author: SIBLEY, Circuit Judge.

text:
    PACIFIC MUT. LIFE INS. CO. OF CALIFORNIA v. BARTON et al.
    No. 6131.
    Circuit Court of Appeals, Fifth Circuit.
    June 2, 1931.
    Rehearing Denied July 6, 1931.

      J. L. Doggett and Charles Cook Howell, both of Jacksonville, Fla. (Doggett, McCol-lum, Howell & Doggett, of Jacksonville, Fla., and Blake Franklin, of Los Angeles, Cal., on the brief), for appellant.
    J. T. G. Crawford and Philip S. May, both of Jacksonville, Fla., for appellees.
    Before BRYAN, SIBLEY, and HUTCH-ESON, Circuit Judges.
   SIBLEY, Circuit Judge.

The Pacific Mutual Life Insurance Company, defendant below, appeals from a judgment at law rendered in a case removed from a State court of Florida, by which it was held liable to pay $7,000' on a policy of life insurance and $7,000 more because the death resulted solely through external, violent, and accidental means, and a fee for the attorneys of the plaintiffs. The pleadings were elaborately extended in common-law form, and numerous rulings as to their suffi-eieney are assigned as errors; but the case was at last by a written stipulation submitted to the court for decision without a jury upon an agreed statement of facts. The correctness of the judgment upon these facts is thus the controlling matter. We will notice but one question arising on the pleadings touching the authority of the agent through whom the insurance was placed, and who collected the premiums. The declaration alleged that the insured, Barton, made a written application for insurance, and delivered it to one Goodman, “who was then and there the duly authorized agent of said defendant,” and thereafter “paid to the agent of the defendant the premiums on said life insurance and said accidental total loss benefits insurance for the period of one year next ensuing.” There was a demurrer that it did not appear that the alleged agent was authorized to receive the payment. The demurrer was properly overruled, not because it was unnecessary that the agent have authority to act, but because alleging him to be an agent implies that he was authorized, and the allegation can be sustained only by proving an authority, actual or apparent. An act done through an agent may properly be alleged according to its legal effect as the act of the principal without alluding to the agent at all, or it may be done, as in this declaration, by averring the agency; and where the agency is averred it may be done generally, without describing the authority of the agent. Bank of Metropolis v. Guttschlick, 14 Pet. 19, 27, 10 L. Ed. 335; Childress v. Emory, 8 Wheat. 642, 669, 5 L. Ed. 705; 2 C. J., Agency, §§ 610, 611.

By its first amended plea the defendant denied that the agent to whom payment was alleged to have been made was authorized by defendant to receive the same. This plea was stricken on demurrer, seemingly because it did not deny an apparent authority or allege that the insured knew the agent’s authority was limited. It was, however, as specific as the plaintiffs’ allegation of authority, and appears to be a sufficient separate traverse of a material fact, which is allowed under the Florida pleading statute. Compiled General Laws of 1927, § 4321. The error, however, if any, in striking it was harmless because the general issue that defendant never promised as alleged was also pleaded, and that, we think, sufficiently puts in issue the authority, as well as the acts of the agent which were counted on as perfecting a contract with the defendant. The parties so understood, for the agreed statement ■of facts undertook to cover, not only what Goodman did* in this instance, but also what bis. express authority and customary practice was in collecting premiums.

The agreed facts are in brief these: The dSteased, Barton, at Jacksonville, Fla., on January 11, 1927, upon a printed form bearing a serial number and evidently prepared and furnished by defendant, made written application to defendant, attested by Goodman, whp signed as soliciting agent, for insurance on'his life in an amount of $8,000, the policies to be on the plan of “ordinary life” and to carry monthly benefits of $120 in ease of total disability, but $7,000' thereof was to be issued payable to his personal representatives and $1,000 to his wife. The $7,000 policy alone is in issue here. The application concluded thus: “It is understood and agreed (1) that if the entire amount of the first annual, semiannual or quarter premium as selected by me under the statement numbered 7a on the insurance herein applied for is not paid at the time of making this application, there shall be no liability on the part of said Company under this application unless or until a policy shall be issued and manually delivered tq me and the entire amount of such first premium thereon actually paid during my lifetime, and while I am in good health; and (2) that if the entire amount of such first premium is paid to said Company’s agent at the time of making this application the insurance, subject to the provisions of the said Company’s policy applied for, shall be effective from the date of my medical examination therefor, and such a policy shall be issued and delivered to me or to my legal representative, provided the said •Company in its judgment shall be satisfied as to my insurability on the date of such medical examination for the amount and on- the plan and'form applied for; and (3) that if said Company shall not be so satisfied the entire amount of the premium paid, without interest, shall be returned.” A form followed, which was to be used in case the premium was prepaid to the agent; but it was left unfilled and unsigned. It referred to a premium receipt as attached which was to be detached and signed by the agent if sueh prepayment were made. On another sheet was a written request for $8,000 of “accidental total loss benefits,” meaning insurance against accidental death, similarly to be divided, $7,000 to insured’s personal representatives and $1,000 to his wife. 'This application was signed by Goodman only, and contained no stipulation postponing effectiveness until delivery of the policy. No money was paid Goodman at that time for either insurance, but a medical examination was made and forwarded with the application to the home office of defendant at Los Angeles, Cal. On January 19, 1927, the home office, having approved the. risk, issued a policy in the form applied for for $7,000 on the life of Barton, payable to his personal representatives, which provided for the monthly total disability payments, and apparently also issued a-poliey for $1,000 payable to the wife, and mailed them to its general agent at Jacksonville with a letter stating: “Before delivering the policies it will be necessary to get a signed statement from the applicant to the effect that his earnings are $1040.00 per month, this statement to be be sent to the home office.” The statement to be signed read: “For your confidential information, and for the sole purpose of determining the amount of monthly disability benefits to which I may be entitled, I hereby declare that my average net earnings are in excess of $- per month.” The insurance against accidental death was issued as a separate policy, though bearing the same serial number as the other. It recites a separate premium, and is complete in itself. It purports to be signed by the defendant’s officers at Los Angeles; but is to become effective when countersigned by a duly authorized agent or manager, and is so countersigned by the agent at Jacksonville under date of January 19, 1927. The policies sent from Los Angeles did not reach Jacksonville until January 24th. On January 22d, however, Barton paid Goodman in money the full premiums for all the insurance. The premium receipt originally attached to the application form appears now detached, but whether it was given to Barton at the time of this payment, and what was said in the transaction, does not appear. When the policies arrived, Goodman sought to have Barton sign the certificate of earnings (of which Barton had never been in any way advised), and to deliver all the policies, but found him out of the city. On January 28th, and before returning to Jacksonville, Barton was killed in an automobile accident. The premiums were tendered back to plaintiffs on February ' 18, 1927, and refused. Goodman customarily collected the first premium on all insurance which he sold, and was allowed sixty days in which to deliver or return policies and make settlement with defendant. In this ease he did not deliver the money to the defendant until after Barton’s death. He was not expressly authorized to collect premiums except when paid with the policy, or on delivery of the policy.

Upon these facts, and the favorable inferences which the judge acting in place of a jury might make, we think the law is with the plaintiffs. Touching the accident policy, there can be little doubt. It is á separate contract from the other insurance. The aplication for it was distinct, signed by Goodman and not by Barton. The premium was separate, and its provisions were embodied in a separate policy. It took effect, not by any act at the home office, but by countersignature in Jacksonville. For such accident policies no medical examination is customarily required, because if disease.should contribute to the death there is no liability. Ryan v. Continental Casualty Co., 47 F.(2d) 472, decided by this court at the present term. They are frequently issued, like fire policies, without communication with the home office, on mere countersignature of a local agent. There was here no agreement to postpone the operation of this insurance until the delivery of the policy. The certificate of earnings had nothing to do with accidental death. If this policy came from Los Angeles with the ordinary life policies, there is nothing in the accompanying letter certainly referring to it, or requesting its nondelivery. When Barton’s unconditional application for accident insurance was accepted by issuing the policy, and he paid his full premium, the contract was complete, and the insurance was of force “without delivery of the policy to him. 32 C. J., Insurance, § 226.

The case as to the other insurance is not so clear. The monthly benefits insurance, while no claim has arisen or can arise under it since Barton so soon died, was applied for along with the ordinary life insurance, and is part of the same policy. Monthly earnings have a direct bearing upon this risk. It is plain that the defendant’s home office did not intend to put this policy in force by delivery until assured that Barton’s monthly earnings were far in excess of sick benefits claimable under this and other policies which he had. As the premium had not been paid on this policy at the time of the application, the home office, in issuing the policy and conditioning its delivery, understood that under the first alternative above quoted from the application, the insurance would not go into effect until manual delivery of the policy to Barton while alive and in good health. No such delivery occurred, but within three days after the home office had approved the health risk and mailed the policy to be delivered on obtaining the certificate about Barton’s earnings, Goodman collected the full premiums. This act put another face upon the situation. The declaration in the ease does not claim that the policy was ever delivered, and does not exhibit it as the cause of action, but exhibits the application and claims that the. collection of the premium by Goodman entitled Barton to the insurance applied for as it was defined in the policy duly issued but not delivered. This claim involves rather the acts and intentions of Goodman than those of the home office, and demands examination of his authority to bind the defendant. We lay no great stress upon the statute of Florida Compiled General Laws of 1927, § 6297, which declares in substance that any person who receives or receipts for money on account of any contract for insurance shall be deemed to all intents and purposes an agent or representative of the insurer. In American Fire Insurance Co. v. King Lumber Co., 74 Fla. 130, 77 So. 168, affirmed in 250 U. S. 2, 39 S. Ct. 431, 63 L. Ed. 819, this statute was held to make Florida insurance brokers who collected the premium so far the agents of a foreign insurance company as that their knowledge of a breach of warranty at the time the company issued a fire policy at its home office constituted a waiver of the breach. But in Mutual Life Insurance Co. of New York v. Hilton-Green, 241 U. S. 613, 36 S. Ct. 676, 60 L. Ed. 1202, it was said that this statute, while it might settle whether one doing the things it mentioned was the agent of the insurer rather than of the insured, did not fix the scope of his authority as between the company and third persons, nor convert a special agent with limited powers into a general one with unlimited powers. And the view was expressed by this court in Maryland Casualty Co. v. Campbell, 255 F. 437, and Fidelity-Phenix Fire Ins. Co. v. Handley, 296 F. 902, that an authority is not given by this statute which the parties contract shall not exist.

In the present ease there is no dispute that Goodman was the defendant’s agent; the question is as to his real or apparent authority under the evidence and the agreement touching it. We have no direct evidence of the scope of his employment. The reference to his express authority to collect premiums on taking applications and delivering policies we understand to refer to the provisions of the defendant’s application form above quoted. The forms furnished an agent for his use in transacting business with the public are cogent evidence as to what he is employed to do, and are representations to the public that he has authority to do the things thereby indicated. 32 C. J., Insurance, § 134, and cases under note 32. There is no effort in this form expressly to limit the agent’s authority. While he signs as “soliciting agent,” the form itself indicates that he is much more than that. It is said that a soliciting agent has only power to make out and transmit applications for insurance, but cannot make contracts therefor, and is thus distinguished from a general agent. 32 C. J. §§ 145, 181, 182, 183. Goodman, by this application form, is held out as having power by receiving the full premium to bind the defendant to an insurance according to the policy applied for, and effective from the date of the-medical examination subject to one condition only: That the company is satisfied of applicant’s insurability at that date. The insurance is independent of consent at the home office, and of the actual issuance of a policy before death, for the policy is represented as deliverable to applicant or his legal representative. Defendant’s furnishing Goodman with this form for Barton to sign is in effect an assurance to Barton that payment of the premium to Goodman will accomplish the things stated in the form. It is true that the form speaks of “payment to the Company’s agent at the time of making this application,” but there is no denial of power to receive payment pending the application. The alternatives in the form suggest that the company refuses to insure without payment, and if the applicant wishes not to pay until he is certain of getting his insurance, that both payment and insurance shall stand in abeyance until policy and payment are actually exchanged during the life and good health of applicant; but if applicant will pay the company’s agent it will insure him from the date of his medical examination if he is insurable, payment and insurability being the only things insisted on by the company, and insurability being the only thing which the home office reserves to itself to decide. This is a wide departure from the plan of application to be met with in most of the adjudicated cases, where the' authority of the agent taking the application is by its terms strictly limited, and where the insurer is seeking to defer until the last possible moment the operation of the insurance. We think Barton may well have understood that Goodman could take the money at any time pending the determination of and notification concerning his insurability, and by so doing make the appb • cation operate under the second alternative expressed in it. They could have accomplished this unquestionably by filling out a new form based upon the same medical examination and making the payment. The acceptance of payment by the agent is the substantial thing that determines whether the application is only a proposal for insurance or a conditional contract of insurance. Having the power so to contract by accepting payment, no good reason appears why the pending application could not be adopted in connection with the payment in lieu' of writing out -a new one. If notice to the principal be desired, it could have been given, and is implied by law." Such an adoption must have been Bárton’s and Goodman’s intention. The money would not have been paid and accepted if nothing was to be accomplished thereby. Under the first alternative it was not due until the manual delivery of the policy. There is no suggestion of any change of health or other circumstance that would supply any other motive. Whatever restriction there may have been upon the authority of Goodman to receive premiums was unknown to Barton. His apparent authority extended to receiving them at all times and to making a conditional contract of insurance such as was set forth in the application form.

Apparent authority is equal to real authority when the limitations are unknown. 32 C. J., Insurance, § 181. There were in the insurance policy statements that agents are not authorized to make, alter; or discharge contracts, and that premiums are to be paid only to agents who have company receipts to be given for them. But these not having been brought to the knowledge of Barton by delivery of the policy, do not affect him. They would control only things done after the policy should become by acceptance the full embodiment of the contract. Goodman indeed had company receipts for premiums, and for all that appears may have signed and delivered to Barton the one detached from the application form. Barton having been found insurable, and the premium having been fully paid, the insurance dated from the medical examination. There was no right to condition the delivery of the promised policy by requiring a statement as to monthly earnings which was not alluded to in the application form nor by Goodman. New York Life Ins. Co. v. Baker (C. C. A.) 33 F.(2d) 434; Unterharnscheidt v. Missouri State Life Ins. Co., 160 Iowa, 223, 138 N. W. 459, 45 L. R. A. (N. S.) 743. The judge was justified in holding that the policy ought to have been delivered to the legal representatives of Barton after his death, as mentioned in the application form.

Error is assigned generally on the allowance of an attorney’s fee to the plaintiffs. A Florida statute long antedating this insurance provides for the allowance of such a fee in insurance cases. Compiled General Laws, 1927, § 6220. Its uneonstitutionality is suggested in argument, but no pleading or assignment, of error asserts conflict with any particular constitutional provision, or shows the point to have been raised at the trial. No constitutional question is therefore presented for decision here. New York v. Kleinert, 268 U. S. 641, 45 S. Ct. 618, 69 L. Ed. 1135; Wong Tai v. U. S., 273 U. S. 77, 47 S. Ct. 300, 71 L. Ed. 545. The statute has, however, been upheld by the Supreme Court of Florida. United States Fire Ins. Co. v. Dickerson, 82 Fla. 442, 90 So. 613, and by this Court, Hartford Fire Ins. Co. v. Wilson & Toomer, 4 F.(2d) 835.

The judgment is affirmed.


source: Caselaw Access Project

author: LEWIS, Circuit Judge.

license: Public Domain

text:
    NEIHART (NEIHART, Intervener) v. BUEK.
    No. 423.
    Circuit Court of Appeals, Tenth Circuit.
    May 27, 1931.
    J. D. M. Hamilton, of Topeka, Kan. (Ralph T. O’Neil and Barton E. Griffith, both of Topeka, Kan., on the brief), for appellants.
    Howard A. Jones and J. E. Addington, both of Topeka, Kan. (J. T. Pringle, of Bur-lingame, Kan., on the brief), for appellee.
    Before LEWIS and COTTERAL, Circuit Judges.
   LEWIS, Circuit Judge.

This is a controversy between client and attorney. The question is, which has the right to redeem from a sale of land under a mortgage foreclosure decree, each claiming to be owner of the equity. The court decided in favor of the client, and the attorney has appealed.

These are the material facts: J. H. Mills, the client, had for many years owned, occupied and cultivated a valuable farm of 325 acres in Osage County, Kansas. He was industrious and frugal, but when he reached the age of about seventy-five years he entered into speculative ventures which left him heavily in debt. He departed from former methods of economy and industry and made improvident deals. He provided himself with $5,000.00 at one time and left home to bet on horse races and doubtless would have done so had his family not discovered his whereabouts and intentions. His losses in the respects indicated rendered him well nigh, if not entirely insolvent. He then on February 4,-1918, gave the mortgage in suit on his farm to secure the payment of his $15,-000.00 note, which with interest amounted to $20,101.07 at the time of foreclosure decree and order of sale on August 13, 1927. On October 3, 1919, he gave a second mortgage on his farm to the Pioneer State Bank of Burlingame, Kansas, to secure payment of his note of $12,000.00 to'that bank. Thereafter, on April 21, 1921, he gave a third mortgage on the farm to the Lebo State Bank of Lebo, Kansas, to secure the payment of his indebtedness of $8,018.00 to that bank. The indebtedness secured by these three mortgages approximated the value of the farm in December, 1924, and the receiver for the Pioneer State Bank had begun foreclosure proceedings on its $12,000.00 mortgage, which with unpaid interest made that debt about $15,000.00.

Neihart appeared for Mills in that suit. He resided at Lyndon, Osage County. His first employment by Mills as attorney was in 1913. Thereafter he frequently gave Mills advice, drew legal documents for him and represented him in litigation. In September, - 1924, they discussed the matter of Neihart’s fee. Clearly, Mills’ involved condition made Neihart anxious on this subject. He offered fifty cents for every dollar Neihart would save him, but they did not agree. Neihart testified:

“In the latter part November or December, 1924, I talked to him about fee again. Said, ‘Mr. Mills, we have always been good friends, but if I spend my time fighting this I owe it to my family to arrange for money consideration and unless you can arrange for money consideration I will have to quit the case or I might in some way arrange to take over the farm.’ Told him I had done good deal of work for him in past and hadn’t received anything. He never paid me the $50'.-00 I paid to Harvey in settlement of his fee. 1 loaned Mills $10 which he has never repaid. * * * Told him under certain condition I would take farm and get out of it what I could. I said, ‘if I am successful in clearing the land up you will be free of all debts against it.’ * * * There was then about $42,000.00 against land.
“Well, I told him that I would take the land and fight the ease to the best of my ability, and if I was successful in fighting those cases out, that he wouldn’t have any deficiency judgment against him for anything on the home place that I got a deed to. * * *
“Well, at that particular time, or at that particular conversation, we didn’t agree to anything. We didn’t agree to anything that day.
“Three to five days later he came back and said he was going to let me have the farm on those conditions.
“He would give me a deed to the home place, and I told him I would fight these claims to the best of my ability. That was to be my fee.
“In first conversation with Mills when I made my offer, I told Mr. Mills that if he turned this place to me, that would settle all past fees. He asked me that, and I told him it would.”

Shortly thereafter, Mills gave Neihart a quit-claim deed to the farm. Neihart took possession, collected rents from the tenants, one of whom was a son of Mills, and put other tenants on the place who attorned to him during the litigation. The deed from Mills to Neihart is the basis of the latter’s claim of a right to redeem.

After the foreclosure deeree was entered in the suit on the $3.5,000.00 mortgage, Mills was adjudged to be insane by the Probate Court of Osage County on September 26, 1928. Buck was appointed his guardian, and he.filed, on behalf of Mills in the foreclosure suit on the $15,000.00' mortgage, a petition asking the court to adjudge that the right of redemption was in Mills. In that petition he set up that the transaction between Mills and Neihart^ under which Neihart procured the quit-claim deed from Mills, was not a valid and binding agreement between them because of the relation of client and attorney, and also that Mills was of weak and unsound mind at the time the transaction was entered into to the knowledge of Neihart. Neihart initiated the lunacy proceedings against Mills. However, he testified in the present proceedings that he first got the impression that Mills had lost his mind in July, 1928, and he “then started things to take care of him, that he told Mills’ son his father had lapsed his memory, and imagined things, and ought to be taken care of,” that the Probate Court appointed him to represent Mills at the lunacy hearing, and that Mills was intermittently insane, but was of sound mind until July, 1928. Mills’ neighbors did not agree as to the inception of his insanity. Some testified that it was prior to the giving of the quit-claim deed to Neihart and some that it was after that date. NeihartJiad been intimately acquainted with Mills and his family for many years.

Neihart had filed answer for Mills on November 21, 1924, in the suit of the receiver of the Pioneer State Bank to foreclose the mortgage given to said bank on October 3, 1919. He thereafter filed additional answer in that case on March 22, 1926, as attorney for Mills, and therein alleged:

“This defendant alleges that the note and mortgage set out in plaintiff’s petition was made, executed and delivered to said plaintiff under duress. That this defendant at the time of delivery thereof, was- not of sound mind and wholly unfit mentally to attend to his business, which said Pioneer State Bank by its officers, well knew, and that said Pioneer State Bank by its officers threatened, this defendant that if this said defendant did not make, execute, and deliver to said Pioneer State Bank the said note and mortgage set out in plaintiff’s petition, that said Pioneer State Bank by its officers would have said defendant declared of unsound mind and have a guardian appointed over him. That said defendant in fear of the threat so made and believing that the said plaintiff would carry out his threat, made, executed, and delivered to said plaintiff the above mentioned note and mortgage.”

Neihart gaye as his reason for making this allegation of Mills’ unsound mind and mental ineompeteney to transact business, when he gave the note and mortgage to the Pioneer State Bank in 1919, that he put that allegation in the answer at the suggestion of a son of Mills.

The Pioneer State Bank suit was in the state district court of Osage County. The suit to foreclose the $15,000.00' mortgage, in which decree was entered hi August, 1927, was brought in the federal court, and Neihart testified that he filed answer to that suit for Mills in which he alleged that he was of unsound mind, and asked that a guardian be appointed for him, and that he personally verified that answer, but that in doing so he merely followed the thought given to him by a son of Mills.

Mills was past eighty-two years of age when he gave the quit-claim deed to Neihart. Neihart settled the liability of Mills to the Pioneer State Bank for $5,000.00. He also settled with the Lebo State Bank its claim of more than $11,000.00 on the note and mortgage for $5,600.00.

Neihart in making settlement with the Lebo State Bank gave that bank, on May 20, 1925, a note for $2,240.00, secured by a chattel mortgage on 250 acres of com on the Mills farm, signed by himself, by Mills, and by Mills’ son, the tenant; and there is no doubt that large sums received by Neihart from the sale of crops pending the litigation were applied by him in payment of the settlements he made with the two banks.

The learned district judge expressed the opinion that since the year 1913 by numerous acts and conduct Mills had demonstrated such weakness of intellect as to put anyone dealing with him upon inquiry as to his weakened and enfeebled mental state and lack of business ability or mental power to conserve his property. He was also of the opinion that the relation between the parties, being one of especial confidence, trust and influence, prohibited Neihart from taking to himself under his claimed agreement with Mills all benefit and advantage that might be obtained out of the property in litigation.

Perry on Trusts (5th Ed.) vol. 1, § 202, states the rule thus:

“The relation of attorney and client is one of especial confidence and influence, and while that relation continues the attorney cannot receive gifts or make purchases from the client. It has been said in some eases that the attorney is absolutely prohibited from entering into contracts with his clients. If the rule is not quite so peremptory as » this, it at least goes to the extent of prohibiting him from contracting with his client for an interest in the subject-matter of the litigation.”

Some of the courts do not fully sustain some of the restrictions in the above excerpt, but the last one there noted is, we think, generally supported. Yeamans v. James, 27 Kan. 195, 206, 207; Cunningham v. Jones, 37 Kan. 477, 15 P. 572, 1 Am. St. Rep. 257; Keenan v. Scott, 64 W. Va. 137, 61 S. E. 806; Thomas v. Turner’s Adm’r, 87 Va. 1, 12 S. E. 149, 668; Rogers v. Marshall (C. C.) 13 F. 59. See, also, Ridge v. Healy (C. C. A.) 251 F. 798, 805; Condit v. Blackwell, 22 N. J. Eq. 481; 6 Corpus Juris, 686; 3 Am. & Eng. Ency. of Law (2d Ed.) 337, and eases cited.

Obviously Neihart rendered valuable services; but when he induced the two banks to reduce their claims to the amounts stated there was a valuable equity in the farm, and no reason appears why Neihart could not have accomplished those results without taking the deed from Mills. Mills’ advanced age and weakened mental condition when he dealt with Neihart are not without weight. Some of his sons knew of the transaction with Neihart, but testified that they thought what was being done was only a method to protect the interests of their father, and did not know until late in the litigation that Neihart claimed to own the farm; that their first knowledge of that claim was when they or Buek spoke of redeeming from the mortgage sale, and Neihart informed them they were too late.

The order appealed from is affirmed.


text:
    UNITED STATES v. GOWER et al.
    No. 422.
    Circuit Court of Appeals, Tenth Circuit.
    May 29, 1931.
    C. L. Dawson, Atty., U. S. Veterans’ Bureau, of Washington, D. C. (Jno. M. Goldes-berry, U. S. Atty., and A. E. Williams, Asst. U. S. Atty., both of Tulsa, Okl., and William Wolff Smith, General Counsel, U. S. Veterans’ Bureau, of Washington, D. C., on the brief), for the United States.
    Glenn O. Young, of Sapulpa, Okl., for appellees.
    Before LEWIS, and COTTERAL, Circuit Judges, and POLLOCK, District Judge.
   LEWIS, Circuit Judge.

Claude Gower, a soldier in the World War, was discharged from service on June 3. 1919, and immediately returned to his father’s home in Oklahoma. He sought employment of different kinds, but after short service in each he in turn quit because he could not continue on account of his physical and mental condition. Early in November, 1919, he was accidentally and fatally shot. While in the military service two policies of term insurance of $5,000.00 each were issued to him on which premiums were paid to July 31, 1919.

His father and mother, appellees here, brought this suit on the policies as beneficiaries and recovered. They alleged that their son suffered total permanent disability during the life of the policies. The defendant below has appealed and contends that the verdicts are not sustained by the proof, hence the court erred in overruling defendant’s motion for an instructed verdict in its favor; that the ease should not have been submitted to the jury. That is the only error assigned, and the argument here is that the evidence does not sustain a finding that the insured suffered total permanent disability while the policies were in force.

On that subject Doctor King, who had practised medicine for twenty-five years and had served as physician in the Medical Corps of the United States Army, was called as a witness. He saw and treated the insured twice a week for three or four weeks .after his return home from military service. He testified that the physical and mental condition of Gower was very poor. He had a rapid heart, listless expression, undernourished condition, both lungs abnormal, and more or less adema of the hands and face; that from the history of the case he determined that the patient was suffering from gas poison, and that in his opinion he was not able to perform any substantial and gainful work; that while he was attending him he did not improve to amount to anything. He would have spells like asthma. When asked as to whether Gower might have recovered had he ' not been accidentally shot, witness said he had a chance to get well. Asked whether or not his condition was permanent, he answered, “No, Sir”; and asked whether he was able to say his condition was temporary, he answered, “No, Sir.”

Members of insured’s family and others for whom he tried to work described his condition, action and inability to continue except for very brief periods at different kinds of labor. A grocer who employed him to deliver groceries in the town testified that when he would direct him to go to one part of town, he would go to another part, and he would have to go or send someone after him; that his mind seemed to wander; he kept trying to get him to work for some eight or ten days; that he was flighty and trembly, would give out and sit down. He tried other employment. He shueked eom for a day or so, and quit because he was sick. His appetite was poor, and he didn’t sleep much. He tried to work in the cane at another, place, but quit in a short time, and was sick in bed there for about three days. He tried to pick cotton, but became short of breath and had to quit. There was testimony that he fell from a horse for no apparent cause. Another witness testified he did not seem the same boy after he came back that he was before, that he could not hold down a job. Another neighbor testified that he was just silly, foolish. His father testified that he worked for about a week with him after he came home, and had to quit. His mother testified that he complained of headaches, and of the back of his head, and of his breast; and after he worked a little he was unstrung and nervous. That he was wakeful, didn’t rest at night, mumbled and groaned in his sleep, and had poor appetite. At times his hands would be swollen.

Other neighbors who saw and talked with Gower after his return testified they did not notice any change in him,' either mentally or physically. We do not doubt there was ample proof to sustain a finding that insured was totally disabled to engage in any gainful occupation on his return home, and that that disability continued while the policies were in force. A contrary conclusion, in our judgment, would be against the greater weight of the evidence.

The redi question here is whether the total disability thus proven and evidently found to exist, while the policies were still in force, was of such character and of such grip upon insured’s vitality as to cause it to be reasonably certain that it would be permanent, thus disabling insured to follow continuously any substantially gainful occupation during the remainder of his natural life.

Doctor King, the only witness called who was competent as an expert to give an opinion on the subject of the extent of the soldier’s disability, was not asked if that disability was total and permanent. -He was asked whether the condition under which he found the soldier was a permanent condition, and he answered, Ho. His condition might have been fluctuating — better and then worse, and vice versa — but still in the doctor’s opinion one of permanent and total disability to ever follow continuously any substantially gainful occupation. In fact, he said the soldier’s condition was not temporary, and had previously said he was not able to perform any substantial and gainful work. He also testified the soldier had a chance to get well — a possibility, not a probability. So, it cannot be fairly said the verdicts were opposed to the judgment and opinion of the only witness competent to speak on this vital subject. Moreover, expert testimony is only an aid to the solution of the main issue. It cannot be arbitrarily ignored or indolently accepted, and after it has been considered by the jury, if they believe their own experience, observations and common knowledge, as applied to the facts in the ease, will guide them to a solution and verdict, they have a right to follow their own convictions, thus reached, although in doing so their verdict may be contrary to the opinion evidence of experts on the subject. United States Smelting Co. v. Parry (C. C. A.) 166 F. 407, 411; Head v. Hargrave, 105 U. S. 45, 47-49, 26 L. Ed. 1028; The Conqueror, 166 U. S. 110, 17 S. Ct. 510, 41 L. Ed. 937; Jones on Evidence (2d Ed.) § 1373. After consideration of the evidence in the record, both that of laymen and the attending physician, as to the soldier’s ailments and their effects upon him physically and mentally, we cannot hold that the proof does not sustain the verdicts.

Judgments affirmed.


author: ANDERSON, Circuit Judge.

text:
    LEACH v. COMMISSIONER OF INTERNAL REVENUE.
    No. 2522.
    Circuit Court of Appeals, First Circuit.
    May 28, 1931.

      O. Walker Taylor, of Boston, Mass., for petitioner for review.
    Dean P. Kimball, Sp. Atty., Bureau of Internal Revenue, of Washington, D. C. (G. A. Youngquist, Asst. Atty. Gen., J. Louis Monarch, Andrew D. Sharpe, and John G. Remey, Sp. Assts. to Atty. Gen., and C. M. Charest, General Counsel, Bureau of Internal Revenue, of Washington, D. C., on the brief), for the Commissioner.
    Before BINGHAM, ANDERSON, and WILSON, Circuit Judges. .
   ANDERSON, Circuit Judge.

This is a petition for review of a decision of the Board of Tax Appeals, sustaining the Commissioner of Internal Revenue in his determination of deficiencies in the petitioner’s income- taxes of $7,133.45 for 1921, and of $1,823.09 for 1922.

The questions are: (1) Whether the board erred in holding the petitioner not entitled to deduct $59,000 of an estate tax until 1922; (2) in holding that her deduction for 1922 should be reduced by the amount of the refund of estate taxes, received in 1928.

The material facts are as follows:

The petitioner, of Taunton, Mass., was the sole beneficiary under the will of her father, William E. Walker, who died on November 9, 1918. The petitioner’s husband duly qualified as executor of that estate; and on May 8, 1919, filed an estate tax return, and paid, on November 3, 1919, the tax, thus shown, of $37,700.68. On November 14, 1919, he transferred to his wife the entire balance of the estate, receiving from her an undertaking' to hold him, as executor, harmless from any further claim for taxes and debts.

On April 14, 1921, the commissioner determined a deficiency in the estate tax of $79,759.16, above the $37,700.68 previously paid. On a claim for abatement and after some negotiation, it became evident that this deficiency would be reduced to an amount somewhat in excess of $50;000. Thereupon the petitioner, on December 5, 1921, drew her check to the- collector for $50,000, in order to reduce, pro tanto, the accrual of interest, at 10 per cent, on the deficiency. This cheek was actually delivered and accepted by the collector on February 21, 1922. The estate-tax deficiency was, on March 18,1922, determined to be $52,034.98 instead of $79,759.16, and the unpaid balance, with interest, aggregating $6,017.40, was paid on March 27, 1922.

In making her individual income tax return for 1921, the petitioner deducted from her gross income $50,000; and in 1922, deducted $6,017.40. In 1928 the executor recovered judgment against the government on account of the above deficiency in the estate tax for $60,329.32, of which $43,865.30 was for excess estate taxes paid, and $16,463.95 for interest on such refund.

Petitioner’s contention of a right to deduct from her income for 1921 the $50,000, for which she had drawn her cheek on December 5, 1921, cannot be sustained. She kept her accounts upon the basis of cash received and disbursed. The $50,000 was not actually paid until February 21, 1922. While, under section 214 (a) (3) of the Revenue Act of 1921, 42 Stat. 227, 239, it is provided that, “For the purpose of this paragraph estate taxes accrue on the due date thereof except as otherwise provided by the law of the jurisdiction imposing such taxes,” this provision must be construed with section 200, entitled “Definitions” where paragraph (4) reads:

“(4) The term ‘paid,’ for the purposes of the deductions and credits under this title, means ‘paid or accrued’ or ‘paid or incurred,’ and the terms ‘paid or incurred’ and ‘paid or accrued’ shall be construed according to the method of accounting upon the basis of which the net income is computed under section 212.” (Italics supplied.)

Compare United States v. Mitchell, 271 U. S. 9, 12, 46 S. Ct. 418, 70 L. Ed. 799. See, also, United States v. Anderson, 269 U. S. 422, 46 S. Ct. 131, 70 L. Ed. 347. United States v. Woodward, 256 U. S. 632, 41 S. Ct. 615, 65 L. Ed. 1131, is plainly not in point.

Parenthetically, we assume in the petitioner’s favor that an actual tender of the $50,000 in 1921 would operate pro tanto to prevent the running of interest at 10 per cent, and would make the later payment effective as of December, 1921. But there is and can be no serious contention of a valid tender in December, 1921. The taxpayer's attorney simply took the check to the commissioner’s office, on December 17, 1921; stated that he came “to pay this on account of that $50,000 odd, settlement”; that he was asked if he had any letter from Washington relative to the matter; that he said no; that it was stated to him that “they expected it most any time”; “to hold up on the check a few days, which hé did,” taking the cheek back to Taunton and keeping it in his safe until February 21, 1922, when he again took it to the commissioner’s office and left it. He testified “that if he had known as much in December as he did in February, he would have insisted on leaving the cheek there.”

The petitioner also complains that the board erred in determining the amount of her income tax for 1922., The board held her gross income for 1922 reducible by $8,169.68 —the difference between the estate tax paid in that year — $52,034.98, and $43,865.30 of such tax, recovered in 1928.

The petitioner’s counsel contends that this recovery in 1928 should be treated-like a debt charged off as bad and subsequently recovered, under article 331 of Regulation 74. But the board (and we think properly) held this point ruled by Inland Products Company v. Commissioner, 10 B. T. A. 235, affirmed by the Circuit Court of Appeals for the Fourth Circuit, 31 F.(2d) 867, 868. That ease involved, as does this, an erroneous payment of taxes. The fact that in the instant case there was enforceable remedy makes no difference as to the year to which the repayment should be applied. In that case the court said:

“But money erroneously paid to the government as taxes is not in any true sense a loss, and is not to be treated as such.”

There is no merit in the contention that the petitioner should be permitted to deduct from her income tax for 1922 the sum of $3,982.42 paid by her in that year as interest on the estate tax; for the 1928 recovery included $16,463.95 as interest, besides the principal (above stated) of $43,865.30.

The petitioner also contends that the reduction of $43,865.30 should be diminished by the amount paid as attorneys’ fees and expenses in the litigation for its recovery, to $22,435.68. We know of no authority warranting us in holding that attorneys’ fees and expenses, incident to the recovery of taxes erroneously assessed, may, either directly, or indirectly by set-off,, be charged against the government.

The decision of the Board of Tax Appeals is affirmed.


author: ALSCHULER, Circuit Judge.

text:
    MURRAY v. CHICAGO, ST. P., M. & O. RY. CO.
    No. 4472.
    Circuit Court of Appeals, Seventh Circuit.
    June 11, 1931.
    James E. Burns, of Chicago, Ill., for appellant.
    Nelson Trottman and Nelson J. Wilcox, both of Chicago, Ill., William T. Faricy, of St. Paul, Minn., and I. C. Belden, of Chicago, Ill., for appellee.
    Before ALSCHULER, EYANS, and SPARKS, Circuit Judges.»
   ALSCHULER, Circuit Judge.

Appellant Murray was a coal broker at Chicago, doing business under the name of Murray Coal & Coke Company. He represented certain coal mines, and under date of July 8, 1921, entered into three contracts with appellee railway company for the sale to the latter of coal. The contracts are identical, except that they are for different quantities, being for 70,000, 35,000, and 65,000 tons,, respectively, each terminating March 31, 1922, and specifying two kinds of coal, viz., “mine run” and “egg,” at appellee’s option, “mine run” at $2.70 and “egg” at $2.90 per ton. The contracts specified the mines to supply the coal, and provided that the ap-pellee should “place orders for daily shipments of coal under this contract in as uniform daily amounts as practicable, due allowance being made- for the accumulation of a reasonable amount of coal in stock by the Railway at times when the natural conditions make it advisable to accumulate such stock.”

The practice was for appellee to send Murray weekly orders specifying the daily requirements for the week, which orders were transmitted by him 'to the mines, which thereupon shipped the coal to the points directed, notifying both Murray and appel-lee; and therefrom Murray rendered to ap-pellee monthly invoices’, upon receiving which appellee paid Murray.

It appears that during the last three months of the contracts there were shipped to appellee 34,000 tons of “mine" run” and 27,580.31 tons of “egg”; but the written orders which appellee from time to time placed for all this coal specified “special mine run” coal, none of. them specifying “egg.” The invoices, however, which Murray, sent ap-pellee during that period specified “mine run” and “egg” in the above-indicated aggregates; but in each of these invoices the price stated for all the coal was $2.70 per ton, and it was at this price that appellee made its settle* ments with Murray.

• The action was for the difference on the “egg” coal between the contract price of $2.-90 peí; ton and the $2.70 per ton which ap-pellee paid. The cause was heard by the court without a jury, and judgment was given for appellee.

Murray testified that just prior to the beginning of the last three-month period Sed-don, who was appellee’s purchasing agent, asked him to include in future shipments as much “egg” coal as was possible, and that it was because of this oral request of Seddon that the “egg” coal was thenceforth included. Seddon, testifying some seven years after the occurrence, when he was an old man and retired from his near half century of employment with appellee, said that some such conversation did take place, but he did not know whether any orders had ever been placed on such basis. While at first seeming to confirm Murray’s version, he afterwards stated that on his own initiative he requested that “egg” coal be sent for one week as an experiment, and that he was not certain how it happened to be sent thereafter. Prom a reading of his testimony it does not appear to be definite or convincing.

It does not definitely appear how appellee came to employ the term “special mine run” in its orders. The contracts do not specify such grade. It was testified that it might indicate a modified “mine run” or a modified “egg.” It is very possible that in the conversation between Murray and Seddon ■ it was suggested that somewhat larger coal be supplied, short of the grade of “egg,” and that thereafter the order specified “special mine run” while the mines called it “egg,” and Murray charged it at $2.70.

Murray was not a producer of coal, but a seller, whose business was not so large but that it was* conducted by himself and his stenographer; and yet it appears that for four years after the billing, by him of the “egg” coal at $2.70 per ton, and payment therefor on that basis, he did not, as. he testified, know of the supposed error, and became aware of it then only through an examination of his books by income tax agents of the government.

The fact that one in Murray’s situation did not in all that time discover this error against him, involving over $5,000, was a circumstance tending to corroborate the conclusion that at the time of the transactions “egg” instead of “mine run” coal was sent for shippers’ convenience, or that it was then mutually understood by the parties that the price should not be in excess of $2.70 for any of the coal. Such conclusion finds further corroboration in the testimony of witnesses to the effect that the grades were produced by screening the coal, and that in filling their orders the mines would frequently accumulate a larger supply of “egg” than was needed, and, in order to keep their mines running and shipments moving, would often supply “egg” upon orders for “mine run.” This would tend to explain how it happened that, while no “egg” was specified in appel-lee’s orders, “egg” was billed, but was priced and paid for as “mine run,” which would tend to support appellee’s contention that the supplying of the “egg” upon orders for “mine run” was for the convenience of the shippers of the coal.

The controversy involves facts only, and the District Court heard the contradictory evidence thereon — largely of witnesses testifying in open court. We are not at liberty to disturb the court’s findings, and its judgment is affirmed.


text:
    HADLEY v. UNITED STATES.
    No. 4448.
    Circuit Court of Appeals, Seventh Circuit.
    June 11, 1931.
    John E. Dougherty, of Peoria, 111., for appellant.
    Walter M. Provine, U. S. Atty., and Marks Alexander, Asst. U. S. Atty., both of Springfield, Ill.
    Before ALS CHULEE, EVANS, and SPAEKS, Circuit Judges.
   ALSCHULER, Circuit Judge.

Appellant Hadley was convicted and sentenced under an indictment chai’ging him with unlawful possession and transporting of intoxicating liquors. Error is alleged in the overruling of Hadley’s motion to suppress the evidence obtained by search of his automobile, in which a large quantity of alcohol contained in gallon cans was being transported.

The federal agents had been credibly notified that intoxicating liquor was being transported into Burlington, Iowa, in an Oldsmobile coupé with a license plate of a given number of Wapello county, Iowa, over an Illinois federal highway leading into Burlington. On April 18 the agents were driving along the highway and overtook an automobile headed in the direction of Burlington, which tallied in every way with the information they had received, and having the appearance of being very heavily loaded. They signaled the car to stop, and on going toward it one of the agents detected what he testified to be a very strong odor of alcohol proceeding from it. Hadley, who was driving the ear, being asked what it contained, either did not answer or denied that he knew. Being asked for its key, he did not produce it. An agent took the key from the lock of the ignition switch, and, unlocking the locked rear part of the car, found the alcohol, which he seized. Motion made before the trial began for suppression of the evidence thus obtained was denied by the court at the dose of the government’s evidence.

We are of the opinion that the stated circumstances bring the case fairly within the rule announced by the Supreme Court in Carroll et al. v. United States, 267 U. S. 132, 45 S. Ct. 280, 69 L. Ed. 543, 39 A. L. R. 790. If, with such credible information respecting a particular car said to be transporting liquor over an Illinois highway into Burlington, the seeing of that car, heavily loaded, moving toward Burlington, supplemented by the strong odor of liquor emanating from the car before the agents touched it, did not afford the agents reasonable ground for believing that the ear was then being used for the transportation of liquor, the instances would be few indeed where officers would have reasonable ground for believing that automobile was being so used; and few indeed would be the instances where an automobile so employed could be lawfully seized with its unlawful cargo if it were held that a search warrant for that purpose was a necessary prerequisite. Such conveyances do not tarry in order that search warrants may be obtained, and their contraband freight would in most instances have been safely discharged while the officers were chasing about in search of a search warrant.

We believe that under the facts here disclosed the District Court properly denied the motion to suppress.

It is contended there was error in charging the jury that “if you believe the evidence of the witness Whitteberry, that he had all this information before he passed the ear, or prior to this search, that fact, together with the manner in which the car was weighted down, would be sufficient as a matter of law, if true, to warrant the search. If he didn’t have it, it would not be, and all of the evidence gained by reason of that search should be disregarded.”

It is contended for Hadley that it was for the court and not the jury to pass on the motion to suppress the evidence. But, if this be granted, wherein was Hadley thereby harmed ? The court had denied his motion to suppress, and, assuming the denial was justified, that ended the matter. But by the instruction the court gave Hadley another chance, to which he was not entitled, and interposed another hurdle in the path of the ’prosecution. Had the jury found for Had-ley upon this issue they would have acquitted him. Their finding against him thereon in no manner affected the court’s prior decision to the same effect. Surely the charge in no manner prejudiced Hadley.

Besides, there was no exception to the giving of this charge as a matter of law. Indeed, its propriety was conceded so far as concerns the referring of the question to the jury. At the conclusion of the charge Hadley’s counsel stated: “I want to preserve an exception to that as given, if the Court please, not that that would probably not be the law, but in this particular case Whitteberry, the man who claimed to have most of the information here, drove right by this ear, and didn’t attempt to stop it and would not have stopped it.”

Hadley’s contention 'that there was no evidence to sustain the jury’s verdict is too utterly groundless for discussion.

The judgment is affirmed.


author: KERRIGAN, District Judge.

text:
    WONG SUN YING v. WEEDIN, Commissioner of Immigration.
    No. 6415.
    Circuit Court of Appeals, Ninth Circuit.
    June 8, 1931.
    Hugh C. Todd, of Seattle, Wash., for appellant.
    Anthony Savage, U. S. Atty., and Hamlet P. Dodd, Asst. U. S. Atty., both of Seattle, Wash. (John F. Dunton, U. S. Immigration Service, of Seattle, Wash., on the brief), for appellee.
    Before WILBUR and SAWTELLE, Circuit Judges, and KERRIGAN, District Judge.
   KERRIGAN, District Judge.

The appellant, Wong Sun Ying, was bom in China, but claims the right to admission to the United States as a foreign-bom son of Wong Wah, a native-born citizen. The citizenship of the alleged father is conceded by the Immigration Service, but the Board of Special Inquiry and the Board of Review in the Department of Labor have refused appellant admission on the ground that the proof fails to establish that he is the son of Wong Wah. A petition for writ of habeas corpus has been denied, from which order this appeal is taken.

Considering the record as a whole, this court is of the opinion that the tribunals of the Department of -Labor have reached their conclusions after giving the applicant a fair hearing. Under the rule that the courts have the power to set aside the findings of such tribunals only when the record shows that the appellant has not been granted a fair hearing, the order for the deportation of appellant should not be disturbed.

In this case the alleged father was in China at a time to make possible the paternity of the 11 year old boy seeking admission to this country. Although the records of the Immigration Service upon the previous arrivals and departures of Wong Wah, the alleged father, and the testimony of near relatives, seem to show that he has a son of the approximate age of appellant, the discrepancies between the testimony of the boy and that of his alleged father are such that it may fairly be believed that appellant is not that son. The nature of the discrepancies and agreements indicates that the appellant is some other boy of the village substituted for the son of Wong Wah.

All of the witnesses agree in the main as to matters of family pedigree, the identification of family photographs, and as to details of the village and its life. The alleged father and the appellant agree as to certain irrelevant details of family life such as the length of time the alleged father spent on a visit to Hong Kong during his last visit and the fact that the father smoked cigarettes which he rolled himself. If a fraud were being perpetrated, 'the boy would be carefully coached as to matters of family pedigree and family pictures and as many details of family life as could be anticipated as a subject of questioning. It is significant in this connection that the alleged father left China for the United States only a few months before the boy. Agreement as to details about the village would be expected from a boy who had lived there. A bright boy of 11 years of age, knowing that he would be subjected to rigid cross-examination about his village, would sharply inspect many details before leaving.

Discrepancies in matters of family life which the alleged father might forget to mention are the ones which are significant. It is in just this field that a boy not brought up in the family would have to quickly fabricate his testimony. One of the most important discrepancies concerns a visit of an alleged married sister of appellant. Wong Wah testified definitely that this daughter returned from a distant village where she had been living for several years ever since her marriage and made a month’s visit at -his home during his last visit to China. The testimony agrees that the boy was home all that time. A boy of that age would not be apt to forget a complete family reunion, but he nevertheless testifies consistently that his sister had not been home since her marriage. The concurring visits of the father from a distant land and a sister not seen since her marriage are among the things that are deeply important to the mind of a 9 year- old boy, the age of appellant at that time. In considering the weight of discrepancies, the psychological importance of their subject-matter to the witness should be estimated. If the subject is psychologically important and if it concerns the intimate family life, then a discrepancy with reference to it is inconsistent with the alleged relationship. This is the essence of the test used by this court in the case of Weedin v. Yee Wing Soon, 48 F.(2d) 36, 37. In that ease the alleged father testified that the paternal grandmother of appellant had died within the year preceding the taking of the testimony, in the home shared by himself and the applicant, and that-on the day of her funeral there were two feasts attended by eight or ten guests from neighboring villages. The applicant' testified that she died at the time stated by the alleged father, but that she died, not in their home, but in the home of a brother, that no feasts were held, and that no guests came from a distance. The court held that such a discrepancy was inconsistent with membership in the same family of the witness and the -alleged father.

In the ease before us there is another discrepancy inconsistent with mutual family life. The appellant testified that a servant girl, 15 or 16 years old, had been employed in the home continuously sinee 1926 or 1925 up to the time when he left China. He stated that this servant girl did general work in the house, including the serving of meals to his father. The alleged father, on the other hand, testified that there never had been a servant girl employed in his house, and that no such girl assisted in the work or came to the house at all. The attorney for appellant attempts to explain this discrepancy by an ex parte statement made to him by the alleged father that he thought the examiner was inquiring about slave girls, and did not want to prejudice his position in this country by admitting that a slave girl was kept in his home. He admitted that there was such a girl in his home. The explanation is plausible, but it is equally plausible that the explanation was invented when the discrepancy was called to his attention.

The appellant testified that during all the time his father was last in China he slept in the same room, which is one of the bedrooms, with his father. The alleged father testified that throughout that visit he slept in the parlor of his house, and that the appellant never slept with him. This court has held that a similar discrepancy is not controlling in showing want of parental relationship if the rest of the record is consistent with the relationship. Hom Chung v. Nagle, 41 F.(2d) 126. Among the discrepancies which are ambiguous in themselves, but the effect of which is cumulative, may be mentioned the fact that the appellant had no recollection of having seen two trunks and a blanket brought by his alleged father from America which" were in his mother’s room during the father’s entire visit, and the fact that the appellant and his alleged father differed as to details of the latter’s departure and the taking of his baggage from the home. Some of these discrepancies, taken alone, might only indicate the inaccuracy of human observation and the frailty of human memory, but when they are added to what may be called the “key” discrepancies their effect is cumulative to induce in the mind a belief that the parental relationship does not exist between the American citizen •and the appellant. '

Judgment affirmed.


author: NETERER, District Judge.

text:
    PACIFIC INDEMNITY CO. v. UNITED STATES.

    No. 6376.
    Circuit Court of Appeals, Ninth Circuit.
    June 8, 1931.
    A. E. Cooley, Louis Y. Crowley, and Edward D. Keil, all of San Francisco, Cal., for appellant.
    Geo. J. Hatfield, U. S. Atty., and Lucas E. Kilkenny, Asst. U. S. Atty., both of San Francisco, Cal.
    Before WILBUR and SAWTELLE, Circuit Judges, and NETERER, District Judge.

      Rehearing denied July 22, 1931.

   NETERER, District Judge.

This is an appeal from a judgment for unpaid fines on a supersedeas bond in a criminal ease, given by the convicted party, one Randolph, as principal, and appellant as surety, conditioned that, “if the said J. W. Randolph shall'prosecute his appeal to effect, and if he fail to make his plea good; shall answer and pay all damages and costs and shall also personally be and appear * * * and shall surrender himself to the United States Marshal * * * then this obligation to be void.” The principal surrendered himelf to the marshal and is serving sentence, but did not pay the fine. Pursuant to statute and court rule, judgment was entered against appellant for the fine imposed.

Appellant contends that the statutory basis for the action is section 1273 of the Penal Code of California, and that by this statute the judgment cannot be sustained, citing People v. Barrett, 6 Cal. App. 578, 92 P. 647, and County of Merced v. Shaffer, 40 Cal. App. 163, 180 P. 342. The státute and cases clearly have no application. The instant ease is governed by federal statute (28 USCA § 869), which provides: “* * * The appellant shall prosecute his • * * appeal to effect, and, if he fails to make his plea good, shall answer all damages and costs. * * * ”

And by Rule 13 of this court: “Super-sedeas bonds in the District Courts must be taken with good and sufficient security that the appellant shall prosceute his appeal to effect and answer all damages and costs if he fail to make his plea good. * * * ”

And Rule 34 of the District Court: “Whenever, by the rules of this court or of either of the Appellate Courts or by any statute, security is required to be given, * * '* and the form of such security is not prescribed by sueh rule or statute, the same may be given, at the election of the party giving the same, either by a bond with sureties in the form in use at common law, or by an undertaking given by sureties on behalf of sueh party.”

The issue before the court is not whether the principal was required to supersede the judgment on the fine as a condition to be enlarged, but whether the undertaking is to pay the fine.

The case of Connley v. United States (C. C. A.) 41 F.(2d) 49, had to do with Rule 75 of the District Court of the United States for the Southern District of California, and the only question was whether or not the provisions made by the District Court with reference to bail were in excess of their requirements. The court held that defendant may .be enlarged on bail without superseding the judgment so far as concerns the issuance of execution to collect the fine imposed, unless further bond is given for that purpose.

Allowance of appeal stays imprisonment in the penitentiary, but does not release a convicted person from custody. Connley v. United States, supra; Hanes v. United States (C. C. A.) 299 F. 296.

The bond recites: “Randolph desires said order allowing an appeal to operate as a supersedeas and stay of execution and to be admitted to bail and to be permitted to be and remain at large” — two conditions (1) to stay execution, and (2) to remain at large. The only purpose for which an execution can issue after allowing appeal is for collection of fine and costs. The surety, by decisions, of the Supreme Court covering more than a century, was obligated to pay the fine on default of the principal. In Catlett v. Brodie, 22 U. S. (9 Wheat.) 553, 554, 6 L. Ed. 158 the court said: “The word ‘damages’ is here used, not as descriptive of the nature of the claim upon which the original judgment is founded, but as descriptive of the indemnity which the defendant is entitled to, if the judgment is affirmed. Whatever losses he may sustain by the judgment’s not being satisfied and paid, after the affirmance, these are the damages which he has sustained, and for which the bond ought to give good and sufficient security.”

And in Pease v. Rathbun-Jones Eng. Co., 243 U. S. 273, 280, 37 S. Ct. 283, 287, 61 L. Ed. 715, Ann. Cas. 1918C, 1147: “The supersedeas bond was in the common form, conditioned that the appellant shall ‘prosecute its appeal to effect and answer all damages and costs, if it fails to make its plea good.’ It has long been settled that a bond in that form binds the surety, upon affirmance of a judgment or decree for the mere payment of money, to pay the amount of the judgment or decree.”

No different rule applies in criminal eases, as suggested by appellant. 18 USCA § 569, provides: “In all criminal or penal catis-es in which judgment *. * * has been or shall be rendered, imposing the payment of a fine * * * the said judgment * * * may be enforced by execution against the property of the defendant in like manner as judgments in civil cases are enforced.”

And in Pierce v. United States, 255 U. S. 398, 41 S. Ct. 365, 65 L. Ed. 697, the court held that a judgment for a fine imposed in a criminal ease is enforceable, like a civil judgment, by execution.

The judgment is affirmed.


author: PER CURIAM.

text:
    ROWN v. BRAKE-TESTING EQUIPMENT CORPORATION et al.
    No. 5929.
    Circuit Court of Appeals, Ninth Circuit.
    June 1, 1931.
    For former opinion, see 38 F.(2d) 220.
    Ira J. Wilson, of Chicago, Ill., and John H. Miller and A. W. Boyken, both of San Francisco, Cal., for appellant-respondent.
    Chas. E. Townsend and Wm. A. Loftus, both of San Francisco, Cal., for appellees-petitioners.
    Before WILBUR and SAWTELLE, Circuit Judges, and NETERER, District Judge.
   PER CURIAM.

In this cause in the District Court an interlocutory decree was made and entered on the 29th day of May, 1929, in favor of the plaintiffs-appellees, in accordance with the prayer of the bill of complaint. On appeal to this court the decree of the District Court was reversed with instructions that the said suit be dismissed, finding that the plaintiff’s patent was invalid and also that there was no infringement. 38 F.(2d) 220. The mandate of this court when received by the District Court was duly entered, and in accordance therewith the final decree of the District Court was entered on or about the 21st day of April, 1930.

This is a petition by plain tiff-appellee for permission to apply to the District Court.for leave to file a supplemental bill, for reopening the case and for rehearing, i. e., a supplemental bill in the nature of a bill of review. The ground upon whieh this petition is based is newly discovered evidence, that is, evidence that some of the material testimony introduced at the hearing before the lower court was false, because in conflict with declarations of two of the witnesses who testified in the ease at bar. The allegation in the petition is to the effect that the said newly discovered evidence constitutes a complete refutation of the Seppmann testimony as given in the instant ease and credited by this court.

In the infringement suit, one of the grounds for the decision was that the patent sued upon was invalid because of prior use, the prior use being that of the Seppmann device whieh it was then testified was first made and used in the year 1912. The petitioner elaims that at the time of this infringement suit there was pending in the Patent Office an interference suit in whieh testimony in regard to this Seppmann device, given by Sepp-mann and Thomson, two of the witnesses who testified in this ease at the trial below, is to the effect that the device was not completed until July 8,1922, whieh was after the granting of the patent sued on. It is upon the discrepancies in the testimony given in the interference suit and in the infringement suit that the petitioner bases this petition.

A federal appellate court may ordinarily entertain an original petition for leave to file, in the court below, a bill of review, or a supplemental bill in the nature thereof, even when the application is made after the rendition of judgment by the appellate court, after the going down of the mandate, and after the dose of the term at whieh the judgment was entered. This method of procedure has been held proper in the leading case of Southard v. Russell, 16 How. 547, 14 L. Ed. 1052; In re Potts, 166 U. S. 263, 17 S. Ct. 520, 41 L. Ed. 994; National Brake & Electric Co. v. Christensen, 254 U. S. 425, 41 S. Ct. 154, 65 L. Ed. 341; In re Gamewell Fire-Alarm Tel. Co. et al. (C. C. A.) 73 F. 908; Central California Canneries Co. v. Dunkley Co., 282 F. 406 (C. C. A. 9).

In the ease of National Brake & Electric Co. v. Christensen, supra, the Supreme Court of the United States, speaking through Mr. Justice Day, said (page 431 of 254 U. S., 41 S. Ct. 154, 156): “That leave to file a supplemental petition in the nature of a bill of review may be granted after the judgment of the appellate court, and after the going down of the mandate at the close of the term at whieh judgment was rendered, was held In re Gamewell Fire-Alarm Teleg. Co., 73 F. 908, 20 C. C. A. 111, in a carefully considered opinion rendered by the Circuit Court of Appeals for the First Circuit, reciting the previous consideration of the question in eases in this court. We think these eases settle the proper practice in applications of this nature.”

The ground for the petition in this ease is that the testimony of Seppmann and Thomson as to the time of the completion of the Seppmann device was in conflict with their testimony in the interference ease. Such conflicting statements tend only to impeach these two witnesses. There were numerous other witnesses who corroborated their testimony in the case at bar. Mere impeachment of witnesses by proof of statements or testimony inconsistent with that given on the trial is not a sufficient basis for the granting of a petition of this character and it should for that reason be denied. Society of Shakers v. Watson et al. (C. C. A.) 77 F. 512; Acord v. Western Pocahontas Corporation (C. C.) 156 F. 989, affirmed (C. C. A.) 174 F. 1019, certiorari denied 215 U. S. 607, 30 S. Ct. 408, 54 L. Ed. 346.

The court in Society of Shakers v. Watson, supra, said (page 515 of 77 F.): “The discovery of new evidence, or of new witnesses, impeaching witnesses examined upon the original hearing, or for the purpose of showing subornation or perjury of such witnesses, is not generally regarded as a sufficient ground for allowing a bill of review.”

It is well settled, also, that the newly discovered evidence must be such that, if produced on the original trial, it would probably have caused a different result. Carson v. American Smelting & Refining Co., 11 F.(2d) 766 (C. C. A. 9). In the instant ease, even assuming the testimony of these two witnesses was entirely rejected, there is other evidence supporting the priority of the Seppmann device. Furthermore, it was decided in the original case that there was no infringement of the plaintiff’s patent, even if valid.

Petition denied.


author: NETERER, District Judge

text:
    HEINE v. NEW YORK LIFE INS. CO.
    No. 6405.
    Circuit Court of Appeals, Ninth Circuit.
    May 25, 1931.

      C. T. Haas and E. B. Seabrook, both of Portland, Or., for appellant.
    Huntington, Wilson & Huntington and Clark & Clark, all of Portland, Or., for ap-pellee.
    Before WILBUR and SAWTELLE, Circuit Judges, and NETERER, District Judge.
   NETERER, District Judge

(after stating the facts).

The agency in Germany was established as a distinct entity, a German creation under German law. A reserve fund was made and all premiums received were placed in that fund and invested in Germany under German official approval. Upon creation of “Erónos,” all funds and property of appellee in Germany were delivered to and supervision and execution of power assumed by the German Federal Insurance Board, and additional deposits made by the appellee, as required by the German valorization laws, in accordance with the decisions of the German Federal Insurance Board. The laws in relation thereto have been interpreted to apply to like policies, and many similar cases are noW pending before the German courts, they being open, able, competent, and efficient, and the German Federal Insurance Board being active and fully functioning.

It is obvious that this litigation is not the normal outgrowth of usual business activity and relation, but that it is the creation of activity to secure representation of some 28,-000 insurance policies executed in Germany by1 American companies,- written in the German language, in the relation of collection agent or agencies, and file actions thereon in the state, and federal courts of the United States, an indirect appeal from the German judiciary and the German Federal Insurance Board.

Incidentally, it may be said that the courts of the United States have uniformly applied the law of the place to insurance contracts. Orient Insurance Co. v. Daggs, 172 U. S. 557, 19 S. Ct. 281, 43 L. Ed. 552; Mutual Life Ins. Co. of N. Y. v. Cohen, 179 U. S. 262, 21 S. Ct. 106, 45 L. Ed. 181; Mutual Life Ins. Co. v. Hill, 193 U. S. 551, 24 S. Ct. 538, 48 L. Ed. 788; Northwestern Mut. Life Ins. Co. v. McCue, 223 U. S. 234, 32 S. Ct. 220, 56 L. Ed. 419, 38 L. R. A. (N. S.) 57. And, when suit was entertained, the cause of which arose in a foreign country, the courts granted relief according to the laws of the country where the action arose. Slater v. Mexican Nat. Ry. Co., 194 U. S. 120, 24 S. Ct. 581, 48 L. Ed. 900. It has been held that discharge under a foreign obligation in accordance with the foreign law is a complete defense. Zimmerman v. Sutherland, 274 U. S. 253, 47 S. Ct. 625, 71 L. Ed. 1034. It has also been held that the courts of the United States will not inquire into the validity, wisdom or justice of the laws of a foreign country, or the administration of foreign agencies. League v. De Young, 52 U. S. (11 How.) 185, 13 L. Ed. 657; Canada Southern Ry. Co. v. Gebhard, 109 U. S. 527, 3 S. Ct. 363, 27 L. Ed. 1020; Underhill v. Hernandez, 168 U. S. 250, 18 S. Ct. 83, 42 L. Ed. 456; Hewitt v. Speyer (C. C. A.) 250 F. 367.

Nor does it appear that enlarged rights may be obtained over the German law should a suit by a policyholder be entertained by the courts of the United States. Sutherland v. Mayer, 271 U. S. 272, 46 S. Ct. 538, 70 L. Ed. 943; Deutsche Bank v. Humphrey, 272 U. S. 517, 47 S. Ct. 166, 71 L. Ed. 383; see, also, Zimmerman v. Sutherland, supra. Such holding is in harmony with other courts. See, Chesterman’s Trust, (1923) 2 Chancery 466, where the court had before it a debt payable in German marks which had greatly depreciated, and it was held that it might be paid in the depreciated marks or in their exchange value converted into British currency. The same rule was applied in British Bank v. Russian Bank, (1921) 38 Times Law Reports 65, in which Mr. Justice Russell’said that he “had great sympathy with the defendants,' but it must be remembered that the same causes that caused the fall in the value of roubles had produced great depreciation in the plaintiff’s securities.” This was ap- . proved in Anderson v. Equitable Assurance Society, (1926) 134 Law Times 557.

It is asserted by appellant that, jurisdiction being apparent on the face of the ree- ' ord, it may not be challenged by motion but must be by plea, and that when, as here, jurisdiction is challenged by plea, by the answer, and put in issue by the reply, issue must be submitted to the jury for decision on the merits, and that there is no precedent for the order of the trial court.

As to the last objection, to have a precedent there must be an antecedent case; but the lack thereof does not defeat a right or privilege. No fault can be found with the cases cited by the appellant, the following of which are the more prominent: Farmington v. Pillsbury, 114 U. S. 138, 5 S. Ct. 807, 29 L. Ed. 114; Hartog v. Memory, 116 U. S. 588, 6 S. Ct. 521, 29 L. Ed. 725; Mexican Central Railway Co. v. Pinkney, 149 U. S. 194, 13 S. Ct. 859, 37 L. Ed. 699; City Railway Co. v. Citizen’s Street Railroad Co., 166 U. S. 557, 17 S. Ct. 653, 41 L. Ed. 1114; Union Mutual Life Insurance Co. v. Kirchoff, 169 U. S. 103, 18 S. Ct. 260, 42 L. Ed. 677; York County Sav. Bank v. Abbot (C. C.) 131 F. 980. These cases do not point the way. One sustains dismissal when the fact appears to a legal certainty; another, where a party is collusively added; another holds that the evidence considered must be pertinent to the issue, or to the inquiry by the court; another holds that where there is reasonable plausibility of bona fide claim, jurisdiction will be passed to trial on the merits, and another is one where the court holds that claim rightly viewed unfounded must be denied.

Every requirement appears to be met substantially by the record. Process in this case was served upon the statutory agent of the appellee in Oregon, appointed as a condition to do business in that state and for the convenience and protection of residents to whom policies may be issued and afford them access to the courts of the state or district.

The appellant contends that, notwithstanding the agreement that the German courts shall have exclusive jurisdiction, such agreement is not binding on the federal courts, vested with their jurisdiction by th6 United States Constitution, of which they cannot be deprived by foreign laws or agreement. The appellant also contends that these are not actions upon the policies. But, whatever the designation may be, the basis is the policies.

No alien has a constitutional right to sue in the United States courts. Kline v. Burke Construction Co., 260 U. S. 226, 43 S. Ct. 79, 67 L. Ed. 226, 24 A. L. R. 1077. The United States District Courts have such jurisdiction as the Congress confers. 28 USCA § 41, grants jurisdiction as follows:

“First. Of all suits of a civil nature, at common law or in equity * * * between citizens of a State and foreign States, citizens, or subjects. * * *
“Third. Of all civil causes of admiralty and maritime jurisdiction, saving to suitors in all cases the right of a common-law remedy. • • *”

Civil cases and actions in admiralty and maritime jurisdiction have equal status, and the courts have uniformly, where the question has arisen, declined to entertain jurisdiction in admiralty suits by nonresidents when in the discretion of the court it would be inconvenient and inexpedient to do so. And no distinction has been made to civil cases.

Nor is the right to challenge the jurisdiction or to invite the discretion of the court waived or forfeited by removal from the state to the federal court, or the right of the court, after issue joined, to make investigation on noti.ee and, in its discretion, decline jurisdiction after such inquiry. 28 USCA, § 81, provides that in all suits removed the court shall proceed as if the suit had been originally commenced in the district court and the same proceedings had been taken in such suit in said district court as shall have been had therein in said state court prior to its removal.

Upon the face of the record the district court had jurisdiction when the ease came to it from the state court. When the issue first came to its attention, and upon inquiry and examination, the court became cognizant of the status and relation and no doubt had inherent power to protect itself from a deluge of litigation by nonresidents, inspired by contingent retainers to avoid or overcome foreign laws and interpretation and application thereof by foreign courts of the country of the situs of the contract; and it had the power to prefer resident litigants of the district in access to overcrowded calendars, for, as Justice Holmes said in Douglas v. New York, N. H. & H. R. Co., 279 U. S. 377, 387, 49 S. Ct. 355, 356, 73 L. Ed. 747: “There are manifest reasons for preferring residents in access to often overcrowded Courts, both in convenience and in the fact that broadly speaking it is they who pay for maintaining the Courts concerned”; and it had the power to prevent imposition upon its jurisdiction and use of the court as a “cover for injustice to the defendants” (Cuba R. Co. v. Crosby, 222 U. S. 473, 479, 32 S. Ct. 132, 133, 56 L. Ed. 274, 38 L. R. A. (N. S.) 40) by reason of the enormous expense involved in bringing across the continent witnesses from Germany and New'York and the records of appellee which plaintiff demands as necessary in another case and, if so, must also be necessary in this case, the removal of which would destroy the ability of the appellee, representing more than 2,500,000 policyholders, to function.

Comity between the United States and Germany should also have consideration.

With the foregoing, nothing can be added to the opinion of Judge Robert S. Bean, who at the time of his recent demise was the dean of the American bench, and whose death terminated a creditable judicial career of more than forty-eight years on the state and federal bench. His opinion is reported in (D. C.) 45 F.(2d) 426, and is adopted as a part of the opinion of the court.

Affirmed.


text:
    Paul HERRMANN, Appellant, v. NEW YORK LIFE INSURANCE CO., a Corporation, Appellee.
    No. 6406.
    Circuit Court of Appeals, Ninth Circuit.
    May 25, 1931.
    C. T. Haas and E. B. Seabrook, both of Portland, Or., for appellant.
    Huntington, Wilson & Huntington and Clark & Clark, all of Portland, Or., for ap-pellee.
    Before WILBUR and SAWTELLE, Circuit Judges, and NETERER, District Judge.
   PER CURIAM.

The order of dismissal is affirmed on the authority of Heine v. New York Life Insurance Co. (C. C. A.) 50 F.(2d) 382, this day filed.


author: MOORMAN, Circuit Judge.

text:
    DEDICH et al. v. NATIONAL COAL CO. et al.
    No. 5711.
    Circuit Court of Appeals, Sixth Circuit.
    June 10, 1931.

      R. E. Scott, of Cambridge, Ohio (R. T. Scott, of Cambridge, Ohio, on the brief), for appellants.
    Chas. S. Sheppard, of Cambridge, Ohio, and H. A. Hauxhurst, of Cleveland, Ohio (Bulkley, Hauxhurst, Jamison & Sharp and Frank X. Cull, all of Cleveland, Ohio, on the brief), for appellees.
    Before DENISON, MOORMAN, and HICKENLOOPER, Circuit Judges.
   MOORMAN, Circuit Judge.

This is an appeal from a deeree dismissing a bill seeking reformation of a deed executed and delivered to appellants by the National Coal Company. The deed conveyed a tract of land in Guernsey county, Ohio, reserving to the grantor, its successors and assigns, “all of the coal, oil, gas and all other minerals in or under” the land, with “the right to drill and prospect for the same at any time,” together with all necessary or convenient rights of way on the surface and under it -for approaching, mining, moving and transporting “said coal and all above minerals.” It is claimed by appellants that ■ the deed erroneously excepted the oil and gas from the grant. This claim is primarily based upon two documents offered in evidence as constituting the contract of sale.

It is conceded that the National Coal Company was the owner of the property in fee in 1909. In October of that year, A. Schultz, who operated a store for the company, contracted in writing to sell the land to Mike Dedich. A few days later, on November 4th, Loomis, vice president of the coal company, entered into a new contract with Mike Dedich, in which Joe Dedich was also named as one of the purchasers. On November 22, 1909, the deed in question was made, and on December 1st the Dediehs executed a mortgage on the property to the coal company to secure the unpaid portion of the purchase price. Subsequently, in November of 1926, a receiver for the coal company, under authority of a court order, executed a lease for the oil and gas in the property to the Wiser Oil Company, which lease was filed for record in Guernsey county on December 13, 1926. -During the same month the Wiser Company began drilling on the property for oil, and on March 18, 1927, the first oil well came in. On March 29, 1927, appellants made claim to the oil and gas.

It is too well settled to need citation of authority that one who seeks to reform a deed on the ground of mutual mistake, or mistake on one side and fraud on the other, must establish the mistake or fraud by clear and convincing evidence. Appellants rely, in the present ease, upon the documents executed by Schultz and Loomis, the originals of which were before the court below and have been brought to this court for inspection. The accuracy of both is questioned. The Schultz document, as offered in evidence, excepts from the grant “any minerals under this ground, as coal only.” Appellants contend that this phrase limited the exception to coal and did not include oil and gas. An examination of the document convinces us that the words “as coal only” were written into it by some one other than the original draftsman. It requires no expert to deteet the difference in the handwritings. The lower court found as a fact that the words “were not in the original document.” The Loomis document, as offered in evidence, excepted from the grant “coal and all other mineral substances but oil and gas.” The word “but” is relied upon by appellee as excepting from the exception oil and-gas. It is evident, from an inspection of this document, that the word was written in it by some one other than the draftsman of the document. Furthermore, the word was squeezed into a place not naturally intended for it, and it also appears that it was placed over an erasure of the symbol The explanation as to why, after excepting coal and all other mineral substances, the draftsman added “& oil and gas”, may be found in the circumstance that it was probably thought that oil and gas were not included within the phrase “mineral substances.”

In view of the explicit terms of the deed, the time that elapsed after its execution and delivery before the Dediehs asserted claim to the oil and gas, and the testimony tending to show that on several occasions they disclaimed ownership thereof, saying that it was in the coal company, we can give little credence to the somewhat contradictory testimony of Schultz and one of the Dedichs to the effect that it was the understanding that the oil and gas were not to be excepted from the conveyance. Although appellants were uneducated, only one of them being able to read and he but slightly, it seems incredible that they would accept a deed reserving to the grantor the oil and gas and retain it for nearly nineteen years without objection if, as they claim, they were careful to make it a condition of their contracts with Schultz and Loomis that the oil and gas should pass. Did it appear that the contracts executed by Schultz and Loomis were unchanged, we would hardly be justified, in view of the parol testimony, in overruling the decision of the District Judge. When, however, it is considered that the deed correctly states the exceptions and reservations which were embodied in both of the prior documents, if there be disregarded the words written into them by some one other than the draftsman — in one over an erasure at a place where there was no room for such a word, and in the other in a way that evidenced an awkward purpose of limiting what had been stated immediately theretofore— we entertain no doubt of the rightness of the decision of the lower court. Having reached this conclusion, it is not necessary to consider the other defenses, such as whether the rights of the Wiser Oil Company, a bona fide lessee without notice and for a valuable consideration, are paramount to the rights of appellants, even though as between appellants and the National Coal Company the deed did not express the intentions of the parties. It is sufficient that appellants failed to show that there was a mutual mistake, or a mistake on their part and fraud on the part of the coal company.

The decree is affirmed.