author: DONAHUE, Circuit Judge

text:
    PARKER et al. v. ELGIN et al.
    (Circuit Court of Appeals, Sixth Circuit.
    May 15, 1925.)
    No. 4155.
    1. Appeal and error <@=I032(I) — Duty of plaintiff in error to show affirmatively that error intervened to his prejudice.
    It is duty of plaintiff in error to show affirmatively that error intervened to his prejudice in trial of the cause.
    2. Evidence <®=470 — When opinion evidence of nonexperts admissible, stated.
    Nonexpert opinion evidence may be given in many matters where it is impossible to reproduce and describe in words every detail on which’ opinion of witness is predicated.
    3. Evidence' <@=472(4) — Opinion of passenger as to whether boy was in peril, and whether mototman should have observed peril, held incompetent.
    Opinion of passenger on street car as to perilous position of boy, and whether motorman should have observed peril, held incompetent; question being for jury to determine from evidence.
    4. Appeal and e'rror <@=263(1, 3) — In absence of exceptions to charge or to refusal to charge as requested, record presented nothing for review.
    Where no exceptions were taken to any part of charge nor to refusal to charge as requested, record did not present those, questions for review, in absence of plain error authorizing appellate court to review matter to prevent gross injustice under rule 11 of the Circuit Court of Appeals, Sixth Circuit.
    5. Appeal and erro'r <@=977(5) — Overruling of motion for new trial is not reviewable by appellate court except.for abuse of discretion.
    Overruling of motion for new trial is not reviewable by appellate court except for abuse of discretion.
    6. New trial <@=6 — Overruling of plaintiffs’ motion -for new trial held not abuse of trial court’s discretion.
    Overruling of plaintiffs’ motion for new trial, in action against street railroad for injuries to boy struck by street car when he fell in front of car, held: not abuse of trial court’s discretion.
    In Error to tbe District Court of the United States for the Western District of Tennessee; J. W. Ross, Judge.
    Separate actions by Jerome P. Parker, Jr., by his next friend, and by Jerome P. Parker, Sr., against E. S. Elgin and another, receivers of the Memphis Street Railway Company. Judgment for defendants, and plaintiffs bring error.
    Affirmed.
    Jerome P. Parker, Sr., and Jerome P. Parker, Jr., a minor, by his next friend, brought separate actions in the circuit court of Shelby county, Tenn., against E. S. Elgin and T. H. Tutwiler, receivers of the Memphis Street Railway Company. In the one ease Jerome P. Parker, Jr., sought to recover damages for personal injuries sustained by him by being struck by a street car then being operated by the agents and employees of the above-named receivers of the Memphis Street Railway Company. In the other case Jerome P. Parker, Sr., father of said minor, sought to recover expenses incurred by him, incident to the injuries received by his son, fbr doctors, nurses, etc., which it was agreed amounted to $2,960. Upon application of the receivers, both of these eases were removed to the United States District Court, where they were tried together.
    It was alleged by each of these plaintiffs in their separate declarations that the defendant’s agents and employees were negligent in the operation of the street car that struck and injured Jerome P. Parker, Jr., and that this negligence was the proximate cause of Ms injuries. The defendants pleaded 'not guilty and contributory negligence, but on the hearing the plea of contributory negligence was withdrawn.
    The accident resulting in these injuries occurred about 150 feet east of the intersection of Peabody avenue and McLean boulevard in the city of MempMs. At tMs point the street railway has a double-track line on Peabody avenue on a neutral strip construction in the center of the street and separated from the traveled portion by concrete curbs. This strip is not paved or used for traffic, but divides the street in its center; the east-bound traffic using the south portion of the street and the west-bound traffic using the north side. The car was traveling east on the south track at a speed of from 18 to 22 miles per hour. The Parker boy, who was about 12 years of age, was riding a bicycle in a westerly direction, but was on the south side of the neutral strip instead of the north side used for west bound traffic. His bicycle was from 4 to 6 feet from the track, and he was moving slowly toward the oncoming car. When he was first noticed by the witnesses, he was probably about 500 feet away from the ear, and a boy companion was walking along beside him and holding the bicycle. This companion left Mm and went to the south sidewalk, but continued to keep pace with Mm until the approaching street ear was about 72 feet away, at which time he ran out from the sidewalk toward the boy “as if to tag him.” The Parker boy either dodged on his bicycle or was shoved by his playmate. His wheel turned to the right, and he fell upon the ear track about 30 feet in front of the approaching car, wMch, before it could be stopped, struck and seriously injured Mm. Upon the issues joined by the pleading, the jury found in favor of the defendant. A motion for a new trial was overruled, and judgment entered upon the verdict.
    J. E. Holmes, of Memphis, Tenn. (Phil M. Canale and Holmes & Canale, all of Memphis, Tenn., on the brief), for plaintiffs in error.
    Roane Waring, of Memphis, Tenn. (Miles, Waring & Walker, of Memphis, Tenn., on the brief), for defendants in error.
    Before DENISON, DONAHUE, and MOORMAN, Circuit Judges.
   DONAHUE, Circuit Judge

(after stating the facts as above). It is claimed on the part of the plaintiffs in error that the motorman in charge of tMs car was negligent, in that although he could see these boys playing in proximity to the track when he was 500 feet away from them, be did nothing whatever to put his ear under control or to slow up the speed of his ear until the boy was in the act of falling on the street car track. It was'then too late to stop Ms ear in time to prevent injury.

T. O. Vinton, Jr., was a passenger on this ear. Being about to leave, he came out on the front platform with the motorman. He saw the children playing in the street about 500 feet away. Counsel for plaintiffs asked this witness whether or not the motorman could tell these boys were in peril. The court sustained an objection to this question, but no exceptions were noted. Counsel then asked the witness, “Well, what was it about tMs situation that attracted your attention ?” To this question the defendant objected and the court sustained the objection. Thereupon counsel for plaintiffs said: “All right, now why was your attention attracted towards those boys?” The defendant objected, and the court said: “Yes, he can detail what he saw, but not the impression that was made upon him.” Mr. Holmes, counsel for plaintiffs : “I don’t” want to get any impression that was made upon him.” Thereupon the following question was asked: “What was the boy doing that caused you to look at the boys?” The defendant objected to this question on the ground that he -had fully stated what the boys were doing. The Court: “Well, I think he has detailed what they were doing. If there is any particular, time that you want to direct Ms attention to.” Mr. Holmes: “We except to your honor’s ruling.” Later the witness was asked by counsel for plaintiffs: “Why were you watching the boys? A. Well, I was just watching them because11 was interested in them; they were there. Q. Well, why were you interested in them?” The Court: “Well, I don’t think you can put too much speculation into it.” Mr. Holmes: “I don’t want to put any speculation into it.” Court: “Well, you asked Mm why.” Mr. Holmes: “We except.” The record does not disclose that counsel stated to the court the answer expected.

Rule 11 of tMs court specifically provides that when the error alleged is to the admission or. the rejection of evidence, the assignment of error shall quote the full substance admitted or rejected. TMs is the general rule, not only in the federal courts, but in many, if not all, of the state courts. Shauer v. Alterton, 151 U. S. 607, 616, 14 S. Ct. 442, 38 L. Ed, 286; Anderson Lumber Corp. v. Lehto (C. C. A.) 282 F. 488; Camp Mfg. Co. v. Beck (C. C. A.) 283 F. 705.

It is the, duty of a plaintiff in error to show affirmatively that error intervened to his prejudice in the trial of the cause. Mercantile Trust Co. v. Hansey, 205 U. S. 298, 306, 27 S. Ct. 535, 51 L. Ed. 811, 10 Ann. Cas. 572.

However that may he, the question whether these boys were in peril, and whether the motorman was in position to see their peril in time to prevent the injury, were the ultimate questions, for the jury to determine from the facts and circumstances established by the evidence. Opinion evidence may be given by a nonexpert witness in many matters where it is impossible to reproduce or describe in words every detail upon which the opinion of the witness is predicated, but this is not such a ease. The facts and circumstances preceding the injury were not in dispute. They were of such a nature that they could be readily understood by the jury. The testimony of the witness was clear, intelligent, and unambiguous. There were no other facts and circumstances within the knowledge of the witness than those detailed in hfs testimony, that would place him in better position than the jury to form an opinion of the peril to these children from the approaching ear or the duty of the motorman after their location upon the street and their conduct became apparent to him when he was still five hundred feet away. For this reason the opinion of the witness was not competent evidence.

It was also insisted upon the part of the plaintiffs in error that the trial court erred in its charge to the jury and in refusing to give plaintiffs’ request. No exceptions were taken to any part of the court’s charge,, nor was exception taken to the refusal of the court to charge as requested. The record, .therefore, does not present these questions. Guerini Stone Co. v. Carlin Constr. Co., 248 U. S. 334, 348, 39 S. Ct. 102, 63 L. Ed. 275; United States v. U. S. Fidelity Co., 236 U. S. 512, 529, 35 S. Ct. 298, 59 L. Ed. 696; Pennsylvania Co. v. Sheeley, 221 F. 901, 905, 137 C. C. A. 471; Eaton v. Clabaugh, 251 F. 575, 163 C. C. A. 569; Glynn v. May (C. C. A.) 271 F. 464; Simmons Hardware Co. v. Railway Co. (C. C. A.) 279 F. 929.

It is urged, however, upon the part of plaintiffs in error, that a reviewing court may notice a plain error not assigned. Un•der rule 11 of this court, that may sometimes be done to prevent a gross miscarriage of justice, yet nothing appears in this record that would justify this court in departing from its general rule requiring litigants, in fairness to the trial court and in furtherance of the dispatch, of judicial business, to present every question to the court upon the trial of the cause. The plaintiffs in error have had a full and fair trial by jury. The charge of the court substantially covered every proposition contained in the request and specifically called the jury’s attention to the law in reference to the duty of the motorman and the degree of care he should exercise • for the protection of children of such immature age that they cannot be expected to exercise such care for their own safety as would be expected and required of persons of more mature years.

The overruling of a motion for a new trial is not reviewable by an appellate court except for an abuse of discretion. Simmons Hardware Co. v. Railway Co., supra. It is clear that the trial court, in overruling the motion for a new trial, did not abuse its discretion.

For the reasons stated, the judgment of the District Court is affirmed.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    HAWKINS v. BORTHWICK, U. S. Marshal for the Southern Dist. of Ohio. SAME v. UNITED STATES.
    (Circuit Court of Appeals, Sixth Circuit.
    May 11, 1925.)
    Nos. 4371, 4392.
    1. Criminal law <@=s>242(7) — Evidence held to show probable cause for issuing warrant for removal of accused to another district and for discharging writ of habeas corpus.
    Evidence helé to show probable cause for issuing warrant for removal of accused to another district to answer indictment charging use of mails to defraud under Penal -Code, § 215 (Comp. St. § 10385), and conspiracy under section 37 (section 10201) to violate section 215, and' discharge of writ of habeas corpus was warranted.
    2. Criminal law <®=s>242(6) — Generally, decision of court where indictment was found that it has jurisdiction is not open to question in proceedings in another district for removal of accused.
    Generally, decision of court where indictment was found that it has jurisdiction is not open to question in proceedings in another district on application for removal of arrested defendant to district in which indictment is pending.

      3. Criminal law <@=>242(5') — Indictment establishes prima facie the existence of probable cause for removal of accused to another district.
    Indictment itself establishes prima facie the ’ existence of probable cause for removal of accused to district in which indictment was found.
    4. Criminal law <@=>242(8) — Merits of accused’s guilt or innocence held not triable in proceedings for his removal to another district.
    Though court in proceedings for removal of accused to another district may hear competent evidence rebutting prima facie showing made by indictment, merits of accused’s guilt or innocence were not triable in- such proceedings, where accused failed to appear for trial under indictment charging use of mails to defraud and conspiracy under Penal Code, §§ 37, 215 (Comp. St. §§ 10201, 10385) and capias was issued for his arrest, and other joint defendants had been convicted.
    5. Criminal law <@=>586, 1151 — Refusing or granting continuance is for sound discretion of trial court, and its decision will not be disturbed by appellate court except for clear abuse thereof.
    Refusing or granting of continuance is ordinarily addressed to sound discretion of trial court, and its decision will not be overturned by appellate court in absence of abuse thereof.
    6. Criminal law <@=>242(8) — Refusal to grant continuance in proceedings for removal of accused to another district held not error.
    It was not error to refuse to grant continuance in proceedings for removal of accused to another district, so that testimony before commissioner could be taken anew, where court itself took testimony of accused.
    7. Criminal law <@=>242(8) — Refusal to grant continuance, in proceedings for removal of accused to another district, held not error.
    In proceedings for removal of accused to another district, it was not error to refuse continuance until certain witnesses could be produced, where there was no showing that witnesses could and would be procured or that necessary steps had been taken to obtain their depositions, and there was no disclosure of nature of testimony sought to be obtained and that it would be competent or material.
    8. Criminal law <@=>242(7) — Testimony going • to merits properly excluded in proceeding for removal of accused to another district.
    In proceeding for removal of accused to another district, testimony, though material, as to merits, held properly excluded as not tending to overcome prima facie showing of probable cause.
    9. Criminal law <@=>l 115(1) — Record of proceedings for removal of accused to another district held not to present anything for review.
    Record embracing, previous to petition for writ of error, only application for warrant of removal of accused, entry dismissing writ of habeas corpus and granting application for warrant of removal, and assignment of errors, held to present nothing for review, in absence of bill of exceptions or testimony otherwise.
    Appeal from the District Court of the United States for the Western Division of the Southern District of Ohio; Smith Hieken-looper, Judge.
    In Error to the District Court of the United States for the Western Division of the Southern District of Ohio; Smith Hieken-looper, Judge.
    Morton S. Hawkins was indicted with others for using mails to defraud, and conspiracy to violate Pen. Code, § 215. On his failure to appear for trial, he was arrested on capias, and petitioned for habeas corpus. The District Court for the Southern District of Ohio ordered his removal to the district of Indiana, and in the same order dismissed the writ of habeas corpus, and he appeals, and brings error.
    Order affirmed.
    Fred W. Warner, of Marion, Ohio (Fred L. Carhart, of Marion, Ohio, on the brief), for appellant.
    Homer Elliott, Sp. Asst. Atty. Gen. (Hav-eth E. Mau, of Cincinnati, Ohio, on the brief), for appellees.
    Before DENISON, DONAHUE, and KNAPPEN, Circuit Judges.
   PER CURIAM.

On March 10,1924, Morton S. Hawkins and 18 others were jointly indicted in the District of Indiana upon charges of using the mails to promote fraudulent schemes (Penal Code, § 215 [Comp. St. § 10385]), as well as a charge of conspiracy (Penal Code, § 37 [section 10201]) to violate section 215 of the Penal Code. On January 24, 1925, the District Court below granted the application of the United States attorney for appellant’s removal from Ohio— where he had been arrested upon warrant by a commissioner for the Southern District of Ohio — to the Indiana court to answer the indictment referred to (unless the required bond for his appearance should be given); and by the same order dismissed the writ of habeas corpus, brought to obtain discharge from the custody of the marshal. No. 4371 is an appeal to and No. 4392 is a writ of error from this court to review the order of January 24,1925, made by the District Court for the Southern District of Ohio. Applications for allowance of appeal and for writ of error were made on the same day.

Appellant complains that before both the commissioner and the District Court below, he was not permitted to show want of probable cause for the issuing of the warrant challenging the sufficiency and lawfulness of the indictment as competent evidence, and asserts that he was not given reasonable time to produce witnesses and to enable him to have the presence and services of his attorney.

On March 31,1924, Hawkins had appeared in the District Court for the District of Indiana — presumably having been duly arrested- — and there moved to quash the indictment, which motion was overruled.

He thereupon'filed demurrer to the indictment, which also was overruled; he was thereupon arraigned and pleaded not guilty. On October 1, 1924, he filed a motion for a bill of particulars, which was denied. Having failed to appear for trial, his appearance- bond was forfeited and capias issued for his arrest. On trial later had in the District Court for the District of Indiana under the indictments in question, fourteen of the joint defendants were convicted (two others being acquitted), and on January 10, 1925, sentences were pronounced upon those convicted, several of whom, at least, have taken writs of error from the United States Circuit Court of Appeals for the Seventh Circuit for a review.

Upon the hearing before the District Court below, which resulted in the order here under review, appellant’s identity was not only affirmatively 'established, but was not denied by appellant, who admitted that he was a resident of Portland, Ind., until September, 1923. Thirteen of the fifteen overt acts charged in the conspiracy count are in terms laid previous to that date, and in each of the counts charging fraudulent use . of the mails, such mailing is charged at dates prior to September, 1923.

Appellant' gave some testimony before the commissioner regarding his own personal .and family history, but was not permitted to answer seven questions manifestly addressed to the meritorious question of his guilt or innocence of the charges in the indictment.

We think appellant has no cause to complain of the order of the District Court below. The jurisdiction of the court in which the indictment was found is not, on this record, open to question here. Normally the decision of that question would be for the Indiana court. Rodman v. Pothier, 264 U. S. 399, 402, 403, 44 S. Ct. 360, 68 L. Ed. 759, The indictment itself established prima facie the existence of probable cause. Beavers v. Henkel, 194 U. S. 73, 84, 85, 87, 24 S. Ct. 605, 48 L. Ed. 882; and while the question of probable cause is'not thereby concluded, Tinsley v. Treat, 205 U. S. 20, 29, et seq., 27 S. Ct. 430, 51 L. Ed. 689, and the District Judge, might hear other competent evidence rebutting the prima facie showing made by the indictment, it was not open to appellant upon the ease made, and under the situation here presented, to try out before the commissioner or the District Judge the meritorious-question of appellant’s guilt or innocence. Hyde v. Shine, 199 U. S. 62, 84, 25 S. Ct. 760, 50 L. Ed. 90; Henry v. Henkel, 235 U. S. 219, 228, et seq., 35 S. Ct. 54, 59 L. Ed. 203; Price v. Henkel, 216 U. S. 488, 492, 30 S. Ct. 257, 54 L. Ed. 581; Greene v. Henkel, 183 U. S. 249, 259, et seq., 22 S. Ct. 218, 46 L. Ed. 177. There was ample evidence to justify the order of removal and the discharge of the writ of habeas corpus.

Nor do we think reversible error was committed in the refusal of continuance. Ordinarily questions of that nature are addressed to the sound discretion of the court which will not be overturned in the absence of abuse thereof which we think does not appear. It was fairly open to inference that appellant was seeking unnecessary delay. If there were otherwise merit in the proposition that the testimony before the commissioner should be taken anew and not certified up, the merit disappeared when the District Judge took before himself the testimony of appellant. Nor do we think appellant has any reason to complain of the refusal to continue the hearing until certain witnesses for whom appellant filed praseipe could be produced. Not only was there no showing that the attendance of the witnesses could and would be procured, or that the necessary steps had been taken to obtain their depositions, but -there was no disclosure of the nature of the testimony sought to be obtained from the witnesses, and thus nothing to show that the testimony would be competent or material. The application was, to- say the least, addressed to the sound discretion of the judge.

Prom what we have said regarding the nature of the hearing, it follows that the District Judge was justified in refusing to permit the witness Doughty to testify that he' was a stockholder and an investor in one of the companies and a large investor in another of the companies, fraudulent transactions in whose stocks were charged in the indictment, and that one of those companies has been a prosperous institution, has earned more than the necessary 8 per cent, dividend, and has paid its dividends out of its earnings. However material this testimony might be upon tbe trial under tbe indictment, it would not reasonably tend to overcome tbe prima facie showing of probable cause.

This cause came on for expedited bearing in this court upon tbe appeal in No. 4371. During tbe bearing it appeared that tbe writ of error in No. 4392 had been taken out and the record therein printed — embracing, previous to tbe petition for writ of error, only tbe application for warrant of removal, tbe entry of January 24, 1925, dismissing writ of habeas corpus and granting application for warrant of removal,- plus an assignment of errors. In tbe absence of bill of exceptions or testimony otherwise, no ease for review is presented by that writ and record. The questions involved therein seem, however, to be fully covered by tbe briefs and arguments in 4371, tbe record in which ease includes testimony and bill of exceptions fairly applicable to a record in No. 4392. Tbe entry of January 24, 1925, appears also in tbe record in No. 4371; tbe appeal in which case is broad enough, in terms, to include tbe warrant for removal as well as tbe habeas corpus order. Counsel have suggested no reason for separate or further bearing in No. 4392, which, indeed, could have no office unless considered as part of tbe record in No. 4371. We have accordingly so treated it.

For tbe reasons stated in this opinion, tbe order of January 24, 1925, is affirmed in its entirety; that is to say, both as regards tbe order and warrant for removal and as to tbe dismissal of writ of habeas corpus.


text:
    LEVINSON v. UNITED STATES.
    (Circuit Court of Appeals, Sixth Circuit.
    May 4, 1925.)
    No. 4309.
    1. Post office <§=48(4) — Allegation that defendant expected personal profit unnecessary to sufficiency of indictment charging use of mails to defraud.
    Allegation that defendant expected to obtain some benefit from carrying out alleged fraudulent scheme is not essential to indictment, under Criminal Code, § 215 (Comp. St. § 10385), charging unlawful úse of mails in furtherance of scheme to defraud.
    2. Post office <§=48(8) — Indictment charging use of mails with intent to defraud held not at fatal variance with proof in matter of allegation of persons intended to be defrauded.
    Indictment, under Criminal Code, § 215 (Comp. St. § 10385), for unlawfully using mails with intent to defraud, alleging intent to defraud two specific firms, and “other persons, firms, and corporations * * * whose names were unknown to the grand jury,” helé not at fatal variance with proof.
    3. Post office <§=49 — Evidence held to sustain finding defendant had mailed or caused to be mailed letters involved in furtherance of scheme to defraud.
    In prosecution, under Criminal Code, § 215 (Comp. St. § 10385), for use of mails in furtherance of scheme to defraud, evidence helé to justify finding that defendant had placed or caused to be placed in post office letters involved, notwithstanding defendant denied writing or mailing such letters, and no one testified to having seen him do so, and notwithstanding envelopes in which letters were received were not preserved or put in evidence.
    4. Post office <§=49 — Evidence held to sustain conviction for use of mails in furtherance of scheme to defraud.
    Evidence that person in charge of corporate affairs had furnished credit-reporting companies with false financial statements for purpose of obtaining unwarranted ratings, with intent to defraud persons dealing with corporation in reliance on such ratings, helé sufficient to sustain conviction for fraudulent use of mails in furtherance of scheme to defraud, under Criminal Code, § 215 (Comp. St. § 10385).
    5. Criminal law <§=633(I) — Refusal to require government witnesses to remain in court, subject to irecall after cross-examination by defendant, not error.
    Refusal to require government witnesses to remain in court, subject to recall after they had testified for government, and after defendant had availed himself of opportunity of full cross-examination, held not error.
    In Error to tbe District Court of tbe United States for tbe Southern District of Obio; Smith Hickenlooper, Judge.
    W. William Levinson was convicted of unlawfully using tbe United States mails in furtherance of a scheme to defraud, and be brings error.
    Affirmed.
    R. T. Dickerson and Dudley C. Outcalt, both of Cincinnati, Obio (J. W. Heintzman, of Cincinnati, Obio, on the brief), for plaintiff in error.
    Robert A. Kramer, Asst. U. S. Atty., of Cincinnati, Ohio (Benson W. Hough, U. S. Atty., of Columbus, Ohio, on the brief), for the United States.
    Before DENISON and MOORMAN, Circuit Judges, and WESTENHAVER, District Judge.
   PER CURIAM.

Levinson, defendant below, was indicted under section 215 of tbe Criminal Code (Comp. St.'§ 10385) on seven counte, each of which charged him with unlawfully using tbe United States mails in furtherance of a scheme to defraud. Upon the trial five of the counts were dismissed, but upon counts 2 and 6 verdicts of guilty and judgments of conviction were rendered.

The two counts on which defendant was convicted áre identical in their averments as to the scheme devised, the correlative element of the offense in count 2 being, as charged, the mailing of a letter of August 1, 1923, to the Florence Table & Manufacturing Company, of Memphis, Tenn., and in count 6 the mailing of a letter of August 25, 1923, to the Newark Ohio Furniture Company, Newark, Ohio. The scheme, as alleged in substance, was that defendant, being the manager of the Moorman Furniture Company, which was engaged in the wholesaling and retailing of furniture, carpets, etc., at Cincinnati, made or caused to be made and delivered to the Bradstreet Company in count 2, and to R. G. Dun & Co. in count 6, a false statement'of the assets and liabilities of the Moorman Furniture Company, as of May 31, 1923, for the purpose and with the intention of fraudulently obtaining merchandise, property, and credit from designated clients and customers of the rating companies, and other persons, firms, and corporations of the same class, whose names were unknown to the grand jury. The contents of, the statement, its falsity, and the intent thereby to defraud were set out in each of the counts, with the additional averments that defendant mailed or caused to be mailed the letters referred to for the purpose of executing the previously devised scheme to defraud.

Defendant organized the Moorman Furniture Company in the early part of 1922, and exercised general supervision and control over its affairs throughout its brief existence. His wife subscribed for and owned the greater part of its capital stock. Other incorpo-rators and stockholders, with one exception, subscribed for only such shares as were necessary to qualify as directors. Joseph Moor-man agreed to take more than the requisite amount, with the understanding that he was not to pay for it, and the stock certificate issued to him was held by the defendant. Moorman was the nominal president of the company, but was in fact an employé drawing a relatively small salary, with no authority or control over the business. His son, Henry Moorman, kept the books, during the time he could spare from his regular employment elsewhere.

The financial statement issued in furtherance of the scheme to defraud, as claimed by the government, was prepared by defendant and delivered to the rating companies July 20, 1923. It purported to show the financial condition of the company as of May 31, 1923. The letter to the Florence Table & Manufacturing Company, was dated August 1st, at “Cincinnati, Ohio,” and was evidently written in response to a request to pay for an order before shipment. It referred the manufacturing company to R. G. Dun & Co. and Bradstreet & Co. as to the financial responsibility of the Moorman Furniture Company. The letter of August 25th, presumably written at “Cincinnati, Ohio,” ordered from the Newark Ohio Furniture Company, for prompt shipment, a bill of goods of the approximate value of $150, and referred the Newark Company to R. G. Dun & Co. as to the financial standing of the Moorman Furniture Company. These letters were transmitted through the mails to the companies to which they were written.

Consideration will be given in this opinion to such of the many assignments of error as are thought pertinent to a decision of the case. The first relates to the sufficiency of the indictment. It is contended that counts 2 and 6 are defective, because of the absence therein of averments to the effect that defendant expected to .obtain some benefit through the carrying out of the alleged fraudulent scheme. Such an allegation, in our opinion, was not indispensable to the validity of the charges. United States v. Young, 232 U. S. 155, 34 S. Ct. 303, 58 L. Ed. 548. But whether.it was or was not it is necessarily implied in the facts alleged.

The claim of fatal variance between the indictment and the proof rests on a line of cases of which Larkin v. United States, 107 F. 697, 46 C. C. A. 588, is an extreme example, wherein the indictments were held bad because of language importing an intention to defraud individuals whose names were known or ascertainable, but were not given. They are inapplicable to a case like this, where it is averred that the scheme was to defraud specific individuals and others of a class described as particularly as possible. As to the unnamed persons the case is controlled by Durland v. United States, 161 U. S. 306, 16 S. Ct. 508, 40 L. Ed. 709, and Finnegan v. United States (C. C. A. 6), 231 F. 561, 145 C. C. A. 447. If, however, it. were otherwise, the contention could not prevail, because the purpose of definiteness was adequately served in the naming of the persons to whom defendant was charged with mailing the letters in furtherance of the-scheme.

The envelopes 'in which the letters-were received were not preserved or put in. evidence. No one testified to seeing Levin-son mail the letters, and he denied -writing or mailing either of them. Neither of them bears his signature. From this seeming deficiency in the record it is argued that the venue was not shown, that' it was not infer-able from the proven facts, and that the finding of its existence as a fact was an inference upon other inferences, which, it is contended, does not meet the requirement that it be proved like any other essential element of the offense. Underwood v. United States (C. C. A. 6) 267 F. 412, is referred to as sustaining the contention. We do not so regard it, for in that case there was nothing to show where the letter was mailed, and what the court held was that it would not presume, from the receipt of the letter alone, that it was mailed at the defendant’s usual place of residence.

The evidence for the government in this ease tended to show that defendant was dominant in the affaire of the company, carried -on all of its correspondence, and exercised a control of its business that precluded others from purchasing goods and contracting indebtedness. Furthermore, the letters in question were written on the stationery of the company, seemingly from its place of business in “Cincinnati, Ohio.” It was there that it conducted its business, and at that point written orders and letters with respect to them were in the regular and usual course of business mailed. One of the letters was a response to a request addressed to the furniture company at Cincinnati only two days before. These facts, with others in the record, were sufficient to justify the finding that defendant placed the letters or caused them to be placed in the post office at Cincinnati, where such letters were ordinarily mailed.

As to the evidence upon which the government relied to establish the scheme to defraud, it is, we think, sufficient to say that there was proof of defendant’s making a false financial statement with intent to defraud those to whom the two letters were written, and others who might be induced by reason of the false rating so acquired to extend credit to his company. That the government depended on the witness Egan alone to show the falsity of the statement is not important. The testimony of that witness was based on the records and books of the company. It shows a wide’ discrepancy between the actual financial status of the company as of May 31st- and that reported by defendant to the rating companies, and it does not appear, as said by defendant, that, had the witness appraised stock values at retail prices of 50 per cent, above cost instead of 25 per cent., the result of his calculation would have been in substantial accord with the defendant’s financial statement. Computations upon either basis, combined with either method used by the witness — i. e., sales and purchases shown on the books from the beginning of the business to May 31st, or figuring from the inventory taken prior to the bankruptcy sale back to that date — show results wholly inconsistent with substantial accuracy in the statement issued by defendant. There was, in our opinion, abundant evidence to sustain the verdict.

Egan’s testimony as to the assets and liabilities of the company on May 31st, as reflected by the inventory at the time of the bankruptcy sale, after taking into account the sales and purchases between that date and May 31st, was manifestly competent as an allowable method of ascertaining as nearly as possible the fact in issue. Other exceptions to rulings in admitting and rejecting testimony are too trivial for discussion. The same view may be expressed as to the exception to the court’s refusal to order the government’s witnesses to remain in court subject to recall after they had testified for the government. Defendant was given and availed himself of the opportunity of full cross-examination. Subsequent developments disclosed no reasons for extending it.

The exception to the charge, in so far as it excluded the necessity of the jury’s believing that defendant was to receive or did personally receive some benefit by reason of the fraud, was not well taken, since that part of the charge as qualified correctly stated the law. United States v. Young, supra. The court’s 'comment on the failure of the defendant, when upon the stand, to testify as to certain aspects of the alleged scheme to defraud was justified under Caminetti v. United States, 242 U. S. 470, 37 S. Ct. 192, 61 L. Ed. 442, L. R. A. 1917F, 502, Ann. Cas. 1917B, 1168. The charge is not open to the objection of undue emphasis on certain features of the evidence or failure to cover others. It was a fair exposition of the law applicable to the case.

Judgment affirmed.


author: WOODS, Circuit Judge.

text:
    BELLA S. S. CO. v. INSURANCE CO. OF NORTH AMERICA.
    (Circuit Court of Appeals, Fourth Circuit.
    April 14, 1925.)
    No. 2249.
    !. Insurance <@=255 — Untrue answer te specific inquiry concerning risk avoids policy, regardless of materiality.
    Where specific inquiry concerning risk, is made and an untrue answer given, policy is avoided whether inquiry and answer were, in view of court and jury, material or not.
    2. Insurance <@=272 — False representation that vessel had profitable charter giving her value in excess of her market value held material and sufficient to invalidate policy.
    Where, in answer to request for explanation of apparently excessive insurance, sought on vessel, agent employed to negotiate such insurance falsely represented that vessel had value above its market value because of favorable charter, helé representation was material and invalidated policy.
    3. Insurance <@=256(1) — False representation as to material feature of risk avoids policy.
    False representation as to material feature of risk avoids policy.
    4. Evidence <@=357 — Correspondence between insurance brokers negotiating policy not communicated to insurer held properly excluded in action on policy.
    Where insurance on steamship was obtained by insurance brokers acting through a second brokerage firm in another city helé, in action on policy, correspondence between the two brokers not communicated to the insurer was properly excluded.
    In Error to the District Court of the United States for the District of Maryland, at Baltimore; Morris A. Soper, Judge.
    Action by the Bella Steamship Company against the Insurance Company of North America. Judgment for defendant (290 F. 992), and plaintiff brings error.
    Affirmed.
    Emory H. Niles, John Henry Skeen, and Edgar Allan Poe, all of Baltimore, Md. (Edwin H. Brownley, of Baltimore, Md., on the brief), for plaintiff in error.
    Stuart S. Janney, of Baltimore, Md., and T. Catesby Jones, of New York City (James W. Ryan and Bigham, Englar & Jones, all of New York City, and Janney, Ober, Sling-luff & Williams, of Baltimore, Md., on the brief), for defendant in error.
    Before WOODS, WADDILL, and ROSE, Circuit Judges.
   WOODS, Circuit Judge.

The Bella steamship, owned by the plaintiff, the Bella Steamship Company, foundered about 160 miles north of San Salvador early in the morning of June 18, 1922. She was covered by an insurance policy issued February 1, 1922, by the “American Marine Insurance Syndicate C” for $143,000. The defendant, Insurance Company of North America, was a subscriber to the policy to the extent of 5.625 per cent.; and this action is brought to recover that per cent, of $143,-000. Two defenses were set up: First, scuttling of the ship by' the design and connivance of the owner for the purpose of recovering the insurance; second, concealment- and misrepresentation of facts material to the risk. On the trial the District Judge held the evidence of the first defense raised an-issue of fact which the jury only could decide, and refused to direct a verdict for the defendant on that point.

Holding that the .uneontroverted evidence conclusively proved concealment and misrepresentation of facts material to the risk before the policy was issued, the District Judge on this ground held the policy invalid and directed a verdict for the defendant. The vital question here is whether this was a correct instruction.

The Bella Steamship Company is a corporation organized under the laws of Maryland for the purpose of owning and chartering for hire the steamship Bella. The corporate stock was owned at the time of. organization by Antonio Carozza and two others in equal shares. Carozza had purchased the vessel 'from the United States government for $137,000 as a private investment, paying 10 per cent, in cash, and agreeing to pay 15 per cent. 30 days after the initial payment;, the remainder of the purchase price was covered by his promissory note, payment of which was secured by a mortgage on the vessel. Carozza spent large sums for repairs to put the vessel in a seaworthy condition. The Bella Steamship Company took Over the vessel from Carozza for $320,000, the total amount it had cost him.

On February 1, 1921, the Bella was chartered to the Baltimore & Jamaica' Trading Company for one year at $14,000 a month; the owner agreeing by the terms of the. charter to pay for insurance, wages, and provisions for the officers and crew, and to keep the vessel in serviceable condition. When the vessel began to operate, the company owed between $35,000 and $45,000 for repair bills besides what was still owing on the purchase price to the government. In June, 1921, Carozza became sole owner of the stock in the steamship company. In January, 1922, the indebtedness had been increased by another bill for repairs for $40,-000.

Near the close of the first year, the Baltimore & Jamaica Trading Company indicated its willingness to reeharter the vessel at a reduced rate. Carozza employed the Maury Donnelly-'W'illiams Company, insurance brokers of Baltimore, to' obtain insurance on the Bella for the second year, upon a valuation of $286,000; one-half of the valuation being the basis of insurable value. Maury Donnelly-Williams Company in turn employed Johnson & Higgins of New York, who obtained the insurance for the plaintiff. On February 10, 1922, the Bella was rechartered to the Baltimore & Jamaica Trading Company -for six months at $5,500 a month.

The representation alleged to be material and false was made partly in writing and partly by telephone. On December 23, 1921, Johnson & Higgins, brokers employed by the plaintiffs, formally applied to the American Marine Insurance Syndicate for insurance “for $286,000, at and from February 1, 1922, to February 1, 1923 (noon Eastern standard time), on the vessel called the steamship Bella. Valued at, hull, etc., $190,665; machinery, etc., $95,335; total $286,000.00.” Accompanying the application was a letter from Johnson & Higgins to the Insurance Syndicate in which they said:

“This vessel was bought by the present owners in the fall of 1920 at which time she was thoroughly overhauled and placed in first-class condition. Mr. A. T. Carozza, the controlling owner, is a man of large means and one of the principal building contractors of Baltimore. We understand that both the controlling owner and the management of the vessel bear an excellent reputation.
“The vessel is engaged on a profitable charter in the fruit trade between the West Indies and United States ports, principally Baltimore, and arrangements are already in progress for renewal of this charter for another year.
“We will be obliged if you will kindly indicate to us the rate at which you are willing to write all or part of this insurance at the earliest possible date and if you desire any information prior to your next meeting and will communicate with the writer we will try and supply you with it with as little delay as possible.”

In addition to this written representation that the vessel was under a profitable charter for the year 1921, Brengle, the represen-' tative of the Syndicate, testified as follows:

“We did not have the insurance on the Bella during the year 1921, and we had no insurance on the Bella when I received this letter from Mr-. Becker. I telephoned Mr. Becker and asked him why the value was so high, that it was out of line with other values of similar vessels, and that it would be necessary for me to have some explanation in order that I might put that before the rate committee when the vessel came before them for rating. Mr. Becker, in addition to the information given to me by him in the letter, stated that the vessel was enjoying a very profitable charter, which meant a net income to the owners of 6 per cent, on $500,000.”

This evidence was corroborated by the testimony of Becker. The falsity alleged and relied upon as vitally affecting the risk is in the statement that the operation of the vessel under the charter during 1921 was profitable, that it had netted 6 per cent, on $500,000, and that arrangements were in progress for a renewal of. the charter for another year.

Brengle testified that while the market value of a vessel is the general basis of determining the amount of the insurance to be carried, the market value is not necessarily controlling. He said:

“It. is not unusual for some owners, where they have a vessel in a special trade, or which is enjoying a profitable charter, to insure that' vessel for more than the market value, and when representations are made to us that such is the ease, we would be willing to accept vessels on a higher value than their market worth at the time the insurance attached.”

He testified further in answer to a question from the court that the policy would not have been issued but for the assurances “that the vessel was enjoying a most profitable charter, which was in progress of renewal, in addition to which the owners were earning a net income of 6 per cent, on an investment of $500,000.”

This undisputed testimony leaves no escape from the inference that the representations as to the current charter being profitable to the extent of -6 per cent, on a value of $500,-000, with a prospect of renewal, was made in answer to the request for explanation for what appeared to be an application for excessive insurance, the market value of the vessel alone considered; and that the representation was a basis for the insurance and was made as an inducement to accept the application.

. Does the undisputed evidence prove that it was false? The charter called for the payment of $14,000 a month to the owner from February 7, 1921, to February 7, 1922. For lack of required speed this amount was reduced to $12,000 a month for part of th«> time. Taking, however, $14,000 for the entire eleven months of operations in 1921 — ■

The gross income from the charter during 1921 was...............$154,000.00

The total disbursements for the ' same period were............... 130,668.25

Difference ...................$ 23,331.75

This difference between income and disbursements does not, however, represent net profit as a result of the operations for the year 1921. The plaintiff commenced repairs about December 20, 1921, which cost $20,-000. These repairs were made necessary by the operations of the ship Under the charter. In addition to that the plaintiff had to deduct as off-hire for the time the vessel was laid up during the charter-period, $4,400. The repairs were commenced and their extent at least approximately known when the representations above set out were made to the insurer on December 23, 1921, the date of the application; on December 27, 1921, when plaintiff’s broker made the representations to Brengle; certainly on February 3, 1922, when plaintiff took the defendant’s insurance policy issued on the faith of the representations. It seems clear beyond' doubt that these items must be added to the actual disbursements as charges against the ship in computing the result of its operations under its charter for 1921. Thus it appears that instead of the ship' being under a charter which produced a profit to the owner of 6 per cent, on $500,000, as represented by the insured, there was actually a loss in its operations of $1,108.25.

Many authorities may be cited to the effect that when a specific inquiry concerning the risk is made and an untrue answer given, the policy is avoided whether inquiry and answer were in the view of the court and jury material ór not, because the insurer has the right to decide for himself what is material to his risk, and his inquiry is, notice to the applicant for insurance that he regards the answer material. Snare & Triest Co. v. St. Paul Fire & Marine Ins. Co., 258 F. 425, 169 C. C. A. 441; Kerr et al. v. Union Marine Ins. Co., 130 F. 415, 64 C. C. A. 617; Joyce on Insurance, § 114, and authorities there cited; 32 C. J. p. 1289. But if we leave-that doctrine out of consideration, nobody can doubt that the representation here made was on its face material. Here the inquiry was: What is the explanation of the apparently excessive insurance applied for. The answer was specific; the vessel has a value to the owner above the market value because of the profitable charter. A false representation as to a material feature of the risk avoids the policy.

■ No reasonable insurer will knowingly take an insurance risk when it is to the interest of the insured that the property should be lost. When the insurer said the market value of the ship was.too high, and the agent of the-owner replied as an inducement to the insurance that the objection of high value was offset by the fact that the vessel was under a charter in the fruit trade which returned a net income of 6 per cent, on $500,000, and this indueem'ent to the insurance turns out to be without foundation by reason of the misrepresentation of the plaintiff’s agent,, the owner cannot hold the insurer. Sun Mutual Ins. Co. v. Ocean Ins. Co., 107 U. S. 485, 509, 1 S. Ct. 582, 27 L. Ed. 337; Clark et al. v. Manufacturers’ Ins. Co., 8 How. 235, 248, 12 L. Ed. 1061; Columbian Ins. Co., etc., v.‘ Eawrenee, 10 Pet. 507, 516, 9 L. Ed. 512.

Error is assigned in the exclusion- of correspondence between the Baltimore and New York insurance brokers of the plaintiff. These letters were not communicated to the Insurance Syndicate and therefore could not bind its subscribers. Even if competent,, however, we do not see how they could have-affected the vital issue of false representation as to the material facts on which the-contract of insurance is founded.

The conclusion that the policy was void for-misrepresentation makes unnecessary consideration of the averment that the ship was scuttled. We agree, however, with the District Judge that but for the plain misrepresentation in obtaining the policy, the issue as to .whether the ship was scuttled would have been proper for the jury.

Affirmed.


author: BUFFINGTON, Circuit Judge.

text:
    MANUFACTURERS’ LIGHT & HEAT CO. v. AMERICAN TELEPHONE & TELGRAPH CO.
    (Circuit Court of Appeals, Third Circuit.
    May 2, 1925.)
    No. 3278.
    1. Dedication <@=45 — Evidence held to justify submission to jury of issue of owners’ dedication of land as highway.
    Evidence of 50 years’ user by public with owners’ consent heldi to justify submission to jury of. issue of owners’ dedication of land to public as highway.
    2. Gas <@=20 (4)— Gas company’s negligence in failing to bury pipe under highway held for jury.
    Under Pennsylvania statutes giving natural gas companies right to cross public highways-with their pipe lines, but requiring pipes through agricultural lands to be buried at least 24 inches below surface, 7teZd, that court properly submitted to jury questions of company’s negligence in failing to bury pipe 24.inches under surface of highway, and whether such negligence caused burning of plaintiff’s motor truck passing over pipe.
    In Error to the District Court of the United States for the Western District of Pennsylvania; W. H. Seward Thomson, Judge.
    Action by the American Telephone & Telegraph Company against the Manufacturers’ Light • & Heat Company. Judgment for plaintiff, and defendant brings error.
    Affirmed.
    Weil, Christy & Weil, of Pittsburgh, Pa. (F. T. Weil and A. Leo Weil, Jr., both of Pittsburgh, Pa., of counsel), for plaintiff in error.
    Patterson, Crawford, Miller & Arensberg, of Pittsburgh, Pa. (Lloyd G. Reynolds, of Philadelphia, Pa., and C. F. C. Arensberg, of'Pittsburgh, Pa., of counsel), for'defendant in error.
    Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
   BUFFINGTON, Circuit Judge.

In the court below, the telephone company brought suit and recovered a verdict against the gas company for damages for the loss of its auto truck, burned by natural gas escaping from the gas company’s pipe while the truck was passing over it. On entry of judgment thereon, the gas company sued out this writ of error.

Legal liability of the gas company depends on whether the pipe in question was laid under a public highway, and, if so, whether the gas company was negligent in not burying it 24 'inches under such roadway. The accident is described in the gas company’s argument as follows: “The truck of the defendant in error, while being driven along a narrow dirt road traversing the private property belonging jointly to one Watson' A. Reel and one Ellis Reel, in or near the borough of East Bellevue, Pa., became stalled on the up-hill grade. This dirt road was a short road on the Reel property, connecting or acting as a short cut between two public roads in or near the borough of East Bellevue, Pa. Adjacent to and parallel with this dirt road, on the Reel property, there was a borough road, not on the Reel property, called Fourteenth alley, laid out on the borough maps, but never actually constructed into a street.”

The testimony of Watson A. Reel was as follows: “Q. Do you know an old road along the line of the township there that connects up with Cornell course? A. Yes, sir. Q. What is it known as? A. It is known as-Williams street, or Williams road. Q. How long has the public used that road ? A. Well, between 40 and 50 years, anyway; as long as I can remember. Q. Has it always been open and used? A. Yes, sir. Q. Where did that road go up there? A. Why, that roal left the Spruce Run road and connected with the road going to Perrysville. Q. Was that much used' before Perrysville avenue was paved? A. Well, now, it was used before the Spruce Run road was open. That was the only outlet people had from Spruce Run out to the Perrysville. road.”

The testimony of Ellis Reel, the brother of Watson Reel, was: “Q. Do you know the old road that runs along the dividing line between Ross township and Westview borough? A. Yes, sir. Q. Do you own property on each side of that? A. On each side of this road, do you mean? Q. Yes. A. Yes; we do, after it gets to the top of the hill, up to the borough line. Q. Has the public used that road for any length of time? A. Used it as long as I can remember. Q. How long can you remember? Are you older than your brother? A. Yes; two years older. I can remember back when I was a boy about that road. Q. Where did it go? Did it connect with any other road? A. It connected with the Spruce Run road.”

It will be noted, of course, that we have not here in issue the duty of either of the abutting municipal bodies to maintain this road, or their several liability for injuries resultant from negligence in so doing; but the present ease concerns only the right of the telephone company as a part of the public to run its truck along such roadway as a public highway. With 50 years’ use by the public of the roadway proven, and the owners of the land testifying to such use and their consent thereto, there can be no question under pertinent Pennsylvania authorities (Waters v. Philadelphia, 208 Pa. 192, 57 A. 523; Commonwealth v. Cole, 26 Pa. 189; Pittsburgh, etc., v. Dunn, 56 Pa. 285) of the courts being justified in submitting to the jury the question of the dedication of this land by the owners thereof to public use as a highway; and, if so found, the legal right of the telephone company to run its truck along the same is clear.

Such being the status of the road and the right of the public as fixed by the verdict, we next inquire what right had the gas company to cross such public road by its gas lines. No claim is made of any voluntary grant of .crossing by the owner, of an enforced crossing under condemnation proceedings by virtue of the right of eminent domain or of any municipal ordinances, and the only way in which a Pennsylvania gas company can in any way justify its crossing of the roadway in that state must be found,in that state’s statutes, quoted by the court in its charge, which gives to natural gas companies the. right of eminent domain for natural gas pipe lines, which “shall include the right to appropriate land upon or under which to lay said lines and locate pipes upon and over, under and across, any lands, rivers, streams, bridges, woods, streets, lanes, alleys or other public highways.” But this act embraces also the provision “that any pipe line laid under the provisions of this act, or laid upon or over land cleared and used for agricultural purposes, the same shall be buried at least twenty-four inches below the surface,” etc. In the light of the quoted proofs and of the court’s construction of the statute, with which construction we agree, the court below properly left, three questions to the jury, viz.: First, whether the place of the injury was a public highway; and, if it was, then, secondly, whether the gas company was negligent in complying with its statutory duty to bury the pipe; and, lastly, whether such negligence caused the injury.

We find no error either in the fact or the terms of such submission, and we therefore affirm the judgment.


text:
    OPPENHEIM, OBERNDORF & CO., Inc., v. FEDERAL TRADE COMMISSION.
    (Circuit Court of Appeals, Fourth Circuit.
    April 14, 1925.)
    No. 2274.
    Monopolies <@=»17(2) — System of merchandizing calculated to maintain resale price held to justify action by Federal Trade Commission in ordering its discontinuance.
    System of merchandizing employed by manufacturer of underwear under which jobbers, wholesalers, and mail order houses not maintaining resale prices fixed by it are reported by its salesmen and placed on list of price cutters to which goods will not be sold until they give assurance that they will not cut prices, held to authorize Federal Trade Commission to order discontinuance of practice of reporting ■names of dealers not observing resale prices and placing their names on list of undesirable purchasers, employing salesmen or agents to report dealers not observing such resale prices, or utilizing any other equivalent co-operative means to maintain prices fixed by it.
    On'Petition for Review of Order of the Federal Trade Commission.
    The Oppenheim, Oberndorf & Company, Ine., doing business under the trade-name and style Sealpax Company, was by order of the Federal Trade Commission commanded to cease and desist from certain unfair practices and methods of sale, and it petitions for review.
    Order affirmed.
    W. Calvin Chesnut and Charles Markell, both of Baltimore, Md. (S. Ralph Warnken and Haman, Cook, Chesnut & Markell, all of Baltimore, Md., on the brief"), for petitioner.
    Adrien F. Busick, Asst. Counsel for Federal Trade Commission, of Washington, D. C. (W. H. Fuller, Chief Counsel Federal Trade Commission, of Washington, D. C., and T. H. Baker, Jr., on the brief), for respondent.
    Before WOODS, WADDILL, and ROSE, Circuit Judges.
   WOODS, Circuit Judge.

The Federal Trade Commission, after a full hearing, found unfair the methods of interstate business of Oppenheim, Oberndorf & Co., and on the 19th of April, 1924, ordered that:

“Oppenheim, Oberndorf & Co., Ine., doing business under the trade-name and style of Sealpax Company, its officers, agents, servants and employees, do cease and desist from directly or indirectly carrying into effect by co-operative methods a system of resale prices in which respondent, its customers and agents, undertake to prevent others from obtaining the Sealpax products of respondent at less than the prices designated by it by:

“(1) The practice of reporting the names of jobbers and wholesalers who do not observe such resale prices.
“(2) Causing jobbers and wholesalers to be enrolled upon lists of undesirable purchasers who are not to be supplied with the Sealpax products of the company unless and until they have given satisfactory assurance of their purpose to maintain such designated prices in the future.
“(3) By employing its salesmen or agents to assist in any plan of reporting jobbers and wholesalers who do not observe such resale prices for said products.
“(4) By-utilizing any other equivalent cooperative means of accomplishing the maintenance of prices fixed by respondent for said products.”

The following facts found by the Commission were clearly established by the evidence:

Oppenheim, Oberndorf & Co. are manufacturers of underwear. One of its products is called “Sealpax,” which is sold exclusively to jobbers, wholesalers, and mail order houses. This branch of its business is conducted under the name of the Sealpax Company, Inc. It-notifies its customers of the price at which Sealpax underwear shall be sold and undertakes, in the main successfully, to prevent sales at a less price. To accomplish this purpose, it uses these methods:

It selects its customers for their credit standing and their willingness to maintain the price fixed. It refuses to sell to dealers who persist in cutting the price. Through its salesmen it endeavors to discover customers who do not maintain the required price so as to cut them off or get them to restore the price. By correspondence, circulars, and through agents, it exhorts and persuades its purchasers not to sell at a less price; and in the same way gives notice that it will not sell to dealers who do not maintain the price. It endeavors by letters and through agents to induce customers who have been excluded for price cutting to give pledges and assurances that they will in future maintain the price as a condition to reinstatement, and it reinstates customers who give the assurance. By correspondence and through agents it has sought with considerable success the co-operation of its customers in maintaining prices. It has offered guaranty of prices and allowed goods to be returned as an inducement for the maintenance of the fixed price. It keeps a list of jobbers and wholesalers 'called “D S,” meaning “Don’t Sell,” on which is placed the names of customers who have not maintained the price and are therefore not to be solicited or allowed to purchase until they give assurance that they will not in future cut the price.

We see no escape from holding that the Commission w.as required to respond to these facts by making the order above recited. The facts are substantially the same as in Federal Trade Commission v. Beech-Nut Packing Co., 257 U. S. 441, 42 S. Ct. 150, 66 L. Ed. 307, 19 A. L. R. 882, except in two particulars. In the case cited the effort to control prices extended to retailers while in this case it did not. This difference, of course, cannot affect the principle. In the Beech-Nut Case the packages were so marked under a key number system as to enable the Beech-Nut Company’s agents to trace to the seller goods sold at less than the fixed price. That, however, was only one of the means of throttling competition, and its absence here does not affect the illegality of the other means to that end condemned by the Supreme Court. As this means was not used in the present case, it was, of course, not enjoined by the Commission. As to those illegal means condemned by the Supreme Court which were used to suppress competition, the Commission rightly adopted the precise language of the Supreme Court in making its order.

Counsel for petitioner contend the language of the order is too indefinite for its guidance. The Supreme Court thought otherwise, doubtless having in mind the impossibility of anticipating and mentioning every illegal variation of device for preventing competition.

The case has been elaborately argued, with the citation of many authorities. It seems to us, however, to be absolutely controlled by the Beech-Nut Case, and the order of the Commission must be approved and affirmed.

Affirmed.


author: ROSE, Circuit Judge. WOODS, Circuit Judge

text:
    DAVIS, Director General of Railroads, v. CAROLINA COTTON & WOOLEN MILLS CO.
    (Circuit Court of Appeals, Fourth Circuit.
    April 14, 1925.)
    No. 2279.
    1. Negligence <§=>62(3) — Condition of smokestack, which fell and carried down wire across railroad track, held hot proximate cause of injury to trainman by wire. •
    Where badly rusted smokestack of mill, blown down by high wind of not extraordinary force, in falling tore down wire crossing railroad track, which' was subsequently fastened to pole by workman, so that trains could pass under it, but not sufficiently high to clear head of man on top .of train, held, that condition of smokestack was not proximate cause of injury to trainman, who was swept off top of train by wire.
    2. Master and servant <§=>302(2) — Mill held not responsible for act of member of gang engaged in moving its coal, who moved wire torn down by falling of smokestack.
    . Where employé of civic association of town was told by manager of association’s outside work to take gang to help defendant mill move its coal, held) that, even if members of gang, while engaged in such work, were in mill’s employ, it was merely for purpose of moving coal, and mill was not answerable for result of action of member of gang in moving wire, which fell on railroad track when mill’s smokestack was blown down.
    Woods, Circuit Judge, dissenting.

      In Error to the District Court of the United States for the Western District of North Carolina, at Greensboro; James E. Boyd and Edwin Y. Webb, Judges.
    Action by.James C. Davis, Director General of Railroads, against the Carolina Cotton & Woolen Mills Company. Judgment for defendant, and plaintiff brings error.
    Affirmed.'
    W. M. Hendren, of Winston-Salem, N. C. (Clement Manly and B. S. Womble, both of Winston-Salem, N. C., on the brief), for plaintiff in error.
    Oscar L. Sapp, of Greensboro, N. C. (Robert R. King and Robert R. King, Jr., both of Greensboro, N. C., on the brief), for defendant in error.
    Before WOODS, WADDILL and ROSE, Circuit Judges.
   ROSE, Circuit Judge.

The parties occupied' before us the same relative positions as they did below; that is to say, the Director General of Railroads, the plaintiff in error in this court, was plaintiff below, and the Carolina Cotton & Woolen Mills Company, was defendant in the District Court, and is defendant in error here. It will tend to readier apprehension of the facts if the parties be referred to as the railroad and as the mill, respectively:

The controversy had its origin in something which happened in Spray, N. C., on St. Valentine’s Day in the year T919.' At that time ánd place a high wind was blowing. There was nothing extraordinary about its force or its velocity. It was what might have been expected at that season. It, however, blew down a badly rusted smokestack on one of the buildings belonging to the mill and used by it. In falling, the stack brought down from position a number of wires which crossed the tracks of the railroad. Among them was one or more belonging to the Western Union Telegraph Company. At that place, the railroad apparently ran through something of a cut. A man named Odell picked up a fallen wire, got up on a cinder pile, and reached up as high as he could, and made it fast to a pole standing on the bank above the tracks. In the position in which he placed it, it was elevated enough to allow a locomotive and ears to pass under it, but it was not sufficiently high to clear the head of a man who was standing on top of a car. While it was in this position, a freight train passed under the wire, and one of the train crew named Smith was swept off a ear by the wire and was seriously injured. He brought suit in the United States District Court for the Western District of North Carolina against, not only the then Director General of Railroads, but the railroad as a corporate entity, the Western Union Telegraph Company, and the mill. When' the case was called for trial, Smith submitted to a nonsuit so far as concerned the V(estern Union Telegraph Company, the mill, and the railroad, as distinguished' from the Director General.

The plaintiff in the instant ease unavailingly objected to the abandonment, of the suit against the mill, having already notified the latter that he expected it to indemnify and- reimburse him for all sums that he might be required to pay Smith as damages and as costs and expenses. The trial proceeded against the present plaintiff, whom we will again refer to as the railroad, and against no one else. It resulted in a judgment against him for $12,000, on the ground that the railroad knew or should have known of the dangerous position of the wire, and should have warned Smith of it. ■ He subsequently settled with Smith for $10,000 and $258.84 costs, these sums aggregating $10,-258.84, and for the additional sum of $224.-78, paid by the railroad as costs and expenses incident to the trial, making a grand total of $10,483.62, for which the present suit was brought.

At the close of the testimony, the court, at the motion of the mill, directed a compulsory nonsuit, and the railroad sued out this writ of error. We may put aside at the start any question of the mill’s liability in consequence of the condition of the smokestack which fell. Such fall was not the proximate cause of the harm done Smith. He would not have been'hurt, had it not been for the subsequent action of Odell in lifting the wire from the track and making it fast in a position in which it was highly dangerous to any one on top of a freight car passing under it.

Many questions have been discussed in the case, some of them- of great interest and nicety, but it will be clearly unnecessary to consider any of them unless the railroad has sustained the burden resting on it to present evidence from which the jury would have been justified in finding that the mill was answerable for what Odell did. It is admitted he was not one of its regular employees. He testified that on that day he was working for Mr. Chatham, moving coal from one of the mill buildings to another, and that what he did with the wire was done under Mr. Chatham’s direction. That was all the evidence offered by the railroad on the subject of Ms relationsMp to the mill. The latter on its behalf proved that Chatham was an employee of the Spray Civic Association, an incorporated body made up of the different companies and mills located at Spray. His brother was the general manager of the outside work of the association. There was at the time a shortage of labor, and his brother told the witness to take a gang of men and help out the mill, by moving coal from one of its buildings to another. Odell was one of these men, and had, prior to raising the wire, been engaged for four hours or more in handling the mill’s coal. The witness and the men under him were paid by the Spray Civic Association. That is all there is in the record on the subject. It is obviously insufficient to make the mill answerable for what Odell or Chatham did. If they were at the time in the employ of the mill, it was merely for the purpose of moving coal, and that they were called upon to handle the wire by it or by any one authorized to speak for it, is not shown.

The learned court below was, we tMnk, right in holding that the plaintiff had not made out its ease.

Affirmed.

WOODS, Circuit Judge

(dissenting). I think the motion for nonsuit should have been refused. The issue was whether the Carolina Cotton & Woolen Mills Company was guilty of the primary negligence which resulted in the recovery by Smith, the injured man, against the Director General. If it was, then it seems to me the ease falls under the exception, stated in Union Stockyards v. Chicago, P. & Q. R. R., 196 U. S. 217, 226, 25 S. Ct. 226, 49 L. Ed. 453, 2 Ann. Cas. 525, to the general rule that one wrongdoer cannot recover indemnity or contribution from the other, and that the Director General has the right to recovery of the amount paid Smith.

The evidence falls far short of proving that the primary negligence in taking up and restringing the wires' was that of the Spray Civic Association, and not of the Carolina Cotton & Woolen Mills. The Spray Civic Association was an incorporated society, made up of cotton mills and other local corporations. The defendant, Carolina Cotton & Woolen Mills Company, was one of the owners and stockholders. The object and duties, if any, of the association, do not appear from the evidence. J. W. Chatham testified that he was regularly employed by the Spray Civic Association; but on the day of the injury of Smith, and the day before, he was in charge of a gang of men working for the Carolina Cotton & Woolen Mills Company in moving coal from one mill to another. He testified that he had been told to do this work by Ms brother, who was general manager of the outside work of the Spray Civic Association. The brother did not testify, and there was no evidence that the Civic Association controlled the men, and were responsible for them while they were engaged in the work of the defendant cotton mill, nor was there any evidence that the Civic Association had any duty of removing the dé-bris from the fallen smokestack and wires, or that it had any reason to- concern itself with the accident.

On the contrary, the Carolina Cotton & Woolen Mills Company owed the urgent and primary duties of immediate removal of obstacles which constituted a nuisance from the railroad, and the restoration of the telegraph wires to a safe position, because of its gross carelessness in allowing an obviously dangerous smokestack to stand over and fall upon the railroad and wires. Accordingly, as soon as the smokestack fell, we find men who were employed in the mill and doing its work leaving that work and going immediately, to the scene. They undertook the removal- of the debris and restoration of the wires. All of this seems to be cogent evidence that Chatham, Odell, and the men who were working with them were the servants of the mill and doing its work in stringing the wires by which Smith was injured.

In addition to this, the following paragraph of the Carolina Cotton & Woolen Mills Company’s answer to the motion of Smith is strong evidence that the negligent work of removing and restringing the wires was done by persons who were the servants of the cotton mill and acting under its orders :

“In answer to the allegations in article II of the complaint, defendant admits that it had actual knowledge shortly after the section of said smokestack had fallen, and avers that it immediately sent and removed the same, and removed all wires over which it had any authority which crossed said railroad track; that it notified its eodefendant, the said telegraph company, that said telegraph company’s line or lines of wire had been lowered from their original and normal position of suspension, so as to sag or fall across said railroad track, and also notified its codefendant, the said railway company, of the location of said wires, and further notified the train crew, of wMch plaintiff was a member, and the persons having charge of said train crew, of the location of said wires, and each and every allegation in article II of the complaint nor herein admitted and inconsistent herewith is untrue and denied.”


text:
    FREE et al. v. SHAPIRO.
    (Circuit Court of Appeals, Fourth Circuit.
    April 15, 1925.)
    No. 2293.
    1. Bankruptcy <®=>228 — Report of referee entitled to great weight, but is not conclusive on District Court.
    Report of referee in bankruptcy, who heard witnesses in proceeding to compel bankrupt to turn over assets, is entitled to great weight, but is not conclusive on District Court.
    2. Bankruptcy <§=»446 — On petition to superintend and revise, District Court’s findings of fact are conclusive when there is substantial conflict in testimony.
    On petition to superintend and revise, District Court’s findings of fact are conclusive when there is substantial conflict in testimony, and will be reversed only for error in application of law to facts.
    3. Bankruptcy <S=?l36(i) — After filing of petition bankrupt holds property in trust.
    After filing of petition, bankrupt holds all his property in trust to preserve it and turn it over to his trustee as soon as appointed.
    4. Bankruptcy <@=»I36(2) — Petition and order to show cause why bankrupt should not turn over property to trustee is not criminal in nature.
    Petition and order to show cause why bankrupt should not turn over his property to trustee in substance requires bankrupt, as trustee, to account for property alleged to be under his control to be administered by trustee for benefit of creditors, and is not in nature of criminal proceeding, nor does it necessarily import moral turpitude, nor necessarily result in contempt proceeding's.
    5. Bankruptcy 136(2) — Not presumed that bankrupt will not obey order to turn over property to trustee.
    It should not be presumed that bankrupt will not obey order to turn over his property to trustee.
    6. Bankruptcy <®=>!36(2) — Order requiring bankrupt to turn over property to trustee held final adjudication that he did improperly retain assets. <
    Order requiring bankrupt to turn over assets to trustee, after hearing on order to show cause why assets' should not be turned over to trustee, is final adjudication that bankrupt did improperly retain assets, but is not conclusive in contempt proceedings of present ability to comply with order.
    7. Bankruptcy <®=»I36(2) — In proceedings to recover assets, burden is on trustee and creditors to prove by clear preponderance of evidence that bankrupt withheld assets.
    In proceedings to recover assets which should have been turned over to bankruptcy trustee by bankrupt, creditors and trustee have burden of proving by clear preponderance of testimony, but not beyond reasonable doubt, that bankrupt withheld assets.
    Petition to Superintend and Revise, in Matter of Law, Proceedings of the District Court of the United States for the Eastern District of South Carolina, at Charleston, in /bankruptcy; Ernest E. Cochran, Judge.
    In Bankruptcy. Proceeding by W. E. Free, trustee in bankruptcy of Milton Shapiro, bankrupt, and others, against Milton Shapiro, bankrupt. On petition to superintend and revise, in matter of law, proceedings of the District Court and order reversing finding and order of referee.
    Reversed and remanded.
    J. Wesley Crum, of Bamberg, S. C., for petitioners.
    Bert D. Carter, of Bamberg, S. C., and John F. Williams, of Aiken, S. C. (Carter, Carter & Kearse, of Bamberg, S. C., and Williams, Croft & Busbee, of Aiken, S. C., on the brief), for respondent.
    Before WOODS, WADDILL, and ROSE, Circuit Judges.
   WOODS, Circuit Judge.

Milton Shapiro was adjudged bankrúpt in January, 1923. On petition of certain creditors and the trustee, the referee made an order requiring the bankrupt to show cause why he should not be required to turn over to the trustee goods and mdney concealed by him. After full hearing of testimony and argument, the referée ordered the bankrupt to turn over $14,248.03 in money as the value • of assets concealed. In the event of his failure to comply, the trustee was ordered to institute criminal proceedings against him under section 29 of the Bankruptcy Act (Comp. St. § 9613). In response to the petition for review by the District Court, the referee in certifying the proceedings made an elaborate, and .impressive report, in which he said he had reached his conclusion after allowing the bankrupt credit for every item about which there was any reasonable doubt. The District Judge reviewed the testimony and the report and reversed the finding of the referee.

The report of the referee was entitled to great weight because the witnesses, including the bankrupt, testified before him; but it was not conclusive on the District Court. On a petition to superintend and revise, the District Court’s findings of fact are conclusive in this court when there is substantial conflict in the testimony. In such case we can reverse only for error in the application of law to the facts.

The view of the law applied by the District Court is thus stated in the opinion:

“The referee’s report is very full and clear, and if this case were a ease of an accounting by a trustee, or if it were a case in which the determination of the court should be arrived at by a preponderance of the evidence, I should in all probability sustain the report. But as I view it, the court should not in a case of this sort arrive at its conclusions of fact upon a preponderance of the testimony, but should be satisfied to a moral certainty. ’* e ■ K
“There are various other items which were disallowed by the referee in the accounting which may have been properly disallowed, if it had been an accounting by a trustee; but when the disallowance of these items is made the basis for the conclusion that the bankrupt has been shown to have in his possession beyond a reasonable doubt property of the bankrupt, there is too much uncertainty about these items for me to find that they should have been disallowed. * 4 *
“The main difficulty, however, in the case lies not in the allowance or disallowance of any of these particular small items. The difficulty lies in the fact that the whole foundation for the conclusion reached is subject to too much doubt. The premises are not established beyond a reasonable doubt. For these reasons I cannot concur in the conclusion of the referee.
“It must be borne in mind that this is not a question arising upon objections to the bankrupt’s discharge in bankruptcy. If this question should arise upon his application for a discharge and on objection by creditors, I should probably hold that he would not be entitled to a discharge upon the showing made. But I do not care to prejudge that question, and all that I say now is that that question is left open. The only question decided is that the evidence is insufficient at present to establish beyond a reasonable doubt to my satisfaction that the bankrupt has property in his possession which he should be required by an order of the court to turn over to his trustee to be followed in ease of failure to comply by imprisonment for contempt.
“ ® ■' In this circuit, whatever may be the rule elsewhere, there is no question that the proof must be beyond any reasonable doubt. Kirsner v. Taliaferro [202 F. 51, 120 C. C. A. 305] supra; In re Switzer [(D. C.) 140 F. 976], supra.”

By the weight of authority, in attachment for contempt for failure to turn over assets adjudged to be withheld the court will not imprison the bankrupt unless satisfied beyond reasonable doubt of his guilt. The cases are cited in 7 Remington on Bankruptcy (3d Ed.) § 3041. So this court held in Kirsner v. Taliaferro, 202 F. 51, 120 C. C. A. 305. This is but the application to contempt which results in imprisonment of that tender consideration for the liberty of the citizen expressed in the doctrine that a charge of crime must be proved beyond reasonable doubt. But we are not now called on to decide the degree of proof nor where the burden of proof lies in contempt proceedings. It is true that the opinion in the Kirsner Case put forward the question whether the rule of reasonable doubt in favor of the bankrupt should not be applied to an inquiry under an order requiring him to show cause why he should not be required to turn over assets retained by him as well as in contempt proceedings. But the point was not involved and was not decided, nor was anything more than a doubt expressed. After careful consideration, we are convinced there is good reason for the distinction.

From the time of filing his petition the bankrupt holds all his property in trust to preserve it and turn it over to his trustee as soon as appointed. A petition and order to show cause why he should not turn over property is in substance a proceeding to require a bankrupt as trustee to account for property alleged to be in his hands or under his control, to be administered by his trustee for the benefit of creditors. Such accounting has nothing in it in the nature of a criminal proceeding. It does not necessarily import moral turpitude, nor does it necessarily result in contempt proceedings. An adjudication that the bankrupt has money or other property in his hands and an order requiring him to turn it over to his trustee may well be efficacious without resort to contempt proceedings. The property may be so identified that it could be taken by the marshal under order of the court. The bankrupt may conclude to rectify his mistake or his wrong by turning over the property. Refusal of a discharge may induce compliance with the order of the court and make resort to contempt proceedings unnecessary. The presumption should not be indulged that the bankrupt will not obey the order of the court in a bankruptcy proceeding of this nature. The inquiry is whether the bankrupt has assets which he failed to turn over to the trustee. If the inquiry leads to the conclusion that he did have assets which were not turned over to the trustee, the order follows requiring him to turn them over, and it is a final adjudication that he did improperly retain assets. But this is not inconsistent with the view that, in contempt proceedings, where the issue of imprisonment is involved, the court may refuse to imprison because the evidence of present ability to pay is not convincing beyond a reasonable doubt.

There is some conflict in the authorities, as will appear from the review of them in 5 Remington on Bankruptcy (3d Ed.) § 2411, and 7 Remington, §§ 3411, 3412. We think the true rule supported by reason and the better authority is that in a proceeding looking to the recovery of assets which should have been turned over to the trustee by the bankrupt, the creditors and trustee have the burden of proving that the bankrupt has. withheld assets, by the clear- preponderance of the testimony but not beyond a reasonable doubt. No greater degree of proof is required in other similar proceedings even necessarily involving intentional fraud. Rea v. Missouri, 64 U. S. (17 Wall.) 532, 21 L. Ed. 707; note 33 L. R. A. (N. S.) page 836; 27 C. J. 62. No sound reason can be given for making an exception against creditors in a proceeding of this sort in the bankruptcy court. To impose on creditors in a proceeding of this kind the exceptional burden of proof beyond reasonable doubt of the charge against the bankrupt of withholding assets would facilitate and encourage fraudulent bankruptcies, already so prevalent.

The District Judge therefore erred in imposing on the creditors and trustee the burden of proof beyond reasonable doubt that the bankrupt had withheld assets which he should have turned over to the trustee. The decree of the District Court is reversed, and the cause remanded for further proceedings in accordance with this opinion.

Reversed.


author: WADDILL, Circuit Judge.

text:
    CHARLESTON DRY DOCK & MACHINE CO. v. UNITED STATES.
    (Circuit Court of Appeals, Fourth Circuit.
    April 14, 1925.)
    No. 2310.
    Shipping <s=j76 — Contract for repair of -boiler of tender held to require installation of hard patch, as distinguished from soft one.
    Contract for repairs to tender providing for “new patches on forward boiler, etc.,” held to require installation of hard patch, as distinguished from a soft one.
    In Error to the District Court of the United States for the Eastern District of South Carolina, at Florence; Henry A. Middleton Smith, Judge.
    Suit by the United States against the Charleston Dry Dock & Machine Company. Judgment for the United States, and defendant brings error.
    Affirmed.
    George H. Moffett, of Charleston, S. C. (Moffett & Hyde, of Charleston, S. C., on the brief), for plaintiff in error.
    Louis M. Shimel, Asst. U. S. Atty., of Charleston, S. C. (J. D. E. Meyer, U. S. Atty., (of Charleston, S. C., on the brief),' for the United States.
    Before WOODS, WADDILL, and ROSE, Circuit Judges.
   WADDILL, Circuit Judge.

This is a suit at law by the United States of America against the Charleston Dry Dock So Machine Company, to recover damages for failure to perform a contract entered into by the plaintiff and the Yalk Murdock Company, defendant’s predecessors, whose assets were acquired and its liabilities and obligations assumed by the defendant. The contract provided for repairs to the tender Maple, which included the installation of patches on the boiler of the tender. The price for the entire work was $19,740.00, which sum was paid to defendant’s predecessor; the liabilities under the contract being assumed by the defendant.

The suit involves losses sustained by reason of the alleged breach of the contract, respecting the patches to be placed on the boiler, and whether the same conformed to specification 26 relating thereto, which is as follows:

“26. New Patches on Forwa/rd Boiler, etc. —Remove the soft patches on and near the circumferential seam. Build up by electrie welding all grooving in sheE plate under patches including calking edge of shell plate and rivets. Welding grooves to be dressed flush. Install new patches of the same thiek'ness as the old ones removed. They shall be neatly fitted, securely bolted in place and the edges electric welded. The patches shall then be rebolted with grommets and washers under the head and nut and aE work made perfectly tight under hydrostatic and steam pressure.”

The dispute between the parties arose over the meaning of the specification, and whether the same contemplated the installation or placing on the boiler of what is known as hard or soft patches. The learned judge of the District Court was of opinion that hard patches, as distinguished from soft, were meant, and that those furnished failed to conform to the specification, and had to be replaced by the Speddin Shipbuilding Company at an expense of $1,285, and instructed a verdict in favor of the plaintiff for the amount, with interest and costs, from which action of the court this writ of error was sued out.

The assignments of error present for the consideration of the court the correctness of the ruling of the court as well in regard to the instruction of the verdict, as the exclusion of testimony pending the trial. The case turned largely upon what was understood as between hard and soft patches, and whether the court was right in its ruling that the former was contracted for. Considerable expert testimony was introduced by each side, largely centering around the difference in the two patches; Miller, an expert for the defendant, describing the same as follows:

“A hard patch is’riveted on; sometimes in closer places they put them on with a patched bolt, and that is also called a hard patch. A soft patch is a patch put on with bolts, with some filling under it, putty, red lead, borings and such as that mixed together.”

J. K. Cotton, another of defendant’s experts, said:

“A soft patch is put on on the outside of a boiler, either head or shell. It is not allowed in a fire surface; that is, where the actual flames will touch it. It is not put for strength. It is put on more for a covering or protection with bolts, washers, and grommets put under the head and nut of the bolts, and the patch ordinarily lipped over at the edges and filled with red lead putty. Is what we know as a red lead patch made by dry red lead, white lead, linseed oil and east-iron bearings, and placed against the part that is affected, or where you want to stop a leak, and drawn up with bolts, but the patch isn’t put there for strength. It is put there to hold the red lead, putty, or whatever soft filling is used up against what we call pin-leaks:fine leaks. I have seen a patch where lead wasn’t used, but I never saw one unless there was some soft filling. * * » There is several packages got out for that. If it wasn’t 'a soft filling, it wouldn’t be a soft patch.
“A hard patch is entirely different. It is put on usually on the inside of the boiler, so that the pressure of the boiler will come against the back of the patch. It is riveted on, and the edges around is calked up, and the reason of putting it on the inside of the boiler instead of the outside is that the pressure of the boiler will bear against the back of the patch instead of shoving the patch off and throwing pressure against the rivets, if it was on the outside. * *
“In all my long experience I never heard of a soft patch being used without red lead, until this one you are speaking of now on the Maple’s boiler. That is the first I ever heard of.”

Defendant’s contention is that a soft patch, as distinguished from a hard patch, was contemplated, and that it was impractical to construct the same without the use of red lead or other soft material. The government, on the other hand, insisted that no putty, lead, or filler of any kind should be used, and the specification required that the patch be fitted in intimate contact all the way round' the boiler, and securely and firmly bolted there, while electric welding was to be put around the edges for the purpose of making the joints tight, in place of red and white lead and other substances commonly used.

Defendant attempted to construct the patch as thus required, insisting, however, that the same could not be made pressure tight, and the result proved that leakage did occur even after several efforts to prevent the same. The government claimed that this condition was caused by the lack of proper construction, or the use of machinery not suitable for the work.

It does not seem probable that the government would have desired the putting of a soft patch, such as described by the witness Cotton above, on one of its boilers in an important steam vessel; and at all events, in the light of the terms of- specification 26, we do not think it did so. On the contrary, that specification provided, as held by the judge of the District Court, for a hard patch as distinguished from a soft one; and of course, it was within the contemplation of the parties that a proper hard patch would be furnished. Under the construction placed upon the section in question by the District Court, a verdict was properly instructed for the plaintiff, as there was no dispute of the fact that the patch furnished did not conform to the requirements of the specification, and the work had to be done over by another repair yard at the cost mentioned.

The other assignments of error relate to whether the government legally could have made the contract in question, under its general laws respecting inspection of steam vessels and boilers, and whether certain technical works on the subject of steam engineering could be read to the jury; and appear to us as immaterial to the merits of the ease, and at all events that the court was entirely right in its rulings complained of.

The decision of the District Court will be affirmed.

Affirmed.