author: CAFEEY,,District Judge.

text:
    THE PERSEVERANCE. SHAMROCK TOWING CO. Inc., v. CORNELL STEAMBOAT CO.
    District Court, S. D. New York.
    Dec. 24, 1930.
    Alexander, Ash & Jones, of New York City (Edward Ash, of New York City, of counsel), for libelant.
    Kirlin, Campbell, Hiekox, Keating & Mc-Grann, of New York City (Robert S. Erskine and H. P. Elliott, both of New York City, of counsel), for respondent.
   CAFEEY,,District Judge.

The determining issues of fact in this case are, first, whether there was negligence ■ on the part of the tug Perseverance or the respondent company; and, secondly, if so, whether such negligence proximately caused the injury complained of to the brick scow Green Valley/

The items or specifications of negligence are alleged in paragraph 6 of the libel. They are twelve in number. Some I shall not discuss in detail, because in the proof there is no support whatever for them. These are items 1, 2, 4, 5, 6, and 12. Eliminating those, we are brought down, in effect, to three charges. These are, stating them only in substance :

(1) That the wind, water, and other conditions were too severe to warrant continuance of navigation with the tow or at least with the scow in the tow. This charge is embraced in items 3 and 9 of paragraph 6 of the libel.
(2) That there was failure to moor the scow in protected waters or in a harbor. This charge is covered by items 7 and 8.
(3) That the scow was improperly located in the tow because she was in the hawser tier, and should have been behind other boats in the tow so as to have the advantage of protection from them. This charge is in items 10 and 11.

Something is said in the libel about the Osceola or the position of the scow while in tow of the Osceola. Mr. Ash gave notice that he would argue that, prior to the transfer of the tow from the Osceola to the Perseverance, there had been failure to anchor the scow or leave her in a place of safety when there was opportunity and she was improperly in the head tier. I will comment later on these phases which relate to the Osceola.

It is impossible at this time for witnesses to state with perfect recollection or with perfect accuracy what were the wind conditions from the time the scow came into the tow of the Perseverance. In the same way it is impossible for them with certainty and precision to state the water conditions or the extent to which there was, or theretofore had been, rain during October 12th on the Hudson. I think nobody can doubt that records of the Weather Bureau are the best source of information as to direction or velocity of the wind and as to rainfall in so far as they are set down in those records. I therefore accept the Weather Bureau records. Nevertheless, the application of them, even in the hands of so learned and experienced a person as Mr. Scarr, is matter merely of estimate. According to Mr. Scarr, as I recall what he said, the velocity of the wind was very likely to he less down on the water and at a lower level than that in the somewhat elevated place at which the observations of the bureau were taken. I think he also said, and it seems obvious, that the velocity would to some extent be influenced by the terrain in the locality being inquired into. I'think he further said that it takes something like two hours before the effect of particular velocity recorded on top of the Whitehall building in this city would reach the location of the incident involved in this case.

Taking everything into account, his estimate, as I understand it, is that in the part of the river where the accident occurred the velocity of the wind at or about the time of the accident was probably between 40 and 50 miles an hour.

The testimony of the experienced navigators who testified is also entitled to considerable weight. They have been a great deal on the Hudson. They have made many observations of wind conditions in all parts of the river. Nevertheless, what they say is estimate merely, with the accompanying inevitable possible deficiency of recollection, ignoring any question of bias; and I do not think that there has been any very great exhibition of bias by the witnesses on either side, nothing except the ordinary experience with witnesses. The navigating men put the wind velocity at very much below the figure given by Mr. Scarr. The consensus of what they say is about 25 or 30 miles an hour.

It is perfectly impossible now, as between the varying estimates, to be sure just what the rate of the wind was.

The testimony with regard to rain on October 12th is not very full, and it is not satisfactory. At least it is insufficient to make us feel sure just what the precipitation was. . We have no Weather Bureau records for the vicinity about rainfall. That there was some rain is certain. I think everybody agrees about that. Without further information as to degree, it is rather hard to reach a conclusion as to what the probable effect of the precipitation was.

Assuming, however, in favor of libelant’s contentions, the most extreme conditions permissible under the evidence as to wind velocity and as to rain that day, after listening to all of these experienced men, both those engaged on the river that day and the experts heard on both sides, I fail to find in the proof any occasion for alarm or any substantial reason for anticipating injury to the tow or anybody in it by continuing the navigation. Last night as I read eases which have been decided by some of the older local judges — particularly those dealing with navigation on the Hudson, in some of which the conditions of wind and water were vastly more adverse to operation of a tow than any possible view of the testimony in this case would warrant us to infer existed on October 12, 1927, in the part of the river that was traversed, by either the Perseverance or the Osceola, — the thought came into my mind that the former experienced admiralty judges in this district who are now dead would rest a bit uneasily in their graves if they thought that navigators on the Hudson had fallen to such a low estate of virility as to refrain, or that this court were imposing on navigators an obligation to desist, from going ahead under conditions such as existed in the case at bar; that the sleep of these fathers of the admiralty law as administered in this court would be disturbed if they should leam that their successors of to-day had so far shifted away from what in the old days was permitted to, and indeed perhaps required of, navigators on the Hudson in handling their tows.

While I shall attempt no finding as to what was the exact velocity of the wind, from an examination of Exhibit'5 — taking into account the records at New York and at Albany particularly, and interpreting them as best we can with the help of Mr. Scarr — coupled with the testimony of the navigators on the Hudson who have been passing over its water's for many years, it is not unlikely that between 5 and 6 o’clock p. m. on October 12th the wind velocity in the neighborhood of Newburg Bay was somewhat below the estimate given by Mr. Scarr. In addition, when we analyze rather carefully, as I have attempted to do, what he said on the stand, I doubt if he would disagree with that. If so, then this conclusion is somewhat fortified by the statements of those who were present on the river at the time'.

Let me turn now to the second issue stated above:

If I he right in believing that wind and water conditions did not call on, or I think I may put it stronger and say, even suggest to, experienced navigators the discontinuance of the journey down the river with the scow included in the tow, then I think this substantially disposes of the contention that there was a duty by the tug to moor the scow either in protective waters or in some harbor.

As I understand the proof, there is no basis for saying that, having in view the water and wind conditions, the operation was on the wrong side of the Hudson. In the testimony by libelant’s witnesses themselves, I fail to discover anything that occurred while the scow was in tow of the Osceola, or anything that happened during the course of October 12th prior to passing Marlboro — apparently the last station of safety for mooring that was available before reaching New-burg — which suggested or should have suggested to those in charge of the tug that the scow should be cut out and tied up at Marlboro or above. Unless there was occasion to leave the scow at Marlboro or one of the several places mentioned by the witnesses high up the river, then there was no occasion to anchor her in protective waters.

Again, even if at the time of the shift of the tow from the Osceola to the Perseverance there had transpired anything to put the officers of either tug, or any representative, of the respondent company, on notice that there was danger, by reason of retaining the scow in the tow, as I understand the testimony of the experts they agree that it would have been hazardous at that point to cut out the scow and to carry her back to Marlboro with the wind, which was then prevailing, from the south or southeast.

There is one thing, however, in that connection which is significant. This is that the testimony is wholly without dispute that the passing of the tow from one tug to the other was effected entirely without difficulty, with apparent perfect safety, and without anybody expressing at the time or even feeling any alarm. If that be so, then it seems clear that there was not then any demand or occasion for cutting the scow out of the tow and carrying her to Marlboro or anywhere else for shelter or mooring.

If what I have said about the conditions that prevailed on the Hudson be true, so far as concerns putting the scow either in protected waters or at any anchorage in a harbor, it applies just as much to the handling while in tow of the Osceola as at any other time.

That brings us, to the third issue of fact: Was putting the scow in the hawser tier of the tow wrong?

There is some divergence in the testimony of the experts on this phase of the matter. It is necessary, however, to scrutinize rather carefully what they said — to bear in mind the precise forms of the questions addressed to them — in order to determine what weight the answers are entitled to. I am also greatly impressed by the testimony of the captain of the scow himself. He said that she had frequently been carried in the head tier; that it was nothing unusual for her to be carried there. After listening to the experts, I am entirely unconvinced that it was unusual, or that there was anything which would require experienced navigators to refuse, under the conditions of water and weather that prevailed on the Hudson that day, to carry in the first tier a scow of- the type we are now dealing with.

What I have said thus far would perhaps be enough on the facts in respect to the three issues stated at the beginning; but I feel that consideration would be incomplete, unless effort were made to ascertain how the damage to the scow was brought about.

The accident to the Green Valley happened about opposite or just above the ferry slip at Newburg. It is established without dispute that the Perseverance took over the down-river tow below Roseton. It was done adjacent to Big Hill, which is about the upper end of Newburg Bay. The Perseverance had previously carried its up-river tow to New Hamburg, some 4 miles above Newburg. In order to get a correct picture of what followed, it is of consequence to note the times of the events in connection, with the shift of the tows.

It appears in the towing sheet that the New Hamburg halt by the Perseverance of its up-river tow was at 4:50 p. m. It took approximately twenty-five minutes for the Perseverance-to get back to Big Hill. The documentary proof puts it beyond controversy that the shift was complete by the hawsers of the Perseverance having been put on the down-river tow, at 5:30. The trouble of the scow was observed twenty minutes later. It had listed to port, and its eaptain had given a distress signal to the tug.

Capt. Foley of the Green Valley tells us that he put his hatches down the night of the 11th or in- the early morning of the 12th. Mr. Martin, the only other man on the scow, says his recollection is that they were put down about noon of October 12th. Capt. Foley says that it was nothing unusual for the scow to ship water qver the bow. He says he did not use his pumps at all during the entire day of the 12th. He says also that he kept the hatches down all day, that he made an examination at Roseton, and that it was then dry below. I believe he further said that he looked below at or about the time the Perseverance took over the tow. Both Foley and Martin were at the bow of the scow when the hawsers of the Perseverance were put on. They observed nothing out of the way. Not only did they say nothing, but they saw nothing indicating danger to the scow. Roseton is a short distance only above where the accident happened.

It is a little difficult for me to feel confident what was the cause of the aeeident.

There is an allegation in the libel about the effect of the absorption of water by brick loaded on deek. Mr. Ash contends, however, that the listing of the scow to port was caused by water below deek. I think that is true. I should not expect that, with the brick loaded on deek in the way they were, even though they absorbed water to a considerable extent, there would have been a sufficiently uneven distribution of the resulting added weight to shift the deek load enough to the port side to bring about a list to port such as Capt. Foley and Mr. Martin say occurred. So I think-that Mr. Ash is right in attributing the port listing to the presence of water in the scow below deck.

But when did it get in there? If under the description both of the rainfall, so far as we are told about it, and of water coming over the bow during the whole of the day down to Roseton, 'the scow was entirely dry below deek at Roseton as related by Capt. Foley, then the evidence wholly fails to establish so violent a change either in wind conditions or in rainfall or in water getting over the bow between Roseton and the time of the accident to enable me to believe that during that very brief interval there had been so great an accumulation of a quantity of water below deek as to cause the scow to list to. port in the fashion Capt. Foley and Mr. Martin say she did list just before she was cut away from the other boats to her port and to her stem. Consistently with what the men on the scow say, I cannot account for the occurrence.

I think that perhaps there is some mistake by Capt. Foley. There is conflict in the testimony about the proper method for fastening down hatch covers of a scow of the character of the Green Valley. The experts disagree. The proof does not establish that the hatch covers or the methods of fastening them employed on the Green Valley were unusual. Capt. Foley says that he had previously passed up or down the Hudson with this particular scow, with water coming over the bow, without her having shipped sufficient water in the hold to capsize her or to do her injury otherwise. Scrutiny of all the evidence brings no explanation of how there accumulated in the hold of the scow enough water to bring about the catastrophe from which she suffered on October 12th. It may be that water got in through the ventilators. It may be that Capt. Foley is in error in his recollection as to when he last examined below deck with respect to water or as to whether or not the hatch covers continued to be fastened down tight. I do not know. No one hearing the testimony can be sure.

t Such being my view of the facts, without pursuing further the attempt to learn why the scow sank, I pass to the law that is applicable:

It seems to me thoroughly settled that there can be no recovery unless negligence be shown; also that the burden is on libelant to establish negligence. I do not see any difference in the statement of the principles of law made in the eases cited by the respondent from that made in the eases cited by the libelant.

The duty of a tug having a tow, as in this case, is to exercise “reasonable skill, care and diligence.” Those are the precise words used in Doherty v. Pennsylvania Railroad Co. (C. C. A.) 269 F. 959, with which we are all familiar. Judge Hough stated in Brigham v. Cornell Steamboat Co. (C. C. A.) 18 F.(2d) 92, 93, that in order to justify recovery “the tow must bear the burden of affirmatively showing that the injury received was proximately caused by some act or omission of the tug, inconsistent with that reasonable care and skill impliedly promised when the towage contract concluded.”

Mr. Ash refers to Judge Woolsey’s opinion in The Drifter (D. C.) 35 F.(2d) 1006, 1007. But Judge Woolsey relies on the Brigham Case, from which I have just quoted an extract. It is perfectly apparent that there was no intention to depart from the rule which has long stood in this district. Moreover, when the facts in The Drifter are examined, it is perfectly clear that, in talking about the presumption from damage found at the time the tug turned the tow back to its owner, Judge Woolsey was dealing with a case wherein there was an entire failure by the tug to explain “when, how, or where the damage happened.” There is no occasion here to apply the presumption. In the case at bar, there has been quite full testimony as to when, how, and where the damage happened. We may not be able on all points to get such adequate information as will enable us to reach a certain conclusion as to what caused the accident; but, with the burden of proof on libelant, the deficiencies in that regard cannot be attributed to the respondent.

There is another thing to be borne in mind. It is brought out by Judge Hough in The Eli B. Conine (C. C. A.) 233 F. 987, relied on by Mr. Ash. It would not be fair, it is not the law, that navigators of craft be held to such a high degree of conduct that it is negligence if they make a mistake of judgment. Errors of judgment do not, as such, constitute negligence. We must go a good deal further. It is not necessary to establish recklessness, but, if competent navigators do what is reasonably required to bring their tows through safely under the circumstances as they exist, then they have lived up to that reasonable skill, care, and, diligence which is required by the law.

In this case I think it is clear that the Perseverance was in the hands of competent and experienced navigators. It is also clear that, after they had made the safe shift of the scow from the Osceola, there was nothing in the conditions that would lead them to think that there would be danger in continuing the journey down the Hudson. There was nothing about the wind or about the water to indicate peril. I think also that there was nothing at the time that would have suggested to experienced navigators that there was occasion to cut the scow out or to anchor her either in a port of refuge or in sheltered waters. I do not think there was anything to warn them that they should not proceed with the tow, including the scow.

While one expert may express one opinion and one expert may express another as to how it is better to make up a tow, that is not what we are concerned with. In order for the libelant to be entitled to recover because of the scow having been kept in the first tier, it is essential that it be established that it was, as I think Mr. Ash put it in some of his. questions, bad seamanship, negligent seamanship ; that it was not the exercise of reasonable conduct under the circumstances. Capt. Foley said that his scow had frequently been in the first tier. Mr. Erskine conceded the statement of Mr. Ash that the respondent company had frequently towed the scow on the Hudson without damage to her, though we are not informed about the varying weather or wind conditions. The evidence is undisputed that from the time .the scow was put in the tow on October 11th she had proceeded down to the point of the accident without apparent injury. As the shift has been described by the witnesses, it seems to have been made in the usual and ordinary way — the natural way for conducting such a shift. I therefore see no way in which I can challenge the conduct of the master of the Perseverance in having the scow in the head tier or how I can say that there was anything about the conditions that should have impressed him that it was unreasonable to do so or that there was danger of injury to her from doing so.

So also as to the inclusion of the scow in the head tier when in tow of the Osceola. According to Capt. Foley, nothing then happened that contributed to bringing about the accident eventually”.

.Without going into further details, I accordingly find as a fact that the Perseverance and its master were not guilty of negligence. As matter of law, it follows that there should be a decree dismissing the libel.


source: Caselaw Access Project

author: McVICAR, District Judge.

license: Public Domain

text:
    UNITED STATES v. WAINER.
    No. 6863.
    District Court, W. D. Pennsylvania.
    March 13, 1931.

      Louis E. Graham, U. S. Atty., and James H. Dilley, Asst. U. S. Atty., both of Pittsburgh, Pa.
    Frank W. McKean, of Pittsburgh, Pa., for defendant.
   McVICAR, District Judge.

The Fraternal Order of Eagles, No. 533, New Kensington, is a lodge and a fraternal organization, having its lodge, social, and club rooms located at No. 981 Fifth avenue, New Kensington. It has been a member of the Grand Lodge since November 12,1903. It is the owner of the property at the above number.

The defendant is a member of said lodge, the steward thereof, the custodian of the lodge’s property, and has an interest in'said premises.

On November 13,1930, prohibition agents gained entrance to the property aforesaid by cards or receipts purporting to show that they were members of the Homestead Lodge of the Fraternal Order of Eagles. The agents were not members of any lodge of the Fraternal Order of Eagles. The representations made by the cards were false and were known by the agents to be false, and were made for the purpose of gaining entrance to the property of said lodge in order that they might make purchases of intoxicating liquor and use the information thus obtained as a basis for the issuing of a search warrant.

On admission to the lodge’s property the prohibition agents made purchase of intoxicating liquor. On November 18, 1930, application was made for a search warrant-before a United States Commissioner. The affidavit of probable cause was predicated on the information procured by the agents November 13, 1930. A search warrant was issued; the property of the lodge was searched and a return made of having seized a quantity of whisky, home-brew beer, mash, etc.

On January 28, 1931, the grand jury found a true bill against the defendant, inducting him for the manufacture, sale, and possession of intoxicating liquor.

On February 13, 1931, defendant presented his petition to this court praying that the evidence procured by the prohibition agents at the time of their entrance to the lodge’s property, and by the seizure made under the search warrant November 19, 1930, be suppressed on the ground that said evidence had been procured by fraud, and by the commission of a crime under the laws of the commonwealth of Pennsylvania. The government filed an answer admitting the facts alleged in the petition.

The Pennsylvania Act of March 28, 1907, P. L. 35, is entitled: “An Act to prohibit-the fraudulent use of the name or title of secret fraternities, associations, societies, orders, or organizations; also prohibiting the fraudulent wearing or use of any emblem, badge, buttqn, or insignia of such secret fraternal organization; and fixing the penalty for violation of this act.”

It is enacted therein: “That it shall be unlawful, and it is hereby expressly prohibited, for any person, * * * directly or indirectly, to aid in the use of, the name or title of any secret fraternal association, society, order or organization which has had a. grand lodge having jurisdiction in this commonwealth for ten years or longer; or to imitate such name or title, or any name or title so nearly resembling it as to be calculated to deceive; or to wear or use, or aid in the wearing or use of, any emblem, badge, button, device or insignia, fraudulently or with the intent to deceive.” (18 PS § 2719.)

The act further provides that: “Any person or persons violating this act shall be guilty of misdemeanor.” (38 PS § 2720.)

The Fourtli Amendment reads: “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

Should the evidence procured by the prohibition agents be suppressed on the ground that it was procured by fraud and by acts which violated the statute aforesaid?

„ It may be helpful in the consideration of this question to consider some established facts, rules of law having a relationship to the question involved, together with inferences which can be properly taken therefrom.

1. No question is raised that the affidavit of probable cause to support the search warrant does not show probable cause, or that the search warrant in itself is not in legal form, or that it was not legally executed. Whether the evidence should be suppressed is to be determined wholly on the facts relating to the manner and method in which the prohibition agents procured the facts which were used in the affidavit of probable cause.

2. No ease has been called to our attention, nor have we seen any, which has determined that evidence should be suppressed which was procured by officers of the United States through trick or artifice, or by the commission of a crime under State law.

3. Under the common law competent evidence of the commission of a crime is admissible, regardless of how it is procured. Olmstead v. United States, 277 U. S. 438, 466, 467 and 468, 48 S. Ct. 564,. 72 L. Ed. 944, 66 A. L. R. 376.

4. The common-law rule has been modified in the United States courts to the extent only of excluding evidence of the commission of a crime, which is procured by United States officers or representatives in violation of the Constitution of the United States. Olmstead v. United States, 277 U. S. 438, 467, 48 S. Ct. 564, 72 L. Ed. 944, 66 A. L. R. 376.

5. Evidence has always been received in criminal cases, of officers or representatives of the public, who have joined gangs of robbers, or murderers, took oaths of secrecy, entered the houses of the members thereof,, entered into criminal conspiracies with its members, -which was done for the purpose of investigating crime and the arrest and conviction of the criminals. In Olmstead v. United States, 277 U. S. 438, 468, 48 S. Ct. 564, 569, 72 L. Ed. 944, 66 A. L. R. 376, it is stated: “The history of criminal trials shows numerous eases of prosecutions of oathbound conspiracies for murder, robbery, and other crimes, where officers of the law have disguised themselves and joined the organizations, taken the oaths, and given themselves every appearance of active members engaged in the promotion of crime for the .purpose of securing evidence. Evidence secured by such means has always been received.”

Such conspiracies, tricks, and artifices have never been considered a violation of the Fourth and Fifth Amendments — such evidence is admissible by necessity. Society has always needed such protection and probably has never needed it more than at the present time.

6. Constitutional provisions should be construed so as to avoid absurd, unjust, or unreasonable consequence. In re Chapman, 166 U. S. 661, 667, 17 S. Ct. 677, 680, 41 L. Ed. 1154, it is stated: “But nothing is better settled than that statutes should receive a sensible construction, such as will effectuate the legislative intention, and, if possible, so as to avoid an unjust or an absurd conclusion.”

If trick or artifice cannot be resorted to by officers under the National Prohibition Act (27 USCA), absurd, unjust, and unreasonable consequences will follow. It is common knowledge that to-day there are many saloons, so-called one-man clubs, and other places where intoxicating liquors are sold. Prohibition agents cannot ordinarily gain admission to such places without representing that they are not prohibition agents and without satisfying the person in charge that they are otherwise satisfactory. The agents usually make such representations. After they gain entrance they make purchases, and upon these purchases affidavits of probable cause are made and search warrants are issued. Their entrance is gained in such cases by misrepresentations, trick and artifice, but if such methods cannot be used the result will be that the owners thereof in a large measure will be running the same with immunity while the government, through its public officers, stand impotently by.

7. The Fourth and Fifth Amendments should be construed in a practical way so as to conserve the interest of the public as well as that of the citizen. In Olmstead v. United States, 277 U. S. 438, 465, 48 S. Ct. 564, 568, 72 L. Ed. 944, 66 A. L. R. 376, it is stated:

“This court, in Carroll v. United States, 267 U. S. 132, 149, 45 S. Ct. 280, 284, 69 L. Ed. 543, 39 A. L. R. 790, declared:

“ ‘The Fourth Amendment is to be construed in the light of what was deemed an unreasonable search and seizure when it was adopted, and in a manner which will conserve public interests, as well as the interest and rights of individual citizens.’ ”

A practical construction of the Constitution and a construction which will conserve the interest of the public and the individual requires such an interpretation that law breakers cannot violate the law with immunity, and this requires that officers in the enforcement of the National Prohibition Act (27 USCA) should have the same right to resort to trick or artifice as is permissible where other laws are violated.

8. Evidence procured by prohibition agents which involve the commission of a crime under state law is admissible against the parties charged with the crime in the United States courts. Olmstead v. United States, 277 U. S. 438, 468, 469, 48 S. Ct. 564, 72 L. Ed. 944, 66 A. L. R. 376.

This character of evidence being admissible at the trial of defendants in court would also be competent in an affidavit of probable cause. If facts which constitute a crime against the state are competent and admissible in court and in an affidavit of probable cause, it would follow under like conditions that evidence procured by trick or artifice would also be admissible.

9. Evidence procured by officers or representatives of the United States (without a search warrant and without incident to a legal arrest) by means of force, actual or threatened, or by stealth, is in violation of the Fourth Amendment and will be suppressed upon proper action being taken therefor. Illustrative of this rule are the following cases:

In Weeks v. United States, 232 U. S. 383, 34 S. Ct. 341, 58 L. Ed. 652, L. R. A. 1915B, 834, Ann. Cas. 1915C, 1177, it was held that a search was unreasonable and in violation of the Fourth Amendment where entrance was gained to Weeks’ home by the officers without a search warrant. Weeks was arrested at another place.

In Amos v. United States, 255 U. S. 313, 41 S. Ct. 266, 65 L. Ed. 654, a search was held to be unreasonable and in violation of the Fourth Amendment, where revenue agents, in the absence of Amos, without a search warrant entered his home and store after gaining admission by telling Amos’s wife that they were revenue agents and had come to search the premises.

In Silverthorne Lumber Company v. United States, 251 U. S. 385, 40 S. Ct. 182, 64 L. Ed. 319, 24 A. L. R. 1426, a search and seizure was held to be unreasonable and in violation of the Fourth Amendment. The search was made without a search warrant after the arrest of two of the individual Silverthomes, and was made under color of an invalid subpoena.

In Agnello v. United States, 269 U. S. 20, 46 S. Ct. 4, 70 L. Ed. 145, 51 A. L. R. 409, a search was held unreasonable and in violation of the Fourth Amendment, the search being made at defendant’s home without a search warrant some time after his arrest on the street.

,In Go-Bart Importing Co. et al. v. United States, 282 U. S. 344, 51 S. Ct. 153, 75 L. Ed.-, opinion by Mr. Justice Butler, January 5,1931, search and seizure was held to be unreasonable and in violation of the Fourth Amendment. The search was made without a search warrant of the office of the company, of which two officers were under arrest, by requiring the president to take keys and ópen a safe and cabinet therein.

These cases are distinguishable from the present case, in that the officers acted under color of authority, and there was force, either actual or threatened. In the present case the agents did not act under color of United States authority and no force was employed.

In 'the ease of Gouled v. United States, 255 U. S. 298, 41 S. Ct. 261, 65 L. Ed. 647, a search and seizure was held to be unreasonable and in violation of the Fourth Amendment. In Olmstead v. United States, 277 U. S. 438, 463, 464, 48 S. Ct. 564, 567, 72 L. Ed. 944, 66 A. L. R. 376, the Supreme Court, in commenting on the Gouled Case, said: “Gouled v. United States, carried the inhibition against unreasonable searches and seizures to the extreme limit. Its authority is not to be enlarged by implication, and must be confined to the precise state of facts disclosed by the record. A representative of the Intelligence Department of the Army, having by stealth obtained admission to the defendant’s office, seized and carried away certain private papers valuable for evidential purposes. This was held an unreasonable search and seizure within the Fourth Amendment. A stealthy entrance in such circumstances became the equivalent to an entry by force. There was actual entrance into the private quarters of defendant and the taking away of something tangible.”

I therefore conclude that the petition to suppress should be dismissed for the reasons : That there are no reported eases holding search and seizure invalid where procured by officers or representatives of the United States through trick or artifice; that evidence of trick, artifice, and crime by officers have always been held admissible in the trial of criminals; that evidence involving crime by officers under a state law is admissible in United States Courts; that a construction of the Fourth Amendment, which will conserve the public interest as well as that of the citizen and which will prevent absurd and unreasonable consequences, requires the admission of such evidence; and for the other reasons stated above.

By reason of our decision on the application of the Fourth Amendment, it is not necessary to determine whether defendant is in a position to invoke the protection of the Fourth Amendment. He, at the time of the entrance and search, was a member of the Fraternal Order of Eagles, No. 533; he was its steward; he was the custodian of its property and had an interest in the property which it owned. There is no direet evidence whether this lodge was incorporated or not. There is an allegation, in the petition to suppress, that the lodge was the owner of the property. In the search warrant it is stated that the record owner, according to the 1930 tax assessments, is the Fraternal Order of Eagles, No. 533. The statement in the petition and in the tax assessment records would indicate that the lodge was incorporated for the reason that corporations can hold title to real estate while unincorporated associations cannot.

In Wilson v. United States, 221 U. S. 361, 31 S. Ct. 538, 55 L. Ed. 771, Ann. Cas. 1912D, 558, it is stated in the syllabus:

“A subpoena duces tecum, which is suitably specific and properly limited in its scope, and calls for the production of documents which, as against their lawful owner to whom the writ is directed, the party procuring its issuance is entitled to have produced, does not violate the unreasonable search and seizure provisions of the Fourth Amendment, and the constitutional privilege against testifying against himself cannot be raised for his personal benefit by an officer of the corporation. having the documents in his possession.
“A lawful command to a corporation is in effect a command to its officers, who may be punished for contempt for disobedience of its terms.
“An officer of a corporation is protected by the self-incrimination provisions of the Fifth Amendment against the compulsory production of his private books and papers, but this privilege does not extend to books of the corporation in his possession.
“An officer of a corporation cannot refuse to produce documents of a corporation on the ground that they would incriminate him simply because he himself wrote or signed them, and this even if indictments are pending against him.
“Physical custody of incriminating documents does not protect the custodian against their compulsory production. The privilege which exists as to private papers cannot be maintained.”

In Schenck v. United States, 249 U. S. 47, 39 S. Ct. 247, 63 L. Ed. 470, it is stated in the syllabus: “Incriminating documents seized under a search warrant directed against a Socialist headquarters, held admissible in evidence, consistently with the Fourth and Fifth Amendments, in a criminal prosecution against the general secretary of a Socialist party, who had charge of the office.”

In Guckenheimer v. United States, 3 F. (2d) 786, 789 (C. C. A. 3), it is stated by Judge Woolley in the opinion of the court: “If these papers were unlawfully seized and thereby the constitutional rights of any one were invaded, they were the rights of the corporation and not the rights of the other defendants. Next, it is clear that a question of the lawfulness of a seizure can be raised only by one whose rights have been invaded. Certainly such a seizure, if unlawful, could not affect the constitutional rights of defendants whose property had not been seized or the privacy of whose homes had not been disturbed; nor could they claim for themselves the benefits of the Fourth Amendment when its violation, if any, was with reference to the rights of another. Remus v. United States (C. C. A.) 291 F. 501, 510, 511. It follows therefore that the question of the admissibility of the evidence based on an alleged unlawful search and seizure does not extend to the personal defendants but embraces, only .the corporation whose property was taken.”

In United States v. Mandel (D. C.) 17 F. (2d) 270, it was held that a person in possession of a still and operating it for the owner or lessee cannot invoke the benefit of the Fourth Amendment. See also Essgee Co. v. United States, 262 U. S. 151, 43 S. Ct. 514, 67 L. Ed. 917.

If the Fraternal Order of Eagles, No. 533, is a corporation, defendant cannot invoke the protection of the Fourth Amendment. If the Lodge was incorporated, it is doubtful whether defendant can invoke its protection. The burden of proof was upon the petitioner. •

The petition is dismissed.


author: CAMPBELL, District Judge.

text:
    SHONNARD v. PRICE.
    No. 4154.
    District Court, E. D. New York.
    April 8, 1931.
    Livermore & Livermore, of New York City (Russell B. Livermore, of New York City, of counsel), for plaintiff.
    Howard W. Ameli, U. S. Atty., and A. D. Smith, Asst. U. S. Atty., both of Brooklyn, N. Y., and C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, and Lester L. Gibson, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., for defendant.
   CAMPBELL, District Judge.

This is an action at law brought to recover the amount of an additional income tax paid by the plaintiff to the defendant under protest; a claim for a refund of the same having been denied.

On the trial a jury was waived and the case submitted upon an agreed statement of facts, and no other evidence was offered.

I find the faets as agreed and státed as follows:

During the years 19Í7, 1918, and 1919, plaintiff resided in Oyster Bay, N. Y., and he now resides at 300 Park avenue, in the city of New York.

That heretofore and at the time of the commencement of this action, to wit, November 26, 1929, the defendant was the duly appointed collector of internal revenue for the First district of New York, and resided therein at all times.

The plaintiff filed with the collector of internal revenue for the First district of New York, his income and excess profits tax returns for the calendar years 1917, 1918, and 1919, and at the time of filing said returns paid to the said collector of internal revenue a tax of $8,522.94 for the year 1917, and a tax of $2,051.03 for the year 1918, and $54,-574.04 for the year 1919.

On June 30, 1917, the plaintiff formed a copartnership with J. H. Goadby Mills and Franklyn C. Thompson under the firm name of Shonnard Mills & Co. of New York City, for the purpose of carrying on a general commission business in stocks, bonds, and commodities as a member of the New York Stock Exchange.

From June 30, 1917, to July 1, 1919, the said partnership adopted as its annual accounting period, the fiscal year ending June 30 and filed its tax returns accordingly; the first return embracing the fiscal year ending June 30, 1918, and the second return embracing tbe fiscal year ending June 30, 1919.

Shortly after June 30, 1919, the partnership applied to the Commissioner of Internal Revenue for permission to change its accounting period from the fiscal year to the calendar year, and such permission was granted on March 2,1920.

The said partnership accordingly, within the time required by law, filed a return on the calendar year basis for the year 1919, embracing the period from the close of its fiscal year on June 30,1919, to December 31,1919.

The plaintiff and other members of the said partnership adopted the calendar year as their annual accounting period and filed their tax returns accordingly for years 1917, .1918, and 1919.

Throughout the period here in question, June 30, 1917, to December 31, 1918, the partnership balanced its books on tbe last day of each month, and was enabled thereby to ascertain its profits or losses for each month.

Immediately after the books Were thus balanced, the partnership distributed and paid to the individual partners, month by month, the monthly profits of the partnership. As a result, there was accordingly paid over and distributed to the plaintiff, ihe following sums in each of the calendar years 1917, 1918, and 1919:

June 30 to Dee. 31, 1917, $11,638.48 1918 1919 1st 6 months... $18,162 08 1st 6 months... $67,155 56 2nd 6 months... $24,148 98 2nd 6 months... $80,229 16 $42,311 06 $147,384 72

Plaintiff included the amount of $11,-638.48 in his tax return for 1917 as income from said partnership, and paid the tax thereon. He included the amount of $42,-311.06 for 1918 as income from said partnership and paid the tax thereon. He included the amount of $147,384.72 in his tax return for 1919 as income from said partnership and paid the tax thereon.

The distributions thus made to plaintiff, when computed according to the accounting period of the partnership, are as follows:

1918 1919 1919 Fiscal Year Fiscal Year Second .Half Calendar Ending June Ending June Year July 1 to Dec. 31. 30. 30. $11,638 48 $24,148 98 $80,229 16 18,162 08 67,155 56 $29,800 56 $91,804 54

Upon auditing the returns of the taxpayer for the calendar years 1917, 1918, and 1919, the Commissioner of Internal Revenue proceeded on the theory that profits of a partnership having an accounting period different from that of the partners constitute income to the partners in the year in which the annual accounting period of the partnership ended within the annual accounting period of the partners, held that such distributions, the total of which throughout the accounting periods of the partnership corresponded with the net income of the partnership in such periods, should have be n. accounted for in plaintiff’s respective calendar year returns as follows: •<

1917 1918 1919 None' $29,800.56 $91,304 54 80,229 16 $171,533 70

The first amount appearing under 1919 represents the total distributions made by the partnership out of its entire fiscal year ended June 30, 1919. The second amount represents the total distributions made by the partnership throughout the last six months of 1919 when it changed to a calendar year basis. The determination of the Commissioner of Internal Revenue as above set out was approved by tbe United States Board of Tax Appeals, and is reported in 3 B. T. A. 1245, Appeals of J. H. Goady Mills, Franklyn Thompson and Horatio S. Shonnard.

Subsequent to the filing of the returns for the years 1917, 1918, and' 1919, as set out in paragraph 3 hereof, and on or about May 2, 1925, plaintiff received a letter from the Commissioner of Internal Revenue stating that the determination of plaintiff’s income and excess profits tax liability for the years 1917 to 1920, inclusive, disclosed a deficiency in tax amounting to $16,999.95 for the year 1919 and an overassessment aggregating $3,-671.33 for the years 1917 and 1918.

Plaintiff duly filed with the United States Board of Tax Appeals an appeal from said determination of the Commissioner of Internal Revenue as to the deficiency in tax of $16,999.95 for the year 1919 as above set out. The appeal was duly heard and decision rendered against the plaintiff on April 19, 1926, and final order of redetermination made by the United States Board of Tax Appeals and entered on September 4, 1926, to the effect -that plaintiff had made an overpayment of ineome tax on his return for 1917, of $2,-063.24 and an overpayment on return for 1918 of $1,608.09, and that there was a deficiency in his tax for the year 1919 of $16,-999.95, making a net deficiency for those years of $13,328.62. The deficiency for the year 1919 of $16,999.95 was duly assessed by the Commissioner of Internal Revenue on assessment list dated October 16, 1926, page 4, line 1, #3.

Subsequently plaintiff received a bill from the defendant, as collector of internal revenue for the First district of New York, for the sum of $13,328.62, being the net deficiency in his ineome tax for the years 1917, 1918, and 1919, plus interest of $650.89, making a total of $13,979.51, which amount was paid to the defendant under protest on or about the 3d day of November, 1926.

Subsequently, on or about the 14th day of February, 1929, plaintiff filed with the defendant, as collector of internal revenue for the First district of New York, claim for refund of said additional tax in the sum of $13,979.51.

Said claim for refund in the sum of $13,-979.51 was disallowed by the Commissioner of Internal Revenue on schedule dated June 11, 1929.

The following are the statutes and regulations which are controlling in the instant ease:

“Statutes.
“Section 212 (a) — 1918 Revenue Act (40 Stat. 1064). ‘That in the case of an individual the term “net income” means the gross income as defined in section 213, less the deductions allowed by section 214.
“ ‘(b) The net income shall be computed upon the basis of the taxpayer’s annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the eomputa,tion shall be made upon such basis and in such manner as in the opinion of the Commissioner does clearly reflect the income. If the taxpayer’s annual accounting period is other than, a fiscal year as defined in section 200 or if the taxpayer has no annual accounting period or does not keep books, the net ineome shall be computed on the basis of the calendar year.
“ ‘If the taxpayer changes his accounting period from fiscal year to calendar year, from calendar year to fiscal year, or from one fiscal year to another, the net ineome shall, with the approval of the Commissioner, be computed on the basis of such new accounting period, subject to the provisions of section 226.’
“Sec. 213. — 1918 Revenue Act. ‘That for the purposes of this title (except as otherwise provided in section 233) the term “gross ineome”—
“ ‘(a) Includes gains, profits, and income derived from salaries, wages, or compensation for personal service (including in the ease of the President of the United States, £he judges of the Supreme and inferior courts of the United States, and all other officers and employees, whether elected or .appointed, of the United States, Alaska, Hawaii, or any political subdivision thereof, or the District of Columbia, the compensation received as such), of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever. The amount of all such items shall be included in the gross ineome for the taxable year in which received by the taxpayer, unless, under methods of accounting permitted under subdivision (b) of section 212, any such amounts are to be properly accounted for as of a different period; but * * *.’
“See. 218 (a). — 1918 Revenue Act. ‘That individuals carrying on business in partnership shall be liable for income tax only in their individual capacity. There shall be included in computing the net ineome of eaeh partner his distributive share, whether distributed or not, of the net ineome of the partnership for the taxable year, or, if his net income for such taxable year is computed upon the basis of a period different from that upon the basis of which the net income of the partnership is computed, then his distributive share of the net ineome of the partnership for any accounting period of the partnership ending within the fiscal or calendar year upon the basis of which the partner’s net income is computed.’
“See. 226. — 1918 Revenue Act. ‘That if a taxpayer, with the approval of the Com•missioner, changes the basis of computing net income from fiscal year to calendar year a separate return shall be made for the period between the close of the last fiscal year for which return was made and the following December thirty-first. If the change is from calendar year to fiscal year, a separate return shall be made for the period between the close of the, last calendar year for which return was made and the date designated as the close of the fiscal year. If the change is from one fiscal year to another fiscal year a separate return shall be made for the period between the close of the former fiscal year and the date designated as the close of the new fiscal year. If a taxpayer making his first return for income tax keeps his accounts on the basis of a fiscal year he shall make a separate return for the period between the beginning of the calendar year in which such fiscal year ends and the end of such fiscal year.
“ ‘In all of the above cases the net income shall be computed on the basis of such period for which separate return is made, and the tax shall be paid thereon at the rate for the calendar year in which such period is included; and the credits provided in subdivisions (c) and (d) of section 216 shall be reduced respectively to amounts which bear the same ratio to the full credits provided in such subdivisions as the number of months in such period bears to twelve months.’ ”
“Regulations Applicable.
“Art. 321. Partnerships. — ‘Partnerships as such are not subject to taxation under the statute, but are required to make returns of income. See section 224 of the statute and articles 411 and 412. Individuals carrying on business in partnership are, however, taxable upon their distributive shares of the net income of such partnerships, whether distributed or not, and are required to include such distributive shares in their returns. The net income of a partnership shall be computed in the same manner and on the same basis as the net income of an individual, except that the deduction of contributions or gifts is not permitted. See section 212 and articles 21-26. As to the excess profits tax on partnerships with fiscal years ending in 1918 see section 335 (c)/
“Art. 322. Distributive Shares of Partners. ‘The distributive share of the net income of a partnership which a partner is required to include in his return is his proportionate share of the net income of the partnership, either (a) for the taxable year upon the basis of which the partner’s net income is computed, or (b) if the partner’s net income is computed npon the basis of a taxable year different from that upon the basis of which the net income of the partnership is computed, for the taxable year of the partnership ending within the taxable year upon the basis of which the partner’s net income is computed. Amounts earned and distributed to a partner by a partnership after the end of its taxable year and before the end of his corresponding taxable year should be accounted for both by the partnership and by the partner in their returns for their next succeeding taxable years.’ ”

The .main contention of the plaintiff is stated by his counsel as follows: “Our contention is that when a partnership, with an accounting period different from that of the partners, balances its books monthly and determines its profits, and makes monthly distributions of its profits to the partners, these distributions become income to the partners in the calendar year in which .actually received.”

The plaintiff also contends, as stated by counsel: “That if the Commissioner has the right to tax the plaintiff in one year on eighteen months income whieh is definitely ascertainable and has been received by him in two different years, that compared to the method used in taxing other individuals such a 'determination would be so arbitrary and capricious that it would be in violation of the Fifth Amendment of the Federal Constitution.”

The main issue now before this court seems to me to have been more clearly stated by the Board of Tax Appeals, as follows: “The issue concerns the question of whether the profits of a partnership for its fiscal year ending June 30 should be included, in the income of the partners, who kept their accounts on the calendar-year basis, for the calendar year in which the accounting period of the partnership ended, when such profits were determined and distributed by the partnership monthly.”

The issues now presented in the instant suit were heard and determined by the Board of Tax Appeals, on the appeal by J. H. Goad-by Mills, Franklyn Thompson, and Horatio Shonnard, 3 B. T. A. 1245.

That determination, however, is not binding on this court, but is entitled to respectful consideration, and the same is true of the decisions in the other appeals heard and determined hy the Board of Tax Appeals subsequent to that of Mills et al., supra, in which such issue was presented.

The partnership of which the plaintiff was a member adopted as its accounting period a fiscal year period from June 30 to June 30, and this continued for two years from June 30, 1917, to June 30, 1919, when it was voluntarily changed by the partnership to the calendar year basis upon the close of the fiscal year of June 30, 1919. During all of this time plaintiff was on the calendar year basis, and rendered his return on a calendar year receipts and disbursements basis.

The Commissioner of Internal Revenue required the plaintiff to report all income received from the partnership in his return for the calendar year in which the fiscal year of the partnership ended, whether distributed or not.

Plaintiff contends that, the income of the partnership being distributed monthly, he should be allowed to report the amount received in the year in which received, for the reason that section 213 of the Revenue Act of 1918 provides that all items of income are to be included in the gross income for the taxable year in which received, and, unless an exception is read into it by section 218 (a), the income of a partnership formally distributed monthly, should be accounted for by the partners in the year in which received.

This contention the plaintiff has not sustained.

I am in entire accord with so much of the opinion of the Board of Tax Appeals in which the Board said:

“In the enactment of section 218 (a) Congress ignored for taxing purposes the existence of the partnership and framed the law so as to -treat the gains and profits of the partnership as if they were gains and profits of the individual partners. Unlike a corporation, a partnership has no legal existence aside from the members who compose it; consequently, in order that the profits of the partnership might not escape taxation, Congress provided that its income should be taxed to • the individual partners, the same as if they had received it direct without the intervention of the partnership.”
“The purpose of Congress in the enactment of section 218 (a) to the effect that' each partner should include in his net income ‘his distributive share, whether distributed or not, of the net income of the partnership for the taxable year,’ to cover a situation already taken care of hy the provisions of sections 212 (b) and 213 (a) was to make more evident its intent to ignore the partnership and treat its profits and earnings as accruing directly to the partners. The use of the phrase ‘whether distributed or not’ evidences an intent on the part of Congress to levy the tax against the same income with respect to which the tax would have been levied had the partnership been created a taxable entity and made liable for the tax instead of the partners in their individual capacities.”

The fact that the partnership balanced its books monthly, and made distribution monthly to the partners, does not, in my opinion, change the situation.

Until the change in the accounting period of the partnership, the taxable income of the partners was measured by the partners’ share of the net earnings during its accounting period from June 30 to June 30, computed at the close of such period.

This must be true because, although the books may have been balanced monthly and distribution made monthly, the amount of the net income could not be determined until the end of the accounting period of the partnership. Earle v. Commissioner of Internal Revenue (C. C. A’.) 38 F.(2d) 965.

The partnership did not have a monthly accounting period for the purposes of taxation, but a fiscal year period, and might have suffered losses in one part of the fiscal year and made profits in another, and therefore the net income could not be computed until the close of the fiscal year period, and it was that income which the plaintiff was bound to report in the calendar year in which the partnership period ended.

This to me is clearly the meaning of section 218 (a). Bankers’ Trust Co. v. Bowers (C. C. A.) 295 F. 89, 31 A. L. R. 922.

The contention on behalf of plaintiff that the omission of the words “whether distributed or not” from the second clause of section 218 (a), which are found in the first clause of that section, showed an intention on the part of Congress to provide that amounts actually distributed are to be included by the partner in the year in which received, but, as to the undistributed income, the partner, if his accounting period is different from that of the partnership, is to include his distributive share in the year in which the accounting period of the partnership ends, within the accounting period of the partner, is not sustained.

The first clause of that section describes how income from a partnership is to be computed, assuming of course that both the partnership and the partner are computing upon the basis of the same taxable year, while the second clause provides for a situation where both are not computing their income upon the basis of the same taxable period, but does not relieve the partner from computing as his net income his distributive share, whether distributed or not.

Section 218 (a) provides an exception to section 213 of the Revenue Act of 1918, and is not inconsistent with sections 218 (e), 218 (b), 205 (c), 221 (a and b), or section 224, all of the Revenue Act of 1918.

The accounting period of the partnership was changed with consent of the Commissioner from the basis of a fiscal year ending on June 30 to the calendar year ending on December 31, and under section 226 of the Revenue Act of 1918, the plaintiff was, upon the change in the accounting period of the partnership, required to make a return in his annual accounting period, of the income received from the partnership within said time.

This required the plaintiff in the instant suit to make, in his annual return for the year 1919, a return of his distributive share of the net profits, whether distributed or not, of the partnership, reported as of its fiscal year ending on June 30, 1919, and also of the net profits from that time to December 31, 1919, as by such change of its reporting period the partnership was required to make report for two periods expiring during the calendar year 1919.

The plaintiff therefore was required to make a return for the calendar year 1919 of eighteen months’ income of the partnership, but that was not due to any act of the government, but solely to the voluntary act of the partnership, and we must not lose sight, of the fact that the partnership had no legal existence aside from the members who composed it, of whom the plaintiff was apparently the dominant member. Bankers’ Tru'st Co. v. Bowers, supra.

The intention of Congress was to put the assessment of income taxes upon a yearly basis, and, as in some instances, loss and inconvenience would be occasioned by requiring returns on the basis of the calendar years, it provided for returns being made in such instances on the basis of fiscal years.

As, however, it was anticipated that it might be desired to change from the fiscal to the calendar year, in some instances the only way this could he accomplished was to require, as was done in section 226, that a return be made as of the fiscal year, and an additional return for the period from that time to the close of the calendar year, and thus again fix an annual accounting period.

The taxation of the plaintiff for the two periods, both ending in the year 1919, was in accordance with the statute, and was not so arbitrary and capricious that it was a violation of the Fifth Amendment of the Federal Constitution. Bankers’ Trust Co. v. Bowers, supra; Iron Mountain Oil Co. v. Alexander (C. C. A.) 37 F.(2d) 231; Graham & Foster v. Goodcell, 282 U. S. 409, 51 S. Ct. 186, 75 L. Ed.-.

The tax of the plaintiff was correctly computed by the Commissioner, the decision of the Board of Tax Appeals was right, and the provisions of the Revenue Act in question are constitutional.

The defendant is entitled to a decree dismissing this suit, with costs. .

A decree may be entered in favor of the defendant, against the plaintiff, dismissing the complaint herein with costs.

Submit findings of fact and conclusions of law in accordance with this opinion.


author: NETERER, District Judge.

text:
    THE DONAU. BORDER LINE TRANSP. CO. v. NORD DEUTSCHER LLOYD.
    No. 12968.
    District Court, W. D. Washington, N. D.
    March 13, 1931.

      Hayden, Merritt, Summers & Bucey, of Seattle, Wash., for libelant.
    Bogle, Bogle & Gates, of Seattle, Wash., for respondent and claimant'.
   NETERER, District Judge.

On November 21, 1929, at approximately 6 a. m., about the break of day, the Border King and the steamship Donau collided in the waters of Puget Sound off Marrowstone. The Border King was entering the Puget Sound from Vancouver, and the Donau was outgoing from the port of Seattle. The Border King had a course of east by south three-quarters south, and the Donau northwest by one-half north. At 5:52, each vessel, being about three miles from the other, changed its course: The Donau claims two points to starboard, and the Border King claims to starboard, from east by south three-quarters south, to southeast. After the change and the Donau was straight on the course, she gave one blast of the whistle, to which there was no answer, the Border King being about one-half point off the Donau’s port bow. The captain appeared on the bridge and said, “What is it, Pilot?” and was informed of the approaching vessel, and after a short period, directed, “Blow one blast.” There was no answer.

After the change of courses, the Border King showed to the Donau its green light, “range barely cracked,” “ * * * indicated that he (Border King) was crossing my (Donau) bow just the slightest amount”; “it was so slight I could not see why I could not see his red light.” The green light of the Border King was exposed until the collision. The vessels approached from opposite directions head and head, or nearly so.

The Donau has a gross tonnage of 9,026; deadweight, 12,040; length, 545 feet; 63% feet beam; crew of 65; and is a freight steamer with small passenger limit, and was in charge of a pilot on Puget Sound waters of 35 years’ experience, who directed the navigation. *

The Border King is 165 feet long, and “answered very quick.” It had a crew of 14 men and three officers (captain and two mates). It has a pilot house 100 feet from the stem, which is inclosed by four windows ■ — two in front, one on the port, and one on the starboard side. All windows were closed, except that on the starboard side. The lookout also discharged the duty of night watchman, making regular inspection every “half hour or hour.” The lookout was stationed just forward of the mast. When he saw the Donau “she was dead ahead.” He heard one whistle of the Donau, he says, eight or ten or fifteen minutes before, and again says, just ' before the collision. I think the fact is that he did see the Donau about eight minutes before the collision just after she changed her course, because “she was dead ahead.” He reported no lights to the second officer, who was officer of the deck and stationed in the pilot house at the starboard window. The second officer, after he saw the lights, 5:54 or 5:55, from the starboard pilot house win- dow, says the lookout “was calling the watch at that time,” and, in answer to the question, “Did he get back on the forecastle head before the collision?” he answered, “No, sir.” The watch of the lookout was from 6 p. m. to 7 a. m.

Immediately after changing the course of the Border King the seeond officer in charge “went back” to see the standard compass aft of the captain’s room, which was about 25 feet aft of the pilot house, and was gone, he says, about a minute. I am satisfied it was longer; and between 5:53 and 5:54 (if in the compass room a minute) he saw “her red light was just cracked.” “I saw the range lights and her side lights;” “both side lights were showing at that time.” Between 5:54 and 5:55 (assuming he was in the compass room only a minute), he said, “They were showing a little bit like she was'coming on me.” Shortly after the Donau’s seeond blast and just before the last blast, when the vessels were approximately 2,000 feet or less apart, the pilot of the Donau said to the captain, “If there is not something done there mil be a collision,” and the captain directed the chief officer to blow one blast, which was the third, and the order, “Throw the stern to port and the bow to starboard,” was executed and the engines reversed. The second officer of the Border Bang heard the blast, “saw the red light right after the first mate came in the wheel house,” he says, at 5:58, but it must have been later. He says, “I glanced to see where he was and he had the red light on me.” “I gave one whistle and tried to get my vessel clear and put her hard aport and full astern,” which was at 5:59 by the engine room log, and the Donau on reverse engines at 6 miles an hour at 6:00 scraped the Border Bang on her port bow, and on rebound struck her just aft the wheelhouse.

There would have been no collision if the Border King, after the Donau, by two blasts, tried in vain to ascertain her intentions, had met her duty and discharged her responsibility in asserting her power by porting her helm and reversing her engines (she “answered very quick”) or kept out of the way by any proper efficient maneuver which she had time to execute, for the navigating officer confessedly saw the range lights and side lights of the Donau at 5:54 or 5:55 “when they were showing a little bit like she was coming on me.” The Steel Inventor (C. C. A.) 43 F.(2d) 958. The vessels were moving approximately 10% and 12% miles per hour, respectively; the weather was fine and clear; the sea smooth and open, and visibility unimpaired.

The conclusion is obvious that, with the navigating crew of the Border King, efficiency and power did not go along with duty and responsibility. The pilot house, being glass inclosed, prevented the hearing of the blasts of the Donau by helmsman or any one therein, and during part of the critical time the officer of the deck was not in the pilot house, but was concerning himself with the magnetic course rather than his course with relation to the approaching vessel head and head or nearly so, which was in plain view, and the lookout was not at his post performing his duty. See The Albatross (C. C. A.) 20 F.(2d) 17; The Tillicum (D. C.) 217 F. 976, affirmed (C. C. A.) 230 F. 415. Nor is the helmsman or officer of the deck a proper lookout. The Albatross, supra. A lookout must be constant and vigilant. The Belgenland, 114 U. S. 355, 5 S. Ct. 860, 29 L. Ed. 152. Chamberlain v. Ward, 62 U. S. (21 How.) 548, 16 L. Ed. 211. The master of the Donau had no option as to passing. The rule is mandatory and does not permit two vessels head and head or nearly so to pass starboard to starboard. The foundation of the Rules of the Road is to pass to the right. The Transfer No. 10 (D. C.) 137 F. 666. La Boyteaux. Rules of the Road at Sea, 111. It was the duty of the Donau ¿s the privileged vessel to keep her course and speed, and it was the duty of the Border King to keep out of the way. Had the Donau deviated from the rule and a collision resulted, she would havé been held at fault, even though she acted with the best intentions. The Delaware, 161 U. S. 459, 16 S. Ct. 516, 40 L. Ed. 771.

Article 19 of the Inland and International Rules (33 USCA §§ 104, 204), requires: “When two steam vessels are crossing so as to involve risk of collision, the vessel which' has the other on her starboard side shall keep out of the way of the other.”

Article 21 of both rules (33 USCA §§ 106, 206) : “Where by any of these rules one of the two vessels is to keep out of the way, the other shall keep her course and speed.”

Article 22 of both rules (33 USCA §§ 107, 207) : “Every vessel which is directed by these rules to keep out of the way of another vessel shall, if the circumstances of the case admit, avoid crossing ahead of the other.”

Article 23 of both rules (33 USCA §§ 108, 208): “Every steam vessel which is directed by these rules to keep out of the way of the other vessel, shall, on approaching her, if necessary, slacken her speed, or stop or reverse.” •

The single blast of the Donau indicated that she expected the Border King to pass under her stem. The Britannia, 153 U. S. 130, 14 S. Ct. 795, 38 L. Ed. 660.

Pilot Rule 3: “The signals for passing by the blowing of the whistle shall be given and answered by pilots in compliance with these rules, not only when meeting head and head or nearly so, but at all times when the steam vessels are in sight of eaeh other and passing or meeting. * * * The whistle signals provided in the rules for steam vessels meeting, passing or overtaking are never to be used except when steam vessels are in sight of each other. *' * * ”

The facts in this ease are clearly within The Newport, 276 U. S. 454, 48 S. Ct. 369, 72 L. Ed. 651. The instant ease is distinguished from the West Hartland Case (D. C.) 295 F. 547; Id. (D. C.) 297 F. 330; affirmed (C. C. A.) 2 F.(2d) 834. If The West Hartland had kept her course and speed there would have been no collision. Having deviated from the rule by wrongful maneuver, she assumed the risk.

The Donau was not at fault in keeping her course and speed in harmony with the rule, supra, for navigation at sea. Her master could not know the result of departing from it, and be held to assume the risk, and, when he ported his helm and reversed his engines, he did not contribute to the collision, but mitigated the damage, and but for this maneuver, instead of scraping the port bow of the Border King, there would have been direct forceful contact, with possible destruction of the Border King, much damage to the Donau, and likely loss of life. Wilson v. Pacific S. S. Co., 276 U. S. 454, 48 S. Ct. 369, 72 L. Ed. 651.

To apply or distinguish the many cases cited would unduly extend this opinion.

Decree dismissing the libel may be presented on notice.


author: HAZEL, District Judge.

text:
    CANADA MALTING CO., Limited, v. PATERSON STEAMSHIPS, Limited. BRITISH EMPIRE GRAIN CO., Limited, v. SAME. STARNES v. SAME.
    District Court, W. D. New York.
    Oct. 1, 1930.
    On Rehearing Jan. 2, 1931.
    Brown, Ely & Richards, of Buffalo, N. Y. (Laurence E. Coffey, of Buffalo, N. Y., of counsel), andBigham, Englar, Jones & Houston, of New York City (Leonard J. Matteson and A. J. MeElhinney, both of New York City, of counsel), for libelants.
    Stanley & Gidley, of Buffalo, N. Y., for respondent.
   HAZEL, District Judge.

On the night of July 9,1930, the steamers Yorkton and Mantadoe collided in Whitefish Bay, Lake Superior, within the territorial waters of the United States. Ths above-entitled actions in personam were brought in this jurisdiction against the owner of the Manta-doc alone, and foreign attachments issued by owners of separate' cargoes of grain laden aboard tbe Yorkton which, in consequence of the collision, sank, and the cargoes totally lost. Both vessels are of Canadian registry. Libelants and respondent are foreign citizens, subjects of the Dominion of Canada. The Yorkton was loaded at Port Arthur, Ontario, where the contracts of affreightment were made, and the bills of lading issued for delivery of the cargoes at Montreal, Quebec. An aetion by the respondent owner of the steamer Mantadoe is pending against the claimants of the steamer Yorkton in the Admiralty Court of the Dominion of Canada to determine the fault of the collision between the two vessels and their owners. The motion herein seeks to have this court decline further jurisdiction of the pending causes, and for dismissal of the libels.

Concededly whethei* jurisdiction shall be retained is a matter of discretion, and the exercise of the discretion depends upon the facts and circumstances contained in thei affidavits. See Charter Shipping Co., Ltd., v. Bowring, Jones & Tidy, 281 U. S. 515, 50 S. Ct. 400, 401, 74 L. Ed. 1008, decided by the Supreme Court May 19, 1930. The moving papers show, not only that all the parties, including the colliding vessels and their officers and crews, are citizens and residents of Canada, but also that the Dominion Wreck Commissioner has had the cause of the collision under investigation, and on the evidence before him has reached the conclusion that both vessels were equally at fault for the mishap; both having committed culpable error due to faulty interpretation of the rules of navigation and their negligent application. It is pointed out that under existing United State law, assuming a finding of mutual fault on the part of the navigating vessels, the respondent here would be held liable under Admiralty Rule 56 (28 USCA § 723) for the entire amount of the cargo damage without any effective remedy for recoupment of one-half of cargo damages against the Yorktown in this action, and, on recovery of the damages, to enforce contribution, another aetion would be necessary by the claimants of the Manta-doe against the owner of the Yorkton (see The New York, 175 U. S.187, 20 S. Ct. 67, 44 L. Ed. 126; Erie R. Co. v. Erie & Western Transp. Co., 204 U. S. 220, 27 S. Ct. 246, 51 L. Ed. 450); while, on the other hand, the remission of the actions to the Admiralty Court of Canada, where the rule is the same as in England, would not in any event involve liability of respondent for more than a moiety of the cargo damage recoverable from each of the vessels found at fault.

It seems to me that the circumstances are such that this court is warranted in refusing to retain jurisdiction, and that no injustice will result to libelants by remitting the parties to their home forum. That the rule in this court is more favorable to the cargo owners is insufficient reason for retaining jurisdiction.

Plaintiff in opposition urges that inasmuch as the collision occurred within the territorial water of the United States, jurisdiction should not be declined, citing The Heredia v. Davies (C. C. A.) 12 E.(2d) 500; and several other adjudications. But in the Heredia Case the action was for personal injuries by a foreign seaman against a foreign ship, the injuries occurring owing to the negligence of the latter in an American port, and the court deemed it necessary to exercise jurisdiction to prevent failure of justice; while in the instant ease, as said, no failure of justice would result by refusing jurisdiction and relegating the rights of the parties to the courts of their citizenship. That all the parties in interest are citizens of a foreign country, true enough, standing alone, constitutes no objection to retaining jurisdiction; but I think the reasons assigned in these eases for not doing so are meritorious. The collision of the steamships in Whitefish Bay in American waters does not, in my opinion, demand applying the law of the United States on the principle of lex loci in the determination of liability. See Charter Shipping Co. v. Bowring et a!., supra, where the cause of aetion arose in waters at Jacksonville, Fla. In that case the Supreme Court said:

“Both the parties being British subjects and the present litigation, as well as the suit' pending abroad, apparently involving the application of English Law to the fund located there, it was for the District Court to say, as it did, upon a consideration of all the circumstances, whether it should decline ‘to take cognizance of the case if justice would be done as well by remitting the parties to the home forum.’ See The Maggie Hammond, 9 Wall. 457, 19 L. Ed. 780. * * *
“It was for the District Judge to consider the facts appearing and the inferences which he might draw from them and reach his own conclusion as to the convenience of witnesses, as well as the other factors upon which he decided that justice would be best served by leaving the parties to their suit in England.”

The case of Royal Mail Steam Packet Co. v. Companhia de Navegacao Lloyd Brasileiro (D. C.) 27 F.(2d) 3002, 1003, is cited in support of the contention that jurisdiction should be retained, but I think that in that ease the circumstances were essentially different. There libelant was a British corporation and respondent a Brazilian corporation. The collision occurred in Belgian waters, and, as I read Judge Inch’s opinion, he bases his determination upon the injustice that would ensue to libelant by requiring a determination in the Belgian court because the law of that country had not been revised since the World War “to bring it into line with the depreciation of the Belgian currency.” The result, the learned court said, from the depreciation of the Belgian francs, together with the Belgian law limiting liability to 200 francs per gross ton, and allowing the respondent at fault to limit its liability, would enable unjustly avoiding a large part of the damages. The collision here did not occur on the high seas, as in the last-mentioned ease, but occurred at a point where the inland waters narrowed to a neck, and where it may be assumed the colliding vessels proceeded in United States waters unintentionally or unavoidably. In Fairgrieve v. Marine Ins. Co. (C. C. A.) 94 F. 686, the policy of insurance on the Canadian schooner was issued in this country, and the court was of opinion that, since the validity of the contract was to be determined by the laws of this country, no rules of comity would be violated by retaining the litigation. The adjudication is believed to support respondent’s contention rather than libelant’s. All other citations for retaining jurisdiction are readily distinguishable from the facts here.

There is another point that bears upon the exercise of discretion, to wit, the hearing and finding of the Canadian Wreck Commissioner, the pending action in the Canadian court brought by the respondent owner of the Mantadoc against the owner of the Yorkton to determine the liability for the collision as between the vessels and their owners. It would certainly lead to complications to have the Canadian Court of Admiralty determine the liability one way, and this court another way. Such antagonistic determinations might lead to a multiplicity of actions to determine the rights and liabilities of the parties — something that should be avoided. Other arguments in favor of retaining jurisdiction have béeu considered but are deemed insufficient. The motion of respondent is granted, and an order on five days’ notice to libelant may be entered. ’ The order shall provide for respondent’s appearance in any action brought in Canada by cargo owners and file bond for recovery of damages.

On Application for Rehearing.

1. The word “eoneededly” in paragraph 2, page 803, of the opinion heretofore filed) is stricken out in view of the misunderstanding of the court as to the position of proctors for libelants in this respeet.

The statement in the opinion, “The collision of the steamships in Whitefish Bay in American waters does not, in my opinion, demand applying the law of the United States on the principle of lex loci in the determination of liability,” may also be eliminated. It was unnecessary to the decision of the questions submitted, and doubtless, as claimed, was an erroneous statement of the prevailing rule. Whether the ultimate facts here warrant applying a different rule need not be de • cided.

It is also true, as said by proctor for respondents, that the liability in general average, as held in Charter Shipping Co. v. Bowring et al., was not due to the contract but to participation in a common venture, and adjustment depended upon the law of the port of destination after arrival of the vessel. But the principle of that ease, with relation to the discretionary right of the court to retain or refuse jurisdiction in view of the facts and circumstances in the instant ease, is not inapplicable. On this motion for rehearing proctors for respondent point out that by treaty relations between Great Britian and the United States the boundary waters of the Great Lakes, meaning thereby the entire body of water comprising lakes, rivers, and waterways, separating the two countries, with respeet to navigation have become international waterways and equally free to citizens of Canada and citizens of the United States. See Root-Bryee Treaty of 1909, and President’s "Proclamation of May 13, 1910 [36 Stat. 2448]; More’s Digest of International Law, vol. I, p. 674).

In view of this treaty, there exists, it seems to me, additional reason for declining jurisdiction and relegating the parties to pursue their remedies and rights in the country of which they are citizens and subjects, in the place where the contract of carriage was made and performed, and, further, where the witnesses reside. But assuming, as does libelant, that the collision occurred in American waters, the contention is that this court is without power to refuse jurisdiction, since section 24 of the Judicial Code (28 USCA § 41) confers original jurisdiction in the District Court of all causes of admiralty and maritime jurisdiction.

It was not intended to rule that in such case the court was without jurisdiction, but merely that the circumstances were such as to justify the court in declining jurisdiction. The right to take or refuse jurisdiction for special reasons is recognized in The Belgenland, 114 U. S. 355, 5 S. Ct. 860, 864, 29 L. Ed. 152, wherein instances are mentioned rendering it expedient for the court to take jurisdiction of suits between foreigners in causes “not arising in the country of the forum * * * not on the ground [the learned court says] that it has not jurisdiction, but that, from motives of convenience, or international comity, it will use its discretion whether to exercise jurisdiction or not.” The phrase “not arising in the country of the forum” does not make it obligatory to retain jurisdiction if substantial reason existed for refusing it. Goldman v. Furness, Withy & Co., Ltd. (D. C.) 101 F. 467; The Iquitos (D. C.) 286 F. 383, 384; The New Texas, 1926 A. M. C. 1514. And see The Maggie Hammond, 9 Wall, page 457, 19 L. Ed. 772.

Other points presented for retaining jurisdiction need not be discussed.

The order declining jurisdiction may be entered.


author: WOOLSEY, District Judge. .

text:
    UNITED STATES ex rel. GREIFENHAUN v. DAY, Commissioner of Immigration.
    District Court, S. D. New York.
    May 6, 1931.
    M. Michael Edelstein, of New York City, for relator.
    George Z. Medalie, U. S. Atty., of New York City (Vito Mareaiitonio, of New York City, of counsel), for respondent.
   WOOLSEY, District Judge. .

This writ is dismissed.

I. The relator, a resident alien, is a German national, Who was duly admitted to the United States ex steamship Noordam on 'December 16, 1922.

In August, 1930, the relator had been living apart from his wife about three years, although he was regularly contributing to her support, apparently under an order of a domestic relations court in the Bronx where he resided.

The relator was employed by G. M. Fauser, Inc., of 425 Fourth Avenue, New York City, as a designer of wall papers and cretonnes.

On August 11, 1930, he started on a motor trip to the Canadian Rockies to make photographs which were to he used to form the basis of some of his designs. He took with him, apparently with her mother’s consent, a young unmarried woman also employed by his firm, with whom he had sexual intercourse commencing on their first night out from New York.

He and his companion entered Canada August 24th via Babb and Piegan, Mont., and were examined and passed by the Canadian authorities at Carway, British Columbia.

On August 30th, on their wayhome, the relator and his companion tried to enter the United States at Gateway, Mont. They were there examined by a Board of Special Inquiry of the Immigration Service. The young woman freely admitted that she and the relator had had sexual intercourse throughout their trip. After first denying such intercourse, the relator — on being faced by her admissions — at once admitted the f Set, As a result of this examination, both the relator and his companion were excluded.

The exclusion of the young woman, who claims to be a native-born citizen of the United States, was, of course, conditional on her not being able to prove her citizenship and is not of interest here.

The relator was excluded (1) as likely to become a public charge; (2) as admitting he was bringing in a woman for immoral purposes; and (3) for committing perjury (regarding his relations with his companion) in his examination for admission.

On being advised that he might appeal his exclusion he stated that he did not wish to appeal — apparently because he thought an appeal would be fruitless.

He was then advised as follows: “You are further advised that should you gain entry into the United States by making false and misleading statements or by surreptitious entry that you would be subject to arrest, prosecution and deportation. You are further advised that you are debarred- from entering the United States for a period of one year and should you desire to enter the United States prior to this time that you must first have the permission of the Secretary of Labor, Washington, D. C. before you can reapply for admission.”

Having been thus excluded and warned, the relator and his companion returned across the Canadian border, and on the next day, August 31, 1930, entered the United States at Babb, Mont., after submitting to a very easual examination in which they did not say anything about their exclusion at Gateway, Mont., on the day previous.

The Department of Labor is about to deport the relator under section 19 of the Act of February 5, 1917, 8 USCA § 155 (1) on the ground that he admittedly entered the United States at Babb, Mont., on August 31st, without having been given leave to apply for such admission within one year from his exclusion on August 30th at Gateway, and (2) on the ground that he entered the United States for an immoral purpose. Cf. Act of February 5, 1917, § 3 (8 USCA § 136) and Immigration Rules of January 1, 1930, subdivision P, paragraph 1.

II. This is a ease in which the punishment may seem, on first impression, to be disproportionate to the crime, but this is not the fact.

As it did not appear on the examination of the relator at Gateway, Mont., that either adultery or fornication outside of marriage is a crime under the law either of the Dominion of Canada, or of Saskatchewan, or British Columbia, the provinces thereof through which he passed, if the relator had been in position to have appealed his exclusion at Gateway, he would probably have come-within my'ruling in U. S. ex rel. Linklater v. Commissioner of Immigration, 36 F.(2d) 239, 241-242, in which I followed the decision of the Circuit Court of Appeals for the Ninth Circuit in Wong Yow v. Weedin, 33 F.(2d) 377, 379, and held that a crime committed in this country, and so presumably punishable here, was not ground, under section 19 of the Aet of February 5, 1917, for the deportation of an alien lawfully resident here who had returned from a temporary sojourn in Canada.

Certainly it was not shown at the examination in Gateway that the relator was likely to become a public charge, and his first denial of sex relations with his companion may well be considered venial, in view of his prompt admission thereof, as soon as he found that his companion, by her own evidence, had waived the social estoppel against his telling of their intimacy.

It is doubtful also whether he could have been held to have been bringing in a woman for immoral purposes, because, first, they were sharing expenses, and, second, proof of a liaison hardly comes within such a general allegation.

But an appeal was not taken by the relator, not only because he may not have been in position to do so, but also apparently because he had in mind doing what he actually did next day, namely, coming over our border at a possibly less inhospitable port of entry, in spite of the warning he had received that he must appeal, or remain outside the United States until a year had elapsed unless he got leave from the Department to apply for admission meantime.

Thereupon he left Gateway, went through Canada about eighty miles eastward, and on August 31st passed the inspector at Babb, Mont., without advising him of the occurrence at Gateway. Thus he fraudulently secured admission by his own lack of candor and owing to the ignorance of the authorities at Babb of what had happened at Gateway.

Courts must sternly set their faces against such flouting of our laws and regulations.

I think the hearing afforded to the relator was fair.

It follows that, as the first ground of- deportation has been not only proved but admitted, it becomes unnecessary to discuss or consider the second ground.

Consequently the relator must be deported.