author: SANBORN, Circuit Judge.

text:
    GORDON v. UNITED STATES.
    (Circuit Court of Appeals, Eighth Circuit.
    April 4, 1925.)
    No. 6783.
    1. Criminal law 1090(5)— Motion to quash indictment, heard on affidavits, not reviewabie, in absence of bill of exceptions.
    Denial of motion to quash indictment, heard on affidavits, is not reviewabie, in absence of duly authenticated bill of exceptions containing such affidavits.
    2. Criminal law <®=»1054(3) — Circuit Court of Appeals is not required to review denial of motion for directed verdict, in absence of exception. *
    Circuit Court of Appeals is not required to review denial of motion for directed verdict, in absence of exception to that ruling.
    3. Bankruptcy ¡S=s>495 — Perjury <®=j33(I) — Evidence held to sustain conviction for failing to list and declare assets, and for perjury before referee in bankruptcy.
    Evidence held, to sustain conviction for failing to list and declare assets in schedules in bankruptcy, and- for perjury in testimony before referee in bankruptcy.
    4. Perjury <®=34(l)— Clear and direct testimony of one or more witnesses is sufficient to sustain conviction for perjury.
    Clear and direct testimony of one or more witnesses, or testimony of one witness and convincing corroborative circumstances, or indubitable facts absolutely incompatible with truth of testimony charged to be false, is sufficient to sustain conviction for perjury.
    In Error to the District Court of the United States for the District of North Dakota; Andrew Miller, Judge.
    Abraham Gordon, otherwise known as Abe Gordon, was convicted of fraudulently failing to list and declare certain assets in his schedules of his assets in bankruptcy, and for fraudulently concealing such assets from his trustee and of perjury in his testimony before referee, and he brings error.
    Affirmed.
    Francis Murphy, of Fargo, N. D., for plaintiff in error.
    Seth W. Richardson, U. S. Atty., of Fargo, N. D. (William C. Green, Asst. U. S. Atty., of Fargo, N. D., on the brief), for the United States.
    Before SANBORN, Circuit Judge, and POLLOCK and SYMES, District Judges.
   SANBORN, Circuit Judge.

The grand jury in the court below on January 29, 1923, found an indictment in two counts against the defendant Abraham Gordon, a bankrupt, in the first count for fraudulently failing to list and declare in his schedules of his assets in bankruptcy and for fraudulently concealing from the trustee of his estate in bankruptcy three certificates of deposit aggregating and worth $2,500, issued to him by the Union National Bank of Minot, N. D., and in the second count for committing the crime of perjury in his testimony before the referee in bankruptcy relative to these certificates. He was tried and convicted on 'each of these counts, and sentenced to imprisonment in the penitentiary at Leavenworth for one year and six months. He sued out this writ of error, and his counsel make two complaints of the proceedings at his trial: First, that the court below refused to grant his motion, based on affidavits, to quash the second count of the indictment on the ground that there was no competent testimony or evidence before the grand jury that found the indictment of the commission of the offense charged in that count-; and, second, that the trial court denied the motion of the defendant at the close of the trial to instruct the jury to return a verdict in his favor.

The denial of the motion to quash, however, is not reviewabie in this court because that motion was founded on affidavits and those affidavits are not embodied in a bill of exceptions authenticated by the judge who denied the motion. Chicago Great Western Ry. Co. v. Le Valley, 233 F. 384, 387, 147 C. C. A. 320; Hildreth v. Grandin, 97 F. 870, 872, 38 C. C. A. 516; Ingram v. United States, 5 F.(2d) 940 (8th C. C. A., opinion filed April 17, 1925). Nor is this court required to review the denial of the motion for a directed verdict, for no exception was taken to that ruling. Southern Pacific Co. v. Arnett, 126 F. 75, 81, 61 C. C. A. 131.

We have nevertheless carefully read the evidence at the trial and the briefs of counsel, and these facts are admitted or conclusively proved: On December 2, 1921, the defendant Gordon was doing business under the name of the Gordon Clothing Company at Minot, N. D., and he kept his account with the Union National Bank of that city in that name. On that day he borrowed of that bank $2,500, and gave to it therefor his five promissory notes, for $500 each, secured their payment by an assignment of his rents, caused this $2,500 to be credited to himself under the name Gordon Clothing Company by the bank, drew his cheek as Gordon Clothing Company on the bank for $2,500, bought with that cheek two certificates of deposit of that bank for $1,000 each, and one for $500, running to himself under the name A. Gordon, indorsed them, and delivered them to the bank. Mr. Persons, the president of the hank, testified that he made out the slip for the credit to him as the Gordon Clothing Company of the $2,500 borrowed; that 10 or 15 minutes thereafter he returned with the three certificates of deposit which he had indorsed, handed them to him, and said, “You can put these away with my other collateral ; I want the bank to be safe all the time, and I don’t intend to use the money right now;” and that he (Mr. Persons) understood that he was taking these certificates as collateral security for Gordon’s notes for the $2,500 and for other amounts.

On January 16, 1922, an involuntary petition in bankruptcy was filed against Mr. Gordon, and on February 8,1922,- he was adjudicated a bankrupt. He did not list or describe the three certificates' of deposit or their value in his schedules of his assets in the bankruptcy proceedings. He was called and sworn to testify to the truth in his examination before the referee in bankruptcy at the first meeting of his creditors on March 2, 1922, and at a continuation of that examination on April 6, 1922, he testified that the three certificates of deposit which he obtained from the bank and handed to Mr. Persons oh December 2,1921, were not his, but were his wife’s; that some one in the bank made a mistake in making them out in his name; that his wife gave him the cash for them at just that time; that he went to his wife and got $2,500; that he gave that cheek to his wife; that he got credit to his account and drew it out; that he drew cheek on the bank; that she gave it to him as cash; that she said she did not need it, and he might just as well take it; that he owed the bank, and took the certificate of deposit, and left it in the bank, because his wife was going away for medical attention; that he did not turn over the certificates of deposit; that he gave his wife cheek for cash, and she gave him cash; that he signed the cheek; that he did not remember whether he gave the bank a check, too; that he paid bills with the cash she gave him; that he drew only one cheek on December 2, 1921, and that was to his wife, and he got the currency from her; that he gave her $2,000 in September, which he got from Kopald and Gordon, and gave her for her operation, and she still had it in December, because she had not used it.

“Q. Didn’t you just tell us that you borrowed $2,500 from your wife in December? A. She gave it to me, so I could take certificates of deposit and put it away for her.
“Q. You mean you used it to buy G. D.’s, this currency that you got from your wife? A. I don’t just exactly remember whether I used the check or currency.
“Q. Did you issue any cheeks on December 1st or 2d for $2,500 ? A. I don’t think I issued this check; I drew cheek right on the bank here.
“Q. And that cheek? A. I am sure I did-n’t draw a check.
“Q. Drew it at the bank at the same time you borrowed the money? A. I did not.
“Q. You went home first? A. Sure.
“Q. What did you go home for? A. Well, because I wanted to get the wife.
“Q. Why did you borrow it from the bank, if you had money — if your wife had money? A. I didn’t know she had money. That was given her for medical attention.
“Q. In the first place, you didn’t know she had it? A. But I didn’t know whether she used it.”

It was upon this testimony of Mr. Gordon before the referee that the claim of the government that he committed perjury was based. At the trial below he testified in his own behalf that the three certificates of deposit were his wife’s and not his; that on December 2,1921, after he had borrowed the $2,500, given his notes for it, and received-credit for it in his account with the bank, he went home to his wife and got $2,000 in cash, which she had in the house, took it to Mr. Balerud, the assistant cashier of the bank, drew his cheek on the bank for $2,500, gave it to Balerud, and told him he wanted certificates of deposit for that amount, told Mr. Persons that he just got $2,000 from his wife, which he was going to use for meeting his obligations, and that he would have certificates of deposit for the $2,500 he borrowed of the bank, and leave it with Mr. Persons; and^ that he told his wife he put away $2,-500 for her. He again testified that the certificates were his wife’s, and that that was the reason he did not list them in the schedules of his assets. He also testified that he gave his wife the $2,000 she had in the house in September, 1921. On eross-examination he testified that, just after December 2,1921, he paid about $1,000 or $1,200 taxes by check; that he did not deposit in the bank the $2,000 he obtained from his wife at the time he received it, but deposited it in different amounts subsequently, when he needed credit in the bank to meet his cheeks; that he never held out currency in that way prior to December 2, 1921, but people were suing him, and he kept the cash, and put it in the bank as his checks came in. He further testified that, when he gave the certificates of deposit to Mr. Persons, he told him the certificates were his wife’s; that he got the money from his wife, and was going to use that money to pay his obligations, and was not going to use the money he borrowed from the bank, but that he would put that money in certificates of deposit for her interest; and that when Mr. Balerud handed him the certificates he told him they should have been made out to his wife, and added, “Never mind, it is all right; I will just have to indorse it and put it in the bank anyhow.” He testified that his testimony before the referee that he gave his wife a cheek for the money he obtained from her was not the truth, and that he never gave her such a cheek. He testified that he never testified before the referee to many statements which the stenographer who took his testimony testified from her transcript of the testimony that he had testified to.

Mr. Persons, the president of the bank, testified that, at the time Mr. Gordon brought the certificates of deposit to him and left them with him, he did not say anything to him as to their belonging to any one, but himself, and that he said nothing about their being in his wife’s name: that the certificates remained in the bank; that one day Mr. Gordon wanted to cancel them, but Mr. Persons told him he could not do that .without canceling the notes; that this conversation was about the time Mr. Gordon became bankrupt; that the first time Mr. Gordon claimed the certificates were his wife’s was early in the spring of 1922. Mr. Balerud, the assistant cashier of the bank, testified that he drew the three certificates and delivered them to Mr. Gordon; that the latter gave him a cheek of the Gordon Clothing Company on the bank to pay for them; and that he said nothing to him about the certificates belonging to his wife.

Counsel for the defendant argues that the court fell into an error in its denial of his motion for a directed verdict because (1) the rule is that the testimony of two witnesses, or of one witness and corroborating circumstances, is indispensable to sustain a conviction for perjury; aDd (2) that the evidence to sustain such a conviction must be incompatible with the innocence of the defendant, and incapable of explanation on any other reasonable hypothesis. Conceding that there was a time when a rule prevailed in many courts to the effect that the testimony of two witnesses, or of one witness and corroborating circumstances, was essential to sustain a conviction for perjury, that rule has long since been relaxed, and such testimony is no longer essential to warrant a verdict of perjury.' Clear and direct testimony of one or more witnesses, or the testimony of one witness and convincing corroborating circumstances, or indubitable facts absolutely incompatible with the truth of the testimony charged to be false, may be ample to sustain a verdict for perjury. United States v. Wood, 39 U. S. (14 Pet.) 428, 437, 438, 439, 440, 441, 442, 10 L. Ed. 527; Hashagen v. United States, 169 F. 396, 399, 94 C. C. A. 618; Kahn v. United States, 214 F. 54, 56, 130 C. C. A. 494. And the testimony of Mr. Persons and Mr. Balerud as to the persons by whom, to whom, and for whom the cheek for $2,500 and the certificates of deposit were issued, and the defendant’s many contradictions of his own testimony, and the cheek of $2,500 and the certificates leave no doubt that the substantial evidence in this case is irreconcilable with the innocence of the defendant, and incapable of explanation on any other rational theory than that of his guilt.

The judgment below must therefore be, and it is, affirmed.


source: Caselaw Access Project

author: MANTON, Circuit Judge. LEARNED HAND, District Judge

license: Public Domain

text:
    AMERICAN BRAKE SHOE & FOUNDRY CO. v. NEW YORK RYS. CO. In re EIGHTH AVE. R. CO.
    (Circuit Court of Appeals, Second Circuit.
    December 2, 1924.)
    No. 79.
    Street railroads <©=>58 — Receiver of purchaser of street railway property on foreclosure held not entitled to retain proceeds of fire insurance policy.
    Where street railway property, leased under agreement requiring insurance to be carried in favor of lessor, who was obligated to use proceeds of insurance in rebuilding, was destroyed by fire, but insurance fund was deposited in special account under agreement of all parties interested and only partly used in rebuilding, and lessee’s property and leasehold was sold under mortgage foreclosure held, that receiver of purchaser which also owned substantially all claims against lessee, after termination of lease at direction of court, was not entitled to retain such fund as against lessor, nor entitled to deduct cost of improvements placed on property.
    Appeal from the District Court of the United States for the Southern District of New York.
    Suit in equity by the American Brake Shoe & Foundry Company against the New York Railways Company. On application of the Eighth Avenue Railroad Company, as owner and lessor of certain railroad properties in possession of Job E. Hedges, receiver of defendant, appointed in such suit, for payment to it of fund held by receiver. From an order denying application (291 F. 107), the Eighth Avenue Railroad Company appeals.
    Order reversed.
    Michel Kirtland, of New York City, for appellant.
    Cotton & Franklin, of New York City (Thurlow M. Gordon, óf New York City, of counsel), for appellee Sheeran.
    Before HOUGH and MANTON, Circuit Judges, and LEARNED HAND, District Judge.
   MANTON, Circuit Judge.

On November 23, 1895, the Eighth Avenue Railroad Company leased its railroad and other property including a parcel of real estate upon which there was a car barn on West side of Eighth avenue, between Forty-Ninth and Fiftieth street, in New York City, to the Metropolitan Railway Company for a period of 99 years. This lease provided for insurance against fire, which was payable to the lessor in the event of loss. The lessee went into possession and within a few years thereafter changed the motive power from horses to underground electricity, and later leased its entire system of railroads, including the property in question to the New York City Railways Company. This latter company and the Metropolitan Company went into receivership in 1907. In July, 1900, the Metropolitan Street Railway Company leased the southerly half of the car barn to the New York Electric Vehicle Transportation Company for a term of 25 years, with the privilege of cancellation after September 1, 1910, on two years’ notice. On January 28, 1907, a fire occurred on the Forty-Ninth street side and destroyed a portion of the building leased to the New York Transportation Company, the damaged area being about 300 feet by 94 feet. Thereafter the New York Transportation Company roofed over one story. The second and third stories which were burned were never rebuilt. The insurance under the terms of the lease was carried for the account of the Eighth Avenue Railroad Company, and later with the Guaranty Trust Company as trustee, under a mortgage, as their interest may appear. The lease provided that in ease of fire loss, all insurance moneys received by the lessor should be applied to “restoring, rebuilding or otherwise improving the leased property.” The loss occurring from this fire was adjusted at $71,437, and this amount was collected and deposited in a special fund. On -July 27, 1907, the five parties interested entered into an agreement reciting that each had certain rights and interest in and to the proceeds of the insurance. It was agreed that the Guaranty Trust Company as depository should hold the proceeds of the insurance, investing or reinvesting the same and to pay out the proceeds or any part thereof upon the joint written order of the Metropolitan Street Railway Company and its two mortgagees. Each mortgage included the leasehold interest- of the Metropolitan Street Railway Company. The Eighth Avenue Railroad had issued no mortgage on its property. Between August 20, 1908, and May 20, 1909, there was withdrawn from said deposit on certificate of the receivers of the Metropolitan Street Railway Company, supported by affidavits, expenditures made in restoring, rebuilding,' and otherwise improving said property, in the aggregate sum of $25,-022.14, leaving a balance of $46,402.41 on which interest was allowed from time to time, and which remained in this fund. By an order of the District Court on July Í5,1919, the appellee was directed not to adopt the lease of the Eighth Avenue Railroad Company to the Metropolitan Street-Railway Company and to return and deliver to the Eighth Avenue Railroad Company at midnight July 31, 1919, all of its real property, railroad, and certain other property therein mentioned; but certain questions were left for future determination. This fund was held as a special deposit by the appellee, and it is the contention of the appellant that it should have been returned to it pursuant to the provisions of the aforesaid lease and the order of the court. The failure to pay over the fund resulted in the present petition, which was denied, and an order entered thereon.

It was held below that the New York Railways Company acquired the interest of the lessee (Metropolitan Railway Company) in the Eighth avenue lease, the court stating that the records show that it was sold in the foreclosure, sale of the Metropolitan mortgages, but retained by the Metropolitan receivers, and that the New York Railways Company have acquired substantially all of the bonds of the Metropolitan Company and substantially all tort and general claims against said company, and as such creditor of the Metropolitan Company in 1916 acquired this fund. The obligations of the five-party agreement referred to were: The depository (Guaranty Trust Company) to collect and hold all the proceeds of said insurance on all of the buildings and that it should pay out of these said proceeds, or any part thereof, the moneys upon the joint written order of the parties of the second (Metropolitan Street Railway Company), fourth (Guaranty Trust Company), and fifth (Guaranty Trust Company) parts. There is nothing contained in this agreement which in any way conflicts with the terms of the Eighth avenue lease. Under the lease, the insurance money, after the expenditure of such as was used in rebuilding, was payable to the lessor. The title and ownership of the moneys subject to this cost of rebuilding was in the appellant. In only one way could the leasing railways use these moneys, and that, the use thereof for rebuilding the destroyed premises. The interest of the New York City Railway Company was as subtenant, and its position was merely to see that the moneys were so applied. The Metropolitan Street Railway Company was the tenant of the appellant, and when it leased to the New York Railways Company, this leasehold interest was included in the two mortgages of the Guaranty Trust Company and the Morton Trust Company. It was the duty of each mortgagee to see that the insurance moneys were applied as provided under the lease, and until so applied held as a special fund as an incident to the real property which had been destroyed.

The right of all parties was protected by the five-party agreement of June 27, 1907; the interest of each was recited therein. Provision was made for its collection by one of the parties as depository and as trustee under the mortgage, and withdrawal was provided for on the order of the Metropolitan Company and the two mortgagees. To use the moneys otherwise than as thus agreed upon would be tantamount to a conversion thereof. The fact that the New York City Railway Company and the Metropolitan Companies went into receivership and the insurance moneys came to the receivers appointed by the District Court does not alter the situation. The receivers assumed the burden of these companies. They did apply a portion of the moneys for rebuilding and were reimbursed by receivers’ certificates which were issued upon proper affidavits showing that the purpose of the withdrawal of the money was for “restoring, rebuilding and otherwise improving” the property during the period stated in the affidavits. These receivers had possession and operated the railroads for four years. It appears that their accounts were approved in March, 1916, and the balance then on deposit in this special fund was delivered to the New York Railways Company, and remained with it until the present receiver, the appellee, was appointed. This receiver did not expend any part of this special fund. He was entitled to interest thereon as long as the rental was paid, under the lease, to the Eighth Avenue Railroad Company. After the appellee became receiver, on March 22, 1916, this fund of $46,402.41 was transferred to him. On August 3, 1920, he withdrew $17,316.89 representing the interest on the fund to December 31, 1919, and in December, 1920, under the direction of a letter by counsel for the appellant, he withdrew the principal and some 'remaining interest without prejudice to the rights of the parties; the total of the three sums withdrawn being $66,217.12. The appellant was entitled to the fund of $46,-412.41 and the interest allowed thereon from-October 1,1918 (which was the date the last rental was paid) and received by the ap-pellee amounting to $2,497.82, making a total of $48,900.23.

These withdrawals of the funds as made were pursuant to the agreement of June 27, 1907. At no time was the New York Railways Company at liberty to mingle this money with its own funds. The deposit of the moneys in a special fund was for the benefit of all five parties to the agreement, and at no time did either party thereto release or relinquish any of its rights to the moneys so deposited. After the expenditure of a part thereof for restoring, rebuilding, and improving the destroyed portion of the building, the unexpended balance could not have been included in the foreclosure sale under the Metropolitan mortgages in 1911. All that was sold at that time was the tenants’' rights under the lease, for that is all that was mortgaged. All the work of restoring and rebuilding the property seems to have been done in conformity with the terms of the lease, and the unexpended balance, for reasons sufficient to the parties, was not used in rebuilding purposes.

We do not regard the agreement of June 27, 1907, in any respect ambiguous, and if we are to judge the intention of the parties by their course of conduct and what subsequently transpired, we think their acts were in conformity with these conclusions. This practical interpretation of this agreement by the parties is helpful in arriving at the conclusions we here announce. Insurance Co. v. Dutcher, 95 U. S. 269-273, 24 L. Ed. 410; Old Colony Trust Co. v. Omaha, 230 U. S. 118, 33 S. Ct. 967, 57 L. Ed. 1410; Willard v. U. S., 262 U. S. 494, 43 S. Ct. 592, 67 L. Ed. 1086.

Since the mortgagees under the Metropolitan mortgages acquired no lien on these funds through the mortgage foreclosure sale, they could pass no interest .or title thereon to the New York Railways Company; nor did the latter company acquire the fund as a ..creditor of the Metropolitan Street Railway Company, and this for the reason that at no time did the Metropolitan Railway Company require any interest in the insurance moneys except for the purpose of rebuilding after the fire. When withdrawals were made from the fund in restoring the real property, it was a return from real property to real property, and the balance unexpended at all times had all of the incidents of jjeal property. At no time did the appellant release any rights therein.

It is admitted by the appellee that the New York Railways Company did not expend the balance of the money originally constituting the fund for the purpose of restoring or rebuilding. We find nothing in the record justifying the claim that this fund in question was the property of the Metropolitan Railway Company or that it attempted to sell it- as its property. It passed through the receivership as part of the leasehold property. When the lease of November 23, 1895, was terminated by the order of the court on July 31,1919, the appellee ceased to have any interest in this special fund, and it should then have been returned to the appellant with its other real estate.

It is contended by the appellee that when the appellant got back this property, it was of greater value than when it was turned over to the possession of the Metropolitan Street Railway Company because of certain improvements whieh were made thereon by the New York Transportation Company. This subtenant was not required to make improvements of any kind, but was given the right to make, at its own expense, any reasonable alterations, additions, or improvements required to properly fit the premises for its business. It did make improvements, but never made- any claim therefor. The lease of November 23, 1895, provides that all improvements of any kind on the property belonged to the appellant. The expenditures made by the Metropolitan Railway Company and its receiver were in no way for rebuilding that part whieh was destroyed by fire. These expenditures were apparently made for its business necessities. The money so expended could not be deducted from the fund in question.

The petition of the appellant should have been granted. Order reversed, with costs.

LEARNED HAND, District Judge

(concurring). I agree that the contract of June 27, 1907, did not change the rights of the parties to the fund, but merely gave control over it to the mortgagees and the lessee so that the fund might be disbursed at their discretion. That must, however, be done with due regard to the rights of all concerned, and- we should look to what those rights were. In the lease of the premises by the Eighth Avenue Company, “the lessor agrees that in ease of loss all insurance moneys payable to or received by it shall be applied to the restoring, rebuilding or otherwise improving the leased property.” This gave the lessee and its successors the right to insist upon the application of any such moneys to that purpose; the lessor was not free to withdraw them during the period of the lease; on the contrary, it was bound to use them on the premises unless the lessee consented to release them. If the lessee did the repairs, it got the right of reimbursement out of the fund pro tanto, having discharged the lessor’s obligation and not being by virtue of its interest under the lease a mere volunteer.

The lien so arising extended, however, only to the lessee’s advances upon the buildings actually damaged, and even then only in so far as the lessee restored these to their former condition. For instance, the lessee got no lien for the expense of changing the building on plot 1 B into a five-story building or of rebuilding that on plot 1 C. It did get a lien upon so much of the fund as was paid by the insurance companies for damage to 1 B because rebuilding was also restoring. But any additional stories it put on this building was a voluntary payment not chargeable to the lessor. • Similarly of plot 1 C. As to plot 1 A, the parties agreed to change its character. The lien there should extend only to so mueh as was put on the plot to restore it to the condition whieh was agreeable to the lessee. The balance should go to the lessor, because the lessee released his right during the term to the use of the original building by accepting a lower one. The lessee’s contention that it may -bring all its payments into hotchpot is unfounded.

The lessor urges that the lessee should not be allowed to assert any rights arising from advances made by the sublessee of plot 1 C. This would depend upon whether these were made voluntarily by the sublessee, or whether under agreement with the lessee by which the sublessee could eventually charge them on the lessee’s account. If they were the first, they were in effect advances by the lessee; if the second, the lessee may not claim subrogation to payments which it did not make. The record is not clear about this, and the fact would have had to be ascertained if my views had prevailed.

Therefore, although I agree that the order should be reversed, I think that the lessee was probably entitled to a substantial sum, and that the cause should be sent back to ascertain how much.


author: FOSTER, Circuit Judge.

text:
    McPARLAND-SCANLON LUMBER CO. v. J. J. NEWMAN LUMBER CO.
    (Circuit Court of Appeals, Fifth Circuit.
    May 21, 1925.)
    No. 4477.
    1. Sales <§=>333 — On breach by buyer, notice of resale not required.
    There is no absolute requirement that, on breach of a contract of sale by the buyer, the seller must have given him notice in order to bind him by a resale.
    2. Trial <§=>420 — Motion for directed verdict waived by subsequent introduction of evidence.
    A motion by defendant for directed verdict at the close of plaintiff’s evidence is waived by the subsequent introduction of evidence in defense.
    3. Appeal and error <§=>977(1) — Ruling on motion for new trial not assignable as error.
    In the federal courts the granting or refusing of a new trial is within the sound discretion of the judge, and error cannot be predicated on his decision.
    In Error to the District Court of. the United States for the Southern District of Mississippi; Edwin R. Holmes, Judge.
    Action at law by the J. J. Newman Lumber Company against the McParland-Scan-lon Lumber Company. Judgment for plain*tiff, and defendant brings error.
    Affirmed.
    Stone Deavours and Henry Hilbun, both of Laurel, Miss., for plaintiff in error.
    W. S. Welch and Ellis B. Cooper, both of Laurel, Miss., for defendant in error.
    Before WALKER, BRYAN, and FOSTER, Circuit Judges.
   FOSTER, Circuit Judge.

In this ease the record is somewhat unsatisfactory and it is difficult to determine exactly what errors are relied upon for reversal, because of the failure to follow rule 11 of this court, whieh requires that, when error is alleged to the admission or rejection of evidence, the assignment of errors shall quote the full substance of the evidence admitted or rejected, and when error is alleged to the charge of the court the assignment of errors shall set out the part referred to totidem verbis. The issues presented to this court may be best understood by a brief statement of the ease as appearing from the pleadings and the evidence in the record.

Referring to the parties as they appeared in the District Court, it appears that plaintiff, the J. J. Newman Lumber Company, sold to the Baldwin Lumber Company some 500,000 feet of hardwood lumber, consisting of poplar, oak, and gum, at prices, respectively, of $72.50, $50, and $42.50 per 1,000 The contract was made May 10, 1920, and is in the simple form of an order, calling for delivery at once, 'payment to be in cash, less 2 per cent, discount. Subsequently, and before the entry of this suit, the Baldwin Lumber Company changed its name by amendment of its charter to the MeParland-Sean-lon Lumber Company; the corporation, however, remaining the same. Plaintiff has mills at Hattiesburg and Sumrall, Miss., The greater portion of the lumber had already been manufactured, and was piled on the yards at these mills. The balance was to be manufactured in the course of the delivery. It was in contemplation of the parties that defendant would send its inspectors to one or the other of the mills and there take up and receive delivery of the lumber in carload lots, each carload to be invoiced at delivery, and payment to be made within 15 days. No lumber was taken up between September-, 1920, and December 1, 1921, at which time all the lumber covered by the contract had been manufactured and piled. Two carloads of lumber were taken up and delivered on December 21 and 24, 1921, respectively. These should have been paid for within 15 days from the invoice date, but checks in payment were not received by plaintiff until the 30th of January. On January 20, 1922, an amendment was made to the contract, by which defendant purchased 100,000 feet additional of poplar at $30 per 1,000, and agreed to take up two carloads per month on the old contract, payment of all invoices to be made in cash less 2 per cent, within 15 days up to $30 per 1,-000, and for the balance defendant to give its 60-day acceptance.

In January, 1922, before receiving the cheeks in payment for delivery in December, plaintiff declined to permit defendant to load any more lumber, but in February, 1922, delivery was resumed, and defendant loaded out three carloads of poplar, which completed delivery of the additional 100,000 feet sold on January 20th. This lumber was not paid for within 15 days as agreed, and plaintiff elected to treat the contract as breached by defendant, declined to deliver any more lumber, and subsequently, in April, 1922, sold the lumber remaining on its yards, without notice to defendant, at prices of $20 per 1,000 for both poplar and gum. The oak contracted for had previously been delivered and paid for. Suit was then brought in the chancery court of Jones county, Miss., to recover damages for the breach of the contract. This suit was removed to the District Court for the Southern District of Mississippi, and the pleadings were recast. The declaration alleged the failure of defendant to take up 117,613 feet of poplar and 137,627 feet of gum, and prayed for damages based on the difference between the contract price and the price at which the lumber was sold, aggregating $9,271.28. Defendant pleaded the general issue, and gave notice of special matter to be offered under the pleading. The case went to the jury, and resulted in •& verdict for plaintiff for $8,095.16.

It was the theory of the defense that the plaintiff had waived the terms of the contract as to payment within 15 days, and that by'declining to allow the defendant to take up the balance of the lumber the plaintiff had breached the contract. The court, in submitting the case, charged the jury in substance that, if they found the contract had been breached by defendant, they should then assess the damages on the basis of the difference between the contract price and the highest market value of the lumber between the time the contract was breached and the time the lumber was sold, and that plaintiff, if the contract was breached, was not obliged to notify defendant of the resale of the lumber before making it. We gather from the assignment of errors and the argument that this latter portion of the judge’s charge is objected to.

There are eases holding that, on a breach of a contract off purchase, notice of intention to resell is necessary, based on the theory that the defendant is entitled to' an opportunity to comply with his contract,' or to protect himself against fraudulent or collusive sales by the vendor at a price less than the actual market value of the commodity. Doubtless many eases may arise making .the application of this rule just and equitable, but the weight of authority is to the contrary. Williston thus states the rule: “In some cases it has been held that, in order to bind the buyer by a resale, the seller must have given notice of his intention to make a resale. But by the weight of authority there is no such absolute requirement.” Williston on Sales (2d Ed.) par. 548.

In McDonald Cotton Co. v. Mayo, 86 Miss. 426, 38 So. 372, a ease practically on all fours with this ease, the Supreme Court of Mississippi recognized the rule requiring notice, but held that under the facts of the ease at bar notice was unnecessary. In this ease there was evidence for plaintiff tending to show that the prices at which the lumber was resold were the market prices at the time. There was also evidence for defendant that the market price for gum was $20 per 1,000 and for poplar $30 per 1,000 in the months of February, March, and April, 1922, during which period the breach occurred and the resale was made. It is evident from the amount of the verdict that the jury accepted defendant’s figures as showing the true market price. Whether the decisions be followed one way or the other, it is evident that no injury was suffered by defendant from the charge.

In the course of the trial a witness for plaintiff, Hurst, its sales manager, testified as to conversations had with representatives of the defendant, urging them to take up the lumber more rapidly, and correspondence between the parties was introduced; the letters from defendant endeavoring to excuse its failure to accept delivery more promptly because of its financial condition — the fact that they were already overstocked, and had no customers in sight. In a very general way error is assigned to the admission-of this evidence over objection, on the ground that the amendment of January 20, 1922, created a new contract, and evidence of breaches of the old contract was inadmissible. The amendment referred to did not create a new contract. It merely amended the old contract as to terms of payment and to make more certain the times of delivery. The evidence was admissible as showing the course of conduct between the parties, and on the question of good faith in plaintiff in subsequently declining to make further delivery and in selling the lumber on hand, and also, perhaps, to explain why the contract had not been sooner declared at an end, and the lumber sold more promptly, in order to further minimize losses. On the whole, this evidence was rather favorable to defendant, as showing plaintiff had waived previous breaches of the contract relative to acceptance and payment. If there could be any doubt as to the admissibility of this evidence, it is quite evident the error was harmless and not reversible.

At the close of plaintiff’s case defendant moved for a directed verdict, which was denied. Defendant did not elect to stand on the motion, but introduced further evidence, particularly the testimony as to market value. It is elemental that, when a defendant does not elect to stand upon a motion to direct at the close of the plaintiff’s ease, and introduces testimony in defense, the motion is considered Waived. Furthermore, in this case it is plain that plaintiff had made a prima facie case sufficient to go to the jury.

Error is also assigned to the refusal of the court to grant a new trial. The granting or refusing of a new trial in federal courts is within the sound discretion of the judge, and error cannot be predicated on his decision.

The judgment is affirmed.


author: HOUGH, Circuit Judge.

text:
    KENNEBEC BOX CO., Inc., v. O. S. RICHARDS CORPORATION. UNITED STATES v. JOHNSTON.
    (Circuit Court of Appeals, Second Circuit.
    March 16, 1925.)
    No. 188.
    Receivers @=>154(1) — Expenses of receivership held entitled to priority over taxes due United States, not secured hy lien.
    Expenses of receivership' of insolvent estate have priority over taxes due United States, not secured by lien under Rev. St. § 3186, notwithstanding section 3466, since there is no fund for payment of insolvent’s debts until receivership expenses are paid.
    Appeal from the District Court of the United States for the Eastern District of New York.
    Suit by the Kennebec Box Company, Inc., against the O. S. Richards Corporation. From an order of the District Court (299 F. 871), granting a motion of John B. Johnston, receiver, to establish priority of receiver’s debts over claim of United States for taxes, the United States appeals.
    Affirmed.
    See, also, 295 F. 418; 299 F. 874.
    Mr. Johnston, as receiver and appellee m this matter, officially holds some $28,000, which is insufficient to discharge the expenses of the receivership. There is no fund wherewith to pay creditors of Kennebec Company existing at the time bill was filed. The circumstances from which this situation has resulted are fully set forth in the statement of facts prefixed to the appeal of Lee S. Richards in this same case, in which opinion will be filed cotemporaneously with this decision. 7 F.(2d) -.
    The present proceeding began by Mr. Johnston, as receiver, praying the court’s instructions upon the following facts: In March, 1923, the United States filed a claim for taxes for the year 1920 against the above-named Kennebec Box Company, Inc. It nowhere appears in the record what kind of a tax this was. In January, 1924, the United States filed further claims for taxes in ’the sum of $88,253.95, being additional income tax for the years 1918-1920, both included. We are not informed as to when these taxes were assessed and are unaware of any steps taken.by the Treasury Department to notify any one of their existence or collect them in any way, except by presentation to the receiver as above noted. The court below held that the money in the receiver’s hands should be devoted first to the payment of debts of the receivership, and as there was nothing for the creditors of the Kennebec Box Company, so there was nothing from which the United States could or should be paid. From this order the government appealed.
    Ralph C. Greene, U. S. Atty., and William A. De Groot, Asst. U. S. Atty., both of Brooklyn, N. Y. (Nelson T. Hartson and Frank J. Ready, both of Washington, D. C., of counsel), for the United States.
    Zalkin & Cohen, of New York City (S. Marshall Kronheimer and Emanuel Fiehand-ler, both of New York City, of counsel), for respondent.
    Before HOUGH, MANTON, and HAND, Circuit Judges.
   HOUGH, Circuit Judge.

The record before us is an insufficient groundwork for some of the arguments at bar. It is impossible to argue therefrom that the United States has or ever had a lien upon'any fund in respect of these taxes, or any of them, so that R. S. § 3186, as amended (Comp. St. § 5908), may apply. That statute declares that a tax shall be “a lien in favor of the United States from the time when the assessment list was received by the collector,” etc. There is no evidence whatever as to when any assessment list was received by anybody. We know nothing except that a demand for some unexplained kind of tax was made by the United States in March, 1923, and that further demands for income taxes were made later.

This estate is not in bankruptcy, but it is insolvent, and therefore R. S. § 3466 (Comp. St. § 6372), is the only available statute. That declares that “whenever any person indebted to the United States is insolvent * * * the debts due to the United States shall be first satisfied.” Thus the sole question before us is whether debts of the insolvent secured by no lien shall be paid ahead of expenses created by the receivership, because such debts are for taxes due to the United States. So far as shown, this is the first attempt on the part of the United States to assert a claim for payment out of a fund ahead of the expenses incurred in the production thereof. There being no question of lien before us, we find no rights asserted under any form of execution, as by distress or the like. The United States comes into court and asserts in substance that, when the officers of the court .have accumulated a fund insufficient to defray the expenses of its accumulation, the Treasury is entitled to take that fund and leave the court expenses unpaid.

For purposes of argument only it may be admitted that out of any fund available for paying the debts - of an insolvent debtor United States taxes are to be paid first, and in full. But it is elementary that what is available to pay the debts of any debtor must be the property of that debtor. When these claims were presented, that property had all been consumed in the production of the present fund, which equitably belongs to the persons who made it, and they made it, not by giving credit to the insolvent Box Company, but by giving credit or rendering services to one or another of the various receivers herein. It may well be, as urged by the appellee, that the doctrine of United States v. Oklahoma, 261 U. S. 253, 43 S. Ct. 295, 67 L. Ed. 638, as followed and interpreted in Equitable, etc., Co. v. Connecticut, etc., Co. (C. C. A.) 290 F. 712, and Strain v. United States Fidelity, etc., Co. (C. C. A.) 292 F. 694, disposes of appellant’s claim; but we prefer to put decision on the ground that, thoroughly admitting priority in the United States under the statute in any fund available for the payment of this insolvent’s debts, there is and can be no claim in favor of even the most preferred of creditors until there is some fund available for the payment of all creditors of the insolvent.

There is no such fund; consequently the order below was right, and is affirmed.


author: RUDKIN, Circuit Judge.

text:
    GILE v. DUKE, Supervisor of Banking of Washington, et al. JENKS v. SAME.
    (Circuit Court of Appeals, Ninth Circuit.
    June 1, 1925.
    Rehearing Denied August 3, 1925.)
    Nos. 4544, 4545.
    1. Banks and banking ®=»49(2) — Banking officer of state may sue anywhere to enforce assessment on stockholders of insolvent bank.
    The banking officer of a state is the statutory successor of an insolvent state bank, and may sue in any state to enforce assessment on stockholders.
    2. Banks and banking <S=47(I) — Determination of banking officer of state of necessity of assessment conclusive.
    Determination of the banking officer of a state that an assessment on stockholders of a state bank is necessary is conclusive on the courts, and cannot be controverted by stockholders sued on the assessment.
    3. Trial <§^69 — After motion for nonsuit, plaintiffs may be allowed to supply defects in proof.
    Plaintiffs may be permitted to supply defects and omissions in proof after interposition of motion for nonsuit.
    4. Appeal and error <s=»330(2) — Successors in office pending appeal may be substituted as parties.
    Where plaintiffs sued as banking officers of the state to enforce assessment on stockholder, and pending his appeal their offices were abolished, and the powers and duties thereof vested in other officers, they may be substituted.
    In Error to the District Court of the United States for the District of Oregon; Robert 5. Bean, Judge.
    Two actions by John P. Duke, as Supervisor of Banking of the State of Washington, and another, one against H. S. Gile, and the other against Walter T. Jenks. Judgments for plaintiffs, and defendants bring error.
    Affirmed.
    See, also, 291 F. 282.
    William H. Trindle, of Salem, Or., for plaintiffs in error.

      Kelly & MacMahon, of Tacoma, Wash., and Bowerman & Kavanaugh, of Portland, Or., for defendants in error.
    Before GILBERT, HUNT, and RUDKIN, Circuit Judges.
   RUDKIN, Circuit Judge.

The Scandinavian-Ameriean Bank of Tacoma was a banking corporation organized under the laws of the state of Washington. The original capital of the bank was $200,000, but this was increased on June 27, 1919, to the sum of $400,000, and again on April 15, 1920, to the sum of $1,000,000. The plaintiffs in error Gile and Jenks subscribed for the increased capital to the amount of $5,000, each paying therefor the sum of $125 per share. The subscriptions were in writing and the purchase price was paid in full before the delivery of the stock in April, 1920. The par value of the shares was $100 each. On January 15, 1921, the commissioner of banking of the state closed the bank and proceeded to liquidate its affairs. In the latter part of February, 1921, he levied an assessment of 100 per cent, on each share of the capital stock of the bank, in conformity with the statute, and gave notice of the assessment to all stockholders, including the plaintiffs in error. Payment was refused, and thereafter two actions were commenced in the court below to recover the sum of $5,000 from each of the plaintiffs in error as the superadded or double liability imposed on stockholders of banking corporations under the Constitution and laws of the state. The two actions were consolidated for trial in the court below, and have been submitted together to this court. The court below awarded judgment against each plaintiff in error, and these judgments are now before us for review.

The principal contentions of the plaintiffs in error are: First, that the banking officer of the state is like a mere chancery receiver, and cannot maintain an action in a foreign jurisdiction; and, second, that there was no competent proof of the bank’s insolvency. These two questions have been determined adversely to the plaintiffs in. error by repeated decisions of the Supreme Court of the state and the Supreme Court of the United States. Hanson v. Soderberg, 105 Wash. 255, 177 P. 827; Ætna Casualty & Surety Co. v. Moore, 107 Wash. 99, 181 P. 40; German-American Mer. Bank v. Foster, 116 Wash. 313, 199 P. 314; German-American Mer. Bank v. Ripley, 124 Wash. 322, 214 P. 160; Relfe v. Rundle, 103 U. S. 222, 26 L. Ed. 337; Bernheimer v. Converse, 206 U. S. 516, 27 S. Ct. 755, 51 L. Ed. 1163; Converse v. Hamilton, 224 U. S. 243, 32 S. Ct. 415, 56 L. Ed. 749, Ann. Cas. 1913D, 1292. Under these authorities the banking officer of the state is the statutory successor of the bank for the purpose of winding up its affairs, and may sue in any jurisdiction, and the determination of the banking officer that an assessment is necessary is conclusive upon the courts and cannot be controverted by stockholders.

It is further contended that the stock was issued to the plaintiffs in error before the increase was authorized, and that the subscriptions to the stock were therefore void. But, waiving the question whether such a defense is open to them after having received dividends on the stock, it clearly appears from the testimony that the stock was in fact delivered after the increase was authorized, although bearing an earlier date. The further contention that the court erred in permitting the defendants in error to supply certain defects and omissions in the proof after a motion for a nonsuit was interposed is, of course, without merit.

The plaintiffs below, at the time of the entry of the judgments in question, were the supervisor of banking of the state of Washington and the director of taxation and examination of the state of Washington. Since the writs of error were sued out these offices have been abolished by legislative enactment, and the powers and duties of the director of taxation and examination and supervisor of banking are now vested in C. W. H. Davis as director of efficiency of the state of Washington and H. C. Johnson as supervisor of banking of the state of Washington. The latter have moved to be substituted as defendants in error in the place and stead of the original defendants in error. This motion is granted, and the judgments are affirmed. Sumpter Lumber Co. v. Sound Timber Co., 257 F. 408, 168 C. C. A. 448.


text:
    GARDNER v. MELLON, Secretary of the Treasury, et al.
    (Circuit Court of Appeals, Ninth Circuit.
    May 18, 1925.
    Rehearing Denied June 8, 1925.)
    No. 4543.
    Injunction <§=>75 — Priest, not .possessing per. mit to purchase wine for sacramental purposes, held not entitled to injunction prohibiting interference with purchases.
    Under National Prohibition Act, tit. 2, §§ 3, 5, 6 (Comp. St. Ann. Supp. 1923, §§ 10138%aa, 10138%bb, 1013814c), and sections 1110, 1120 and 1124 of Regulations 60, Revised March, 1924, relating to withdrawal of wine for sacramental purposes, priest, who did not hold, permit to purchase wine at time of hearing, held not entitled to enjoin Prohibition Director and other federal officers from interfering with his procurement of wine for sacramental and like religious rites, pending investigation.
    Appeal from the District Court of the United States for the Southern Division of the Southern District of California; William P. Jamesj Judge.
    Suit by Karl H. M. Gardner to enjoin Andrew W. Mellon, as Secretary of the Treasury, and others, from preventing or interfering with plaintiff’s procurement, possession, and use of wine for sacramental and like religious rites. Prom an order denying a temporary injunction, plaintiff appeals.
    Affirmed.
    Karl H. M. Gardner, of Los Angeles, Cal., in pro. per.
    Samuel W. McNabb, U. S. Atty., and J. Edwin Simpson, Asst. U. S. Atty., both of Los Angeles, Cal., for appellees.
    Before GILBERT, HUNT, and RUDKIN, Circuit Judges.
   RUDKIN, Circuit Judge.

The present suit was instituted by the appellant as priest of the Holy Rosikrucian Church of Los An-geles, against the Prohibition Director and other federal officials to restrain them-from preventing or interfering with the procurement, possession, use, or distribution of wine, by the appellant, for sacramental or like religious rites. Prom an order denying a temporary injunction, this appeal, is prosecuted.

Section 3, tit. 2, of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138%aa) provides that liquor for nonbev-erage purposes and wine for sacramental purposes may be manufactured, purchased, sold, bartered, transported, imported, exported, delivered, furnished, and possessed, but only as therein provided, and that the commissioner may, upon application, issue permits therefor. Section 6 (section 10138%e) provides that all permits to manufacture, prescribe, sell, or transport liquor may be issued for one year and shall expire on the 31st day of December next succeeding the issuance thereof; provided, that the commissioner may without formal application or new bond extend any permit under the act or laws now in force after August 31 in any year to December 31 of the succeeding year. The same section further provides that no one shall manufacture, sell, purchase, transport, or prescribe ‘any liquor without first obtaining a permit from the commissioner so to*do, with certain exceptions not material here, and, in the event of the refusal by the commissioner of any application for a permit, the applicant may have a review of his decision before a court of equity in the manner provided in section 5 of the act (section 10138%bb). Sections 1110 and 1120 of Regulations 60, revised March, 1924, prescribe the form and contents of applications for permits, and section 1124 provides that if the Director is satisfied that the application bears the genuine signature of a rabbi, minister of the gospel, priest, or duly authorized officer of a church or congregation, and, unless he has reason to believe that the wine is not intended for use for sacramental purposes or like religious rites, he will authenticate the application.

It appears from the amended complaint in this case that the Prohibition Director for California, under date of March 13, 1922, notified the bonded wineries of the state that the method of procurement and distribution of sacramental wines by the Holy Rosikru-eian Church was under investigation and requested them not to fill applications for withdrawals of wine until the investigation was completed and until they received further notice that the church was within the law in receiving such sacramental wines. It does not appear from the amended complaint that the appellant had a valid permit for the purchase of wine at the time of the hearing in the court below. Indeed, it does not appear that he ever procured such a permit; but, if he did, the same had expired long prior to the application for an injunction. It is manifest, therefore, that the appellant has mistaken his remedy. He must first apply for a permit on the form and in the manner prescribed by the regulations, and if the permit is refused, he may then have a review of the decision of the commissioner in a court of equity. Whether in connection with such a review the court may issue a temporary injunction, we need not now inquire, because it is manifest from what we have said that the amended complaint and the accompanying affidavits utterly fail to establish a right to injunctive relief.'

The order of the court below is therefore affirmed.


text:
    EQUITABLE TRUST CO. OF NEW YORK et al. v. CASSIA COUNTY et al.
    (Circuit Court of Appeals, Ninth Circuit.
    May 25, 1925.
    Rehearing Denied June 29, 1925.)
    No. 4547.
    1. Waters and water courses ©=j222 — Status of liens on lands granted under Carey Act question of local law.
    Act June 11, 1896, §1 (Comp. St. § 4686), authorizing a state accepting a grant of lands under the Carey Act (Comp. St. § 4685) to create liens on such lands for the cost and expense of their reclamation, is merely an enabling act, and the construction of statutes enacted thereunder and the status of the liens created are determined by the law of the state as declared by its highest court.
    2. Taxation ©=3510 — Reclamation lien under law of Idaho subject to lien for taxes.
    Under the law of Idaho, the reclamation lien created by C. St. Idaho 1919, § 3019, is subject to the lien for taxes on the same land.
    Appeal from the District Court of the United States for the Southern Division of the District of Idaho; Drank S. Dietrich, Judge.
    Suit in equity by the Equitable Trust Company of New York and others against Cassia County and another. Decree for defendants, and complainants appeal.
    Affirmed.
    Oliver O. Haga, McKeen D. Morrow, and J. L. Eberle, all of Boise, Idaho, for appellants.
    John I. Burgess and C. W. Thomas, both of Burley, Idaho, for appellees.
    Before GILBERT, HUNT, and RUDKIN, Circuit Judges.
   RUDKIN, Circuit Judge.

The Act of June 11, 1896 (29 Stat. 434 [Comp. St. § 4686]), provides that under any law heretofore or hereafter enacted by any state, providing for the reclamation of arid lands, in pursuance and acceptance of the terms of the grant made by section 4 of the Act of August 18, 1894 (28 Stat. 422 [Comp. St. § 4685]), commonly known as the Carey Act, a lien or liens is hereby authorized to be created by the state to which such'lands are granted and by no other authority whatever, and when created shall be valid on and against the separate legal subdivisions of land reclaimed, for the actual cost and necessary expenses of reclamation and reasonable interest thereon from the date of reclamation until disposed of to actual settlers: Provided, that in no event, in no contingency, and under no circumstances shall the United States be in any manner directly or indirectly liable for any amount of any such lien or liability, in whole or in part.

a Section 3019 of the Idaho Compiled Statutes of 1919 provides that any person, company, or association, furnishing water for any tract of land, shall have a first and pri- or lien on said water right and land upon which said water is used for all deferred payments for said water right; said lien to be in all respects prior to any and all other liens created or attempted to be created by the owner and possessor of said land; said lien to remain in full force and effect until the last deferred payment for the water right is fully paid and satisfied according to the terms of the contract under which said water right was acquired. Section 3097, Id., provides that all real and personal property subject to assessment and taxation must be assessed at its full cash value for taxation for state, county, city, town, village, school district, and other purposes, with reference to its value at 12 o’clock meridian on the second Monday of January in each year, and all taxes so levied shall be a lien upon the property assessed, and a lien upon any other property of the owner thereof, and all taxes levied upon improvements shall be a lien upon the land upon which the same shall stand, except as otherwise provided, which several liens attach as of the second Monday in January of each year and shall only be discharged by the payment, cancellation, or rebate of the taxes as provided by law. Other sections of the Compiled Statutes provide for the sale of property for delinquent taxes, and section 3263 provides that the tax deed conveys to the grantee the absolute title to the land described therein, free of all incum-brances, except any lien for taxes which may have attached subsequently to the assessment.

The only question presented by the record is the question of priority between a general tax lien and a reclamation lien under the above statutory provisions. The court below accorded priority to the former, and the trustee and other representatives of the bondholders have appealed.

Both the tax lien and the reclamation lien are creatures of the state of Idaho, and all questions as to their validity and priority must be determined by reference to the laws of that state. There seems to be some contention that the reclamation lien finds support or sanction in the laws of the United States, but such is not the ease. The act of Congress referred to is simply an enabling act. The states were powerless to create liens on public lands until the title had passed from the general government, or at' least until the title had been earned, without the consent of the United States, and the act of Congress was passed for the purpose of removing this restriction on the powers of the states. The act does not attempt to do more. It creates no lien, and denies no power to the states after the title has passed from the general government; and, considering the question as one of local law only, the Supreme Court of the state of Idaho has held that the tax lien is superior and prior to the reclamation lien. Continental & Commercial Trust & Savings Bank v. Werner, 215 P. 458. The decisions- of the highest court of the state are controlling upon this court, unless the statutes as thus 'construed impair some right guaranteed by the Constitution or laws of the United States, and the claim that the state of Idaho has been deprived of, ór has bargained away, the sovereign power of taxation, finds no support in the record.

The decree is therefore affirmed.


author: HAND, Circuit Judge.

text:
    In re J. H. SMALL SHOE CO.
    (Circuit Court of Appeals, Second Circuit.
    February 2, 1925.)
    No. 180.
    1. Courts <§=266 — Process of District Court does not run beyond its borders.
    Process of District Court does not run beyond its borders.
    2. Bankruptcy <§=II — Court has ancillary jurisdiction to enforce orders of another bankruptcy court.
    Independently of Bankruptcy Act, § 2, subd. 20, as amended February 5, 1903 (Comp. St. § 9586), any bankruptcy court has ancillary jurisdiction to enforce orders of another bankruptcy court on application made to it.
    3. Bankruptcy <§=l I — Order of bankruptcy court held conclusive in ancillary proceedings in another district.
    Order of bankruptcy court directing bankrupt to deliver concealed assets to trustee is conclusive against bankrupt in ancillary proceedings in another district to enforce such order.
    Petition for Revision of Proceedings of the District Court of the United States for the District of Connecticut; Harland B. Howe, Judge.
    In the matter of J. H. Small Shoe Company, bankrupt. On petition of Joseph H. Small to revise an order of the District Court (4 F.[2d] 618), directing him to turn over bankrupt’s assets to trustee.
    Petition to revise dismissed and order affirmed.
    See, also, 1 F.(2d) 416.
    Slade, Slade & Slade, of New York City (Benjamin Slade, of New York City, of counsel), for petitioner.
    Lesser Bros., of New York City (William Lesser and Samuel L. Miller, both of New York City, of counsel), for respondent.
    Before ROGERS, HOUGH, and HAND, Circuit Judges.
   HAND, Circuit Judge.

The petitioner, Joseph H. Small, was the president of the bankrupt, which was adjudicated in the Southern District of New York in 1921. The trustee made application to the court to compel Small to turn over certain funds of the bankrupt alleged to have been concealed by him from her after her appointment. The matter was referred to the referee as. special commissioner, who reported that-Small had concealed $20,000. On February 19, 1924, the District Court for the Southern District of New York on her motion passed an order directing Small to deliver $10,000 so concealed by him within ten days after the entry of the order. It proved impossible to catch Small in New York, and thereupon, on the 19th of April, 1924, the District Court in Connecticut issued a rule nisi requiring Small to show cause why the order of the District Court for the Southern District of New York should not be made the order of the District Court of Connecticut. Small appeared in the proceeding and the Connecticut court found in accordance with the order of the Southern District of New York that he had in his possession $10,-000 of the bankrupt’s assets to which the trustee was entitled, which he was directed to turn over to her. Thereupon he filed his’ petition to revise that order, and so the ease comes to us.

We of course recognize that the process of a District Court does not run beyond its borders (Staunton v. Wooden, 179 F. 61, 102 C. C. A. 355), but independently of the amendment of 1903 to subdivision 20, § 2, of the Bankruptcy Act (Comp. St. § 9586), any court of bankruptcy has ancillary jurisdiction to enforce the orders of another upon application made to it (Babbitt v. Dutcher, 216 U. S. 102, 30 S. Ct. 372, 54 L. Ed. 402, 17 Ann. Cas. 969).

The question at bar is whether the order of the Southern District of New York is conclusive against the respondent therein in such ancillary proceedings, the petitioner maintaining that the ancillary jurisdiction of the Connecticut court extended only to the entertainment of the proceedings de novo. Granting, he says, that the Connecticut court had the right to entertain the proceedings, he was entitled to a new hearing, in which the proceedings in New York were not conclusive upon him.

The petitioner cites no authority in support of his contention, and it amounts to no less than an assertion that the order of the bankruptcy court is not res judicata. It has been held to have that effect in the case of the allowance or disallowance by a referee in bankruptcy of a claim. Ullman, Stern & Krausse v. Coppard, 246 F. 124, 158 C. C. A. 350 (C. C. A. 5); Breit v. Moore, 220 F. 97, 135 C. C. A. 573 (C. C. A. 9); Hargadine-McKittrick D. G. Co. v. Hudson, 122 F. 232, 58 C. C. A. 596 (C. C. A. 9); Clendening v. Red River Valley Nat. Bank, 12 N. D. 51, 94 N. W. 901. Our own decision in Re Osborn’s Sons, 177 F. 184, 100 C. C. A. 392, 29 L. R. A. (N. S.) 887, extended the rule to claims filed and allowed in bankruptcy. It is quite true that none of these cases concern proceedings of the character here in question, but no one disputes that the New York court of bankruptcy had equal jurisdiction over them as a referee has over the allowance or disallowance of a claim, and we do not hesitate to decide that the two situa^ tions are precisely the same.

We treat this case as it is presented, without in any way indicating our opinion that it was necessaty for the trustee to proceed by independent petition at all. Perhaps she might have applied directly to the Connecticut bankruptcy court for an order of commitment against Small for his contempt of the order of the New York bankruptcy court. On the contrary, she pursued the milder course of treating the order of the New York court as a decree inter partes, which it certainly was. Her petition invited as issues only the existence of the New York decree and its jurisdictional regularity. These Small might have disputed, but he did not. At least, this was the safer course even if it was not necessary. It was unquestionably sufficient.

Petition to revise dismissed. Order affirmed.


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    THOMPSON & DALEY v. PANAMA R. CO.
    (Circuit Court of Appeals, Fifth Circuit.
    May 21, 1925.)
    No. 4473.
    1. Damages <®=jI90 — Evidence held not to sustain a claim of frustration of contract.
    Evidence helé not to sustain a claim for large damages, based on an allegation that plaintiffs had a contract for sale of a vessel, consummation of which was prevented by illegal acts of defendant.
    2. Damages <©=>91 (2) — Exemplary damages not recoverable for acts done in good faith without maiice.
    Exemplary damages are not recoverable for acts done in good faith, under legal advice, and without malice.
    In Error to the District Court of the United States for the Canal Zone; John D. Wall-ingford, Judge.
    ' Action at law by Thompson & Daley against the Panama Railroad Company. Judgment for plaintiffs, from which they ■bring error.
    Affirmed.
    Chauncey P. Fairman, of Christobal, Canal Zone, for plaintiffs in error.
    John O. Collins and Newton A. Becker, both of Ancon, Canal Zone, for defendant in. error.
    Before WALKER, BRYAN, and FOSTER, Circuit Judges.
   FOSTER, Circuit Judge.

In this case it appears that in January, 1921, the steamship Agron, then in the waters of the Canal Zone, was seized and subsequently sold under admiralty process to plaintiffs in error, Frank Y. Thompson and James Daley, hereafter referred to as plaintiffs, doing business as Thompson & Daley. The sale covered the vessel, her tackle and apparel, as is usual in admiralty sales. Prior to her seizure defendant in error, the Panama Railroad Company, hereafter referred to as defendant, which as one of its numerous activities, necessary in that part of the world, is engaged in the storage and sale of bunker coal, had sold and delivered to the Agron some 350 tons of coal, which had not been paid for. The Governor of the Panama Canal is also president of the defendant, and the engineer of maintenance of the Canal Zone is its vice president. By virtue of an executive order, in the absence of the Governor, the engineer of maintenance acts as Governor. The Governor is in command of the Zone police. At the time of the sale notice was given to prospective purchasers that the vessel owed debts and would not be allowed to depart unless they were paid. Demand -was made by defendant on the plaintiffs for the return of the coal, which was refused, and thereafter, aeting under an order of the Aeting Governor and pursuant to an opinion given by the United States attorney of the Canal Zone, defendant sent its agents and laborers protected by the Zone police, and removed the coal from the vessel over the protests of plaintiffs.

Suit was brought to recover from defendant the value of the coal, alleged to be $6,-300, $200 damages caused to the vessel in the removal, for an item of $50,000 alleged to be injury caused to the title and right of possession of the plaintiffs in and to the ship, which prevented her sale to a purchaser, and for a further item of $25,000 for exemplary damages. At the close of the ease the District Court granted motions of defendant to take away from the jury the item of $50,000 for special damages and the item of $25,-000 for exemplary damages. The ease then went to the jury, and resulted in a verdict for the plaintiffs in the sum of $5,600. There are 10 assignments of error, all, however, running to the action of the court in granting the motions above referred to.

The record is rather lengthy, and it would serve no good purpose to attempt to epitomize the evidence.- Suffice it to say there was a failure on the part of plaintiffs to show with reasonable certainty that any bargain had actually been made for the sale of the vessel. She had been sold to the plaintiffs for $16,000, and their contention was that they had> effected a sale for the price of $120,000. She was a Shipping Board vessel, and the prospective purchaser was probably an alien. Therefore she could not be sold without the consent of the Shipping Board, which had not been obtained. But, at most, the negotiations were tentative. No firm offer had been made, and there was nothing to show, except by inference, that the seizure of the coal affected the negotiations in any way. The action of the court on this item was undoubtedly correct.

As to the item of exemplary damages, defendant relies upon the laws of Panama, and contends that under those laws no exemplary damages can be assessed against the defendant. Plaintiffs contend their rights are to be measured by the common law and the federal jurisprudence. It is unnecessary to discuss whether the rights of the parties are to be measured bv the iaws of Panama or the general jurisprudence of the federal courts. It is evident that there was an absence of malice in the action of the defendant in removing the coal. The superintendent of defendant believed he was aeting within his rights under the order of the Acting Governor of the Canal Zone, fortified 'by the opinion of the United States attorney, and while the forcible taking of the coal was wrong and enforced by intimidation, there was no actual violence and no personal injuries to either of the plaintiffs'nor to any of their agents or employees. In this situation an action for exemplary damages would not lie.

As no error appears in the record, the judgment is affirmed.


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    McDONOUGH v. PACIFIC MAIL S. S. CO.
    (Circuit Court of Appeals, Ninth Circuit.
    June 8, 1925.
    Rehearing Denied August 3, 1925.)
    No. 4413.
    Seamen 17 — First assistant engineer, promoted to chief engineer, held not entitled to continued compensation as chief engineer at rate at which he was first paid for serving in that capacity.
    One employed as first assistant engineer on steamship at salary of “$216 per month, subject to increase in wages as promotion offers,” who on being promoted to chief engineer received $305 per month on one voyage and lesser amounts thereafter on other voyages, heldI not entitled, on.termination of employment, to recover difference between amounts actually received as chief engineer on later voyages and $305 per month from date of his first promotion.
    Appeal from the District Court of the United States for the Southern Division of the Northern District of California; George M. Bourquin, Judge.
    Suit by. B. McDonough against the Pacific Mail Steamship Company. Decree for defendant, and plaintiff appeals.
    Affirmed.
    H. W. Hutton, of San Francisco, Cal., for appellant.
    Farnham P. Griffiths, Jay T. Cooper, and McCutchen, Olney, Mannon & Greene, all of San Francisco, Cal., for appellee.
    Before GILBERT, HUNT, and RUDKIN, Circuit Judges.
   RUDKIN, Circuit Judge.

On February 23, 1921, tbe appellant and tbe appellee entered into a written contract wherein the appellant agreed to enter the employ of the appellee as first assistant engineer on such vessels and upon such voyages to ports on the Pacific Ocean as the appellee might from time to time direct, and to perform all duties required by law and by the employment and service, for the full period of one year, “in consideration of the sum of $216.25 per month, subject to increase of wages as promotion offers,” to be paid by the appellee, and to continue until returned to the port of San Francisco, after the expiration of the year, under full pay. It was further agreed that the appellant would, from time to time, execute legal shipping articles in the form and manner required by law, in addition to the written contract in question. Under this contract the appellant went to China and joined the steamship Lake Farmingdale as first assistant engineer. He served in that capacity and received the stipulated wage of $216.25 per month until July 5, 1921, when he was promoted to chief engineer. Upon promotion to chief engineer, his compensation for the first voyage was fixed at $305 per month. Thereafter he made other voyages on different vessels as chief engineer at salaries ranging from $260 per month to $220 per month, and, before the commencement of each voyage, signed shipping articles specifying the rate of wages, as required by law. Upon his return to San Francisco the appellant brought the present suit to recover the difference between the wages actually received and wages at the rate of $305 per month from the date of his first promotion as chief engineer. The court below disallowed his claim; hence this appeal.

The appellant contends that the compensation agreed upon at the time of his first promotion as chief engineer fixed his compensation for the remainder of his term of service, and that he is entitled to a decree accordingly. The written contract affords no basis for this contention. The appellee agreed to pay the appellant the sum of $216.25 per month as first assistant engineer, and it further agreed to pay an increase of wages as promotion offered. There was no agreement by the appellee to promote the appellant, there was no agreement on the part of the appellant to accept promotion, and there was no agreement as to the rate of wages after promotion, except perhaps an implied agreement to pay the going wage. There was certainly no agreement to pay anything beyond this. When the first voyage after the promotion ended, the appellee was under no obligation to promote the appellant a second time. His promotion from time to time was a mere matter of private contract between the parties, and there was no element of compulsion about it. The appellant might accept the promotion on the terms offered, or he might insist upon his rights under the written contract. He chose the former course and must abide the consequences. Had wages gone up, instead of down, it would now be idle for the appellee to contend that the rights of the parties became fixed at the date of the first promotion, and the fact that wages went down, instead of up, does not change the rule.

The decree is affirmed.


author: BARRETT, District Judge.

text:
    ALONZO v. LOEB et al.
    (Circuit Court of Appeals, Fifth Circuit.
    May 7, 1925.)
    No. 4499.
    Contracts <©=»75(2) — Contract for services held not invalid for want of consideration.
    A contract for services to be rendered by plaintiff, which provided that he should receive a stated sum in payment for all services “in connection with this entire matter,” did not render invalid for want of consideration a subsequent contract to pay him for further services relating to the same subject-matter, made' after the first contract had been fully performed.
    In Error to the District Court of the United States for the Eastern District of Louisiana; Rufus E. Foster, Judge.
    Action at law by Ernest M. Loeb against Edouard Fernandez Alonzo and Joseph W. Berengher, partners as E. Fernandez & Co. Judgment for plaintiff, and defendant Alonzo brings error.
    Affirmed.
    J. Marshall Quintero and Edwin T. Merrick, both of New Orleans, La. (Ralph J. Schwarz, of New Orleans, La., on the brief), for plaintiff in error.
    Philip S. Gidiere, of New Orleans, La. (Spencer, Gidiere, Phelps & Dunbar, of New Orleans, La., on the brief), for defendants in error.
    Before WALKER and BRYAN, Circuit Judges, and BARRETT, District Judge.
   BARRETT, District Judge.

The alleged error is made clear by this summary of the petition and evidence sustaining the same:

On February 6, 1922, E. Fernandez & Co., a firm composed of Edouard Fernandez Alonzo and Joseph W. Berengher, contracted with a man named Bourse in the city of Mexico to purchase 110,000 bags of garbanzo peas at a cost of approximately $1,000,-000; a part of the contract of purchase being that an.embargo should be enforced by Mexico upon the export of any other garbanzo peas up to December 1, 1922. Fernandez & Go. were unable to finance such transaction, and employed Mr. Ernest M. Loeb to assist them in effecting the necessary financial arrangements. This he did with the Commercial Credit Company of Baltimore. The contract provided for the payment to Loeb of “a flat commission of twenty-five cents,($.25) per bag on one hundred and ten thousand (110,000) bags of garbanzos, minimum twenty-seven thousand five hundred dollars ($27,500), which is in lieu of all services of said Ernest M. Loeb in connection with this entire matter.”

The garbanzos were shipped into this country with unexpected celerity, and sales by Fernandez & Co.' were slow, with the result that the Commercial Credit Company beeame apprehensive that the garbanzos would become infected with weevils, and the market value of the garbanzos would greatly depreciate with the expiration of the embargo, and it threatened to sell the garbanzos under a summary proceeding. Fernandez & Co. realized that this would mean disaster to them, changing an expected profit of " some $400,000 into a loss. Fernandez & Go. employed Loeb at a stipulated compensation of $12,500 to dissuade "the Commercial Credit Company from executing its threat. This Loeb succeeded in doing, with a profit resulting to Fernandez' & Co. from the transaction of some $250,000. In order to accomplish this it was necessary for Loeb to ascertain by inspection that the threat of weevils could be guarded against by fumigation, and by a trip to Cuba that a continuing market for the garbanzos would exist there, and to convince the Commercial Credit Company of the correctness of such conclusions. $5,-000 of the $12,500 has been paid.

Berengher, one of the partners, admits liability for the remaining $7,500. Alonzo, the other partner, denies liability, claiming that the original contract provided that the $27,-500 paid thereunder was “in lieu of all services of said Ernest M. ’ Loeb in connection with this entire matter,” that the services rendered under the second contract were “in connection with this entire matter,” and that such second contract was a nudum pactum.

The objects sought to be accomplished by the two contracts, and the matters in the contemplation of the parties when made, were different. The object of the first contract had been accomplished before the second contract was made. The services rendered by Loeb under the second contract were in no way involved in the first contract. Such second contract was not a nudum pactum, and the verdict of $7,500 was proper.

The judgment is affirmed.


author: HUNT, Circuit Judge.

text:
    NG LIN GO v. WEEDIN, as Commissioner of Immigration.
    (Circuit Court of Appeals, Ninth Circuit.
    June 1, 1925.
    Rehearing Denied August 3, 1925.)
    No. 4524.
    Aliens <S=>32(I3) — Chinese minor not shown' to be son of American citizen.
    Exclusion of' Chinese minor, on the ground that he was not, as claimed, son of a citizen of the United States, held warranted by evidence.
    Appeal from the District Court of the United States for the Northern Division of the Western District of Washington; Jeremiah Neterer, Judge.
    Habeas corpus by Ng Lin Go against Luther Weedin, as Commissioner of Immigration at the Port of'Seattle, Wash. From an order discharging writ, petitioner appeals.
    Affirmed.
    John J. Sullivan and V. G. Frost, both of Seattle, Wash., for appellant.
    Thos. P. Revelle, U. S. Atty., and Donald G. Graham, Asst. U. S. Atty., both of Seattle, Wash., for appellee.
    Before GILBERT, HUNT, and RUDKIN, Circuit Judges.
   HUNT, Circuit Judge.

Appellant and Ng Lin For, Chinese youths, arrived at Seattle May 23, 1923, and applied for admission as sons of Ng Lin, who was conceded to be an American citizen. After investigation by duly constituted departmental authorities, admission was denied, and thereafter appeal to the Secretary of Labor was dismissed. Writ of habeas corpus was granted as to Ng Lin For, but denied as to Ng Lin Go, on the ground that the relationship claimed was not satisfactorily established. Ng Lin Go appealed.

It is conceded that Ng Lin,, appellant’s alleged father, was in China at a time when he might have become the father of the appellant, and that when he left China in 1904 he had a son, Ng Lin Sing, less than two years old, who came to the United States in January, 1923, about four months prior to the arrival of the appellant and his alleged brother, Ng Lin For. Immigration authorities found discrepancies between the testimony of appellant and his alleged father with respect to their native village; in the testimony of appellant and Ng Lin Sing concerning the schools they attended in China, and with respect to whether the mother was a natural or a bound foot woman.

The most significant variance, however, was between the statement made in May, 1908, by the alleged father, who then testified that he had hut one son, Ng Lin Sing (who was admitted in February, 1923), and the testimony he gave in 1923, when he said the applicant, Ng Lin Go, was his son and was 20 years old. Applicant himself testified that he was bom December 21,1904. The alleged father endeavored to explain the variance by saying that there was an error in the record of his 1908 testimony, as he was sure he then mentioned two sons. It was recognized by the board that in May, 1908, the alleged father could not testify concerning the alleged brother, Ng Lin For, who was not born until August, 1908. But if, at that time, the alleged father had had a son four years old, he surely would have mentioned him.. There is no substantial ground for believing that the record of 1908 was not a correct statement of the testimony.

There is no foundation for the argument that the hearing was not fairly conducted in 1923. The transcript of the testimony and the findings of the board of special inquiry disclose that all of the testimony taken was before the Department of Labor when the decision was made, and that opportunity was given to counsel to inspect the exhibits. The decision denying the admission must be upheld.

The order discharging the writ is affirmed.


author: PAGE, Circuit Judge.

text:
    FARRIS v. UNITED STATES.
    (Circuit Court of Appeals, Seventh Circuit.
    April 24, 1925.)
    No. 3469.
    I. Receiving stolen goods @=>8(2) — Excluded evidence immaterial as to defendant’s knowledge of car sold by him having been stolen.
    It appearing from testimony of witness for defendant, on prosecution for selling automobile, knowing it had been stolen, of which knowledge there was abundance of evidence, that whatever J. — from whom witness bought the car before he (witness) sold it to defendant’s codefendant — told witness as to how he (J.) had acquired the car, had not been told defendant by witness, refusal to permit witness to testify whether j. had told him anything as to how he got it was not error.
    2. Receiving stolen goods @=8(3) — Evidence of stolen car sold being in interstate commerce sufficient.

    Evidence in prosecution under National Motor Vehicle Theft Act, § 4 (Comp. St. Ann. Supp. 1923, § 10418e), of sold stolen car being at the time in interstate commerce, helé sufficient, notwithstanding lapse of over two weeks between time defendant drove it from one state into another, for purpose of sale, and the date of the sale.
    In Error to the District Court of the United States for the Eastern Division of the Northern District of Illinois.
    Criminal prosecution by the United States against William Farris. Judgment of conviction, and defendant brings error.
    Affirmed.
    Henry W. Freeman, of Chicago, Ill., for plaintiff in error.
    John E. Byrne, of Chicago, Ill., for the United States.
    Before EVANS, PAGE, and ANDERSON, Circuit Judges.
   PAGE, Circuit Judge.

Plaintiff in error, Farris, seeks to reverse a judgment of conviction under count 1 of an indictment charging him with violation of section 4 of the National Motor Vehicle Theft Act (Comp. St. Ann. Supp. 1923, § 10418e), by selling an automobile which he knew had been stolen, and which was moving in and as a part of interstate commerce. The jury was instructed at great length, without any exceptions to the instructions. The assignment of errors is not in accordance with rule 11 of this court. However, we- consider the only important matters urged.

1. It is contended that the court erred in excluding competent evidence offered by the defendant. Witness Pfannenstill, who claimed that he had taken the ear in question in trade from one Jones and subsequently sold it to Krant-z, a codefendant of Farris, but not on trial, was asked, but not permitted to answer, whether Jones had told him anything as to the manner in which he (Jones) had acquired the ear. It appears from Pfannenstill’s testimony that whatever Jones may have told him was not at any time told Farris by Pfannenstill. There was nd error. There is an abundance of evidence in the record from which the jury might have found that Farris knew the car was stolen.

2. It is urged that the evidence shows that the automobile was not moving as, nor was it a part of, nor did it constitute, interstate or foreign commerce. Farris made repeated efforts to sell the ear in Illinois. It was advertised for sale, but not in his name. Failing to sell it in Illinois, Farris drove the car from Chicago to Cleveland, Ohio, and immediately made attempts to sell it, but it was not sold for some 15 or 17 days after its arrival there. He there caused it to be advertised, and again the advertisement was not in his own name. It is urged that, because of the time elapsing between the arrival in Cleveland and the sale date, the car was no longer in interstate commerce. Plaintiff in error lived in Illinois; he did not live in Ohio, and had no intention of living or even remaining there. He did not remain there beyond the time when he had sold the car, and the evidence indicates that the sole purpose of taking the ear to Ohio was to sell it. Under the circumstances disclosed, the evidence was sufficient to present a jury question as to whether plaintiff in error violated the statute.

The judgment should be and is affirmed.


author: BUFFINGTON, Circuit Judge.

text:
    POPP v. NEWPORT NEWS SHIPBUILDING & DRY DOCK CO.
    (Circuit Court of Appeals, Third Circuit.
    May 26, 1925.)
    No. 3308.
    Patents @=3202(1) — Assignment held to carry entire right to invention.
    Defendant, an inventor with application for patent pending, sold and assigned to complainant “my entire right, title, and interest in and to said invention, * * * and in and to any letters patent that may he granted in pursuance of said application.” Held, that the instrument was an assignment of the invention in its entirety, as well as of the pending application, and entitled complainant to an assignment of a patent subsequently procured in a foreign country.
    Appeal from the District Court of the United States for the Middle District of Pennsylvania; Charles B. Witmer, District Judge.
    Suit in equity by the Newport News Shipbuilding & Dry Dock Company against Harry E. Popp. Decree for complainant, and defendant appeals.
    Affirmed.
    Charles H. Andros, of Albany, N. Y., and George S. Love, of York, Pa., for appellant.
    R. W. Archbald, of Scranton, Pa., and Sheffield & Betts, Edward W. Vaill, and Gilman D. Blake, all of New York City, for appellee.
    Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
   BUFFINGTON, Circuit Judge.

This is an appeal by H. E. Popp from a decree of the court below ordering him to assign a Canadian patent to the Newport News Shipbuilding Company. While in the employ of that company, Popp, by written contract wherein he recited that he had “invented a new and useful improvement in draft tubes for which I am about to make application for letters patent of the United States,” sold, assigned, transferred, and set over to said company “my entire light, title, and interest in and to said invention, as fully set forth and described in the application executed by me on the 5th day of September, 1923, and in and to any letters patent that may be granted in pursuance of said application or any division thereof.”

The case turns on the meaning and construction of this paper, and the court below, construing it as covering two things, viz. the assignment of the invention in its entirety, and also the application for the United States patent then being made, held that the former, viz. the assignment of the invention, embraced the right to make an application for the patenting thereof elsewhere, and that consequently, when Popp, the inventor and seller of the invention, subsequently made application for a Canadian patent, he was bound to transfer it to the company which had bought his invention. Such is also our construction of the paper, and this view is in accord with the authorities cited by the late Judge Witmer, with the exception, perhaps, of the case of Emmons et al. v. Sladdin et al., Fed., Cas. No. 4,470. In that ease the contract, besides conveying the invention, by express terms conveyed as well “all * * * letters patent * * * to be thereafter obtained on account thereof.” The habendum covered, not only the remainder of the term of the letters patent expressly conveyed, but also “every other term and interest and extension thereof to be hereafter granted therein.” The court held that by this broad language the parties left nothing for construction, and in doing so announced the general principles of law which the learned trial judge properly applied in the case at bar.

Availing ourselves of the able opinion of Judge Witmer to show the grounds for our decision, we affirm the decree below.


text:
    JERSEY CITY STOCKYARDS CO. v. GROBNER.
    (Circuit Court of Appeals, Third Circuit.
    May 26, 1925.)
    No. 3330.
    Master and servant <®=3288(5) — Assumption of risk by steamboat fireman held for jury.
    Plaintiff, a fireman on defendant’s steamboat, in going down a dark stairway by direction of the engineer, whose duty it was to keep the stairway clean, slipped on the steps, where oil thrown by the machinery had accumulated, and was injured. Held, that the question of assumption of risk was for the jury.
    In Error to the District Court of the United States for the District of New Jersey; Charles F. Lynch, Judge.
    Action at law by Karl Grobner against the Jersey City Stockyards Company. Judgment for plaintiff, and defendant brings error.
    Affirmed.
    John Milton, of Jersey City, N. J. (John L. Ridley, of Jersey City, N. J., of counsel), for plaintiff in error.
    Gross & Gross, of Jersey City, N. J. (Benjamin Gross, of Jersey City, N. J., of counsel), for defendant in error.
    Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
   BUFFINGTON, Circuit Judge.

This writ of error raises a single question — whether the court erred in refusing to give binding instructions for the defendant on the ground of assumption of risk.

We are of opinion the facts were such as to compel the court to submit that question to the jury. The plaintiff was a fireman on defendant’s steamboat. In the performance of his duty, and while going below from deck at the direction of the engineer, he slipped on the lower steps of a steep stairway, and one of his legs was caught in the engine eccentrics and injured. The proofs tended to show the stairway was dark at the point where he slipped, and there was no hand rail or guard on the stairway on the machinery side. The engine had eccentrics with a seis-s.orlike action, and were only four to eight inches from the stairway. When operating, the engine threw some oil on the stairway. This varied in amount from time to time, but when it accumulated in sufficient quantities it was the duty and custom of the engineer to have the stairs cleaned and scrubbed. This was done once or twice a week. Grob-ner had been working for a few weeks. He noticed no oil on the steps as he went down. Both his feet slipped on the last couple of steps. He testified he found oil on the steps after the accident; that it got on his hands as he came up. He testified he cleaned the steps when directed by the engineer; that the accident happened on Friday, and the stairs had not been cleaned since the preceding Monday. His proof was that, owing to the darkness of the place, he could not see whether there was oil on the lower steps.

In view of this testimony, and the situation as shown by photograph, the direction of the engineer to him to go down, his natural assumption that the engineer, whose duty it was to keep the steps clean, would do so, and not order him to descend through a darkened pathway, which was smeared with oil, we are clear that the court would have been in error, had it held that, as a matter of law, the plaintiff had assumed the risk of this slippery, -unguarded, and dangerous place as an incident of his employment. Philadelphia & Reading Railway Co. v. Marland, 239 F. 1, 152 C. C. A. 51. That question was submitted to the jury substantially as the law was announced in Seaboard Air Line v. Horton, 233 U. S. 497, 34 S. Ct. 635, 58 L. Ed. 1062, L. R. A. 1915C, 1, Ann. Cas. 1915B, 475, to which, naturally, no exception was taken.

We accordingly affirm the judgment below.