author: EVANS, Circuit Judge ALSCHULER, Circuit Judge

text:
    O’BRIEN v. UNITED STATES.
    No. 4532.
    Circuit Court of Appeals, Seventh Circuit.
    June 29, 1931.
    Rehearing Denied July 25, 1931.

      ALSCHULER, Circuit Judge, dissenting in part.
    James A. O’Callaghan, of Chicago, Ill., for appellant.

      George E. Q. Johnson, Jacob I. Grossman, and Dwight H. Green, all of Chicago, Ill., for the United States.
    Before ALSCHULER, EVANS, and SPARKS, Circuit Judges.
   EVANS, Circuit Judge

(after stating the facts as above).

Appellant contended that the evidence fails to show that he willfully failed to file income tax returns for the three years under consideration. Although admitting that his income was such as to necessitate the filing of income tax returns, he offered as his explanation for not doing so his belief that because he was a member of the Illinois State Legislature, he was not required to pay an income tax, nor was he under any duty of making an income tax return. Appellant having so testified, his counsel argues that his failure to file his return must be accepted as not having been willful.

Appellant cites as a further attenuative circumstance, the fact that a large portion of his gross income came from the Sanitary Drainage District of Chicago for work done pursuant to contracts with this District, and that the profits derived from such source were not subject to a federal income tax. No such position was taken in the court below, and we may well ignore it, upon the further ground that appellant’s income, for each of these years, aside from the revenue derived from the Drainage District, exceeded the sum of $5,000, and he was, therefore, required to make and file income tax returns thereon.

The narrow question which we are called upon to decide, therefore, is whether the evidence was such as to require its submission to a jury. In other words, could the jury, upon the evidence before it, have found that appellant’s failure to file his income tax returns was willful? In a sense the question is one of credibility. Was the court, upon the motion to dismiss, required to accept appellant’s statement that he believed himself to be immune from federal income tax because he was a State Representative? His statement without explanation hardly seems reasonable, though perhaps possible. The duty of weighing his explanation, and accepting or rejecting it, was, we think, for the jury. This conclusion is strengthened hy other facts which throw some light upon the soundness and rationality of the proffered explanation.

Appellant was a contractor having a substantial business. Eor a decade, he had represented a district in Chicago in the Hlinois State Legislature. His gross income for the three years was nearly a half million dollars. He received over $100,000 a year from the Sanitary Drainage District. He bought and sold stocks and bonds, from which source alone his income exceeded $5,000 in one year. On the other hand, he is pictured by his counsel as a somewhat illiterate, untutored indi-, vidual with little or no knowledge of the complicated federal income tax laws. There was, however, evidence received which tended to refute his inexperience in and unfamiliarity with business in its various phases.

His very large dealings with the Drainage District, while as a legislator he was voting appropriations to that body, his practice of dividing his bills against the drainage district so that none would exceed $500 in amount, thereby avoiding the statutory requirement that such contracts be awarded the lowest bidder, strongly suggest he was no neophyte in mixing polities and business. We think the jury might, without being unduly incredulous, have rejected his asserted naivete as specious.

From our study of the testimony, we are satisfied that the court rightfully submitted this question of willfulness to the jury.

Refusal to Grant a Continuance. — Error is assigned because the court refused to continue his ease. He was indicted March 4, 1930, and trial began December 9 of the same year. His first application for a continuance was for the purpose of enabling him to present his tax ease to the appropriate division of the Bureau of Internal Revenue and, if necessary, to the United States Board of Tax Appeals.

Obviously this application was properly denied for his belated action in seeking to adjust his unpaid taxes with the Government had nothing to do with the prosecution of the criminal action.

A few days later when his ease was called for trial, he again asked for a continuance, and as grounds therefor asserted his inability to complete his examination of the books of the Sanitary Drainage District to ascertain what sums had been paid him, stating that the Sanitary District’s books had been turned over to the United States Government, and that he was pursuing this inquiry at the time the ease was called for trial. There was no showing made that other records were not available, or that he had been diligent in examining the books in the Government’s possession. Moreover, it did not appear that he was ignorant of the amounts he had received from the Sanitary District. His protestations that he could not proceed to trial until he had completed his examina^ tion of these books in order that he might know the amounts that had been paid to him by the Sanitary District are not impressive of a good faith application for a continuance. The court properly refused to continue the case.

Appellant also complains because the prosecuting attorney, on cross-examination, inquired about certain bills, which indicated their preparation and presentation to the Sanitary District before the work was actually performed. It is argued that the accused was prejudiced by a showing of conduct on his part which pointed to the commission of some other offense or improper practices, which had nothing to do with the federal offenses for which he was on trial.

The court ruled, and we think properly, “The Government has the right to inquire whether the work done thereafter was more or less. If it was more; the income would be increased accordingly; if it was less, of course the income would be reduced accordingly. Of course, these bills all show it themselves whether they are in advance. I would not take much time on this.” Apparently, no one at the time this evidence was received considered it other than for the legitimate purpose for which it was admissible. No request was made to limit its scope or to strike it out. Its reception would have been non-prejudieial, if erroneous.

Double Punishment for the Same Offense. — Appellant argues that a count which charged appellant with having willfully failed to file a return for 1926 is the same as one charging him with having willfully attempted to evade and defeat the tax for 1926. With this position we cannot agree. Blockburger v. U. S., 50 F.(2d) 795, decided by this court June 11, 1931. U. S. v. Noveck, 273 U. S. 202, 47 S. Ct. 341, 71 L. Ed. 610. Congress may punish separately each step leading to the consummation of a transaction, which it has the power to prohibit, and also to punish the completed ' transaction. Albrecht v. U. S., 273 U. S. 1, 11, 47 S. Ct. 250, 71 L. Ed. 505.

The offense of willful failure to file an income tax return is not the same as a willful attempt to evade and defeat an income tax. If the two counts of an indictment are identical, element for element, in necessary allegation and proof, then the two charges are for the same offense. Stone v. U. S., 167 U. S. 178, 185, 17 S. Ct. 778, 42 L. Ed. 127; Ryan v. U. S. (C. C. A.) 216 F. 13, 37. But it is not the presence of a common act or acts condemned by two criminal statutes, but the presence in one of an element absent in the other, that determines whether the two indictments define the same offense. A prosecution for a willful failure to file a return might be maintained although there was in fact no tax due. There could, however, be no sueh prosecution for a willful attempt to evade or defeat a tax unless there was some tax due from the taxpayer. Moreover, there could be a successful prosecution for a willful attempt to evade a tax even though the accused filed his return.

Appellant likewise argues that inasmuch as no statute makes it a crime to defeat or evade a tax, there can be no punishment for an attempt to commit something which is not a crime. Again counsel’s error is traceable to the fact that he fails to recognize the right of Congress to punish separately each step leading to the consummation of a transaction concerning which it has the power to legislate. To illustrate, Congress may enact income tax legislation to raise a part of its necessary revenue. It may provide the machinery for determining and collecting sueh taxes. In furtherance of sueh legislation and to insure the full performance of the duties imposed upon its citizens, it may punish those who fail to comply with its requirements. Inasmuch as all crimes against the United States are traceable to-acts of Congress, that body may determine what acts hindering the process of collection of income taxes shall be condemned and punished. A violation of any step of the transaction leading to the collection of sueh tax may be punished. Unquestionably, Congress could have made it a criminal offense for a taxpayer to defeat or evade a tax. Not having done so, however, it was still within its power to punish a willful attempt to evade or defeat a tax.

There was doubtless a good reason why Congress did not make it a criminal offense to defeat or evade a tax. For the moment it discovered that a tax had been evaded, it could proceed to collect it, and thereafter, there would be no defeat or evasion of such tax.

But the taxpayer who willfully attempts to evade the tax might well, in the opinion of Congress, be subjected to a criminal prosecution regardless of the outcome of his attempt.

Another of appellant’s contentions is that the crime charged in the indictment is a willful attempt to defeat and evade an income tax while the proof showed not merely an attempt, but the successful consummation of the attempt. It is argued that the word “attempt” as used in the statute means a frustrated effort, and that one whose efforts are successful does not commit the crime charged.

While there is a well-recognized difference between the meaning of the two verbs “attempt” and “attain,” as well as the corresponding nouns, “attempt” and “attainment,” there is no justification for restricting the usual meaning of the word “attempt” and limiting it to that which is usually described by the words “unsuccessful attempt.” In short, attempts cover both successful and unsuccessful endeavors or efforts. A rational construction of the language of the statute, considering its aims and purposes, requires us to hold that a willful attempt to evade or defeat an income tax includes successful, as well.as futile endeavors.

The argument is also advanced that the statute upon which the indictment is predicated applies only to “any person required under this Title to collect, account for and pay over any tax imposed by this Title,” and appellant not being of this class was not in-eluded.

The use of the words, “and any person,” describing the second class of offenders, makes it impossible for us to construe the statute as appellant contends.- Had Congress used the word “or” in place of the words “and any person,” the argument that only offenders required under the law to collect, account for, and pay over a tax, were included, would be most persuasive. It seems to us that the rational construction of the entire section calls for the inclusion of any person required to collect, account for, and pay over a tax and also any person who willfully attempts in any manner to evade or defeat any tax. The second class included appellant.

It is finally argued that the evidence fails to establish the commission of the crime charged in these three counts in the indictment. We will not review or discuss the evidence. A jury question, we think, was fairly presented. We think there were facts shown which persuasively indicated and eompell-ingly pointed to appellant’s intentional violation of the law.

Appellant’s argument is based largely upon the proposition that one would not be so blundering and so artless as to fail to make a proper income return when the evidence of his misconduct was so readily available, were it not for his belief that his entire income was not taxable because he was a state legislator. The convincingness of this contention, however, was for the jury to weigh rather than for the court to accept, without reservations. This argument merited consideration by the jury. That body might,- however, have explained it, not on the theory of innocence, but in the light of all other facts, as a manifestation of the nonunderstandable boldness of that small class of citizens, who willfully violate the Criminal statutes. Doubtless, the purpose which actuates the wrongdoer, as well as the boldness which characterizes his actions, will always challenge the wonder of the law abiding citizen. Whatever be the motive — avarice, the desire to possess, or a stunted or a blunted conscience — it is seemingly beyond the understanding of the law abiding. But in each ease the trier of fact is required to weigh the argument to the effect that the accused would not expose himself to contumely and imprisonment against the facts which are irreconcilable with his protestations of innocence.

We think the case was properly submitted to the jury on all counts.

The judgment is affirmed.

ALSCHULER, Circuit Judge

(dissenting in part).

Counts 1, 3, and 5 are based on what is now paragraph (a), and counts 2, 4, and 6 on paragraph (b), of section 2146, tit. 26, U. S. C. (26 USCA § 2146, pars, a and b), which are identical with the previous acts in force during the first two years of the period covered by the indictment. In each and all of the counts the only conduct of the defendant charged as constituting the offense is his willful failure to make a return for his income tax.

I cannot bring myself to believe that it was the intent of Congress by paragraph (a) to constitute the willful failure (1), to pay, (2) to make return, (3) to keep records, or (4) to supply information, misdemeanors subject to the prescribed penalties, and then by paragraph (b) to make the very same failures, without the remotest additional element, felonies subject to the larger penalties as therein specified.

The conduct of this defendant out of which both the misdemeanor and the alleged felony grow consists wholly in the single act or omission or failure to make his income tax returns for the several years. This failure in order to be criminal must have been “willful,” and if willful it must have been with the unlawful intent of thereby in some way defrauding the Government in its tax. Thus the willful omission and its criminal purpose would have to be the same under both paragraphs (a) and (b) if (b) applies.

It would follow that Congress passed legislation classifying as a misdemeanor the failure to file an income tax return with the purpose of thereby defrauding the Government, and at the same time classing as a felony the willful failure to file an income tax return with a purpose of intending thereby to evade or defeat the tax. As applying to the circumstances of this ease I fail to see the difference, although I assume there must be some difference if it may be concluded that Congress intended that two convictions might be hung upon this single willful omission of duty.

To my mind there is here no occasion for confusion of the meaning and application of (a) and (b) as applied to such eases, (a) provides only for the penalization of the four willful omissions therein specified; (b) applies Only to willful attempts to evade, etc. The distinction between the two paragraphs as applied to such a case, as I read them, is found in the “omissions” specified in the one and “attempts” in the other. Plainly this legislation contemplates that attempt includes something which mere failwre or omission does not. That something in my judgment is some affirmative act. Conduct which is wholly and only an omission as defined in (a) falls short of being an attempt as defined in (b). Thus while there is here present in the indictment and in the proof the willful omission of (a), there is entirely wanting the affirmative act to constitute the attempt which in my judgment is of the gist of (h). If paragraph (a) made the willful failure to make return a misdemeanor, it.is hardly conceivable that Congress intended to make the very same willful failure to make the return a felony.

Had therefore anything been charged and proved under (b) by way of an affirmative act of any kind, apart from and beyond the mere omission or failure to do the things, or one of them, specified in (a), a transgression of (b) might appear; but, in the entire absence of anything of this nature, I am satisfied that counts 2, 4, and 6 do not charge offenses under (b), and, if they did, there was no proof to sustain them.

It is the same fact with reference to (b) that it is to (a). Charging it as an attempt to evade does not serve to change it from the passive omission, classified in (a) as a misdemeanor, into a willful attempt which under (b) would constitute a felony.

The figure of speech based upon the penalization of the various “steps” of an offense to my mind is wholly without application here. The willful failure to file is just that and nothing else. It is complete in itself and has no fanciful “steps.” Besides, (b) penalizes the attempt, not a “step” leading to an attempt.

There is some reasoning in United States v. Noveck, 273 U. S. 202, 47 S. Ct. 341, 342, 71 L. Ed. 610, which, while not in a parallel case, to my mind has a distinct bearing. There was under consideration the question whether the statute such as (b), penalizing an attempt to evade the tax law, was identical with another statute directed against the making of 'false returns and perjured affidavits thereto. The court said: “The offenses defined in the two statutes are not identical. They are entirely distinct in point of law, even when they arise out of the same transaction or act. Each involves an element not found in the other. Compare Morgan v. Devine, 237 U. S. 632, 35 S. Ct. 712, 59 L. Ed. 1153. The crime of perjury is complete when the oath is taken with the necessary intent, although the false affidavit is never used. Noah v. United States (C. C. A.) 128 F. 270; Berry v. United States (C. C. A.) 259 F. 203. Compare United States v. Rhodes (C. C.) 30 F. 431, 433. The making of a false affidavit, without presentation thereof, does not constitute an attempt to evade the tax law. [Italics mine.] See United States v. Rachmil (D. C.) 270 F. 869, 871, The crime of attempting to defeat or evade the Revenue Law may be committed without verification of a false tax return.”

In the Rachmil Case, there referred to, there is a statement that the preparation of a fraudulent income tax return and the fraudulent signing and acknowledgment of it, while subject to penalty under other statutes, “fall short of an attempt to violate the taxing statute,” referring to the Act of Febru-. ary 24, 1919 (40 Stat. 1057), penalizing an attempt willfully to defeat and evade the income tax.

It occurs to me that the fraudulent preparation of such an affidavit, and the subscribing to and verifying it, would be a most decided “step” in an attempt willfully to evade the tax, and yet the courts there said that, while violative of other statutes, it would not violate the statute directed against the attempt willfully to evade. And so the inquiry oeeurs to me that if the preparing, signing, and swearing to a fraudulent income tax return, with the very purpose of defrauding the Government, does not violate the statute against attempts to evade, how much less is such a statute evaded where the defendant, as here, does simply nothing? If the reasoning of the courts in those eases is sound,.and neither the willful preparation of nor false swearing to the return constituted an “attempt” unless and until the return was actually presented or filed, how is this defendant chargeable with the “attempt” of paragraph (b) if he not only did not file any return, but did not even take the “steps” of preparing false returns and of perjuring himself by swearing to them? To my mind mere willful failure to make an income tax return does not transgress paragraph (b).

I believe that as to counts 2, 4, and 6 the judgment should be reversed and the cause remanded with direction to dismiss those counts; and that as to counts 1, 3, and 5 the judgment imposing fines and concurrent sentences in the Cook county, Ill., jail should be affirmed.

       “(a) Any person required under this title to pay any tax, or required by law or regulations made under authority thereof to make a return, keep any records, or supply any information, for the purposes of the computation, assessment, or collection of any tax imposed by this title, who willfully fails to pay such tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, be fined not more than $10,000, or imprisoned for not more than one year, or both, together with the costs of prosecution.
      “(b) Any person required under this title to collect, account for, and pay over any tax imposed by this title, who willfully fails to collect or truthfully account for and pay over such tax, and any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof, shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, be fined not more than $10,000, or imprisoned for not more than five years, or both, together with the costs of prosecution.”


source: Caselaw Access Project

author: HICKENLOOPER, Circuit Judge.

license: Public Domain

text:
    DIRECTOPLATE CORPORATION v. DONALDSON LITHOGRAPHING CO.

    No. 5630.
    Circuit Court of Appeals, Sixth Circuit.
    July 2, 1931.

      Frank Parker Davis and Glen E. Smith, both of Chicago, Ill., for appellant.
    Geo. I. Haight and Samuel W. Banning, both of Chicago, Ill., for appellee.
    Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.

      For opinion denying rehearing and modifying opinion, see — F.(2d) —.

   HICKENLOOPER, Circuit Judge.

Appellant brought its action in the court below alleging infringement of claims 1, 5, 8, and 12 of patent No-. 1,396,962, and claims 4, 5, 7, 20, 23, 25, 41, 45, 46, 47, 48, 49, 50, 67, 68, and 69 of reissue patent No. 16,567. Both patents originated in applications filed by one Alexander T. Koppe and are hereinafter-respectively referred to as Koppe’s first and second patents. The first patent was for a “vacuum-pressure frame” designed and intended (according to the specification) as appropriate for use in “a machine for making offset press plates.” The second patent was for such a “machine for making offset press plates.” The first issued November 15, 1921. The application for the original second patent was filed'June 30, 1922; the patent (No. 1,510,007) issued September 30, 1924; application for reissue was filed September 25, 1926; and the reissue was granted as of March 8, 1927. The defenses were invalidity and noninfringement. The bill was dismissed by the District Court on the ground that infringement had not been shown. Plaintiff appeals.

We are not impressed with the defendant’s contentions of inutility, inoperability, anticipation or lack of invention as regards Koppe’s first .patent. It is true that Koppe was not a pioneer in the field of photographically producing offset press plates, but he was the first to utilize atmospheric pressure in holding the negative firmly against the sensitized surface of the press plate. Prior to him mechanical pressure only had been used for this purpose, and we think that whatever had been done by Huebner (the real pioneer in the field of mechanical pressure photo-composing machines) in the direction of substituting vacuum pressure for mechanical pressure before the filing of the application for the second patent, certainly before the application for the first one, cannot be said to have passed beyond the experimental stage. It is also true that the use of vacuum pressure in connection with photographic printing was old. See patents to Cope, No. 296,391, April 8, 1884; to Saltmann, No. 654,421, July 24, 1900; to MeCaslin, No. 683,059, September 24, 1901; and to Levy, No. 1,246,620, November 13, 1917; and the German patent to Teppieh, No. 245,915, May 4,1911. But the devices of all of these patents operated to press the sensitized paper or plate against the negative by use of a flexible backing or cover, while the present device operates to press a rigid glass negative against a rigid sensitized plate, the required play being given, not by the flexibility of either, but by the organiza^ tion of frames and sealing strips. We think that invention, was displayed in the reorganization required, and that neither anticipation nor lack of utility was shown.

The underlying concept of Koppe's first patent was that atmospheric pressure should be exerted directly upon the glass negative and thus hold it firmly to the sensitized press plate. Obviously he could not obtain a machine or product patent upon this concept alone, but only upon the means disclosed for effectuating his purpose. Miller v. Eagle Mfg. Co., 151 U. S. 186, 201, 14 S. Ct. 310, 38 L. Ed. 121. Compare also: De Forest Radio Co. v. General Elec. Co., 283 U. S. 664, 51 S. Ct. 563, 75 L. Ed. 1339. A certain amount of vertical play was required to accommodate the device to negatives of different thickness, more, jKoppe evidently thought, than would be supplied by the elasticity of the sealing strips, for the method practiced by his patent involved really three elements or steps. An outer or positioning frame was first located at the desired place upon the sensitized press plate. This positioning frame carried a rubber sealing strip around its outer edge and an extension or flange on its inner edge. When the positioning frame had been located, the negative was laid loosely within the inner opening. A seal was then required as between the outer edges of the negative and the inner edge of the flange of the positioning frame. This seal was provided by a rectangular frame of inverted U-shaped cross-section, called the inner or “bearing frame,” carrying double rubber sealing strips, one of which rested upon and along the outer edge of the negative, and the other upon the flange of the positioning frame. Thus when the air was exhausted from beneath the positioning frame the pressure of the atmosphere operated, not only to hold the negative to the press plate, but also to strengthen the contact of the three sealing strips — between' press plate and outer frame, between inner and outer frames, and between the inner frame and the negative. The inventive concept lay in the means devised for effecting this three-line seal which, supposedly, would accommodate itself to any thickness of negative and to any irregularity of thickness, of a gradual sort, as along the edge of the negative. This is clearly reflected in the claims. Claim 8 is typical and is alone here quoted.

In determining the question of infringement we are concerned with the matter of claim construction as well as with the nature of the defendant’s device, the elements comprising it, the mode and manner of operation of both devices, and whether the elements of defendant’s device are to be considered merely mechanical equivalents of the elements enumerated in the claim. Upon the present record it is clear that the claim above quoted, if read literally, does not cover the defendant’s device, in which the negative is carried by clamps upon the inner and under portion of the outer frame and the inner frame is used solely for the purpose of hermetically sealing the negative within the outer frame, first by a sealing strip between the inner frame and the negative, and secondly by a flexible curtain seal between the inner and outer frames. The points of resemblance are that before assembly for use the defendant’s device is made up of two frames, and that atmospheric pressure is used to seal these two frames together. The chief point of dissimilarity is that after assembly, and when in use, the negative and the two frames of defendant’s device are practically and functionally integral, and the only vertical play of the negative (viewing the operation as upon a horizontal press plate) is afforded by and limited to the elasticity of the outer sealing strip. ,

The claim clearly calls for a frame consisting of two parts which, in use, are separate and distinct, and in which the elasticity of the sealing strips is of minor im-portaüce. The defendant’s device, in use, does not comprise these two separate and functionally independent parts, and elasticity -in the sealing strip of the outer or positioning frame is of prime importance. The question presented is whether the calls of the claim are to be treated as examples of a class only — as the preferred form — and are to -be extended to cover the defendant’s device under the doctrine of equivalents; or whether effeet must be given to the apparent limitation of the claim, and the defendant’s device be held not to infringe.

As so clearly pointed out by Judge Learned Hand in Claude Neon Lights, Inc., v. Machlett & Son (C. C. A.) 36 F.(2d) 574, there is an element of inconsistency between the doctrine of equivalents and the doctrine that it is the claim and that alone which measures the monopoly. In the ordinary ease, the extent to which the court will follow the one doctrine to the exclusion of the other is largely controlled by the state of the art, the originality of the invention, and the disclosure of the specification. Koppe was not a pioneer in the field of vacuum-pressure frames for photographic printing. Like all improvers he was, and is, entitled only to a narrow range of equivalents. He has disclosed no broad, generic invention, unless it be in the use of the .vacuum-pressure frame in a photo-composing machine, and this combination is not claimed. He has been specific in matters of number, form, structure, relationship, and function of” the elements of his claim (as the condition of the art required him to be), and we do not think that he can now be permitted to depart from the plain meaning of the language he has adopted, or to claim for such language a broad and generic construction.Compare Lektophone Corp. v. Rola Co., 282 U. S. 168, 171, 51 S. Ct. 93, 75 L. Ed. 274.

Viewed from another angle, intent and thei inventor’s own appraisal of the nature of his invention are of great importance. In D’Arcy Spring Co. v. Marshall Ventilated Mattress Co., 259 F. 236, 240, this court said: “Where the claim defines an element in terms of its form, material, location or function, thereby apparently creating an express limitation, where that limitation pertains to the inventive step rather than to its mere environment, and where, it imports a substantia), function which the patentee considered of importance to his invention, the court eannot be permitted to say that other forms, which the inventor thus declared not equivalent to what he claimed as his invention, are nevertheless to be treated as equivalent, even though the court may conclude that his actual invention was of a scope which would have permitted the broader equivalency.” This statement has peculiarly forceful application to the present ease. Even though we were to conclude that Koppe might have claimed a broad monopoly in the use of vacuum-pressure frames, of whatever structure, in a photo-composing machine, he has voluntarily limited himself 'to a specific construction of dearly defined elements all pertaining to the inventive step ás he then understood it. Such limitation is not the less effective because voluntary or inserted unnecessarily. Firestone Tire & Rubber Co. v. Seiberling (C. C. A. 6) 257 F. 74, 78, 79; Lakewood Engineering Co. v. Stein (C. C. A. 6) 8 F.(2d) 713, 715; Vanderveld v. Rollman & Sons Co. (C. C. A. 6) 28 F.(2d) 948, 951. That which is not literally within the claim does not infringe.

Further than this, the defendant’s device utilizes the forces of nature and operates in a manner substantially different from the device of the patent. The “bearing section” of the claim, as a separate unit unattached to negative or positioning frame, for so the claim must be construed in view of the specification, is wholly absent. So also are the practically unlimited play of the inner sealing strip upon the negative, the flange of the positioning section, and the function of the bearing section in horizontally bridging the gap between the negative and the positioning section. Elements of the claim are omitted, but, more than this, the manner of operation of the two devices, we are convinced, is substantially different. If this be so the defendant’s device does not infringe. Bates v. Coe, 98 U. S. 31, 42, 25 L. Ed. 68; Union Paper Bag Machine Co. v. Murphy, 97 U. S. 120, 125, 24 L. Ed. 935; Westinghouse v. Boyden Power-Brake Co., 170 U. S. 537, 568, 18 S. Ct. 707, 42 L. Ed. 1136. For these reasons the decree of the District Court, finding this first patent not infringed, must be affirmed.

The claims of the second patent in suit may be divided into three separate groups. Claims 4, 5, and 7 relate to “sealing bars” (claims 5 and 7) or “adjustable means cooperating with the ends of the press plate whereby said negative carrying frame may be positioned beyond the end of the press plate” (claim 4), in “a machine for photographically preparing press plates.” Claims 20 and 23 cover; with other essential elements of such a machine, “means for adjusting the distance between the carrier members, bearing the negative carrying frame” (claim 20), and “a negative carrying frame carriage for said machine, said carriage being provided with means for varying the dimensions thereof” (claim 23). And claims 41 and 45 to 50, inclusive, cover broadly “the combination in a machine for photographically preparing press plates, of means for supporting a press plate, negative carrying means mounted for movement to locate a negative in various positions opposite said press plate, and vaeuum pressure means movable with said negative * *‘ (claim 41). .

We do not deem it essential to deal separately with claim 25, which relates solely to the mechanical details whereby the thin zine press plate is held firmly upon the resilient blanket covering the bed plate; nor with claims 67, 68, and 69, which simply combine the “sealing means” of claims 4, 5, and 7, and the broad combinations of claims 41 and 45 to 50, inclusive, that is, the vaeuum frame in a photo-composing machine. If claim 25 is infringed, which is doubtful, we see nothing more in it than the result of the exercise of mechanical ability in the selection of more or less obvious means, all mechanically old, to accomplish an old result of positioning the press frame. As to claims 67, 68, and 69, if either group of claims 4, 5, and 7, or claims 41 and 45 to 50, inclusive, are not infringed, claims 67, 68, and 69 would not be. If claims 41, etc., are invalid, we see no way to save claims 67, 68, and 69, which would not likewise serve to validate claims 4, 5, and 7. If neither of the other groups is valid, invention would not be discernible in combining them.

We consider first, as the most important, claims 41 and 45 to 50, inclusive. These claims, as we have said, call broadly for the combination of a vaeuum frame with other essential elements óf a photo-composing machine. They were introduced by the reissue application and much is said in the briefs as to the legality of so doing. We do not deem it necessary to determine that question. In his first patent Koppe distinctly disclosed the use of vaeuum frames in “securing the negative in contact with a surface on which the negative is to be photographically reproduced, as for example, the press plate of a machine for making offset press plates.” Passing the question of whether more than the mechanical ability of one skilled in the art would be required to adapt the vaeuum frames of the prior photographic printing art to use in the photo-composing machine of to-day, these claims of the second patent must fall within the condemnation of the rule that all that is disclosed by the specification of a patent, but not claimed, is irrevocably abandoned to the public, except in so far as this may be avoided by reissue. Mahn v. Harwood, 112 U. S. 354, 361, 5 S. Ct. 174, 6 S. Ct. 451, 28 L. Ed. 665; McClain v. Ortmayer, 141 U. S. 419, 423, 12 S. Ct. 76, 35 L. Ed. 800; Royal Co. v. Tweedie, 276 F. 351 (C. C. A. 8); Rip Van Winkle Wall Bed Co. v. Murphy Wall Bed Co., 1 F.(2d) 673, 678, 679 (C. C. A. 9); Gladding-McBean Corp. v. N. Clark & Sons (C. C. A.) 16 F.(2d) 50, 51. Claim for the generic combination of vaeuum frame, press plate, and the other elements of a photo-composing machine might have been made in Koppe’s first patent, at least upon minor change in the specification. The ease is therefore not one in which the claims inserted on reissue of the second patent were so far for a different invention that they could not have been made in the first application; and we do not decide what effect a patent disclosure of such wholly independent invention might have upon the rights of the inventor under an application subsequently filed, that is, whether in such ease the disclosure must be considered a publication only, or a dedication. Had the applications been copending the rule would, of course, be otherwise, for the question is not one of anticipation or prior use, but one of dedication to the publie and abandonment; and once having been abandoned in this manner, the right to patent the invention can not be recalled. Kendall v. Winsor, 21 How. 322, 328, 16 L. Ed. 165.

Turning to claims 4, 5, and 7, we are at once confronted with the question of whether, the defendant having a free right to employ a, vacuum frame in a photo-composing machine (provided it does not infringe the first patent), more than mechanical ability would be required to devise some type of sealing means adjacent the ends and sides of the press plate, which would obviously be required to permit the vaeuum frame to overlap such ends and sides and to function in that position, and to thus enable the plate-maker to use the entire sensitized surface. Compare: Lovell Mfg. Co. v. Cary, 147 U. S. 623, 637, 13 S. Ct. 472, 37 L. Ed. 307; Reynolds Spring Co. v. Young Industries, Inc., 36 F.(2d) 150 (C. C. A. 6); Adams v. Galion Iron Works & Mfg. Co. 42 F.(2d) 395 (C. C. A. 6); Beck-Erost Corp. v. Ford Motor Co., 44 F.(2d) 519 (C. C. A. 6). This contention also lends support to the further contention that these claims are invalid as functional if the “adjustable means” of claim 4, and the “sealing bars” of claims 5 and 7, are to be given so broad a construction as to embrace every manner of accomplishing the desired end. We think, however, that the claims may be saved by construing them as calling for the specific means disclosed in the patent in suit. Merit Oil Equipment Co. v. Fry Equipment Corp., 48 F.(2d) 488 (C. C. A. 6). So construed we think the evidence fails to show that they are infringed.

Lastly, claims 20 and 23 introduce into the otherwise well-known combination of elements open to public use merely the feature of a carriage for the negative frame, which carriage is adjustable to accommodate different sizes of such frames. The adjust-ability of a part does not involve invention (Paquette v. Potter Mfg. Co., 46 F. [2d] 271 [C. C. A. 6]), but here too we prefer to eonstrue these claims as calling for the specific means disclosed by the patent, a spacing of the carriage supports. So construed the "claims are not infringed.

The decree helow simply dismissed the bill “for want of equity.” For the reasons above stated this action was proper, and we do not consider it necessary to remand the cause for revision of the decree which, in its simplified form, is affirmed.

       “8. A two part negative pressure frame, comprising a positioning section within which the negative is arranged, a sealing strip carried by the positioning section to engage the support on which the negative is to be held, and sealing strips carried by the bearing section to engage the positioning section and negative.”


text:
    GOODYEAR TIRE & RUBBER CO. v. INDIA TIRE & RUBBER CO.
    No. 5695.
    Circuit Court of Appeals, Sixth Circuit.
    July 1, 1931.
    D. W. Cooper, of New York City (Ernest D. Given, of New York City, and Tolles, Hogsett & Ginn, of Cleveland, Ohio, on the brief), for appellant.
    A. L. Ely, of Akron, Ohio (Ely & Barrow, of Akron, Ohio, on the brief), for ap-pellee.
    Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.
   HICKENLOOPER, Circuit Judge.

This ease involves questions of the validity and infringement of patent No. 1,462,453, issued to W. G. Lerch, July 17, 1923, for an automobile tire construction. At the time of the application the component parts of an automobile tire were well known. They were: (1) The carcass, made up of a varying number of plies of fabric (woven or cord), covered by and impregnated with rubber, and forming the central body of the tire; (2) the cushion, a layer of softer and more pliant rubber around the periphery of the carcass and usually of about the width of the tread; (3) the breaker-strip, which, pri- or to Lerch, was commonly a strip of bias cut, open mesh, woven fabric located between the cushion and the tread and having various functions in transmitting and distributing blows or impacts from the tread to the carcass, and in preventing tread separation due to such impacts and to torque; and (4) the tread, which consisted of a thicker and harder layer of rubber around the outside periphery of the tire. Lerch claimed to have been the first to use breaker-strips of the also well-known “cord” fabric, laid with the cords “arranged diagonally with respect to the plane of the tire but at right angles with respect to each other,” assuming the use of two plies. Claim 2, in suit, is printed in the margin. This claim was held valid and infringed.

Defendant below appeals.

The patent to Petersen, No. 1,152,756, September 7, 1915, shows identically the same general elements of construction as are disclosed by Lereh, viz., carcass, cushion, cord breaker-strip, and tread, but is said to be distinguished from the patent in suit in that the preferred form of Petersen has the cords located at right angles to the circumferential plane of the tire. However, Petersen says in his specification: “Moreover, this invention is regarded, and understood to be, broad enough to include any arrangement of the elements 5 (the breaker-strip) so long as they extend more in a transverse than a longitudinal direction.”

The patent to Hopkinson, No. 1,374,505, April 12, 1921, for a method of making motor vehicle tires, also discloses the use of cord fabric between the cushion and the tread, “the threads of these plies being spaced apart and serving as the 'breaker’ strips.” He also directs that the threads of his breaker strips be laid “at angles of 44°, 43%°, 42°, and 41%° to the axis respectively,” but here also is said to be a distinguishing feature in that the breaker strips are shown as extending from the bead on one side entirely around the carcass to the bead on the other side. And yet Hopkinson says that “instead of the breaker strips here referred to, the ordinary square woven bias-cut fabric may be used and the width of these breaker strips may be varied as desired.” To meet this it is contended that the use of a narrow cord breaker strip was not in contemplation, and that variation from the preferred form shown was not intended to be of any such substantial proportions. Other patents are referred to, such as those to Palmer, No. 924,186 (1909), and to Dunlap, No. 534,867 (1895), and the patents cited during prosecution of the application, but the disclosures in the patents to Petersen and Hopkinson are the closest references.

Two prior uses are also relied upon as establishing invalidity. In 1917 Goodyear was experimenting with tbe use of a cord fabric breaker-strip. Tires were manufactured and records of mileage kept. In these experiments Goodyear used the ordinary cord fabric which the patent in suit designates as appropriate for use in the patented structure, and the cords were also placed diagonally to the circumferential plane of the tire and to each other where two plies were used. The results were unsatisfactory. This is now said- to have been due to the very use of the “ordinary cord fabric” and the too close positioning of the parallel cords in sueh fabric. It is urged that “the appellant ascertained in 1917 what the appellee did not discover until some years later, namely, that ordinary cord fabric is not the thing to use in a breaker strip.” Be this as it may, we do not consider it necessary to pass upon the issue of whether this use was' simply an abandoned experiment, or an anticipation.

■The second asserted prior use is that in connection with the manufacture of the Palmer-Goodrieh tires from as early as 1905. In the construction of these tires cord fabric was used for the breaker-strips, and it was placed on the diagonal. Apart from the ap-pellee’s contention of insufficiency of proof of this use, it would seem from the Palmer patent, No. 924,572, that the so-called breaker-strips of these tires were intended to function solely as stricture bands to prevent circumferential expansion of the tire, and that there are even more persuasive reasons for considering the Palmer-Goodrieh use as an abandoned experiment than was that of Goodyear. This issue also may be passed without decision. . .

Whether or not the Petersen and Hopkin-son patents are to be considered as anticipations, or whether the Goodyear and the Palmer-Goodrieh uses are properly classified as abandoned experiments, all serve to show that the idea of the desirability of using cord fabric in the construction of the breaker strip did not originate with Lerch, and that the open mesh woven fabric was not exclusively used for that purpose. It is well established that where others were unsuccessfully striving in the same direction (here involving a substitution of materials), invention may be disclosed in arriving at that combination or precise arrangement which replaces failure with success and converts in-utility into a high degree of commercial utility ; but in every such case the element of invention must consist in the particular form, shape, afrangement, and relation of the old elements. The patentee is entitled to but a narrow range of equivalents, to that combination which is only specifically claimed. Here, the crowded condition of the patent art, the closely analogous uses by others (even if they be not regarded as anticipations), the nature of the disclosure, the very essence of the alleged inventive step, and the Patent Office proceedings, involving a possible estoppel, all limit the appellee to a breaker-strip of layers of parallel cords “interposed between the tread and the cushion,” as provided in the claim and under principles more fully discussed in our opinion in Direct-opiate Corp v. Donaldson Lithographing Co., 51 IP. (2d) 199, this day decided.

So considered, the defendant’s structure does not infringe. While cord fabric is used in the construction of defendant’s tires, such fabric is not the “ordinary cord fabric” and it is not used as the conventional breaker-strip. The cords are widely spaced and the two layers are buried in, and separated by substantial parts of, the cushion. In a way, therefore, the defendant’s cord fabric serves a different function, that of providing reinforcement and body to the cushion, and it is not clear that all the functions of the ordinary breaker-strip are performed by the defendant’s form. But it is clear, in any event, that the claim does not read upon tires so constructed. There the breaker-strip is not located “between the cushion and the tread,” if, in truth, a breaker-strip can be said to be used.

The decree of the court below is reversed, and the cause is remanded with instructions to dismiss the bill on the ground of nonin-fringement.

         2. A tire construction comprising, a carcass composed of a plurality of layers of rubberized fabric, a layer of rubber of a character to constitute a cushion over the carcass, a layer of tread rubber over the cushion, and two layers of parallel cords 7 and 8 interposed between the tread and the cushion, said cord layers being arranged as shown and described with the cords in oppositely arranged diagonal positions with respect to the central plane of the tire, whereby the functions of a breaker strip are performed by the layers of cords without frictiunal engagement of the cords with one another, without loss of traction between the tread and the carcass, and without restriction of the circumferential contraction or expansion of the tire.-


author: DENISON, Circuit Judge.

text:
    FORD et al. v. COMMISSIONER OF INTERNAL REVENUE.
    Nos. 5837-5841.
    Circuit Court of Appeals, Sixth Circuit.
    July 8, 1931.
    F. S. Lewis, of Toledo, Ohio, and Ferdinand Tannenbaum, of New York City (Olvany, Eisner & Donnelly, of New York City, Doyle & Lewis, of Toledo, Ohio, and Mark Eisner, of New York City, on the brief), for petitioners.
    A. H. Conner, of Washington, D. C. (G. A. Youngquist; Asst. Atty. Gen., and Sewall Key, J. P. Jackson, C. M. Charest, and De-Witt M. Evans, all of Washington, D. C., on the brief), for respondent.
    Before DENISON, HICKS, and HICK-ENLOOPER, Circuit Judges.
   DENISON, Circuit Judge.

By the will of Edward Ford, who died in June, 1920, his estate, which consisted mostly of stocks, was to be distributed in kind as far as possible and equally among five beneficiaries. In December, 1920, the executors distributed about one-balf of tbe estate, and these petitioners received thereon stocks of the inventory value of some $4,000,000. Certificates were duly transferred so that the legal title passed; and, in 1922, the petitioners received dividends on these stocks amounting to about $570,000. The question is whether these dividends should be considered taxable income for that year. Taxes based thereon were assessed by the Commissioner, and on appeal the Board upheld him.

, By the law of Ohio, the distribution was premature. The indebtedness at the time exceeded the cash in the hands of the executor, and the partial distribution of stocks could be made only if permitted by the order of the probate court. There was no such order. In 1926, the probate court observed this irregularity, and, acting apparently upon its own motion, undertook to set the distribution aside. It was ordered that this distribution was “without authority, illegal and of no effect.” It was further ordered that the distributees “account to said executors for the principal and the income of said stock from the date of distribution until December 31,1922.” It was further ordered that the executors might make a redistribution of the same stock to the same persons “as of December 31,1922,” and that the distributees be chargeable with interest on what they had received up to that date. Accordingly, entries were made on the executors’ books, charging against the petitioners this total income of 1921 and 1922, with interest to December 31st, and at the same time the petitioners were charged with the principal value of the stocks, which same principal value was credited back to them as of January 1, 1923, these entries all having in fact been made after the order of April, 1926. By the final account of the executors allowed in 1928, it appeared that they stood charged, as debtors to the estate, with the total income for these two years, as if the same were then in their hands.

In fact, the petitioners who received the 1921 and 1922 dividends never paid back any part thereof, and the income taxes for both years, based on the receipt of these dividends, were paid by the petitioners. Later one of them brought suit against the collector to recover the 1921 payment; and the District Court held that the taxes had been unlawfully assessed, the plaintiff had judgment, and the Commissioner, in effect, repaid this 1921 tax to all the petitioners.

We think these 1922 dividends were taxable income received by the petitioners during that year. Certainly they then had complete legal title to the stock and to the dividends. If taxes regularly assessed could be invalidated, an indefinite number of years later, by a consent judgment purporting to vacate the title of the taxpayer to the fund he had reported as income, the necessary system of tax collection would be much impaired. The true normal criterion to be applied in this class of case is the actual receipt and retention during the year in question of what was then considered to be income, not whether the taxpayer exposed himself to possible personal liability.

If it were to be conceded that a taxpayer who, before making his return, or perhaps even later, discovers that what he thought was income was improperly paid to him, and who must and does return it, should be relieved from the tax, the concession does not reach a case where the flaw in his title is only a claim of defect, until at a later time it is established, one way or the other, by a court judgment. In that respect, the case is within the rule applied by the Supreme Court in Burnet v. Sanford & Brooks Co., 282 U. S. 365, 51 S. Ct. 159, 75 L. Ed. 383, and by this court in Board v. Commissioner, 51 E.(2d) 73, decided June 11, 1931. Neither would the concession reach a ease where the taxpayer did not repay or give up the income, but only permitted it to be charged against himself as a matter of bookkeeping, knowing that his counter equities were such that the charge against him would be uncollectible.

Even if the order of the probate court should be taken as so far in rem as to bind everyone regarding the invalidity of the stock distribution, petitioners could not prevail. The stock distribution plainly was not void; the transfer of the legal title could not have been void; we interpret the “probate court order only as one which found the transaction voidable, and so set it aside. It then became the duty of the parties to' restore the status quo, and the dividends which the petitioners had received became a debt from them to the executors. Even though then, in a sense, they lost legal title to the dividend fund, and even though this loss could be carried back by relation four years,.still they always had the equitable title. If in 1922 the legal title was one they held in trust for the executors, yet this equitable title of the executors was in turn held in trust for the distributees. We cannot deduce from such a situation nonliability for the income tax.

The judgment of the District Court as to the 1921 tax is not an estoppel in .this proceeding. Even considering that suit as one in behalf of all the petitioners, yet the defendant was the collector individually, and the subject matter involved was the 1921 tax.

The order of the Board of Tax Appeals should be affirmed.


text:
    UNITED STATES v. MAHONING COAL R. R. CO. et al. (three cases). ROUTZAHN, Collector, etc., v. SAME.
    Nos. 5765-5768.
    Circuit Court of Appeals, Sixth Circuit.
    July 8, 1931.
    Wright Matthews, of Washington, D. C. (W. J. Mahon and John B. Osmun, both of Cleveland, Ohio, and C. M. Charest, of Washington, D. C., on the brief), for appellants.
    C. C. Handy and William Mann, both of New York City, for respondents.
    Before DENISON, HICKS, and HICK-ENLOOPER, Circuit Judges.
   DENISON, Circuit Judge.

These four eases involve the liability of the Mahoning Company for income taxes during the years 1917, 1918, 1919, and 1929, the most substantial question being whether the Mahoning Company and the New York Central Railroad, or its subsidiary, the Lake Shore, were affiliated corporations within the meaning of section 249 (b) of the Revenue Act of 1918 (49 Stat. 1982) and section 1331 of the Act of 1921 (26 USCA § 1967).

In case 5765', it appears that the Mahoning Company, having paid this tax for the calendar year 1918, thereafter and on March 7,1924, filed its claim for refund. This claim was disallowed by the Commissioner, at a date which is in controversy. The suit to recover the claimed refund was brought Pebru-ary 7, 1927, more than five years after payment of the tax. The five-year statute of limitations allowed two years after a claim for refund was disallowed. (Section 1113 [a] of the Revenue Act of 1926 [26 USCA § 156]).

We think the statute had not run. The petition shows that on February 2, 1927, the local collector notified the plaintiffs “that said claim for refund had been disallowed on January 27, 1925.” A demurrer presenting the defense of limitation was overruled, upon the expressed understanding by the district judge that notice to the taxpayer of the disallowance was necessary to start the two-year period running. We think the demurrer was properly°overruled, although the reason stated has since been held to be insufficient. U. S. v. Michel, 282 U. S. 656, 51 S. Ct. 284, 75 L. Ed. 598. It is true that this action was not brought within five years after the payment, and hence the burden was upon the petitioner to allege that it was brought within two years after the disallowance of the claim for refund. The petitioner evidently intended to allege a denial, effective as of February 2, 1927. If it had alleged a disallowance on January 27, 1925, that would have been fatal; but that was not the allegation, it was only that the collector said that the claim had been disallowed on that date by the Commissioner. The fact as to the date of the disallowance was not expressly stated; and upon demurrer the petition was therefore good by virtue of its intent to allege dis-allowance as of February 2, 1927.

Thereupon answer was filed, which admitted “that on January 27, 1925, the Commissioner of Internal Revenue disallowed such claim for refund,” and denied everything else. The petition not having made the allegation which the answer purported to- admit, the formal reply therefore made an issue as to the date of the disallowance. Upon the proofs, the alleged letter of February 2, 1927, from the collector did not appear. The only proof as to the rejection is found in a letter of February 7, 1925, from the Commissioner, which makes reference to the claim for refund and the reasons which make it not proper to be allowed and concludes, “These claims will therefore be rejected. The rejection of these claims will officially appear on the next schedule to be approved by the Commissioner.” It therefore sufficiently appears that the disallowance was not earlier than February 7, 1925, and so the suit was in time.

We think it unnecessary to recite all the facts as to the supposed affiliation. They are fully covered by the stipulation of facts. We think it clear that under our decision in the Painesville Case (United States v. Cleveland, P. & E. R. Co.), 42 F.(2d) 413, there is not that degree of ownership or control by one corporation of substantially all the stock of the other, or community of ownership by the same interest of substantially all the stock of both corporations, necessary to give the statutory affiliated character. Indeed, the decision of the district court that they were affiliated was based upon the previous decision of the same court in the Painesville Case to the same effect; and it is now conceded that our reversal of the Painesville Case necessitates also a reversal in these eases, excepting for the additional feature present here and not there. During all the period in question, the relations between the two companies were governed by a long-term lease from the Mahoning Company to the Lake Shore Company, and the Mahoning Company was not operating the railroad or engaged in any business excepting receiving the agreed rentals, paying some corporate maintenance charges, and disbursing the remainder as dividends. The lease is urged as distinguishing from the Painesville Case, and said to disclose such a complete control by one company as to constitute affiliation. On the contrary, we think this makes the ease stronger against the affiliation theory. That rests upon the idea that by unity of stock ownership or control the profits could be shifted back and forth between the two corporations in such a way as to affect the total amount of taxes, and hence that, in those cases, affiliation should either be permitted (as in some years) or required (as in some years). Here, there could be no such shifting of profits, and the fundamental reason for affiliation does not exist. The division of operating profits between the two companies is fixed by contract; and we see no reason why the share apportioned to each by the contract should not constitute the separately taxable income of each.

The remaining question arises- thus: The lease from the Mahoning to the Lake Shore provided that the lessee should pay the lessor’s taxes. In supposed pursuance of this contract, the Lake Shore, and later the New York Central, paid the federal income taxes which were assessed against the Mahoning for all the years, to and-ineluding the first quarter of 1921. Upon the theory that the amount so paid constituted an additional taxable income to the Mahoning, the Commissioner levied an additional tax against it. The question is whether the ease is controlled, in this respect, by Old Colony Trust Co. v. Commissioner, 279 U. S. 716, 49 S. Ct. 499, 73 L. Ed. 918, and U. S. v. Boston & Maine Railroad, 279 U. S. 732, 49 S. Ct. 505, 73 L. Ed. 929. The difference is that in those eases, the income taxes were paid for the benefit of the lessor, pursuant to valid contract obligations; but in this case it was decided in February, 1926, by the Court of Appeals of New York, that this lease did not require such taxes to be paid by the lessee. Brainard v. N. Y. C. R. Co., 242, N. Y. 125, 151 N. E. 152, 45 A. L. R. 751. Should this (legally) voluntary payment to the Mahoning therefore he considered in the nature of a gift and not taxable, or rather be treated as income in the ordinary course of business, taxable as such for the current year, leaving the taxpayer to be recouped, if at all, only by claiming a loss in a later year, when it may be finally decided by litigation, or otherwise, that the receipt of the payment created a duty to repay, and where that duty is met by actual repayment? If there had been at the time such a conscious and admitted duty to repay, or perhaps if the duty to repay were so clear that it could be carried hack by relation, there would he a different question; but here that duty was, to say the least, not clear; nor has it even yet been established in litigation between the parties. A payment -which, though legally voluntary, yet has been' made in the regular course of business and pursuant to contract obligations as understood at the time by both parties, is not necessarily and in all eases repayable when it is later ascertained both parties are mistaken, and that the legal obligation to pay did not exist. Nor can we think that such a payment is so far in the nature of a gift as not to be taxable income. Paid and received under ■claim of right, it becomes income for that period, and we think should be so treated; .and subsequent developments affecting its character must be met, as of the time when they occur. This case falls within the principle of Burnet v. Sanford & Brooks Co., 282 U. S. 359, 51 S. Ct. 150, 75 L. Ed. 383, and as developed and applied by ns in Board v. Commissioner, 51 F.(2d) 73, decided June 11, and Ford v. Commissioner, 51 F.(2d) 206, this day decided.

The judgments in these eases should he reversed, and the eases remanded for further proceedings in accordance with this • opinion. If counsel desire to file a petition for rehearing, we will hold it until the decision of the Supreme Court in a pending certiorari, which involves the right-fulness of our conclusion in the Painesville Case, and which decision might require another result in three of these eases.


author: GARDNER, Circuit Judge.

text:
    WARFIELD v. BIXBY et al.
    No. 9108.
    Circuit Court of Appeals, Eighth Circuit.
    Aug. 17, 1931.

      Edward A. Macdonald, of Detroit, Mich., and James R. Claiborne, of St. Louis, Mo. (Edgar H. Ailes, of Detroit, Mich., Bishop & Claiborne, of St. Louis, Mo., and Miller, Canfield, Paddock & Stone, of Detroit, Mich., on the brief), for appellant.
    James A. Reed, of Kansas City, Mo. (James E. Taylor and James J. McNamara, both of Kansas City, Mo., on the brief), for appellee Lucy McMillan.
    John H. Holliday, of St. Louis, Mo., for appellee William K. Bixby.
    Fred Armstrong, Jr., of St. Louis, Mo., for appellee Washington University.
    P. Taylor Bryan and Thomas S. McPheeters, both of St. Louis, Mo., for appellees St. Louis Union Trust Co. and William K. Bixby.
    Before STONE and GARDNER, Circuit Judges, and YOUMANS, District Judge.
   GARDNER, Circuit Judge.

This is a suit brought by the appellant, who was plaintiff below, to set aside a written assignment made by her to Eliza McMillan and William Northrup McMillan, of one-half of her contingent interest in the estate, of William McMillan, deceased, and for an accounting. The various defendants moved to dismiss the bill for want of equity, and, these motions having been sustained by the lower court, and the plaintiff having declined to further plead, judgment of dismissal was entered, and this appeal is from that final judgment. <

It appears from the bill of complaint that William McMillan died testate in 1901, leaving him surviving his widow, Eliza McMillan, and his son, William Northrup McMillan. By his will testator created a trust in favor of his surviving widow and son, conveying to them and to William K. Bixby, as trustees, his entire property in trust. During the lives of the widow and son, the entire income of the estate was to be paid over by the trustees to the widow and son, and, upon the death of either, the survivor was to receive the entire income. It is noted that the widow and son were both trustees and beneficiaries under this trust. The will further provided that, if the son should have a lineal descendant or descendants, the property should be paid over to such descendant or descendants upon the arrival of such descendant at the age of 21 years; but, if the son should die without; lineal descendants, the property was to go, upon the deáth, of the widow, to James MeMillan and Hugh Me-Millan, brothers of the testator, and the Union Trust Company, of Detroit, Mich., as trustees, who, in turn, were to hold and administer the same for the heirs of said James McMillan and Hugh MeMillan, and on their death said property was to go to their heirs pro rata and absolutely.

Testator’s brother James McMillan died In 1902, and his brother Hugh McMillan died in 1907. His widow, Eliza McMillan, died in 1915-, and his son, Northrup McMillan, died in 1925. Northrup McMillan died without Issue, but leaving him surviving his widow, Lucy MeMillan, who is one of the defendants in this suit.

William K. Bixby, Northrup McMillan, and Eliza McMillan were also named as executors of this will, and in due time they qualified as such, administered on the estate, and at the close of the administration took over the property as trustees. These three trustees acted jointly until the death of Eliza McMillan in 1915. Thereafter Bixby and Northrup McMillan administered it until the death of Northrup McMillan in 1925.

At the time of his death, William McMillan owned a half interest in a partnership known as William McMillan and W. K. Bixby; the other partners being Eliza McMillan, William Northrup MeMillan, and William K. Bixby. The business of this concern was the making of investments in stocks, bonds, car trust obligations, and other securities. The value of this interest was not inventoried by the executors, nor administered on in probate court, but'it was taken possession of by William K. Bixby, Eliza McMillan, and William Northrup- MeMillan, as trustees of the estate of William MeMil-lan, and was accounted for by the surviving trustee, William K. Bixby. No determination of the value of this interest of William MeMillan in the partnership, nor the value of the balance of other property alleged to have been withheld from probate was ever made by the probate court. Following the death of James MeMillan and Hugh McMillan, brothers of the testator, Eliza MeMillan and William Northrup MeMillan purchased from various of the heirs of James McMillan and Hugh McMillan the expectant interests of said heirs in the estate of William McMillan. In the year 1913 plaintiff was induced by representations made to her by Eliza McMillan, William Northrup McMillan, and William K. Bixby, to execute on October 17, 1913, a written assignment transferring and conveying an undivided one-half of her contingent interest in the William MeMillan estate. That instrument is set out in the bill of complaint, and recites that the sale was for a consideration of $25,000, and contains the following other recitals:

“Whereas, the parties of the second part and William K. Bixby, of the said City of St. Louis, are Trustees under the will of William McMillan, deceased, which was duly admitted to probate in the Probate Court of the said City of St. Louis; and as such Trustees are seized and possessed of the title to the residuary property and estate devised and bequeathed to them by said will, and other property since acquired and now held by them as such Trustees; and which said trust property and estate is now of the approximate value of Eight Million Dollars ($8,000,000.00), producing an annual net income which for the past year amounted approximately to Three Hundred Fifty Six Thousand Six Hundred Eleven Dollars and Ninety Four Cents ($356,611.94).
“Whereas, a residuary interest in said trust estate was devised and bequeathed by said will to the heirs of the said Hugh Me-Millan in the event of and after the deaths of said Eliza MeMillan and the said William Northrup McMillan without leaving any descendant surviving them; and
“Whereas, Alice Warfield, the party of the first part, wishes to realize some certain immediate benefit from said contingent devise and bequest; does not wish to take the chance of having the said Eliza McMillan and William Northrup MeMillan, or some descendant of one of them, survive her, and does not in any event wish to wait until the death of the said two last named persons; and being fully advised by counsel respecting all her rights in the premises, has requested the parties of the second part to pirrehase one-half of her right, title and interest, present, future, vested or contingent, of every character whatsoever, as one of the heirs of the said Hugh MeMillan, as well as every other right or interest which she has or may have in the estate of said William McMillan, at and for the price hereinafter stipulated.”

It is alleged that, at the time of this sale and transfer of plaintiff’s contingent interest, it was the duty of the trustee to make to her a full and fair disclosure of every matter pertaining to the estate, which might have a bearing on the value of her expectant interest therein, and which might influence her in exercising her judgment as to the advisability of making such sale and assignment, but that the trustees failed to perform that duty, in that they withheld from invoice and inventory in the probate court, the sum of $750,000 which belonged to the estate, being the value of the testator’s interest in the partnership above referred to, and that they ■withheld from her the alleged fact that Northrup McMillan was incapable of begetting a child or children, as both vendors well knew at the time of the sale, and that she sold her interest at a price far below its actual worth, on account of her ignorance of the two facts above related.

After the death of Northrup McMillan, Bixby, as sole surviving trustee, on the 18th of March, 1926, brought an equity suit in the state circuit court of the city of St. Louis, Mo., against the plaintiff in the instant ease, the Union Trust Company of Detroit, as trustee of the successive trust, the St. Louis Union Trust Company, as the executor under the wills respectively of Eliza McMillan and Northrup McMillan, deceased, and certain others. In that suit brought by Bixby, he submitted his accounting as trustee, prayed for the approval of the court with respect thereto, asked for proper compensation for himself and his attorneys, and that “he be directed to pay over and distribute the remaining assets of the estate to the persons and corporations entitled thereto, and for his discharge as such trustee.” Two days later suit was commenced in the same court by the Union Trust Company of Detroit, trustee of the successive trust under the McMillan will, against Bixby and others, demanding that Bixby, the St. Louis Trust Company, as executor of the will of William Northrup McMillan, and Bixby and the St. Louis Trust Company, as executors of the will of Eliza McMillan, deceased, and Bixby individually, make full accounting of the trusteeship of Eliza McMillan arid William Northrup McMillan, and that the court ascertain, adjudge, and determine the respective beneficial interests of the parties thereto, and that the property be delivered in accordance therewith.

Following the institution of these suits, accountants were employed by the Union Trust Company of Detroit, the trustee of the successive trust, who made an examination of the accounts of the executors and trustees of the estate of William McMillan, and, as a result of such investigation, plaintiff in the instant ease learned early in 1927 of the fact that certain property belonging to the McMillan estate had not been inventoried in the administration proceedings in the McMillan estate. Following this investigation, the Union Trust Company of Detroit, trustee of the successive trust, asserted that there was due from William 3L Bixby, surviving trustee, in addition to the amount of the accounting submitted by him, a very large additional amount, and that said additional amount should be accounted for by said William K. Bixby, trustee, to the estate of William McMillan, deceased, and to the heirs of said estate. As a result of this demand, William K. Bixby paid to the Union Trust Company of Detroit, the sum of $600,000, over and above the amount included in his accounting as submitted to the court, and waived all claims to compensation as trustee.

It will be observed that plaintiff bottoms her right to recovery on the claim that the trustees of the first trust created by the McMillan will owed her the duty, before buying from her any interest in the trust estate, of fully and fairly disclosing all facts and circumstances which might have a bearing on the extent and value of her interest in the estate. It was the contention of the defendants in the lower court, and they also urge here, that no fiduciary relationship existed between the trustees under the first trust and the plaintiff, and counsel for plaintiff in their brief say: “The question of fiduciary obligation is the crux of the ease. If it be true, as the defendants contend, that Eliza and Northrup had no fiduciary responsibilities in dealing with the plaintiff, the issues of res judicata and laches disappear.”

It goes without saying that in fiduciary trusts the trustee is not allowed to advantage himself in dealing with the trust estate, and, while he may not be absolutely prohibited from contracting with the cestui que trust with reference to such estate, equity looks upon such a contract with suspicion, subjects it to the severest scrutiny, and will permit it to stand only when the trustee affirmatively shows that the agreement was entirely fair and advantageous to the beneficiary, and that there was no fraud, concealment, undue influence, or uneonseientious advantage. If, then, at the time of the purchase of plaintiff’s interest by the two- named trustees, the relation of trustee and cestui que trust, as to the property purchased, existed between the parties, the facts pleaded, which must for the purpose of this appeal be accepted as true, constituted a good cause of action, unless the' plaintiff has elected to ratify the same with full knowledge of the facts, or is precluded by the judgment in the suit to which he was a party, brought by the surviving trustee, Rixby. It is therefore essential to determine the relation of these parties.

The will provided for two successive trusts. The first trust was in favor of the widow and son. During the existence of that trust, a fiduciary relation existed between the trustees and the widow and son, but they owed no duty to the plaintiff, nor to the trustee in the second or successive trust, except not to injure or dissipate the corpus of the estate, and to account for it to the trustee of the successive trust. In other words, as to the plaintiff and the trustee in the second trust, the trustees of the first trust were not trustees in the ordinary sense of that term, but by analogy they bore the relation of life tenants to remaindermen or reversioners.

The common law did not originally admit of the creation of a life estate in personal property with a reversion or remainder over, but it is now well settled that life estates may be created in money, as well as other personal property with remainder over to others. And it is also well settled that a future interest in personal property may take effect in analogy to a remainder'after a life estate limited therein, and is then called a quasi remainder. Smith v. Bell, 6 Pet. 68, 78, 8 L. Ed. 322; State v. Welch, 175 Mo. App. 303, 162 S. W. 637; Landers Inv. Co. v. Brown, 300 Mo. 348, 254 S. W. 14, 15, 30 A. L. R. 908; Sherley v. Sherley, 192 Ky. 122, 232 S. W. 53; In re Clifton’s Estate, 207 Iowa, 71, 218 N. W. 926; Hooper v. Bradbury, 133 Mass. 303.

In Smith v. Bell, supra, in an opinion by Chief Justice Marshall, it is said: “The rule that a remainder may be limited, after a life-estate in personal property, is as well settled as any other principle of our law.”

In Landers Investment Co. v. Brown, supra, it is said: “It is now well settled that interests for life and in expectancy, by analogy estates, can be created in personal as well as in real property. Future interests or quasi remainders, operating in analogy to remainders or executory devises, may be created in money and other personalty, and they may be created by either deed or will, and without the intervention of a trustee.”

The relation of these trustees under the first trust to the plaintiff was that of quasi life tenants to a remainderman. The relation of a life tenánt to a remainderman or reversioner, is that of a quasi trustee. He is a trustee in the sense only that he must not injure or dispose of the property to the injury of the rights of the remainderman, and can do nothing during the continuance of his trust to impair the corpus of the property - But there is no fiduciary relation such as will prevent the life tenant from purchasing from the remainderman his remainder interest. Ware v. Fronk’s Adm’r (Ky.) 38 S. W. 1061; Stortz v. Voss, 181 Ky. 546, 205 S. W. 610, 611.

In Ware v. Fronk’s Adm’r, supra, decided by the Supreme Court of Kentucky, it is said: “We know of no principle of law or rule in equity which prevents a life tenant from purchasing the interest of a remainder-man. Certainly, no such fiduciary relations exist between them whieh could make applicable to their transactions the rules of equity which govern trustees and eestuis que trustent.”

The same court, in Stortz v. Voss, supra, in reiterating this doctrine, said: “This leaves for consideration only the two grounds contained in the original exceptions. The first of those grounds — that the purchaser, Charles W. Voss, Sr., occupied a fiduciary relation toward the owners of the property— is not founded in fact, since he had only a life interest as surviving husband in it. This in no sense made him a trustee for or a fiduciary of the owners in remainder, one of whom is the appellant.”

It follows that the relation between the trustees of .the first trust and the plaintiff did not prevent their purchasing from her her contingent remainder, nor was it such as to prevent them from dealing with her at arm’s length.

But there are other considerations which, in our view, preclude plaintiff’s right to any relief in this suit. Upon the death of Northrup McMillan without issue, the second or successive trust came into existence, and it then became the duty of the surviving trustee under the first trust to account to the trustee of the second trust for the corpus of the trust estate. Responding to this duty, Bixby filed a suit in equity in the circuit court of St. Louis, Mo., joining as defendants not only the trustee of the second trust, but also the plaintiff, and asked for instructions as to the distribution of the estate. In that suit a decree was entered, directing such distribution, and discharging the trustee. It is urged that this decree was an adjudication of the rights of the parties here sought to‘ be litigated, and there seems to be both reason .and authority for this contention. But, however this may be, it appears that the Union Trust Company of Detroit, named as trustee in the second trust, within two days after the filing of equity suit by Bixby, brought suit against Bixby and others, demanding a full accounting of the trusteeship. These two eases were pending for nearly a year, and, as a result of the suit brought by the Union Trust Company, a settlement was made by which Bixby, as trustee, paid over some $600,000, in addition to the amount that he in his own suit admitted as due the trustee of the second trust. Now this settlement, it appears from positive allegations of the bill, was made after the plaintiff and her representative, the Union Trust Company, had ascertained all the facts which she now claims were fraudulently concealed from her at the time she made transfer of the undivided one-half interest in her contingent remainder, and which concealment she alleges constituted a fraud upon her. This was a settlement in the nature of an accord and satisfaction. It has not been repudiated nor rescinded, and amounted to a ratification of the transfer, if it were not otherwise binding upon her.

The decree appealed from should be and is affirmed.


author: NORTHCOTT, Circuit Judge.

text:
    LIAS et al. v. UNITED STATES.
    No. 3147.
    Circuit Court of Appeals, Fourth Circuit.
    July 8, 1931.

      Howard D. Matthews and J. Bernard Handlan, both of Wheeling, W. Va. (G. Alan Garden and Handlan, Garden & Matthews, all of Wheeling, W. Va., on the brief), for appellants.
    Prank E. Parrack, Asst. U. S. Atty., of Kingwood, W. Va., and Russell L. Furbee, Asst. U. S. Atty., of Fairmont, W. Va. (Arthur Arnold, U. S. Atty., of Parkersburg, W. Va., and Wm. C. Howard, Asst. U. S. Atty., of Wheeling, W. Va., on the brief), for the United States.
    Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.
   NORTHCOTT, Circuit Judge.

The three appellants together with six others were indicted in the District Court of the United States for the Northern District of West Virginia, at the October term, charged with conspiring to violate the National Prohibition Act in violation of section 37 of the Federal Penal Code (18 USCA § 88), and were tried at the same term at which the indictment was returned. The three appellants had previously been arrested and' taken before a commissioner in September,. 1930.

The evidence, as it appears from the record, shows that the appellants were engaged' in running what they claimed was a gambling-house in the city of Wheeling on premises which consisted of a two-story brick building; that the entrance to this building was through a screen door, then through a front room to an electrically-operated door, behind' which there was another small room with an-electrically operated door leading to a space-under the stairway; that there was a room on the premises fitted up as a bar; that there was a gambling room, in which there was a dice table and other gambling paraphernalia; that there were three electrically operated doors through which entrance was gained to-the inside of the house. Some witnesses for the prosecution, who were prohibition agents,, testified that they had visited the premises on-different occasions and bought whisky there.. There was evidence tending to- show that appellant Lias was in charge of the operation of the premises, and that the others were employees. Two of those indicted were not apprehended, and as to four of the defendants the jury found a verdict of not guilty, returning a verdict of guilty as to the three-appellants. Upon this verdict the court entered judgment, sentencing appellants to the penitentiary, from which action of the court this appeal was taken.

There were twenty-nine assignments of error, but these have been grouped in brief and argument on behalf of appellants into-twelve propositions, the first of which is that the court erred in not granting a continuance or a change of venue, on the ground of the-illness of the leading counsel for the defend. ant, who was the head of the firm representing them and because of .articles appearing in various newspapers dealing with the ease and an alleged attempt to kill one of the prosecution’s witnesses in the case.

The question of continuance was one addressed to the sound discretion of the trial court. This has been repeatedly held by this court, and it is scarcely necessary to cite authorities to that effect. Baker v. United States (C. C. A.) 21 F.(2d) 903; Johnson v. United States (C. C. A.) 5 F.(2d) 471; Guardian Assurance Co. of London v. Quintana, 227 U. S. 100, 33 S. Ct. 236, 57 L. Ed. 437; Fidelity & Deposit Co. v. L. Bucki & Son Lumber Co., 189 U. S. 135, 23 S. Ct. 582, 47 L. Ed. 744.

Here defendants were represented by two other members of the law firm, of which the leading member was ill; one of the attorneys representing appellants at the trial having been present before the commissioner/ There was no good reason for continuance of the ease upon ground of the illness of one of several attorneys, and the motion was properly denied. The defendants had ample notice as to the charges against them, were ably represented at the trial, and were in no way taken by surprise.

With regard to the newspaper articles, an examination of the record shows that the court examined the jurors as to the articles, and ascertained that not a one of the jurors constituting the panel was so biased or prejudiced on account of the articles that he could not be fair and render a true verdict according to the law and the evidence; and it further appears that the jurors denied that they had formed or expressed any opinion as to tho guilt or innocence of the defendants or any of them. There is nothing in the record indicating that the defendants were not tried by a fair and impartial jury. Objection was raised as to the manner of interrogating the jurors upon their voir dire, but the methods of procedure in the selection of the jury were proper and in accordance with the decisions of this court. Ungerleider v. United States (C. C. A.) 5 F.(2d) 604.

The trial court is invested with a wide discretion in determining the competency of the jurors, and the court’s judgment in this respect will not be interfered with except for an abuse of the discretion. In Assaid v. United States (C. C. A.) 10 F.(2d) 752, will be found a full discussion of this question by Judge Waddill, and a number of authorities are there cited, all of which hold to the effect above stated.

It is contended that the court erred in admitting evidence with regard to certain overt acts not mentioned in the indictment, and as to which the defense was taken by surprise; Motion was made by defense for a bill of particulars. Upon agreement of the United States attorney, made in open court, that the files of his office, relating to the case, would be thrown open to the inspection and use of counsel for defendants, and that he would not introduce testimony relating to any overt act not set out in the indictment without first giving counsel for defendants ample notice thereof, said motion for bill of particulars was not insisted upon by defendants. There is no contention that the United States attorney did not scrupulously carry out his promise with respect to opening his files to the inspection and use of the attorneys for the defendants, nor is there anything in the record that leads to the conclusion that the defendants were in any way taken by surprise, or that improper evidence was admitted so as to constitute reversible error. This contention of appellants is without merit.

It is contended that there should have been a mistrial granted by the court, because two of the defendants were at one time seen by members of the jury to be handcuffed together, but we cannot see any merit in such a contention. The jury at the time of the incident complained of were seated in a bus, and the two defendants handcuffed and in charge of an officer happened to walk past the bus. The judge seeing them directed the handcuffs to be removed before defendants 'entered the bus with the jury. We can see no harmful error in this occurrence.

It is also contended that the court erred in stating that it considered certain evidence admissible because in its opinion the government had made out a prima facie case of conspiracy. We are of the opinion that the court’s action in this respect was proper and within the law.

One of the propositions most strongly relied upon by counsel for defendants is directed to the action of the court in refusing to sustain the objection of counsel for the defendants to the remarks of one of the assistant United States attorneys in his arguments to the jury, on the ground that such remarks referred to the fact that the appellants had not taken the stand or testified at the trial. An examination of the remarks objected to shows that the assistant United States attorney well might have been referring, and was in fact apparently referring in his statements, to persons other than defendants, and that when he stated that certain evidence was uneontradieted, he evidently meant that it was uneontradieted by numerous people, who, it had been testified, had frequented the premises in question for the purpose of gambling.

“Comment by court and counsel that said testimony is uneontradieted is common, oftentimes, helpful, and very generally held to be without error.” Morrison v. United States (C. C. A.) 6 F.(2d) 809, and authorities there cited.

We are of the opinion that the remarks objected to here did not constitute reversible error.

Again it is strongly contended that the court erred in giving to the jury certain portions of a special charge after the jury had been considering their verdict for some time. The court of 'its own motion, when the jury had returned into the courtroom and reported that they had not agreed upon a verdict, said to them that, hoping he might be of some aid to them in reaching a verdict, he would instruct them among other things to the effect that they should examine the questions submitted to them with proper regard and deference to the opinions of each other, and that, while undoubtedly the verdict of the jury should represent the opinion of each individual juror, a juror should ask himself whether he might not reasonably doubt the correctness of a conclusion not concurred in by the majority.

We do not think the giving of this instruction constituted reversible error. The instruction given by the court is in every respect substantially sustained by the Supreme Court of the United States in Allen v. United States, 164 U. S. 492, 17 S. Ct. 154, 41 L. Ed. 528, and is in no material way different from a special charge held proper by this court in Johnson v. United States, 5 F.(2d) 471, where Judge Rose in an able opinion, discusses this question. See, also, Angelle v. United States (C. C. A.) 31 F.(2d) 245; Dwyer et al. v. United States (C. C. A.) 17 F.(2d) 696.

Here the court properly told the jury that the verdict must be the verdict of each individual juror, and not his mere acquiescence in the conclusion of his, fellows. For discussion of this question, see, also Stewart v. United States (C. C. A.) 300 F. 769; Nigro v. United States (C. C. A.) 4 F.(2d) 781; Burton v. United States, 196 U. S. 283, 25 S. Ct. 243, 49 L. Ed. 482; St. Louis & S. F. R. R. Co. v. Bishard (C. C. A.) 147 F. 496; Shaffman et al. v. United States (C. C. A.) 289 F. 370, 371.

Comments by a prosecutor in the course of his arguments that might be open to the interpretation that they pointed to the failure of defendants to testify are always to he carefully scrutinized, and the giving of special instructions of the character of those given here should not be approved without a careful analysis of them. In this case the evidence so overwhelmingly and conclusively shows the guilt of the defendants that, to constitute reversible error, such error must be of a character as to have been clearly prejudicial to them. Such is not the case here.

It is also contended that the court erred in refusing to give certain instructions requested on behalf of the defendants, but an examination of the instructions and the court’s charge to the jury leads us to the conclusion that the court substantially covered the points involved in its oral charge, and it is not necessary to quote authorities to the effect that this is sufficient.

A number of other assignments of error, not here discussed, were made on behalf of defendants, in which there is no merit, and they are not of sufficient importance to justify discussion here.

There was no reversible error in the trial, and the judgment of the court below is accordingly affirmed.