author: WEBSTER, District Judge.

text:
    DENNIS et al. v. GREAT NORTHERN RY. CO. et al.
    No. 4341.
    District Court, E. D. Washington, N. D.
    July 15, 1931.
    Graves, Kizer & Graves, of Spokane, Wash., for plaintiffs.
    Ernest E. Sargeant, of Spokane, Wash. (F. G. Dorety and John E. Stryker, both of St. Paul, Minn., of counsel), for defendants.
   WEBSTER, District Judge.

The plaintiffs are the joint owners of letters patent, No. 1,308,583, dated July 1,1919, covering a method or process for excavating tunnels and especially adapted to the boring of long tunnels through rock formations. They bring this action for the recovery of damages for the alleged infringement of the patent by the defendants in excavating the Cascade tunnel for the use of the defendant railway company.

It is admitted by the defendants that, in carrying out at least a part of their Cascade tunnel operations, the method described in the Dennis patent was employed. The defense is rested on several distinct and independent claims, each of which goes to the validity of the patent. It is contended that the alleged invention of Dennis was completely anticipated by prior publications relating to the method employed in excavating the Simplon tunnel through the Alps Mountains. It is also insisted that the field of invention was so limited at the time of the application for a patent that the method claimed by Dennis did not constitute patentable invention.

The single claim of the patent reads as follows: “In a method of tunneling consisting in driving an auxiliary heading outside of the main tunnel section, excavating cross cuts from the auxiliary heading, driving a main heading to connect the cross cuts, drilling from the main heading for enlargement to -the full tunnel section, and then excavating to the full tunnel section.”

The' advantages to be obtained by the use of the method or process described in the claim are stated by the patentee in this language : “At the outset I wish to explain that at present the general practice of tunneling is to excavate a heading in advance of the main tunnel, the heading being enlarged by blasting into the main tunnel as the work advances. The result of this is that all the equipment necessary to the tunneling operations have to be brought into the tunnel past the location where the work is being carried on. With this form of practice, much time and labor is lost owing to one part of the work having to be held up for another and also on account of the various operating appliances having to be moved back during the blasting Operation. With my method of tunneling I provide a working or pioneer tunnel outside the main tunnel and utilize this working tunnel for the purpose of ventilating the main tunnel workings; carrying pipe lines for compressed air and water to the advanced work around the main tunnel blasting and mucking; carrying muck from the advanced work around the main tunnel enlargement aforesaid and mucking so as not to interfere therewith; enabling the advance heading to be driven and enlargement drilling to be done without interfering with the work at the tunnel enlargement and also as a second outlet for the men in ease one of the tunnels should become blocked. * * * Erom the above description it will be seen that all the advantages hereinbefore set forth as features of this invention are readily obtained through the driving of the pioneer heading and cross cuts to the side of the main tunnel location and while the cost of driving this pioneer heading may be considerable, still, it so facilitates the work of .enlarging the main tunnel that it more than saves the cost of its construction in the complete tunneling operation.”

As I do not understand that any claim of patentability is based on the feature of central heading with radial drilling, I shall not pause to discuss that aspect of the case.

The publications relied upon by defendants as anticipating the Dennis patent are principally three: (1) an article in the January, 1900, issue of Cassier’s Magazine, by Axel Larsen, M, Inst. M. E.; (2) a paper by Sir Francis Fox, M. Inst. C. E., published in London by the Institution of Civil Engineers in 1907, and (3) chapter XIY of Modem Tunnel Practice by David MeNeely Stauffer, published in 1911. All these publications deal with the method employed in excavating the Simplon tunnel, and from the file wrapper it seems that none of them was called to the attention of the patent examiners while the Dennis application was under consideration.

The file history of the Dennis application discloses that the applicant originally submitted six separate claims of invention, all of which were disallowed on reference to the See, Perm, and Sooysmith patents. Dennis acquiesced in this ruling, but subsequently submitted the single claim which was ultimately allowed by the patent authorities, and which we have hereinbefore quoted in full. In support of the claim which was allowed, the record discloses that the following contention was made: “The single claim now in the ease is very specific to applicant’s process. It is thought to clearly distinguish from the references because a new function is developed, that is, air is forced into the pioneer and allowed to escape through and out from the main tunnel, whereby all the explosion gases are exhausted and the workmen left unhindered. * * * See’s patent would be entirely impracticable except in soft ground for if used in rock which had to be blasted, it would be impossible to get the smoke and powder fumes out of the chamber above his sub-tunnel. The doing of this very thing is the new function of applicant’s pioneer.” No suggestion was made that the Dennis idea differed from that of See in respect of furnishing a plurality of places for the men to work, or of supplying an additional means of access or egress. These features were characteristic of the See method. See’s idea contemplated two tunnels, one above the other, whilst Dennis’ process contemplated two tunnels side by side. It was the advantage in ventilation afforded by the Dennis process which was pointed out and stressed as the new function of the applicant’s pioneer tunnel.

We call attention to this situation for the purpose of making it plain that plaintiffs must be confined to the specific claim which was allowed the patentee, and that their rights may not be enlarged by a construction which would give them the benefit of rejected claims, or which would broaden or enlarge their rights beyond those specifically granted in the claim actually approved and allowed. Morgan Envelope Co. v. Albany Paper Co., 152 U. S. 425-429, 14 S. Ct. 627, 38 L. Ed. 500; Hauser v. Simplex Window Co. (C. C. A.) 10 F.(2d) 457-460; Vanmanen v. Leonard (C. C. A.) 248 F. 939-941.

I come now to the Simplon publications. These articles are highly technical, and are illustrated by numerous drawings and diagrams impossible of reproduction here. In addition, they are lengthy, covering many pages of printed matter, and it would be quite impractical to set them forth in this memorandum. The defendants insist that these publications completely anticipated every element of the Dennis patent, and show conclusively that the method covered by the claim of that patent was actually used in the construction of the Simplon tunnel. Counsel for the plaintiffs insist that the Simplon operation contemplated from the outstart the boring of two tunnels, side by side, instead of a single tunnel, and that any use or practice adopted in that undertaking involving the use of the second tunnel was merely incidental or accidental, and evidences no method or process for excavating a single tunnel, as worked out by Dennis in his patent.

A careful study of the Simplon publications leaves little room for doubt that the method covered by the Dennis patent was actually employed in excavating the great Simplon tunnel. My conclusion in this re-speet is fortified by the expert opinion of Mr. John Yipond Davies, an internationally, not to say world, renowned engineer of unsurpassed experience in large tunnel excavating operations. It must be admitted that Mr. R. H. Thompson, a distinguished and broadly experienced engineer, testified to the contrary, but my study of the publications inclines me toward the views of Mr. Davies. He impressed me as a man of profound learning in his profession, and that he was quite fair and frank in the expression of his views. He testified that in the Simplon work, as shown by the publications, there were parallel galleries and parallel headings used interchangeably; that there was an, auxiliary heading outside of the main tunnel section; that crosscuts were excavated from the auxiliary heading; that the main heading was driven connecting the crosscuts; that the main heading was drilled for enlargement and excavated to the full tunnel section. These, I believe, include all the steps or elements contemplated by the Dennis method, as disclosed by the claim of his patent.

It is true that in the Simplon operation, excepting one or two special occasions, effort was made to develop the main and the secondary tunnels simultaneously, instead of one being excavated substantially in advance of the others, though Larsen’s article shows that such result was not always effected. On this point Mr.. Davies testified: “In the Simplon tunnel work proceeded by driving two headings parallel one with the other, each of those headings being approximately ten feet and two inches in width and six feet five inches high. They were driven as fast as they could drive them on each tunnel so that roughly they were supposed to and apparently they did, keep step by step. The headings proceeding parallel to each other in the direction the tunnel was driving. Having gotten into a considerable distance, enlargement was started and cross connections were máde between the two headings to give access from one to the other to construct the circulatory system of ventilation. * * * 'As the two parallel tunnels proceeded and at intervals of approximately two hundred metres or somewhat over 600 feet, say, 620 feet, cross cuts were constructed right along as the two tunnels proceeded, making those tunnels continuous.”

It is not thought, however, that the circumstance of attempting to develop the tunnels simultaneously and step by step is of any great materiality. The disallowance by the Patent Office of original claims 1 and 2 in Dennis’ initial application seems to foreclose any contention that there was any patentable novelty in the Dennis idea of driving the pioneer tunnel substantially in advance of the main heading. Nor is this feature of his process described in the claim of his patent, nor was it pointed out to the patent authorities as a distinguishing feature of the process.

The Larsen article in Cassier’s Magazine points out that the original contract for the Simplon work called for two tunnels, the main tunnel to be completed in 5% years and the second tunnel to be finished gradually as increasing traffic might require. Then follows this statement: “Mr. Brandt fairly astounded the engineering world, but astonishment was soon converted into genuine admiration on its becoming manifest with what rare ingenuity and skill he had dealt with his subject. It was soon recognized that the duplex system which was to be used here for the first time, was, indeed, the only means by which the Simplon could ever be successfully tunnelled, for the principal object of the second tunnel is to carry fresh air into the main passage during construction.” This language seems to negative the thought that the use of the second tunnel in connection with the construction of the main tunnel was incidental or casual merely, for the writer states that the principal object of the second tunnel was to aid in the construction of the main tunnel by supplying ventilation, the very ground upon which Dennis insisted that his method differed from the See process.

In the same article, we find a general description of the method of tunnelling employed in the Simplon work in these words: “Turning to the tunnel-work proper, we find that one of the chief aims in the programme of the management is to work simultaneously in as many places as possible. Let us assume, for example, that the main tunnel had been driven 1000 .yards, while a distance of only 600 yards had been reached in the second tunnel. In that case the work would still be vigorously continued in the former, regardless of the slower rate of progress shown in the latter tunnel. In order to help the second tunnel along, without, however, interfering with the work in the main tunnel, the winzes would in due course be cut across to the line of the second tunnel, the driving of which, in its turn, would be proceeded with in both directions, i. e., forwards and backwards. Again, should the excavation make more rapid strides in the secondary tunnel than in the main passage, the same steps would be taken with regard to the latter, in order to make progress equal.”

Here we have a graphic description of the method used in Simplon, whereby a plurality of working faces were provided at the same time — a feature of the Dennis process greatly stressed and emphasized by counsel for plaintiffs as a distinguishing characteristic of its underlying idea. The method described by Larsen of making crosscuts from one tunnel to the other, or to the line of the other, and then excavating forward and backward at the same time, is precisely what I understand the Dennis method contemplates.

The foregoing description of the aetual tunneling method also shows that the faces of the two tunnels were not kept side by side, but that one would be driven ahead of the other and winzes would be cut across to the line of the backward tunnel, and this regardless of whieh tunnel was the more advanced.

In explaining the tunneling methods employed in the Simplon work, the Dennis process seems to be quite accurately described. At least there is no marked or substantial difference between the Simplon method and the one embodied in the patent in suit, so far as I am able to discern or discover.

In the paper on the Simplon tunnel by Sir Francis Fox, one of the three international experts who approved the plans for the undertaking, the author says: “Instead of making one tunnel for a double line of way, as in the St. Gothard and Mont Cenis tunnels, two single-line tunnels, 17 metres (55.8 feet) apart between centre-lines, with cross oblique passages connecting them at every 200 metres (218.7 yards), were designed. It was arranged that one tunnel only should be built at first, with a parallel gallery, and this gallery is to be enlarged for the second tunnel when, according to theintema-tional agreement between Switzerland and Italy, the gross receipts exceed £3,218 per mile per annum. * * * The importance of providing two single-line tunnels in this case cannot be over-estimated, and experience has fully justified their adoption. In fact, the Author has no hesitation in saying that had not this been arranged originally, the work would have proved impossible to carry out, and would have had to be abandoned for reasons given later on.”

The article then goes on to show the tremendous advantages in construction obtained by the duplex, or two-tunnel, method of operation, stressing ventilation as one of the important resulte. In the light of the language of this distinguished expert, it will hardly do to say that the use of the secondary tunnel as an aid to the construction of the main passage was merely incidental or accidental. He states that without the secondary tunnel as originally decided upon the whole undertaking would have resulted in complete failure.

The chapter in Modem Tunnel Practice, by Stauffer, devoted to the Simplon operation, while not so complete and definite as the others, demonstrates that the idea underlying the Dennis patent was successfully used in that great engineering achievement. In this article, the second gallery is referred to as the service tunnel.

The mere fact that the Simplon plans, as finally approved, contemplated the ultimate completion of the second tunnel for commercial use, is not thought to be of distinguishing significance, since it seems quite clear from the publications that the decision of the Simplon engineers to construct two single-track tunnels, instead of one double-track tunnel, was influenced largely by considerations having to do with the successful excavation of the main passage.

Larsen, in his article in Cassier’s, states that the principal object of the second tunnel was to carry fresh air into the main tunnel, thereby facilitating its construction, and that the duplex method was the only means by whieh the Simplon could ever be successfully tunneled. And Sir Francis Fox, in his paper, emphatically states that the two-tunnel or duplex method was indispensable to the construction of the main passage, and that by no other process could the enterprise have been carried into execution.

In the light of these circumstances, I am convinced that the contemplated or actual completion of the secondary tunnel is wholly immaterial. The point is that the Simplon method'was grounded upon the thought that the secondary tunnel was indispensable to the successful excavation of the main tunnel, and that .the duplex system was adopted as a method primarily because of the great assistance whieh such a plan would afford in carrying out the ambitious undertaking of excavating a passageway through the mountain. The use of the secondary tunnel was not incidental. Its construction as a separate unit was an integral and vital part of a comprehensive plan or method of excavating a tunnel through the mountain, without which the whole enterprise would have come to nothing.

Sir Francis Fox’ paper makes this very clear, for he states that, in the absence of the two-tunnel method, the whole work would have had to be abandoned.

In justice to Mr. Dennis, the court deems it appropriate to say that it is convinced that he honestly believed that the method described in his patent was novel, and that the idea originated with himself, and that, in securing the patent, he acted in the utmost good faith. He testified that, at the time of filing his application, his attention had not been called to the method or process used in the Simplon work. The publications to which, we have adverted, however, demonstrate to my mind that he was mistaken in his belief, and that the process described in his claim long before had been used in the great Simplon enterprise, and publicly proclaimed to the world. In these circumstances, Dennis’ good faith and lack of information with respect to the prior use of the method described in his patent are of no consequence. Bone v. Marion County, 251 U. S. 134-144, 40 S. Ct. 96, 64 L. Ed. 188.

.[4] We are not unmindful of the presumption of validity arising out of the issuing of the patent. This presumption, however, is a. rebuttable, not a conclusive, one, and, in this case, is materially weakened by the fact that the Simplon publications were not called to the attention of the patent authorities while the Dennis application was pending And being considered. Westinghouse Electric & Mfg. Co. v. Toledo, etc., Ry. Co. (C. C. A.) 172 F. 371; Wolfe v Bedford-Chevrolet Sales Corp. (D. C.) 31 F.(2d) 124; Cleveland Foundry Co. v. Kaufmann Bros. (C. C.) 126 F. 658; American Can Co. v. Goldee Mfg. Co. (D. C.) 290 F. 523; International Flatstub Check Book Co. v. Young & Selden Co. (C. C. A.) 284 F. 831, 832.

I am convinced that, had the Simplon publications now under review been drawn to the attention of the patent examiners, Dennis’ application would have been denied.

I shall not further labor the question’. My conclusion is that the patent in suit was anticipated by the publications describing the Simplon work, and that the method or process set forth in the Dennis claim was at the time of the issuance of the patent wholly lacking in patentable novelty.

Decree accordingly.


source: Caselaw Access Project

author: KENNERLY, District Judge.

license: Public Domain

text:
    HAYMAN et al. v. UNITED STATES.
    No. 291.
    District Court, E. D. Texas, Sherman Division.
    May 22, 1931.
    J. Cleo Thompson, of Dallas, Tex., for plaintiffs.
    S. D. Bennett, U. S. Atty., of Beaumont, Tex., and Erie Eades, Regional Atty., U. S. Veterans’ Bureau, of Dallas, Tex., for the United States.
   KENNERLY, District Judge.

Madie Hayman, age twenty years, enlisted in the United States Army on February 4, 1918, and on or about March 1st, thereafter, applied for, and was issued, a certificate of insurance, under the provisions of the aet of Congress relating to war risk insurance. He was honorably discharged from the service on July 10,1918, on account of his physical condition, and returned to his home. On October 12, 1918, while on a trip to Muscle Shoals, Ala., he disappeared, and has not been since seen, nor heard from, by his family or friends.

This is an action at law by Sallie Hay-man, his mother (joined pro forma by S. J. Hayman, her husband), as beneficiary under such certificate, and as the administratrix of Madie Hayman, to recover against the United States of America upon such certificate. The original pleadings of plaintiffs alleged both total permanent disability and the death of the soldier at a time when the insurance was in force. The allegation as to total permanent disability was abandoned and dismissed by plaintiffs, the plaintiffs thereafter relying wholly upon the allegation of death. Defendant denied the death of the soldier, or, if dead, that he died while the insurance was in force.

Defendant also brings forward in its answer, and defends upon, an allegation that the soldier secured his enlistment in the army, and such insurance, by false and fraudulent statements regarding, and fraudulent concealment of, the condition of his health, at the time of enlistment and previously, and false and fraudulent statements as to his previous enlistments and service in the navy, and in the Texas National Guard, and in the army, by reason of the guard having been mustered into the federal service. Cancellation of the certificate of insurance is prayed for upon such grounds. Plaintiffs filed pleadings, combating such equitable defense.

By agreement, the issues formed by the pleadings in the action at, law were submitted to a jury, without prejudice to the rights of the parties under the pleadings presenting such equitable defense. The jury found that the soldier died October 12, 1918. This is a hearing upon such equitable defense, and upon the question of whether judgment should enter for plaintiffs or for defendant.

1. At the time of his enlistment in February, 1918, the soldier made the following statement regarding his health and the condition of his body then, and previously, and his former service, to wit:

(a) That he had never been discharged from either the United States Army or Navy, or any other service, on account of disability. This was untrue. He had been discharged from the navy because of physical disability of August 16, 1917. He had been on December 12, 1916, discharged from the army (he having been a member of the Texas National Guard and having been mustered into the federal service) because of physical disability.

(b) He was asked what illnesses, diseases, or accidents he had had since childhood. He answered pneumonia in 1902, chanoroids in 1912, and a social disease in 1917. He was also asked if he had ever had spells of unconsciousness or convulsions. He answered all in the negative. He was asked if he had ever been under treatment at a hospital or asylum. He answered in the negative. He, had in fact received an injury in the head about ’1914, and from that time on suffered, from time to time, from ah illness which was, or was similar to, epilepsy, with spells of unconsciousness and convulsions. This became very serious while he was in the army in 1916, and was diagnosed by the army surgeons in October, 1916, at the time of his discharge, as epilepsy with mental impairment and “fits,” and by the navy surgeons in-1917, at the time of his discharge, as hysteria with spasms. The answers he gave to the questions above set forth were, therefore, untrue.

(e) He stated that he had never previously served in the navy, army, or National Guard. This was untrue.

(d) In other words, this soldier made one attempt to get to fight for his government by entering the army (through the National Guard) in 1916, in anticipation of the World War; another attempt through the navy in 1917 after the declaration of war; and the third through the army in 1918. In the last instance, he, like many other young men, did not tell the truth in the particulars named. Now his government, after giving him an honorable discharge in each instance, more than ten years after these happenings, and more than ten years after his death as found by the jury, seeks to cancel his insurance, which he paid for, upon the ground of fraud. This soldier did not make these untrue statements to obtain the insurance, but only to get into the army. Human experience teaches that men capable of perpetrating a fraud upon their government by obtaining insurance, etc., by fraud, as charged against this soldier by the government, are not fighting men, and do not three times seek to enlist to fight. I am convinced that this soldier had no intention, thought, or purpose of fraudulently obtaining this insurance, and I so find. I think he had no fraudulent intent or purpose in securing enlistment, but only made the untrue statements to get into combat for his government. He did not make the false statements to secure benefits to himself, but to serve his government. In other words, I do not find that mischief in his heart 'existed, either in the matter of the, enlistment, or in the matter of the insurance.

2. Section 518 of title 38 of USCA Act of July 3, 1930, is as follows (italics mine):

“§ 518. Policies incontestable; exceptions; contest defined.
“All contracts or policies of insurance heretofore or hereafter issued, reinstated, or converted shcdl be incontestable from the date of issuance, reinstatement, or conversion, except for fraud, nonpayment of premiums, or on the ground that the applicant was not a member of the military or naval forces of the United States, and subject to the provisions of section 447 of this title. • * • Provided further, That this section shall be deemed to be effective as of April 6, 1917, and applicable from that date to all contracts of policies of insurance.”

I do not find any fraud in this case as to this insurance, nor as to the application therefor. The whole spirit of the different acts of Congress, from the first act regarding insurance,on down, and including the one quoted above, shows a liberal attitude towards those granted insurance, and a purpose that no state of facts, such as exist here, shall serve to render voidable or set aside a soldier’s insurance. The fraud mentioned in this section is not intended to include a ease such as is presented here.

3. When the government seeks to set aside an instrument evidencing an obligation, such as is this certificate, it is subjected to the same rules respecting the burden of proof, the quantity and character of the evidence, and the presumptions of law and fact, that attend the prosecution of a like action by an individual. A quotation from United States v. Stinson, 197 U. S. 205, 25 S. Ct. 426, 49 L. Ed. 724, which was a suit to set aside a patent, fully supports this view: “The government is subjected to the same rules respecting the burden of proof, the quantity and character of evidence, the presumptions, of law and fact, that attend the prosecution of a like action by an individual. ‘It should be well understood that only that class of evidence which commands respect, and that amount of it which produces conviction, shall make such an attempt successful.’ Maxwell Land-Grant Case, supra, page 381 of 121 U. S., 7 S. Ct. 1015, 30 L. Ed. 949, 959; United States v. Iron Silver Mining Co., 128 U. S. 673, 677, 9 S. Ct. 195, 32 L. Ed. 571, 573; United States v. Des Moines, etc., Company, supra, page 541 of 142 U. S., 12 S. Ct. 308, 35 L. Ed. 1099, 1108.”

One of these rules is that one seeking the aid of a court of equity to set aside such an instrument must move without undue delay. The government, at the time of the third enlistment, had in its possession the record of at least one of the former enlistments, and both of the former discharges. No facts are alleged, or proven, excusing the delay for more than ten years after the happening of these events, and more than ten years after the death of the soldier, in suing to cancel the certificate for the alleged fraud.

Up-to the time of filing of defendant’s answer,'praying cancellation of the certificate, no. act of defendant, its officers or agents, repudiating the certificate, is shown. Indeed, their action tends to a ratification, rather than a repudiation. The soldier served as long as his health would permit, and was honorably discharged. Indeed, he would doubtless have been permitted to fulfill his ambition, and do battle for his country, had not his health failed him. He was not deprived of any of his rights flowing from his enlistment. The premium on his insurance was retained by the government, -and even now there is, in defendant’s pleadings, no tender thereof into court, or other offer to do equity, respecting same.

Under these circumstances, equitable relief such as-defendant asks should be denied. U. S. v. Stinson, 197 U. S. 200, 25 S. Ct. 426, 49 L. Ed. 724; Johnston v. Smith, 21 Tex. 722; State v. Snyder, 66 Tex. 687, 18 S. W. 106; Johnson v. Llano County, 15 Tex. Civ. App. 421, 39 S. W. 995; First Herman on Estoppel, § 196; Kennedy v. Bender (Tex. Civ. App.) 140 S. W. 491; Galliher v. Cadwell, 145 U. S. 369, 12 S. Ct. 873, 36 L. Ed. 738; Penn Mut. Life Ins. Co. v. Austin, 168 U. S. 687, 18 S. Ct. 223, 42 L. Ed. 626; Twin-Lick Oil Co. v. Marbury, 91 U. S. 587, 23 L. Ed. 328; Schlawig v. Purslow (C. C. A.) 59 F. 848, 849.

4. 26 Corpus Juris, page 1120 (45) (2), reads as follows: “Intent to Induce Action in General. There can be no redress for misrepresentations made without intent to induce the particular action taken by the hearer, and a fortiori there can be no recovery for representations of a casual nature made without intent to induce any action whatsoever.”

An examination of those cases eited in the footnotes to which I have had access does not disclose that the facts therein are exactly as they are in this ease. I believe, however, that the quotation correctly states the law applicable to this case. I think that the government has no* standing to set aside this certificate of insurance upon the facts which exist in this ease, i. e., that this soldier did not make the untrue statements with respect to his health and his previous enlistment in order to obtain, or for the purpose of obtaining, this insurance. He made the untrue representations as hereinbefore found for one purpose only, and that was to enter the army to do combat for his government.

I think the foregoing presents insurmountable difficulties in the way of the cancellation of this certificate of insurance by the government. It follows -that the equitable relief prayed for by the government should be denied.

5. The only remaining question is whether or not plaintiffs are entitled to judgment upon the verdict of the jury, finding that the soldier, Madie Hayman, is dead, and that he died on October 12,1918.

While no insurance premiums were paid after the soldier’s discharge (July 10, 1918), it is shown that he was entitled to sufficient compensation, pursuant to the rating of the United States Veterans’ Bureau, to pay such premiums under the provisions of section 516, title 38, USCA, to a time subsequent to October 12,1918. So that this insurance was in full force and effect at the date of the death of this soldier (October 12, 1918) as found by the jury.

Judgment will enter that plaintiffs recover from the defendant the amounts provided for in said certificate of insurance.


text:
    UNITED STATES v. SMITH et al.
    Nos. 3546, 3844, 4339.
    District Court, S. D. Texas, Houston Division.
    March 23, 1931.
    H. M. Holden, U. S. Atty., of Houston, Tex., for the United States.
    . Heidingsfelder & Kahn, of Houston, Tex., for defendant C. H. Smith.
   KENNERLY, District Judge.

These are indictments against C. H. Smith, charging violations of the National Prohibition Act (title 27 of U. S. Code [27 USCA]).

Smith files plea of immunity or abatement, and the government demurs thereto. The claim in the plea is that on or about June 23, 1930, an indictment was returned against one Cheatham in Criminal District Court No. 2 of Harris county, Tex., charging Cheatham with violation of certain of the criminal statutes of the state of Texas, relating to intoxicating liquor. That Cheat-ham, being a federal prohibition agent, removed the prosecution of such indictment to this court, by writ of habeas corpus cum cau-sa, and that such prosecution proceeded in this court, the Honorable Joseph C. Hutche-son presiding, with the state of Texas as plaintiff and the said Cheatham as defendant, and with the criminal district attorney of Harris county, Tex., representing the state of Texas, and the United States .District Attorney for the Southern District of Texas representing Cheatham. That said Cheat-ham, upon a trial, was found guilty by a jury, and by this court sentenced to a term in the Texas state penitentiary.

The plea then proceeds in substantially the following language; “That by reason of the sustaining of the motion for writ of cum causa above set forth, the cause of the said D. R. Cheatham was .transferred to this court, and tried as aforesaid, and your defendant shows to the court that he was duly subpoenaed as a witness on behalf of the Government, the State of Texas, in said cause, which subpoena was issued on the 22nd day of July, 1930, by the Honorable L. C. Masterson, Clerk of this Court, a copy of which, is hereby attached, marked Exhibit ‘A’ for all purposes, and that in pursuance to said subpoena so served upon him, and in obedience thereto, this defendant made his personal appearance before this Court, on or about the 7th day of October, 1930, when said cause proceeded to trial, and was, by the Government represented by the State of Texas through her District Attorney, O’Brien Stevens, and the Honorable J. C. Hutcheson, Jr., Judge of this Court, questioned at length in regard to the liquor business that this defendant has been engaged in, which includes the transactions involved in the present indictment herein; and, in answer to the questions so propounded to him the defendant gave and was compelled to give, testimony, which testimony is attached hereto, marked Exhibit ‘B’ and made a part hereof as if fully set forth herein, and as shown by said testimony so given by the said C. H. Smith, he, the said C. H. Smith was in the liquor business, and had been in the liquor business for some time, including the period mentioned in the indictment; that he gave true testimony on the trial hereof, and that the testimony so given by him could be used against him upon the trial of this cause by the Government,” etc.

The United States of America was in no way a party to such cause, and the subpoena served upon defendant Smith required him to appear and testify and give evidence, and he did appear, testify, and give evidence, on behalf of the state of Texas, and not on behalf of the United States. He was cross-examined by counsel for Cheatham.

(1) Defendant claims and contends for immunity and asks abatement of the indictments under article 694 of the Penal Code of the state of Texas, reading as follows: “No person shall be excused from testifying against persons who have violated any provision of this chapter for the reason that such testimony will tend to incriminate him, but no person required to so testify shall be punishable for acts disclosed by such testimony.”

It would seem unnecessary to refer to or discuss authorities to the effect that a state statute cannot give immunity to a defendant charged in a court of the United States with violation of a criminal statute of the United' States.

(2) Defendant also claims and contends for immunity and asks abatement of the indictments under section 47 of title 27 of the U. S. Code (27 USCA § 47), which reads as follows: “No person shall be excused, on the ground that it may tend to incriminate him or subject him to a penalty or forfeiture, from attending and testifying, or producing books, papers, documents, and other evidence in obedience to a subpoena of any court in any suit or proceeding biased upon or growing out of any alleged violation of this chapter; but no natural person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing as to which, in obedience to a subpoena and under oath, he may so testify or produce evidence, 'but no person shall be exempt from prosecution and punishment for perjury committed in so testifying.”

The contention of defendant is answered by the section itself, and particularly the italicized portion. The prosecution or suit or proceeding against Cheatham was under an indictment returned by a grand jury of Harris county, Tex., for alleged violation of a statute of Texas, and was not a suit or proceeding based upon or growing out of an alleged violation of the National Prohibition Act. The most that can be said is that the state statute under which Cheatham was indicted and prosecuted is similar to the National Prohibition Act. The testimony of defendant Smith in such suit does not entitle him to immunity from prosecution by the United States in this court under- these indictments.

(3) This conclusion makes it unnecessary to decide the other questions raised in the argument and briefs of the parties.

An order will enter in each of these cases sustaining the government’s demurrer, and dismissing defendant’s plea.


text:
    HANDY v. JOHNSON et al.
    No. 348.
    District Court, E. D. Texas, Tyler Division.
    July 9, 1931.
    See, also, 51 F.(2d) 809.
    Jos. W. Bailey, Jr., of Dallas, Tex., for complainant.
    James V. Allred, Atty. Gen. of Texas, and Sidney Benbow and F. O. McKinsey, Asst. Attys. Gen. of Texas, for respondents.
   KENNERLY, District Judge.

This is a hearing in this cause, after due notice, on complainant’s application for a temporary injunction and respondents’ motion to dismiss, in connection with such application. The hearing is upon complainant’s bill and respondent’s motion to dismiss and oral argument and written briefs of counsel. The complainant is J. R. Handy, receiver of the Red River Bridge Company of Texas, under appointment of the United States District Court for the Eastern District of Oklahoma, and under appointment of this court; and the respondents are the Honorables Cone Johnson, W. R. Eli, and D. K. Martin, and who are members of, and who constitute, the highway department of the state of Texas.

For many years prior to April, 1929, the Red River Bridge Company owned and operated an interstate tollbridge spanning Red river, and crossing the boundary line between the states of Texas and Oklahoma, and collecting tolls from the public in the operation of such bridge, and since the appointment of the said Handy as receiver in April, 1929, he has had possession of, continued to operate such tollbridge, and collect such tolls.

Prior to and since the appointment of such receiver, the states of Texas and Oklahoma, acting through their respective Attorneys General and their respective highway officers, have filed, instituted, and prosecuted, and threatened to file, institute, and prosecute, various and numerous suits and actions against such bridge company, seeking to forfeit its charter rights, to enjoin it from collecting tolls for traffic passing over its bridge, to compel it to charge a lower rate of toll, if any at all, and involving many and various other matters and controversies, and, in addition, the said states of Texas and Oklahoma proposed and agreed between themselves to construct a free public bridge near to and paralleling the bridge owned by such bridge company, with the view and purpose of diverting traffic from the bridge of such bridge company, the effect of which would be to destroy the business of said bridge company! and render its property valueless. Other similar suits and actions were filed and threatened by such bridge company against such Texas and Oklahoma highway officers, particularly to prevent the building of such free bridge. Such suits pending, and threatened, involved many and intricate questions of law and fact, which, had all or a major portion of them been prosecuted to a final determination in the courts, would have caused and involved large expenditures of time and money by the said states of Texas and Oklahoma, and particularly the state of Texas and by the said bridge company and its receiver, and would have caused long and expensive delay in the settlement of the matters and issues involved therein.

On July 5, 1930, the highway department of the state of Texas and the said bridge company entered into two certain agreements in writing of that date, the forms of which were approved by the Attorney General of the State of Texas, which'two agreements I find should be construed together as one instrument and contract, whereby all of said litigation, and threatened litigation, and all of the issues involved therein, as between the highway department of Texas and said bridge company, were fully and finally compromised and settled. Copies of said agreements are attached to complainant’s bill, and are hereinafter referred to as contracts; the main features thereof being substantially as follows :

(a) The issues in the pending and threatened litigation are briefly set forth and referred to, and it is reeited that both parties are desirous of settling all such 'litigation, and making an amicable adjustment of all matters in controversy between them. It is agreed that all litigation between such parties shall be dismissed, including any and all appeals, pending cases, etc.

(b) Sueh bridge company withdraws all objections, theretofore asserted, to the highway department of Texas constructing, owning, and operating a free bridge across Red river connecting the states of Texas and Oklahoma, parallel to and near to the bridge of said bridge company.

(c) The bridge company agrees to convey to the highway department of Texas, or its nominee, its bridge structure and its approaches and the land upon which sueh approaches are located and all franchises owned by said bridge company, and also to convey to sueh highway department of Texas certain easements for right of way purposes in the state of Oklahoma. The contracts in this respect read (paragraphs 1 and 5 of the first agreement of July 5, 1930) as follows:

“And Bridge Company further agrees to convey to the Highway Department of the State of Texas, or its nominee, at a time to be hereinafter provided, the bridge structure and its approaches and the land upon which said approaches are located and all franchises owned by said Red River Bridge Company of Texas; and further,agrees to immediately upon the issuance of the^order by the Secretary of War increasing the toll rates as herein provided for and as prayed for in application filed with the Secretary of War, to convey such easement for right-of-way purposes to the Highway Department of Texas, or its nominee, as said Bridge Company may have to land on the Oklahoma side leading to said new bridge.”
“(5) The Red River Bridge Company of Texas agrees, as provided for in Paragraph 1 above, to convey to the Highway Department of Texas, or its nominee, the bridge and approaches leading thereto, and the land upon which said approaches are located, and the franchises appertaining to said bridge and its operation, as and when provided for above.”

(d) The parties agree to join in an application to be made by the bridge company to the Secretary of War for authority to have the schedule of rates for sueh bridge company increased during the time that it is contemplated sueh bridge company will operate its bridge under the provisions of said contracts, and the highway department of Texas agrees said bridge company may operate its bridge and collect tolls in operation thereof during the time agreed upon in said contract.

(e) It is further agreed in said contracts that if the Secretary of War declines to grant the application of such bridge company, and the said highway department of Texas, for an increase of tolls for sueh bridge company, sueh bridge company may have additional time over and above the period specified in such contracts, to operate its bridge at the rate of toll in effect at the date of such contracts, as would recompense it for the difference between tolls collected at the reduced rate, and the tolls that would have been collected at the increased rate which it is contemplated would be granted by the Secretary of War.

(f) The highway department of Texas also agrees that it will not hinder nor divert traffic from the bridge of the bridge company, and that it will assert no claim for any money or securities belonging to sueh bridge company or claimed by such bridge company impounded by order of any court, etc.

(g) It is provided that such contracts are to be binding upon the parties thereto, their successors, assigns, or legal representatives.

(h) Sueh contracts in part (paragraphs 1, 2, and 3 of the second agreement of July 5, 1930) read as follows:

“(1) If the Eed Eiver Bridge Company of Texas is permitted to operate its said toll bridge at the agreed and increased rate of toll for a period of fourteen months from the date of the inauguration of said increased toll rate, then, in addition to the toll to be collected by it, the Highway Department of Texas agrees to pay to said Eed Eiver Bridge Company of Texas Sixty Thousand Dollars ($60,000.00) in cash, sueh payment to be made before the new bridge and the approaches and the roads leading thereto from the Texas side are completed and opened for traffic, and simultaneously with the delivery of instruments conveying title to bridge and franchises. All moneys and bonds held by the Eeceivers to be promptly delivered to the Bridge Company.
“(2) If the Eed Eiver Bridge Company of Texas is permitted to operate its toll bridge at the agreed increased schedule of tolls for a period in excess of the fourteen months, then in that event the said Highway Departments of Texas shall be entitled to a credit on the $60,000.00 of the net toll collected by said Bridge Company in excess of said fourteen months, or at the option of said Bridge Company said $60,000.00 shall be credited with the sum of $10,000.00 for each month in excess of said fourteen months.
“(3) In the event the bridge to be constructed by said Highway Departments, with its approaches and the roads leading thereto, are completed prior to the expiration of fourteen months, as provided for herein, and said bridge is 'ready to be opened for traffic by said Highway Department, then in that event the Highway Department of Texas agrees to pay to said Bridge Company, in addition to said sum of $60,000.00, an additional $10,000.00 per month for each month or proportional fraction thereof short of fourteen months operation by said Bridge Company, or at the option of the Highway Commission, it may pay a sum equal to the three months’ average net tolls collected by said Bridge Company immediately prior to the opening of said bridge by said Highway Department of Texas for each month or proportional fraction thereof short of fourteen months operation by said Bridge Company, such sum to be paid said Bridge Company upon delivery of the instruments conveying title to said Bridge and approaches and franchises, and before the opening of said new bridge for traffic.”

Sueh contracts were duly entered into by said highway department of Texas and said bridge company, and said highway department knew at that time that the properties of the bridge company were in the hands of sueh receiver appointed by such courts, and knew that said contracts could and would not become operative until approved by this court, and it was contemplated that sueh contracts would be presented to this court for approval in order to become effective. Sueh contracts were thereafter duly and fully approved by this court, and the' receiver of this court was authorized and directed to enter into, approve, and adopt same, and he did so approve and adopt same, and sueh contracts thereby became in full force and effect arid binding upon sueh receiver, as well as said bridge company and said highway department of Texas.

When said contracts were so approved by this court, all of the litigation between said bridge company and/or its receiver and the highway department of Texas was forthwith dismissed and disposed of, in the manner agreed in sueh contracts, and sueh bridge company and/or its receiver did and performed all other things which they agreed to do and perform .under the provisions of said contracts ; and upon the faith of the representations made in said contracts that same would be carried out by the highway department of Texas, sueh bridge company and sueh receiver have materially changed its and his position, situation, and circumstances, and that of the properties under the control of sueh receiver, and this court, so as to presently and in the future conform to, meet the requirements of, and carry out, said contracts.

The gist of the charge against respondents in complainant’s bill is found in paragraphs XVIII, XIX, and XX of his bill, which paragraphs read as follows:

“XVIII. Your Eeceiver respectfully represents that notwithstanding the terms and provisions of the agreements as heretofore set out in Exhibits ‘A’ and ‘B’ attached hereto and prayed to be read as a part hereof, the Eespondents in this cause, being the present members of the Highway Commission of the State of Texas, have deliberately, unlawfully and wrongfully refused to comply with the terms and conditions of said contract, in that they have announced and communicated to your Eeceiver their determination to open the parallel free bridge located on U. S. Highway No. 75, north of Denison, Grayson County, Texas, on the first day of July 1931, and before said time or at said time they do not intend and will not pay the sum or sums of money due or to be due under the terms of the contract heretofore entered into and agreed upon.
“XIX. Your Receiver respectfully represents that to permit such breach of the contract as contemplated and intended by the Respondents hereto, will absolutely destroy the security which your Receiver has for the performance of the terms and conditions of the contracts hereinbefore- referred to, which action will cause your Receiver great and irreparable damage, for which action he has no adequate remedy at law.
“XX. Your Receiver further respectfully shows to the Court that such deliberate and unlawful action to so knowingly violate the terms of the contract heretofore entered into by and between this Honorable Court, acting through its Receiver, constitutes a knowing and willful contempt of this Honorable Court.”

1. Respondents’ motion to dismiss questions the jurisdiction of this court. It is manifest that this is not a suit in which jurisdiction is conferred upon this court by the parties being citizens of different states, etc. It is clear, however, that this court has jurisdiction because the properties of the bridge company are in the hands and custody of its receiver, and this is a suit for the protection of such properties, and to prevent a violation of contracts entered into by the receiver with reference thereto.

As stated, the bridge company and the highway department of Texas were engaged in litigation involving a franchise, and the bridge company’s right to exist and do business, and the right of the highway department of Texas to build a free bridge adjacent to the bridge of such bridge company, and involving numerous other questions, and such litigation was settled with the approval of this court in accordance with such contracts of July 5,1930. In such contracts, the bridge company and its receiver agree to sell to the highway department of Texas such bridge of the bridge company, together with its site, rights of way, easements, etc., and that, pending such sale and the construction of the f-ree bridge by said highway department of Texas, such bridge company may operate its bridge at tolls agreed upon or fixed, etc. And that such highway department will, in addition to making no claim to the tolls collected by such bridge company, pay to such bridge company the sum of $60,000 and certain other large sums provided for in such contracts. It 'is dearly set forth in such contracts that the sums to be paid the bridge company, including said sum of $60,000, by said highway department of Texas, are to be paid “before the opening of said new bridge for traffic.” It being understood that the opening of such new free bridge near by the bridge of said bridge company would destroy the business and property and the value of the property of such bridge company. Such contracts were adopted by, and became binding upon, the receiver, as well as the other parties thereto, when approved by this court.

In view of these facts, and considering this bill as supplemental and ancillary to the original bill in the receivership cause, and in said receivership, and as a proceeding to protect and preserve the properties in the receiver’s hands, and to prevent a violation of such contracts with reference to such properties, I think that this court has jurisdiction of this suit.

2. Respondents also insist that this is a suit against the state of Texas and therefore cannot be maintained in this court. They rely upon Ex parte Ayers, 123 U. S. 443, 8 S. Ct. 164, 31 L. Ed. 229, and other cases which follow the Ayers Case. This is not a suit such as was the suit in the Ayers Case, but is a suit against respondents to enjoin them from violating, to the loss and injury of complainant, a contract, lawful and binding.

It has long been the rule that individuals who hold certain offices of the state may be enjoined in equity from proceeding in an unlawful manner, or in a manner contrary to a statute, or under a void statute. Ex parte Tyler, 149 U. S. 164, 13 S. Ct. 785, 37 L. Ed. 691; Scott v. Donald, 165 U. S. 58, 17 S. Ct. 265, 41 L. Ed. 633; Missouri, K. & T. R. Co. v. Railway & Warehouse Commissioners, 183 U. S. 53, 22 S. Ct. 18,46 L. Ed. 78. Kaufman County v. McGaughey, 3 Tex. Civ. App. 655, 21 S. W. 261, 265; Terrell v. Middleton (Tex. Civ. App.) 187 S. W. 367, 369.

In the last-mentioned case, the rule is so well stated in a few words that I quote therefrom: “When a state officer aets without legal authority, he is not acting for or in the interest of the state, and a suit against him is not a suit against the state.”

I think it is not unduly enlarging the rule, if it is enlarging it at all, to hold that respondents may be enjoined and restrained from doing acts to the damage and injury of complainant, in violation of the contracts solemnly entered into by them with complainant.

3. Respondents also ask for á dismissal of this suit upon the ground of the lack of equity. It is clear that a eourt of equity, upon the application of one party to a contract, under the circumstances which exist here, will enjoin and restrain the other party from violating it. Particularly is this true where, as in this case, the property of complainant as receiver would be immediately destroyed, and complainant would have no reasonably adequate remedy for the collection of the sums of money agreed to be paid by respondents in consideration of the settlement of the litigation between respondents and such bridge company and in consideration of the conveyance of the bridge of the bridge company to respondents, etc.

4. Respondents (and the state of Oklahoma, which appears as amicus curias) also strenuously insist that the public of the states of Oklahoma and Texas are so greatly interested in the opening of such free bridge, built by the states of Oklahoma and Texas, near to the bridge of such bridge company, that it would be against public policy, and a violation of the rights of the public, to restrain the opening of said free bridge until respondents pay the sums of money, etc., which they have agreed to pay before such bridge is opened. In presenting this contention respondents forget that the contracts which are the basis of complainant’s suit and involved herein were executed in compromise and in settlement of litigation and threatened litigation which, if same had not been settled, would have resulted in long and expensive litigation and long delay in the building and opening of such free bridge, and possibly the prevention of the building of such free bridge. And that whatever rights the public now have in the matter flow out of, and are based upon, said contracts, and that in the execution of such contracts, the highway department of Texas represented and acted for the public. The public has no greater right in the opening of the free bridge than the highway department of Texas, and the right of the highway department of Texas to open such bridge is, by its own contracts, conditioned upon the payment, by such highway department, before such bridge is opened, of the sums of money which it is agreed shall be paid to such bridge company and its receiver under such contracts. Any delay, therefore, in the opening of such bridge is at the door of the highway department of Texas, and may be easily avoided by such highway department carrying out its plain agreement with said bridge company and the receiver of this court. To that end, and as an administrative order in such receivership, the receiver of this court will be directed, and is hereby directed, to use every reasonable and proper effort to bring about an amicable adjustment of this controversy, and to notify the highway department of Texas that he, as such receiver, and this eourt, stand ready to do any and all things necessary and proper to be done in and about the carrying out of said contracts.

In the meantime, however, I cannot allow the respondents, the members of the highway department of Texas, to destroy and .strike down the property in the custody of this court and its receiver, by doing • the things they have agreed not to do, i. e. by opening such freq bridge, until they have complied with such contracts, and paid to the receiver the sums of money agreed to be paid under the terms and provisions thereof. An order will enter, therefore, granting the temporary injunction prayed for by complainant in his bill.


text:
    HANDY v. JOHNSON et al.
    No. 348.
    District Court, E. D. Texas, Tyler Division.
    Aug. 6, 1931.

      Jos. W. Bailey, Jr., of Dallas, Tex., for complainant.
    James V. Allred, Atty. Gen. of Texas, and Sidney Benbow and F. O. McKinsey, Asst. Attys. Gen. of Texas, for respondents.
   KENNERLY, District Judge.

Respondents move to dissolve the temporary injunction, heretofore granted in this cause, (D. C.) 51 F.(2d) 805, upon the ground that the Legislature of Texas has enacted a law, which became effective July 24, 1931 (Acts 42d Leg. [1931], 1st Called Sess., c. 2), granting complainant the right to sue the state of Texas, and/or the Texas highway commission, upon the contracts involved herein, and further upon the ground that the public interests call for the opening of the bridge across Red river, erected by the states of Texas and Oklahoma, and generally referred to as the “free bridge.” Complainant answers that the legislative act may be invalid, or, if valid, that it does not afford complainant such remedy and relief as to justify the dissolution of the temporary injunction.

The first inquiry is as to the validity of this act.

1. Complainant suggests that the act is a local or special law, which the Legislature is prohibited from passing, under section 56 of article 3 of the Texas Constitution, or if not so prohibited, that it was passed without giving the thirty days’ notice required by section 57 of such article.

After naming a number of subjects regarding which the Legislature is prohibited from passing a local or special law, section 56 of said article uses this general language: “And in all other eases where a general law can be made applicable, no local or special law shall be enacted.”

Apparently, by this language, it is left to the Legislature to determine what is, and what is not, a local or special law, or a general law. The determination hy the Legislature that a given subject should be dealt with by a general law, and as to what is a general law, carries-much weight, and may be decisive of the question. In Smith v. Grayson County, 18 Tex. Civ. App. 153, 44 S. W. 921, 923, it is said: “And we find that it has been held that, where this prohibition applies, — i. e. no local law shall be passed where a general law can be made applicable, — it is the sole province of the legislature to determine whether or not a general law can be made applicable. State v. Hitchcock, 1 Kan. 178 [81 Am. Dec. 503]; Gentile v. State, 29 Ind. 409; State v. Tucker, 46 Ind. 355; Marks v. Trustees, 37 Ind. 155; State v. County Court of Boone County, 50 Mo. 317 [11 Am. Rep. 415] ; Davis v. Gaines, 48 Ark. 370, 3 S. W. 184; Cooley, Const. Lim. (7th Ed.) p. 200.”

It is undisputed that no notice such as is contemplated in the passage of local or special laws (section 57 of article 3, Texas Constitution) was given before the passage of this act, and it is clear that the Legislature intended it to be, and passed it as, a general act.

2. The courts, in determining whether an act is general, or whether local or special, ■will not single out one circumstance, or one provision of the act, but will consider the whole act, together with the surrounding circumstances, reasons for its passage, and the purposes to be accomplished. The viewpoint and the intention of the Legislature will be ascertained. It is certain that the Legislature, in passing this act, had in mind, considered, and was influenced by all the facts, i. e. that the Red River Bridge Company for many years operated a tollbridge across Red river, the boundary line between Oklahoma and Texas, and that the operation of such tollbridge was later taken over by complainant as receiver. That the state of Texas and its highway commission, upon the one hand, and the bridge company and its receiver, upon the other hand, became involved in serious controversy and litigation, in which there was brought in question, among other things, the rates charged by the bridge company, the franchise of the bridge company, the right of the states of Texas and Oklahoma to build the free bridge near by such toll bridge, etc. That the state highway commission (of which the present Governor of Texas was then chairman) and the Red River Bridge Company and its receiver, in good faith, and dealing with each other with utmost frankness and fairness, entered into a settlement of the controversy and litigation, which settlement is evidenced by the two contracts of July 5, 1930, referred to in the act. That the Red River Bridge Company and its receiver, in compliance with the contracts, dismissed the litigation, and caused to be made a conveyance of a portion of the property-which it was required to convey, and stands ready to comply with all the terms of such contracts. That although the contracts were approved as to form hy a former Assistant Attorney General of Texas, the present Attorney General of Texas doubts, and advises against, the validity thereof, and under the law of Texas, it had become practically impossible for the state, through its highway commission, or otherwise, to carry out its side of said contracts, particularly with respect to the payment of the sums of money required to be paid to the bridge company or its receiver thereunder. The Legislature also knew that, under the contracts, the state highway commission had obligated itself and the state of Texas, not to open the free bridge until the sums of money agreed to be paid to the bridge company and its receiver thereunder had been paid, and that this court had enjoined the members of the highway commission from opening such free bridge until such sums of money be paid. In other words, the Legislature recognized that the honor of the state of Texas and its people is involved, because the state having received the benefits under said contracts is morally bound (and I think legally bound) to perform under them. With all these facts before it, the' Legislature determined that the matters are of general interest to the people of the state, and should be dealt with by a general act, and it passed, and the Governor of Texas approved, this act.

In the ease of- Stephensen v. Wood, 34 S.W.(2d) 246; page 248, the opinion was by the Commission of Appeals on certified question, and was adopted by the Supreme Court and ordered certified. This is perhaps the latest expression of the -Supreme Court of Texas as to what is, and what is not, a local or special law. It is there said: “It seems to be contended by Stephensen that the instant law is local or special within the meaning of the above-quoted provisions of our state Constitution because its enforcement is restricted to a particular locality, and does not include all coastal waters. This contention is utterly untenable. It is the settled law in this state that a statute is not local or special within the meaning of sections 56 and 57 of article 3 of our state Constitution, . even though its -enforcement be restricted to a particular locality, if persons or things throughout the state are affected thereby, or if it operates upon a subject in which the people at large are interested. Clark v. Finley, 93 Tex. 171, 54 S. W. 343, 345; Reed v. Rogan, 94 Tex. 177, 59 S. W. 255, 257; Logan v. State, 54 Tex. Cr. R. 74, 111 S. W. 1028, 1029.”

Other eases bearing upon the question are: Unity v. Burrage, 103 U. S. 457, 26 L. Ed. 405; Knox County v. Aspinwall, 21 How. (62 U. S.) 539, 16 L. Ed. 208; Reed v. Rogan, 94 Tex. 181, 59 S. W. 255; Ste-phensen v. Wood (Tex. Civ. App.) 35 S.W. (2d) 796; Smith v. State, 54 Tex. Cr. R. 298, 113 S. W. 289, 290.

Complainant cites and relies upon the case of Vincent v. Wayland (Tex. Com. App.) 235 S. W. 1084, 1086, which was a ease involving a legislative act incorporating the city of Plainview. It will at once be seen that the facts in that case are wholly different from the facts here, in that, as stated in the opinion, the act incorporating Plainview was applicable in its terms only to that particular area within the boundaries of the city of Plainview. The cases cited in the opinion are, in the main, cases of the same character. The definition of a local act and of a special act, as given in the opinion, is as follows: “A local act is an act applicable only to a particular part of the legislative jurisdiction. A special or private act is a statute operating only on particular persons or private concerns. 36 Cyc. 986, and authorities there cited.”

I have not had access to all of the eases referred to in the footnotes in the quotation from Cye., but several of the cases cited in the footnotes seem to support the view set forth here. For instance, one of the footnotes is as follows: “Other definitions'are: 'One which relates to private matters, which do not concern the public at large.’ Hart v. Baltimore, etc., R. Co., 6 W. Va. 336, 349; Burrill L. Dict. (quoted in Allen v. Hirsch, 8 Or. 412, 423).”

Not only in the surrounding circumstances, but in the wording of the act itself, it is clearly shown that the act is of a general nature and of general interest throughout the state. In the emergency clause in section 6 of the act; it is found and stated that thousands of citizens of Texas, and of other states, are interested in the subject-matter of the legislation. Not only this, but the money is appropriated to pay any judgment recovered by the bridge company or its receiver, and the particular fund out of which such judgment is to be paid is designated.

If this was a case where, as in State v. Elliott (Tex. Civ. App.) 212 S. W. 696, 697, there was involved only the one question of granting the right to sue the state, then there might be some ground for contending that this act is a local or special law, although I do not regard the decision in the Elliott Case as being necessarily authority for the holding that an act simply giving a person the right to sue the state is a local or special law. The filing of any kind of suit against the state is a matter in which every citizen of the state is interested.

The conclusion is reached that this act is neither a local nor special law within the meaning of the Texas Constitution, but is a general law, and that it is valid.

This conclusion answers the claim of respondents that the act is not valid, because it, as claimed, grants jurisdiction to the district court of Travis county, where it had no jurisdiction before, seeks to regulate the practice in that court, and changes the method of the collection of debts, ete. I think these various provisions, mentioned by complainant, are of the same kind and character discussed in the closing portion of the Elliott Case (State v. Elliott [Tex. Civ. App.] 212 S. W. 702), where it is said: “If the state through her Legislature may grant the right to be sued, which has long since been well settled, it is not perceived why she may not also prescribe the conditions on which, and the procedure through which, that may be done. The statute here presented merely adopts an existing and familiar means of carrying out the purposes contemplated. If specific mention thereof had been omitted, leaving nothing but the bare right to sue, the same procedure would nevertheless have necessarily been followed.”

3. If, however, the act be regarded as local or special law, much can be said in support of the view that it comes within an exception to the prohibition against local and special laws contained in section 56, article 3, of the Constitution, reading as follows: “Relating to ferries or bridges, or incorporating ferry or bridge companies, except for the erection of bridges crossing streams which form boundaries between this and any other State.”

And that since the real subject-matter of the act may be held to be the erection of a bridge crossing a stream which is the boundary line between Texas and Oklahoma, the above-quoted provision of the Constitution permits the passage of such a local or special law. If this be correct, and the act is a local or special law, it is necessary then to look to see whether notice must be given under section 57. Respondents strongly insist that under the last portion of section 9 of article 8 of the Texas Constitution, the thirty days’ notice is not required to be given. This reads as follows: “And the Legislature may pass local laws for the maintenance of the public roads and highways, without the local notice required for special or local laws.”

While the above-quoted provision gives the Legislature the right to pass local laws for the maintenance of public roads and highways,-the word “maintenance” has been given a very broad meaning. In Ex parte Cooks, 61 Tex. Cr. R. 449, 135 S. W. 139, 141, the Texas Court of Criminal Appeals uses this language: “It would seem that if there was any repugnancy (and we see none) between sections 56 and 57, art. 3, and section 9, art. 8, that the expression made by the amendment in 1890 would control. Railway Co. v. Rambolt, 67 Tex. 656, 4 S. W. 356. It is insisted, however, that this clause of the Constitution limits the purposes for which local laws may be passed to the maintenance of roads already constructed, and would not authorize the passage of a statute creating a road system>. We do not think the word 'maintenance,’ as used in this section of the Constitution, was intended to be used in this restricted sense. By the use of the words 'maintenance of public roads and highways’ the framers of the Constitution had reference to maintaining a system of public roads and highways which would include all the necessary powers to provide and keep up a system of highways. Brown v. Graham, 58 Tex. 254.”

It seems beyond question that a bridge such as is involved in this controversy is necessarily a part of the publie road system, and there is much to be said in support of the view, and I strongly incline to the view that if this act is a local or special law, no notice such as contemplated by section 57 of article 3 of the Texas Constitution is required to be given. Dallas County v. Plowman, 99 Tex. 509, 91 S. W. 221.

4. Complainant also suggests that the act is contrary to the Constitution of the United States, and therefore void, because it requires or is conditioned upon the temporary injunction which complainant has obtained in this court being dismissed within a specified time, etc. I think that this is one of the conditions that the Legislature had a right to make in granting the right to sue the state, and do not think that it renders the act contrary to the Eederal Constitution.

5. This brings us to the question of the character of relief that complainant may obtain under such act.

Complainant suggests that the" relief that he, as receiver, can obtain under the act is inadequate, in that he can sue the state of Texas, and/or its highway commission, only to recover the sums of money which the state has, under said contracts, agreed to pay to the bridge company or its receiver. And that in the event such contracts are held invalid, he eannot have in such suit an adjustment of the equities, arising out of the fact that the bridge company and its receiver have, in reliance upon the performance by the state of its contracts, dismissed all of the pending suits, permitted the free bridge to be built, and conveyed to the nominee of Texas, or its highway commission, certain properties required to be conveyed under said contracts, particularly certain land in the state of Oklahoma which was conveyed to that state. If only the wording of section 1 of said act be looked to, there might be- some basis for this suggestion. But the whole act and the surrounding circumstances must be looked to. In wording the act, the Legislature had before it, as already detailed, all such circumstances, and I think it was the intention of the Legislature, in using the language- it did use in this act, to permit such a suit as would settle the whole controversy between these parties. The contracts, .on their face, show that in consideration of the money which the state of Texas agrees thereunder to pay- to the bridge company or its receiver, such bridge company and its receiver surrender valuable rights, and the Legislature knew at the time of the passage of the act that such rights had been so surrendered, and to hold that the Legislature intended to deny to complainant a suit for full relief would lie in effect to charge the Legislature •with improper motives and' unfair dealing. In former opinion, upon granting the temporary injunction restraining the opening of the free bridge, the court recognized that then, or thereafter, the enforcing of the agreement of the state and its highway commission to keep the free bridge closed until the payment by the state of the sum of money, provided in' such contracts, might result in serious inconvenience to the traveling public, and to avoid same, the receiver was instructed to use every effort to bring about a settlement and adjustment of the controversy. I regard this legislative act as the answer of the Legislature to this action of the court, and, therefore, am inclined to give, and do give,. such act a broad and liberal construction. In my opinion, such act authorizes the court in which complainant may sue to give complainant all the relief to which complainant may be entitled, either at law or in equity, except in one particular, and that is that there is to be found in section 1 of the act the following language: “Provided, however, that a writ of injunction will not lie for the purpose of closing said bridge if and when the same is opened for traffic by the dissolution of the pending injunction or otherwise. This limitation, however, shall not be construed to mean that the said Red River Bridge Company and/or J. R. Handy as Receiver, will be denied any right which either of them may have to injunctive relief or otherwise against any public official of the State of Texas, the State of Texas, or any agency thereof, for the enforcement of any judgment which may be obtained against the State of Texas or the Highway Commission, as such.”

This means that the court in which the suit may he brought by complainant cannot, prior to judgment, issue a temporary, injunction, such as this court has issued, but it is clear that complainant’s remedy and relief otherwise are not cut off, and also that after judgment, complainant may have such process as may be necessary to carry out the provisions of the final judgment or'decree, including an injunction closing the free bridge if that be necessary to give complainant full relief.

It is "also suggested that the Legislature may repeal this act. Having passed the act with all the facts before it, I deem it most unlikely that the Legislature will repeal it. Should it do so, however, it is certain that complainant would not be left without relief, either in this court or elsewhere.

In this connection, it occurs to me that this court should not, in this case, require that the remedy at law afforded complainant should be as complete and as adequate as.ordinarily required before a party is prevented from proceeding in equity, for the reason that, as hereinafter more fully pointed out, this court cannot, in this proceeding, accord complainant full and adequate relief in the sense of settling all the issues that have arisen, or will arise, in this controversy. Nor do I think this court should, under the circumstances, strictly enforce the general rule contended for by complainant, that a legal remedy in the state courts is not ordinarily regarded by the federal courts as complete and adequate'.

6. The next question is this: This court cannot give complainant relief in the form of a judgment against either the state or its highway commission, for the money owing to complainant under said contracts. This court cannot adjust the equities between complainant and the state of Texas, and/or the highway commission, if the contracts, on final hearing, are found invalid. .This court can only keep in force the temporary injunction, closing, and keeping closed, the free bridge until the state complies with its contract and pays the money agreed to be paid, or until complainant can, by the operation of the toll bridge, earn the money to which he as receiver is entitled.

Query: Should that course be followed, or should complainant be directed to proceed under this legislative act?

Neither course is altogether desirable. The desirable thing is for the state to comply with its obligation under the contracts, and thus end the matter. But, as stated, that does not seem possible tinder the conditions which have arisen. I have, therefore; reached the conclusion that the proper and better course is to dissolve the temporary injunction herein, and direct the receiver to proceed under the legislative aet, and it is so ordered.


author: OTIS, District Judge.

text:
    STOUT v. UNITED STATES. HORN v. SAME.
    Nos. 1037, 1039.
    District Court, W. D. Missouri, St. Joseph Division.
    Sept. 14, 1928.
    Goldman & Daley, of Kansas City, Mo., for plaintiffs.
    Harry L. Thomas, Asst. U. S. Atty., of Kansas City, Mo. (Roscoe C. Patterson, of Kansas City, Mo., on the brief), for the United States.
   OTIS, District Judge.

These applications are based upon that provision of the World War Veterans’ Act 1924, § 30 (38 USCA § 456) which reads as follows: “All files, records, reports, and other papers and documents pertaining to any claim for the benefits of the provisions of this chapter whether pending or adjudicated, shall be deemed confidential and privileged and no disclosure thereof shall be made except as follows * * * (b) where required by the process of a United States Court to be produced in any suit or proceeding therein pending. * * * ”

It is the contention of the plaintiffs that the last proviso of the above-quoted section vests the United States court with authority to require the production before trial of files, records, etc., pertaining to the claim of a veteran. After careful consideration I have not been able to find this meaning in the statute.

The primary purpose of the statute quoted was to insure the nondisclosure by the Veterans’ Bureau of the contents of any records pertaining to a veteran’s claim. Such records are not to be disclosed to any one except in rare and specified instances. One of those instances is where a process lawfully issued by a United States court requires the production of such records. But the process must have been lawfully issued. Whether it is lawfully issued- depends upon the provisions of law outside of the quoted statute. It was not the purpose of that statute to give to the United States District Court any power that it did not theretofore possess.

At common law a court could not at the instance of .one party require his adversary to produce before the trial any part of that adversary party’s private papers and documents. In equity such a power did exist- and was made operative by a bill of discovery. Early in the history of the country the Congress by statute invested a somewhat similar power in law courts. That was by what is now section 724 of the Revised Statutes (28 USCA § 636).

This section provides that: “In the trial of actions at law, the courts of the United States may, on motion and due notice thereof, require the parties to produce books or writings in their possession or power, which contain evidence pertinent to the issue, in cases and under circumstances where they might be compelled to produce the same by the ordinary rules of proceeding in chancery. If a plaintiff fails to comply with such order, the court may, on motion, give the- like judgment for the defendant as in cases of nonsuit; and if a defendant fails to comply with such order, the court may, on motion, give judgment against him by default.”

Section 724 of the Revised Statutes, however, does not give to the United States court power to require a party to produce papers, documents, etc., before trial, but only' at the trial, and then only under certain restrictions fixed by law. Carpenter v. Winn, 221 U. S. 533, 31 S. Ct. 683, 55 L. Ed. 842.

I know of no other authority than that conferred ” by section 724 under which a United States court may compel the production of papers and documents. That section as it has been construed does not avail the plaintiffs here. The section relied on by them, will not bear the 'construction which they give it.

The applications are denied.


author: SANBORN, District Judge

text:
    TIERNEY v. UNITED STATES (two cases).
    District Court, D. Minnesota, Second Division.
    June 2, 1931.
    Streissguth & Fordyce, of New Ulm, Minn., for plaintiffs.
    L. L. Drill, U. S. Atty., and Joseph W. Finley, Asst. U. S. Atty., both of St. Paul, Minn., for the United States.
   SANBORN, District Judge

(after stating the facts as above).

These actions are at law to recover upon a policy of war risk insurance issued to Desmond Tierney, deceased, during his lifetime and while in the military service of the United States, which policy lapsed for nonpayment of the premium due July 1, 1919.

It is claimed by the plaintiffs that, prior to the lapse of the policy, the insured became totally and permanently disabled, thus maturing the policy.

Attached to the motion papers is an affidavit of Mi*. Streissguth, stating that it is impossible for the plaintiffs to properly prepare for the trial of these actions without' being afforded access and an opportunity to examine the files and records of the United States Veterans’ Bureau with reference to the ease of Desmond Tierney, who died in 1927. He also states that between the date of Tierney’s discharge in 1919 and his death in 1927, he was in the United States Veterans’ Hospital for the period of at least three years, where he was examined by physicians employed by the government, who filed their reports with the Bureau; that he was also examined by his own physician, Dr. Striekler, of Sleepy Eye, Minn., who filed his reports with the Veterans’ Bureau; and that Dr. Striekler is now dead. That the files also contain a large number of affidavits and other statements made by Tierney and other persons in support of his claim for compensation, which affidavits, as Mr. Streissguth believes, contain valuable data and other information concerning Tierney’s physical and mental condition subsequent to the date of his discharge, and that no copies of the affidavits or statements were retained by the deceased. That the officials of the Veterans’ Bureau have refused to permit any examination of the medical reports or other files pertaining to Tierney’s case, and that it is essential to the proper preparation of this case that the plaintiffs, their attorneys and medical experts, have an opportunity to examine the files and records of the Veterans’ Bureau.

In the absence of some special statutory provision, this court is powerless, in an action at law, to grant such a motion as this, requiring the production of documents in advance of the trial, for examination. Carpenter v. Winn, 221 U. S. 533, 31 S. Ct. 683, 55 L. Ed. 842. Title 28, U.S.C., § 636 (28 USCA § 636), regulates proceedings in a court of law for obtaining inspection of pertinent documents in the possession of an adversary at the time of trial, hut not before. Carpenter v. Winn, supra.

A court of equity still retains jurisdiction to compel discovery in aid of an action at law in a proper ease. Colgate v. Compagnie Francaise (C. C.) 23 F. 82; Carpenter v. Winn, supra; 18 C. J. 1062. The statement in Corpus Juris is as follows: “In the federal courts, the statutes making parties competent witnesses, and empowering the court in actions at law to compel the parties to produce books and writings have removed the necessity of resorting to bills of discovery in ordinary cases, but have not altogether abolished the jurisdiction to entertain them. Accordingly while jurisdiction of a bill for discovery in aid of an action at law will ordinarily be declined, and the mere equity to a discovery will not support a bill for relief obtainable at law, a bill of discovery may be maintained where the remedy at law by reason of special circumstances is inadequate, as where it is needed to discover who is the proper person to be made a defendant at law, or where it is desired to have a production and inspection of books and papers before trial, not obtainable at law under the statute.”

See also, Hughes, Federal Practice, vol. 6, § 4005.

It is contended by the plaintiffs, however, that title 38, U.S.C., § 456 (38 USCA § 456), gives to the court the power to compel" the United States Veterans’ Bureau to permit an inspection of documents in such a ease as this. That section provides, so far as here material, as follows:

“All files, records, reports, and other papers and documents pertaining to any claim for the benefits of the provisions of this chapter, whether pending or adjudicated, shall be deemed confidential and privileged and no disclosure thereof shall be made except as follows:
“(a) To a claimant or his duly authorized representative, as to matters concerning himself alone, when in the judgment of the director such disclosure would not be injurious to the physical or mental health of the claimant;
“(b) Where required by the process of a United States court to be produced in any suit or proceeding therein pending; or when such production is deemed by the director to be necessary in any suit or proceeding brought under the provisions of this chapter. * * * ”

It is claimed by tbe plaintiffs that tbe language in subparagraph (b), “where required by the process of a United States court to be produced in any suit or proceeding therein pending,” enlarges the powers of the United States courts with respect to compelling disclosure in advance of trial in such cases as these. The language used is not susceptible of that construction. The section makes the files and records of the Bureau confidential and privileged and prevents any disclosure except as provided. The words “where required by the process of a United States edurt” must be held to relate to such process as the United States court was authorized to issue at the time this section became effective, and ' not to constitute a grant of additional power.

It should perhaps be further" stated that, under existing practice, the court may not permit an inspection of files and records which amounts merely to a “fishing expedition.” See Colgate v. Compagnie Francaise, supra; Keaton v. Kennamer (C. C. A.) 42 F.(2d) 814; Carpenter v. Winn, supra.

In view of the fact that the court has no power to grant the motion of the plaintiffs, there is no necessity of passing upon the sufficiency of the showing made; but the statements contained in the affidavit are very broad and general, do not point out the particular documents desired, and their per-tinency is left only to general inference.

One decision of the United States District Court for the Western District of Washington, Northern Division, filed December 24, 1930, in the ease of Massey v. United States of America, 46 F.(2d) 78, sustaining the views of the plaintiffs, has been called to my attention, as has also a decision by Judge Otis, of the United States District Court for the Western District of Missouri, to the contrary. Judge Otis made his order September 14, 1928, in the cases of Clyde E. Stout, Plaintiff, v. United States of America, Defendant (Rexie Horn, Administratrix of the Estate of Zuland H. Horn, Deceased, Plaintiff, v. United States of America, Defendant) 51 F.(2d) 815.

There may be good reasons why the plaintiffs in cases of this kind should be permitted, in advance of the trial, to examine files and records in the Veterans’ Bureau, but the courts, without the authorization of Congress, are powerless to grant such inspection, on motion.

It is ordered that the motion be, and the same is hereby, in all things denied.