were coming to the United States as mere temporary visitors or on business or pleasure. Quite the contrary. It indicates they were coming here for the purpose of working for hire (see Karnuth v. United States, 279 U. S. 231, 49 S. Ct. 274, 73 L. Ed. 677), and they were therefore not entitled to admission as nonimmigrants, and it is probably fair to assume that, if the representatives of the steamship company had asked them similar questions before selling tickets to them, they would have obtained the same information. Whether this is a fair assumption or not, there is sufficient evidence in the complaint and the affidavits to support the finding of the Secretary of Labor that it did not appear to his satisfaction that the steamship owner did not know, and could not have ascertained by the exercise of reasonable diligence, that the aliens Hermida and Chechia were immigrants not in possession of immigration visas. Upon consideration of the facts, it cannot be said that the decision of the Secretary of Labor was arbitrary, and, having reached such conclusion, the fines were properly imposed. The case at bar is to be distinguished from the case Compagnie Franeaise de Navigation a Vapeur v. Elting (C. C. A.) 19 F.(2d) 773, where the fine was imposed under the provisions of section 6 of the Act of May, 1921, as added by Joint Resolution approved May 11, 1922 (42 Stat. 540).

In neither Heimida’s nor Chechia’s ease, as the facts were found by the board of special inquiry, was there discretionary power to admit them vested in the immigration officials. The aliens, having nonimmigration visas, were absolutely barred. While in Compagnie Franeaise Navigation de Vapeur v. Elting, supra, the alien claimed to be returning from a temporary visit abroad to an unrelinquished domicile, and Judge Swan held that, as the alien had a right, under the Regulations, to present his evidence to the immigration officials at the port of arrival in this country, and who were the only ones who could decide upon his admissibility, the steamship company committed no wrong in bringing the alien to the United States for that purpose. Furthermore, section 6 of the Act of 1921, as added by Joint Resolution of 1922, differs from section 16 of the Act of 1924 (8 USCA § 216). Section 16 definitely states that it shall be unlawful to bring to the United States any immigrant who does not have an unexpired immigration visa or any quota immigrant having a nonquota visa, while section 6 provides that it shall be unlawful to bring to the United States any alien not admissible under'the terms' of this act “or Regulations made thereunder,” and, since it appears that there was sufficient evidence to support the conclusion of the Secretary of Labor, the plaintiff’s motion for summary judgment in the second and third causes of action must therefore be denied.

Judgment may be entered in accordance with this opinion.


author: DAWKINS, District Judge.

text:
    THOMASON v. DAVIS et al. (three cases).
    Nos. 428-430.
    District Court, W. D. Louisiana, Monroe Division.
    March 31, 1931.

      Stubbs & Thompson, of Monroe, La., for complainant.
    McHenry, Montgomery, Lamkin & Lamkin, of Monroe, La., for respondents.
   DAWKINS, District Judge.

These three suits were filed in the Fifth district court for Richland parish on July 21, 1930, citations were issued on the same day, and service was made July 25th, following, on the defendant Southern Carbon Company in Ouachita parish. The citations were in the usual form, and commanded the defendant to comply with the demands of the petitions, copies of which accompanied the citations, or file its answers -in writing “in the office of the clerk of the district court” for Richland parish, within ten days after the service, with one day additional for each ten miles the defendant lived “from Rayville, not to exceed fifteen (15) days.” The rules of the court fixed July and August as vacation months, with the regular term at Rayville, beginning on the “last Monday in September.” However, the court was actually convened there on September 12th and 19th, respectively, but no defaults were entered in these eases, as might have been done.

On September 27, 1930', defendant Southern Carbon Company filed and had served in each of said cases notice to the attorneys for the plaintiffs that it would, on Monday the 29th, ask for orders for removal to this court. The petitions' therefor and bonds were accordingly filed on the 29th, and the state court immediately signed the orders of removal.

Plaintiffs have moved to remand, for the reason that the petitions for removal came too late.

The matter is controlled by section 72 of title 28 U. S. C., 28 USCA § 72 (section 29, Judicial Code), which requires the application to be made to the state court at “any time before the defendant is required by the laws of the State or the rule of the State court in which such suit is brought to answer or plead to the declaration or complaint of the plaintiff. * * * ” Of course, in this state, the delays for answering suits are not governed by rule of court but by statute. La. Revised Code of Practice, art. 180. It provides that the defendant shall have ten days, counted from the day the citation “has been served * * * to comply with the demand” of the petition, if the defendant resides in the place where the court is held, with one additional day for each ten miles that his residence is distant therefrom, not to exceed in any case “fifteen days in all.” This article of the Code of Practice has been construed by the Supreme Court of the State to require the answer to be filed within the delay allowed, and that, unless a motion to remove is filed by that time, it comes too late. See Font v. Gulf State Land and Improvement Co., 47 La. Ann. 272, 16 So. 828; Hart v. Nixon, 25 La. Ann. 136. There is no other statutory provision of the state, and, the Legislature having dealt with the specific subject-matter, the courts have no power to change it under their limited rule-making authority. The court of last resort of the state has construed it to mean that the time for pleading is fixed thereby, whether default has been entered or not, and the federal courts are bound to accept its interpretation of the state law. See Kansas City, Ft. S. & M. R. Co. v. Daughtry, 138 U. S. 298, 11 S. Ct. 306, 34 L. Ed. 963; Southwest Power Co. v. Price, 180 Ark. 567, 22 S. W.(2d) 373, certiorari denied (1930) 281 U. S. 753, 50 S. Ct. 353, 74 L. Ed. 1163.

The state trial courts may hold terms at any time the business may require, at the discretion of the j’udge, except as to those months designated as vacation, but I cannot see that this has anything to do with the question here.

The motions to remand will therefore be granted. Proper decree may be presented.


text:
    VICKSBURG, S. & P. RY. CO. v. NATTIN, Tax Collector, et al.
    No. 442.
    District Court, W. D. Louisiana, Shreveport Division.
    Aug. 5, 1931.
    Randolph, Rendall & Freyer, of Shreveport, La., for complainant.
    L. B. Duke, of Benton, La., and R. F. Kennon, of Minden, La., for respondents.
   DAWKINS, District Judge.

The petition in this case alleges that the defendant tax collector is about to enforce collection of an annual tax of eight mills, amounting to $406.80 for the year 1930, claimed by the subdrainage district No. 1 of Bossier parish. It alleges that the said tax is illegal, for the reason that complainant was a nonresident of the district, and, although the assessed value of its property is greater than that of any other taxpayer, amounting to $50,850, it was not permitted to vote thereon or to be heard in any manner as to the imposition of said tax; that its property consists of its roadbed, right of way, and track, amounting to some twenty acres, which will in no Avise be benefited by the drainage scheme, and assessed at some twenty-five times the value per acre placed upon other-property in the district, and the action of the respondents results in gross discrimination, denial of due process, and the taking of its property in violation of the Fourteenth Amendment of the Federal Constitution; that the district was created, bonds amounting to $47,000, maturing over a term of twenty-five years, were issued, and its property will therefore be taxed each year for the payment thereof to an amount in the aggregate over said period of more than $5,000. Petitioner prays for a restraining order, that upon hearing it be granted a preliminary injunction, and finally that the defendants be permanently enjoined from collecting said tax.

A restraining order was granted and subsequently a temporary injunction.

The matter has now been submitted upon a motion to dismiss, the grounds of which are as follows: (1) That the petition does not set forth facts to give jurisdiction in a court of the United States; (2) that the amount involved is insufficient to give this court jurisdiction; (3) that the allegations are too indefinite, and contain only conclusions of law; (4) that there is no allegation that plaintiff is not bound by the sixty-day prescription provided by the state Constitution; (5) nor does it allege that plaintiff is not bound by the thirty-day limitation of Act No. 9 of the state Legislature of 1924; (6) that on its face the petition shows that plaintiff has been guilty of laches; and (7) that no irreparable injury has been shown.

I deem it necessary to consider only the question of the jurisdictional amount involved. It seems to be settled that in cases of this kind a complainant cannot add the taxes of subsequent years to those which are due and sought to be collected, in order to make up an amount sufficient to give a federal court jurisdiction. It is the sum claimed by the tax collector against which the injunction is asked that controls, and the court cannot consider the collateral effect of a subsequent suit between the same or other parties which might involve the tax during other years. This is not a case in which the action of the defendants will result in the destruction of the defendant’s business but merely to enjoin the collection of an ad valorem tax upon its tangible property, the effect of which can be avoided by payment of the sum claimed; or it may proceed in a state court of proper jurisdiction, with the right ultimately to have the federal question reviewed by the Supreme Court of the United States in the manner provided by law. I am convinced that the amount actually in dispute is only the sum of $406.80, which is wholly insufficient t<? give this court jurisdiction.

In Washington & Georgetown Railroad Co. v. District of Columbia, 146 U. S. 227, 13 S. Ct. 64, 66, 36 L. Ed. 951, the Supreme Court of the United States, through Chief Justice Fuller, in a similar ease, said: “The matter in dispute in its relation to jurisdiction is the particular tax attacked, and unaecrued or unspecified taxes cannot be included, upon conjecture, to make up the requisite amount.”

See, also, the following eases: Citizens’ Bank v. Cannon, 164 U. S. 319, 17 S. Ct. 89, 41 L. Ed. 451 (which went to the Supreme Court from this district); Holt v. Indiana Manufacturing Co., 176 U. S. 72, 20 S. Ct. 272, 44 L. Ed. 374; Fishback v. Western Union Tel. Co., 161 U. S. 96, 16 S. Ct. 506, 40 L. Ed. 630; New England Mortgage Security Co. v. Gay, 145 U. S. 123-130, 12 S. Ct. 815, 36 L. Ed. 646; Northern Pacific Railroad Co. v. Walker, 148 U. S. 392, 13 S. Ct. 650, 37 L. Ed. 494; Walter v. Northeastern Railroad Co., 147 U. S. 370, 13 S. Ct. 348, 37 L. Ed. 206; Clay Center v. Farmers’ Loan & Trust Co., 145 U. S. 224, 12, S. Ct. 817, 36 L. Ed. 685; Mayor, etc., of City of Baltimore v. Postal Tel. Cable Co. (C. C.) 62 F. 500; Linehan Railway Transfer. Co. v. Pendergrass, 70 F. 1, 16 C. C. A. 585; Woodman v. Ely (C. C.) 2 F. 839; Murphy v. East Portland (C. C.) 42 F. 308.

For the reasons assigned, the plea to the jurisdiction ration® materi® will be sustained. Proper decree should be presented.


author: KENNERLY, District Judge.

text:
    Petition of TURNER.
    No. 273.
    District Court, S. D. Texas, Brownsville Division.
    Aug. 6, 1931.
    Harry M. Carroll, of Donna, Tex., for petitioner.
    Grover C. Warren, District Director of Naturalization, of New Orleans, La., for the government.
   KENNERLY, District Judge.

This is a hearing on May 12, 1931, of the petition of Robert Miller Turner, an alien, for naturalization, under chapter 9 of title 8, USCA. The facts, shorn of matter immaterial to. the questions involved, are substantially as follows:

Petitioner, an alien, and a subject of Great Britain, and then a minor, entered the United States about September, 1923, with his parents. He became twenty-one years of age, and married, prior to filing, on December -1, 1930, his petition for naturalization. From the time of his entry up to the time of this hearing, he has continuously resided at Donna, in Hidalgo county, Tex., within this district, first with his parents, and later with, his wife. He has been actually physically present in Hidalgo county during such time, except that prior to his marriage he was temporarily in the Panama Canal Zone from January 9,1929, to September 15, 1929. He went to the Canal Zone on a visit, but worked from about February, 1929, for the “Transportation Department of the United States Government” until just before he started upon his return. He was temporarily absent in the Canal Zone, and at no time intended to reside there. All prerequisites to naturalization have been complied with, and no questions are raised by the government as to his right to naturalization, except in the following particulars:

(a) It is claimed that petitioner’s temporary stay in the Canal Zone broke the continuity of his required five years’ residence in the United States.

(b) It is claimed that there is no proof of his behavior, etc., during this temporary stay in the Canal Zone.

(1) In the argument at the bar and in the briefs filed, much has been said about, whether the Panama Canal Zone is a part of the United States, within the meaning of the naturalization laws. I find it unnecessary to determine that question.

(2) Section 361 of title 8, USCA is as follows: “No alien shall be admitted to become a citizen who has not for the continued term of five years next preceding his admission resided within the United States.”

It is well settled by the authorities that under this section there may be periods of absence from the United States. Not a change of residence, but periods of absence, such as is here presented. Prior to the Act of March 2, 1929 (45 Stat. 1512) the courts variously construe such periods of absence. In re Conis (D. C.) 35 F.(2d) 960; In re Zapisecki (D. C.) 41 F.(2d) 859; In re Ringstad (D. C.) 41 F.(2d) 753.

But such act fixes the time of a temporary absence in the following language: “Absence from the United States for a continuous period of one year or more during the period immediately preceding the date of filing the petition for citizenship for which continuous residence is required as a condition precedent to admission to citizenship shall break the continuity of such residence.” Section 6(b), 8 USCA § 382.

The period of petitioner’s absence was less than one year, and even if, as the government insists, the Canal Zone is not a part of the United States within the meaning of the naturalization laws, petitioner’s absence would not serve to break the continuity of his five years’ residence prior to the filing of his petition.

(3) This brings us to the second contention of the government that, though it has been shown that petitioner behaved as a person of good moral character, attached to the principles of the Constitution of the United States, and well disposed to the good order and happiness of the United States, while he was actually present in Hidalgo county, it does not follow that his behavior and disposition while in the Canal Zone was of that character. In other words, the government seems to suspect that while this petitioner may have been Dr. Jekyll in Hidalgo county, Tex., he was Mr. Hyde in the Canal Zone. It ■is sufficient to say that the good behavior, etc., of petitioner during the required five-year period has been fully shown.

Since this disposes of the only two questions raised by the government, an order will enter, admitting the petitioner to citizenship upon his taking the oath, etc.