author: HICKENLOOPER, Circuit Judge.

text:
    BRUCKER, Atty. Gen. of Michigan, et al. v. FISHER et al.
    No. 5928.
    Circuit Court of Appeals, Sixth Circuit.
    May 11, 1931.

      Paul W. Voorhies, Atty. Gen., and E. R. Boyles, Deputy Atty. Gen., for appellants.
    Beaumont, Smith & Harris, of Detroit, Mich., Archibald Broomfield, and Hal H. Smith, of Detroit, Mich., for appellees.
    Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.
   HICKENLOOPER, Circuit Judge.

This cause comes on for hearing upon motion to dismiss defendants’ appeal from the decision [41 F.(2d) 774] of a three-judge court sitting in the Eastern District of Michigan, in which the plaintiffs, Marion H. Fisher and the Union Trust Company of Cleveland, here appellees, sought both a temporary and a permanent injunction against defendants to restrain the enforcement of the Michigan Inheritance Tax Law (chapter 236, Compiled Laws of Michigan of 1915, as amended), upon the ground, inter alia, that such inheritance tax law operated in violation of the Fourteenth Amendment to the Federal Constitution. Whether a preliminary restraining order was issued does not clearly appear from the record in its present state. It is, however, made to appear that a motion for interlocutory injunction was filed with the bill of complaint, that notice thereof was given to opposing counsel, and that the three-judge court -(Judges Denison, .Tuttle, and Simons) was thereupon convened to hear said motion, all as provided by section 266 of the Judicial Code (28 U. S. C. § 380 [28 USCA § 380]).

At the time set for hearing of the motion for interlocutory injunction, the court suggested that perhaps final disposition of the action could bo expedited by stipulating the facts and submitting the ease upon the merits at the one hearing. Counsel for the plaintiffs thereupon engaged in a dialogue with the court, a fair statement of the substance of which is that the plaintiffs were not to be considered as waiving any rights of appeal which they might have by virtue of their pressing the motion for interlocutory injunction. The defendants announced that they would take no action in the case pending final submission, but it seems to have been definitely understood at that time that the three-judge court was doing no more than accepting submission of the case both upon the application for interlocutory injunction and upon the merits. The case was apparently then fully argued, and the stipulation as to the facts and written briefs were subsequently submitted. No interlocutory injunction was granted, nor did the eourt eventually pass upon the constitutional question, but it was decided that the plaintiffs were entitled to rer lief under the state law as properly conr strued. 41 F.(2d) 774. The issue presented by the present motion is whether, under these circumstances, tie appeal should lave been to the Supreme Court of the United States, rather than to tlis court.

Tlis question would seem to require an affirmative answer under the decision in Stratton v. St. Louis S. W. Ry. Co., 282 U. S. 10, 51 S. Ct. 8, 75 L. Ed. —, and the eases tlere cited. These cases establish the principles that section 266 applies only wlere tlere is a substantial claim of invalidity under the Federal Constitution and wlere an application for an interlocutory injunction is made and pressed. (No contention is made tlat the constitutional question was frivolous or that the plaintiff did not press the application for interlocutory injunction to hear-' ing.) If an interlocutory injunction is not sought, a single judge may lear and determine the case, and the appeal tlen lies to the Circuit Court of Appeals; but tlis election lies with the complainant, and “if an application for an interlocutory injunction is made and pressed to restrain the enforcement of a state statute, or of an administrative order made pursuant to a state statute, upon the ground tlat such enforcement would be in violation of the Federal Constitution, a single judge las no jurisdiction to entertain a motion to dismiss the bill on the merits.” Stratton v. St. Louis S. W. Ry. Co., supra, 282 U. S. page 15, 51 S. Ct. 8, 10, 75 L. Ed.-. The motion for interlocutory injunction must be heard before the statutory three-judge court. By the 1925 amendment of section 266 (28 USCA § 380) the hearing upon the merits must likewise be held before such three-judge court if an application for a temporary injunction lad been duly made and pressed. An appeal lies directly to the Supreme Court from the decision of the three-judge court in either such instance. The Court of Appeals is then without jurisdiction. See Judicial Code, §§ 238 and 128 (28 U. S. C. §§ 345 and 225 [28 USCA §§ 345 and. 225]).

The language of the Supreme Court tlat an application for an interlocutory injunction must be “made and pressed,” in order to justify a hearing before the three-judge court and a subsequent appeal direct to the Supreme Court, can logically mean only “pressed to hearing” and not, necessarily, decided. Once the three-judge court las been properly convened to lear an application for interlocutory injunction and las assumed jurisdiction of the ease, the jurisdietion of such court would continue to the end, or at least as long as the applcation for temporary injunction lad not been withdrawn. It would tlen seem immaterial whether a preHminary restraining order lad or lad not issued, whether an interlocutory injunction lad in fact issued pending determination on the merits, or whether the statutory court lad simply reserved decision upon the application for interlocutory injunction, and, in lieu of deciding tlat question, lad disposed of the case upon its merits. The determinative question always is whether the plaintiffs lave pressed their application for interlocutory injunction so as to procure the immediate hearing and the early decision which are contemplated by section 266. The defendants’ voluntary consent to inaction on the part of state officers, in lieu of preliminary restraining order or interlocutory injunction, likewise should not divest the three-judge court of jurisdiction in a ease wlere the application for interlocutory injunction had been made and immediate hearing and early decision had been secured by tlis special procedure. The plaintiffs are masters of tlis phase of the ease and cannot be deposed by defendants.

Nor do the existence of other grounds of federal jurisdiction and the fact that the court placed the final decision upon noneonstitutional grounds affect the jurisdiction of the statutory three-judge court. If the three-judge court rightly acquired and proceeded to exercise its jurisdiction, the appeal would be to the Supreme Court, upon whatever grounds the injunction was allowed or denied, provided always tlat the constitutional question was substantial and not frivolous. The •expression in Ex parte Buder, 271 U. S. 461, 465, 46 S. Ct. 557, 70 L. Ed. 1036, upon which defendant relies, was obviously not meant to nullify the provision of section 128 of the Judicial Code (28 USCA § 225) expressly excepting this class of eases from the jurisdiction of the Circuit Courts of Appeals.

The suggestion was made tlat this was perhaps a case in which a transfer could be made to the Supreme Court. Provision for such transfers was added by the Act of September 14,1922, Judiedal Code § 238a, e. 305, 42 Stat. 837, and was repealed by the Act of February 13, 1925, e. 229, 43 Stat. 936, 942. Since then there is apparently no provision for transfer.

The motion to docket and dismiss the appeal is therefore granted.


source: Caselaw Access Project

author: SIBLEY, Circuit Judge.

license: Public Domain

text:
    UNITED STATES et al. v. BOYKIN.
    No. 6140.
    Circuit Court of Appeals, Fifth Circuit.
    May 1, 1931.
    Fred Cubberly, U. S. Atty., and G. E. Hoffman, Asst. U. S. Atty., both of Pensacola, Fla., and Edouard F. Henriques, Sp. Asst, in Admiralty to U..S. Atty., of New Orleans, La., for appellants.
    Simone N. Gazan, of New York City (Simone N. Gazan, of New York City, and Ernest E. Mason, of Pensacola, Fla., on the brief), for appellee.
    Before BRYAN, SIBLEY, and HUTCHESON, Circuit Judges.
   SIBLEY, Circuit Judge.

The appellee, Edward R. Boykin, as administrator of the estate of John W. Boy-kin, recovered for his own use as surviving parent a sum of $9,000 as damages for the death of the deceased while serving as a seaman on the steamship Antinous. The libel in personam was brought under 46 USCA § 688 against the United States and the United States Shipping Board Merchant Fleet Corporation as owners of the ship. The vessel had a cargo of wheat under the hatches, and a deck load of heavy timbers covering to a depth of six feet the forward well deck, being held down with chains, and having a wire cable strung near each edge of the deck load as a temporary rail. Several ventilators came up from the hold through the deck load. The vessel was caught off the coast of Florida on September 27,1927, in a hurricane, and during that night she was swept by heavy seas which carried away the plugs and canvas covers with which the ventilator trunks had been covered. They were all replaced save on the port ventilator just forward of the bridge, the plug for which was lost and the trunk of which was temporarily covered by lashing a tarpaulin over it. It was important to prevent water from entering through it into the hold, not only to preserve the cargo from damage, but also lest the wheat by swelling should force open the plates of the vessel. By 8:20 a. m. the carpenter had made a new plug, and the boatswain called Boykin and two other seamen to go with him out upon the deck load to insert the plug and make fast a cover over it. The wind was unabated, and blowing eighty or eighty-five miles per hour. The seas were high, and breaking in spray over the vessel, which was headed almost directly into them and taking them on her port bow. There were no life lines strung along the center or athwart the deck load. No notice seems to have been given by the boatswain to the officers in the pilot house or on the bridge of the exposure of these men, but they were in plain view of the third mate, who was on the bridge. Neither the course nor the speed of the vessel was altered. Two of the men went down into the space between the ends of the timbers and the bulkhead of the amidship house to reach the ventilator trunk, while Boykin and the boatswain were on the timbers assisting with the plug. Just as it was inserted, a very high sea, referred to as a tidal wave, appeared in front of the vessel. It was seen by the master from the pilot house at a distance estimated as much as three-quarters of a mile away, and at a time fixed as from two to four minutes before it reached the ship. It appearing to be dangerous, the master directed the third mate, who was keeping watch on the bridge, to warn any one who might be on the deck. The mate could see the seamen at work, and ran first to the star-hoard end of the bridge and shouted to them, but could not be heard against the wind, and then ran to the port end and got their attention, but only as the sea boarded the ship. It flooded the deck to a depth of about twenty feet, and almost swept the mate from the bridge. One of the men, though injured, was saved, but the boatswain and Boykin and the third seaman were washed overboard and lost, though search was made for them for thirty-six hours afterwards. The chains of some of the deekload were snapped, and about two hundred o,f the sticks of timber carried away.

The absence of life lines is charged as negligence, but it is doubtful if they would have been of any efficacy, since the timber carried away the starboard line rail. It is also contended that the ship should have been brought around with her stern to the seas so as to protect the forward deck while the ventilator was covered, but the danger of taking the seas on the beam while making the turn would have been very great. We think, however, there was clear negligence in undertaking the work without further cheeking of the ship’s speed, which the witnesses agree would have enabled her to meet the seas better, and especially without keeping a better lookout for the very thing that happened, and in not giving more effectual warning of it. Great seas had swept the ship during the night, and were likely to be met again at any time'; yet no one was on special lookout for these men. The officers on the bridge saw the danger coming, but delayed the warning until it was too late to be effectual. A seaman is bound to obey, and Boykin was acting under direct orders of a superior in exposing himself to danger. There was no assumption of the risk, although the danger may have been obvious to him. Panama R. R. Co. v. Johnson (C. C. A.) 289 F. 964, 965; Zinnel v. U. S. Shipping Board E. F. Corp. (C. C. A.) 10 F. (2d) 47; Masjulis v. U. S. Shipping Board E. F. Corp. (C. C. A.) 31 F.(2d) 284, 285. We think liability is established.

The deceased left no wife or children, so the recovery is for the use of his father, his sole surviving parent, 45 USCA § 59, and is measured by the father’s actual pecuniary loss, Kansas City R. R. v. Leslie, Adm’r, 238 U. S. 599, 35 S. Ct. 844, 59 L. Ed. 1478; Norfolk & Western Ry. Co. v. Holbrook, 235 U. S. 625, 35 S. Ct. 143, 59 L. Ed. 392, reduced to present value, Chesapeake & Ohio Ry. Co. v. Kelly, Adm’x, 241 U. S. 485, 36 S. Ct; 630, 60 L. Ed. 1117. The father was 44 years old, and the deceased 23. The father’s life expectancy, being the shorter, is the more important to consider. He testifies the deceased was earning $67 per month above his keep, and had allotted to his father $20.00 per month, and often gave him more. He elsewhere testified that his son gave him $35.00 or $40.00 a month as a rule, as near as he could figure it. The father was himself at work, and not entirely dependent. While it was likely under the proven circumstances that the son would have come to earn more, it is also probable that he would have married and had other obligations. We see no good reason to conclude” that he would have contributed to- his father more than an average of $450 per year. The present value by standard tables of an annuity of $450 for the lifetime of the father with money put at 6 per cent, is around $5,200. That we fix as a fair limit of recovery, and direct that the decree be modified by reducing it from $9,000 to $5,200. The appellants are entitled to recover the costs of this appeal.

Modified and affirmed.


text:
    WABASH RY. CO. v. WALCZAK.
    No. 5693.
    Circuit Court of Appeals, Sixth Circuit.
    May 6, 1931.

      Hal H. Smith, of Detroit, Mich. (Beaumont, Smith & Harris, of Detroit, Mich., on the brief), for appellant.
    N. C. Bigelow, of Detroit, Mich. (Dohany & Dohany, of Detroit, Mich., on the brief), for appellee.
    Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.
   HICKENLOOPER, Circuit Judge.

Appellee recovered a judgment in the court below for injuries sustained when the automobile in which he was riding was struek at a grade crossing in the city of Detroit by one of appellant’s trains. The only question of serious moment is whether the court below should have directed a verdict under the doctrine of Baltimore & O. R. Co. v. Goodman, 275 U. S. 66, 48 S. Ct. 24, 72 L. Ed. 167, 56 A. L. R. 645. The car belonged to and was being driven by an adult son of appellee, and there-was substantial evidence to the effect that, upon reaching the crossing, the automobile was stopped and all of its occupants looked in both directions. Their attention was specifically directed to a “flasher” crossing signal which, they testified, was not operating. Hearing no bell or whistle and seeing no flashing of the lights, the automobile proceeded and had traveled a total distance of 46 feet and 5 inches to the point of collision, as measured from the flasher pole to the nearest rail of the track upon which the train was moving. On this journey three other tracks were crossed. There is some, rather confused, testimony as to box cars situated upon the first and/or second track so crossed, which cars were said to obstruct the view of the approaching train.

The flasher signal was manually operated by a tower man and there is no serious contention by appellant that it was flashing at the time the automobile stopped. The contention is that, notwithstanding the failure of the flasher signal to give warning, the appellee and all other occupants of the automobile were under constant and affirmative obligation to continue to exercise ordinary care for their protection while crossing the three tracks in question, and to continually look and listen for approaching trains. That they did not discover the train by which the automobile was struek is urged as proof positive that they failed in the exereisé of this duty of continued care.

Eorty-six feet may be considered as a comparatively long distance when it is traveled on foot or even by horse-drawn vehicle. It is a comparatively short distance when traveled by an automobile. This court has repeatedly held that open gates, the absence of a customary watchman, or the failure of crossing signal to operate, lessened the otherwise imperative duty of the traveler to* stop, look, and listen, and was the practical equivalent o^ an invitation to cross. Landers v. Erie R. Co. (C. C. A.) 244 F. 72; Zimmerman v. Pennsylvania Co. (C. C. A.) 252 F. 571; Detroit United Railway v. Weintrobe (C. C. A.) 259 F. 64; Hines v. Smith (C. C. A.) 270 F. 132; Leuthold v. Pennsylvania R. Co. (C. C. A.) 33 F.(2d) 758; Cincinnati, N. O. & T. P. R. Co. v. Rimmer (C. C. A.) 37 F. (2d) 668, 669; Pennsylvania R. Co. v. Shindledecker (C. C. A.) 44 F.(2d) 162.

Practically all of the abóve-eited cases recognize an obligation upon the part of the traveler to continue in the exercise of ordinary care throughout the crossing journey, but it is the negligence of the plaintiff himself which alone can defeat recovery upon the ground of contributory negligence. The doctrine of imputed negligence is applied in the state courts of Michigan, and the jury was fully instructed that any negligence of the driver would be imputed to the passenger. In the absence of any statute establishing such rule, however, this would seem to be a matter of general law in which the federal courts would not feel obligated to follow those of the state. Cf. Baltimore & O. R. Co. v. Baugh, 149 U. S. 368, 13 S. Ct. 914, 37 L. Ed. 772; Black & White Taxicab Co. v. B. & Y. Taxi Co., 276 U. S. 518, 529, 48 S. Ct. 404, 72 L. Ed. 681, 57 A. L. R. 426; Illinois Cent. R. Co. v. Hart, 176 F. 245, 52 L. R. A. (N. S.) 1117 (C. C. A. 6); Texas Co. v. Brice, 26 F.(2d) 164, 167 (C. C. A. 6). In a number of our decisions we have distinctly ruled contrary to this doctrine of imputed negligence. Kline v. Pennsylvania R. Co. (C. C. A.) 9 F.(2d) 290; Pennsylvania R. Co. v. Stegaman (C. C. A.) 22 F. (2d) 69; Wabash Ry. Co. v. Glass (C. C. A.) 32 F.(2d) 697; Erie R. Co. v. Stewart (C. C. A.) 40 F.(2d) 855. It is true that each of these eases was an appeal from a District Court in Ohio, where the rule of imputed negligence does not apply, but in Wabash Ry. Co. v. Glass the accident happened in El. Wayne, Ind., and no inquiry was made as to the law of the situs. We feel that the sounder doctrine requires that the question of contributory negligence-should he determined in each case upon a consideration of the degree of care reasonably to be required of one in the position of the plaintiff at the time of the accident. Viewed in this light, we are of the opinion that the question of plaintiff’s contributory negligence was for the jury.

Furthermore, the same result would seem to follow an application of the doctrine of imputed negligence to the facts disclosed by this record. There was substantial evidence of obstructions to view. “The jury had the right to reconcile, as well as they could, conflicts and inconsistencies in the testimony” (Cincinnati, N. O. & T. P. R. Co. v. Rimmer, supra), the distance was comparatively short if regarded in connection (with automobile travel, and the driver was lulled into a sense of security by the defendant (Pennsylvania R. Co. v. Shindledeeter, su*pra), and was then suddenly confronted by a situation of great peril even if we assume that he had, too late, discovered the approaching train. We do not think that it can be said that due care required him to exercise that same degree of care in crossing each of the series of tracks, as he was required to exercise before he first entered the place of known danger, or even such as he would otherwise have been required to exercise while crossing^ had he not, in substance, been invited to proceed. In the face of emergency one is not held to the same standard of care that he must usually exercise, and, in the absence of negligence in first passing upon the tracks, we cannot say that the driver’s conduct in not avoiding the collision must have been regarded as negligent, as a matter of law, even though it appeared that he had then discovered the approaching train. If this be so, his alleged negligence in not discovering the train cannot bar recovery, as a matter of law, for he was free from negligence in first passing upon the tracks and into the place of danger.

The granting or overruling of a motion for a new trial is addressed to the sound discretion of the trial court. The discretion was not abused in this case. Nor do we think there was error in admitting the evidence complained of. Even if, in this particular case, the court permitted counsel to go pretty far, it is not clear that proper exception was taken and the question saved.

The judgment of the District Court is affirmed.


author: PER CURIAM.

text:
    STEINFUR PATENTS CORPORATION v. MEYERSON et al.
    Circuit Court of Appeals, Second Circuit.
    May 14, 1931.
    Edward M. Evarts, of New York City, for appellee.
    Alexander A. Mayper, of New York City, for appellants.
    Before MANTON, SWAN, and CHASE, Circuit Judges.
   PER CURIAM.

On a default by the defendants the plaintiff entered a decree of infringement of patent. This motion is to- set aside that decree. An order was entered below denying the motion to set aside the decree entered.

This appeal is not from the decree, but from the order. Discretionary orders are not appealable. Roemer v. Bernheim, 132 U. S. 103, 10 S. Ct. 12, 33 L. Ed. 277; Dean v. Mason, 20 How. 198, 15 L. Ed. 876; Mobile Shipbuilding Co. v. Federal Bridge &. S. Co., 280 F. 292 (C. C. A. 7); Connor v. Peugh’s Lessee, 18 How. 394, 15 L. Ed. 432; Cambuston v. United States, 95 U. S. 285, 24 L. Ed. 448. The authority relied on by the defendants, Zadig v. Aetna Ins. Co., 42 F.(2d) 142 (C. C. A. 2), involved a dismissal for lack of prosecution. The court considered the order of dismissal as if a final decree. We held that the trial court’s refusing to consider the mption on the merits was not an exercise of discretion, but rather passing upon the want of jurisdiction. We held the order final and appealable. Such orders are appealable. Mandel Bros. v. Victory Belt Co., 15 F.(2d) 610 (C. C. A. 7); Marion County Court v. Ridge, 13 F.(2d) 969 (C. C. A. 4); United States v. Trogler, 237 F. 181 (C. C. A. 8).

Motion to dismiss appeal granted.


text:
    FEDERAL TRADE COMMISSION v. NON-PLATE ENGRAVING CO., Inc.
    No. 253.
    Circuit Court of Appeals, Second Circuit.
    May 4, 1931.
    Robt. E. HSaly, Chief Counsel, Federal Trade Commission, Martin A. Morrison, Asst. Chief Counsel, Federal Trade Commission, and Richard P. Whiteley, all of Washington, D. C., for petitioner.
    Franklin & Hicks, of New York City (George Seagrave Franklin, of New York City, of counsel), for respondent.
    Before MANTON, L. HAND, and CHASE, Circuit Judges.
   PER CURIAM.

The petition below established before the Federal Trade Commission a violation of section 5 of the Federal Trade Commission Act (38 Stat. 717, 719,15 U. S. C. § 45 [15 USCA § 45]) in the use of the words “non-plate” engraving, and advertising its product as “non-plate engraving,” “engraved effects,” and “non-plate engraved,” when its products were not engraved but were printed by a special process. The order entered directed it to “cease and desist from using the word ‘engraving’ or ‘engraved’ in its corporate name, business signs, or advertising matter used in the offering for sale or sale of stationery in interstate commerce, upon which the words, letters, figures, and designs have not been produced from metal plates, into which such words, letters, and designs have been cut.” On this record, the order is amply supported by the evidence, and was lawfully granted. Sea Island Thread Co., Inc., v. Fed. Trade Comm., 22 F.(2d) 1019 (C. C. A. 2); Fed. Trade Comm, v. Winstead Hosiery Co., 258 U. S. 483, 42 S. Ct. 384, 66 L. Ed. 729.

The petitioner is entitled to and may enter an order of enforcement directing the respondent to comply with the order to cease and desist.

Order granted.


text:
    AMERICAN S. S. CO. v. WICKWIRE SPENCER STEEL CO., and three other cases.
    No. 377.
    Circuit Court of Appeals, Second Circuit.
    May 4, 1931.

      Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
    Joseph & Zeamans, of New York City (Edmund G. Joseph, of New York City, -of counsel), for intervening defendants-appellants Alexander Guttman and others as a stockholders’ committee.
    Davis, Polk, Wardwell, Gardiner & Reed, of New York City, for appellee Guaranty Trust Co. of New York, as trustee of the first mortgage of Wiekwire Spencer Steel Corporation.
    Rushmore, Bisbee & Stem, of New York City (William C. Cannon, Bertram F. Ship-man, Leighton H. Coleman, and Theodore W. Morris, Jr., all of New York City, of counsel), for appellee Chase Nat. Bank of New York, as trustee of the prior lien mortgage of Wiekwire Speneer Steel Co.
    Larkin, Rathbone & Perry, of New York City (Henry Y. Poor and Henry E. Kelley, both of New York City, of counsel), for Reorganization Committee.
    Ernst, Gale & Bemays, of New York City (Murray C. Bernays, of New York City, and Abraham Friedman, of counsel), for Irving Trust Co. as trustee in bankruptcy of Walter Furniture Co., Inc., bankrupt, amicus curia.
   PER CURIAM.

The special master’s report fully considered the numerous objections now urged on this appeal. The learned District Judge, in a carefully considered opinion, confirmed in all respects the conclusions reached by the special master. We have examined the many objections urged against the decree of foreclosure and sale entered below, but find them satisfactorily answered in the opinion below.

As the valuation of the properties of the Wiekwire Speneer Steel Company arrived at by appraisal amounts to less than- the liens and indebtedness which have priority over the claims of the stockholders who are appellants here, the court below properly held that the appellants have no interest, and therefore should have no voice, in the plan of reorganization which will be considered by the court below.

Decree affirmed.


author: KENYON, Circuit Judge.

text:
    PASENTINO v. UNITED STATES.
    No. 9019.
    Circuit Court of Appeals, Eighth Circuit.
    April 9, 1931.
    Frank D. Rader, Charles S. Walden, Paul S. Conwell, and Thomas A. Costolow, all of Kansas City, Mo., for appellants.
    William L. Yandeventer, U. S. Atty., and Claude E. Curtis, Asst. U. S. Atty., both of Kansas City, Mo.
    Before KENYON and YAN YALKENBURGH, Circuit Judges, and DAYIS, District Judge.
   KENYON, Circuit Judge.

Defendant with others was indicted in the United States District Court for the Western Division of the Western District of Missouri, for violation of the National Prohibition Act (27 USCA) in the sale of intoxicating liquor, and also in maintaining a place where such liquors were unlawfully kept for sale. Demurrers were sustained by the court as to four counts of the indictment, and the ease was tried as to count 4 charging sales, and count 6 charging the maintenance of a nuisance.

Appellant, together with one Henry Mitchell, was convicted on both counts and duly sentenced. Mitchell’s appeal has been dismissed, and we are concerned only with the appeal of Pasentino.

The only alleged error presented is that the court did not sustain the demurrer to the evidence at the close thereof, and the only question argued is that the evidence was insufficient to sustain the verdict.

S. W. Thomas was a prohibition agent at Kansas City during October and November, 1929. ■ He testified that he visited the place charged in the indictment as the place where appellant was alleged to have sold whisky and maintained a nuisance. He saw there on November 4, 1925, people drinking whisky, and saw appellant serving whisky drinks in whisky glasses and being paid therefor. Witness Reese, another prohibition agent, was with him, and he ordered drinks and paid for them. A part of Reese’s purchase was identified by witness Thomas as colored com whisky. Appellant seemed to be in charge of the place. Numbers of people were there buying liquor, and the place was equipped with a bar. There is no need of referring to all of the evidence — it is sufficient to say that, if the jury, who were the judges of credibility, believed the government’s witnesses, there was ample evidence to sustain the verdict of guilty on both counts 4 and 6. It is apparent that under this record there is really no question for an appellate court to pass on, and the appeal is evidently taken inerely for the purpose of delay. It is frivolous. In view of this, while affirming the judgment, we have decided that the mandate shall issue at once, and it is so ordered.

Judgment affirmed.


text:
    UNITED STATES et al. v. KINCAID.
    No. 5928.
    Circuit Court of Appeals, Fifth Circuit.
    May 15, 1931.
    Philip H. Mecom, U. S. Atty., and J. 0. Modisette, Sp_. Asst. U. S. Atty., both of Shreveport, La., and Arthur B. Hammond, Sp. Asst, to U. S. Atty., of New Orleans, La. (Philip H. Mecom, U. S. Atty., and J. 0. Modisette, Sp. Asst. U. S. Atty., both of Shreveport, La., and G. A. Iverson, Sp. Asst, to Atty. Gen., on the brief), for appellants.
    Thomas-J. Freeman, Wm. C. Dufour, and John St. Paul, Jr., all of New Orleans, La., Harry H. Russell, of Monroe, La., and W. G. Streett and O. C. Burnside, both of Lake Village, Ark., for appellee.
    Before BRYAN, FOSTER, and WALKER, Circuit Judges.
   PER CURIAM.

This is an appeal from a final decree rendered in a suit brought by the appellee, the owner of a tract of improved land, located in the Boeuf River Basin, in Louisiana, which, by the execution of the plan for the control of flood waters of the Mississippi river adopted pursuant to provisions of the Flood Control Act, approved May 15, 1928 (33 USCA § 702a et seq.), would be subject to be flooded by a greater volume of water than ever before. That decree awarded in favor of the appellee an injunction restraining the Secretary of War, the Chief of Engineers, the Mississippi River Commission, the District Engineer, and their agents, servants, etc., from proceeding with the construction authorized by, or carrying out the plan adopted by or pursuant to, that act, §§ 1, 4 (33 USCA §§ 702a, 702d), in the Boeuf River Basin flood-way, including all levee work or levee construction and the awarding or letting of contracts for the same, unless and until the said property of the appellee shall be acquired by the United States government, or the flowage rights over the same shall be acquired by purchase or condemnation for such purpose.

For reasons stated, in opinions rendered by the District Judge [Kincaid v. United States, 35 F.(2d) 235; Id. 37 F.(2d) 602], we conclude that appellee was entitled to the relief granted by that decree. The record showing no reversible error, that decree is affirmed.


text:
    McIntyre v. United States.
    No. 5885.
    Circuit Court of Appeals, Sixth Circuit.
    May 15, 1931.
    O. D. Eshelman, of Cleveland, Ohio, for appellant.
    Wilfred J. Mahon, U. S. Atty., and Charles I. Russo, Asst. U. S. Atty., both of Cleveland, Ohio.
    Before DENISON and HICKS, Circuit Judges, and SIMONS,. District Judge.
   PER CURIAM.

Prosecution for using the mails to defraud (section 338, tit. 18, USCA). This record presents no question for review except whether there was substantial evidence to support the jury’s necessarily implied finding that the. letters and statements signed by McIntyre were mailed or caused to be mailed within the district. We think there was. They were received by mail; they were dated at Cleveland ; Cleveland was the regularly established place of business of the company for whieh defendant was conducting the correspondence; he does not appear to have had any other place of business; and nothing appears throwing substantial doubt upon the natural inference that the letters were mailed at Cleveland. The only other suggested possibility is that the letters or the signed statements directly involved might have been delivered by or for defendant to tbe addressee’s agent in Cleveland, to be by him forwarded. This is possible; but it is merely surmise, and upon the whole is not probable. Sueh a possibility does not make it improper for the jury to adopt and aet upon the otherwise natural inference. Compare Underwood v. U. S. (C. C. A. 6) 267 F. 412, 418; Levinson v. U. S. (C. C. A. 6) 5 F. (2d) 567-569.

The judgment is affirmed.


author: KIRKPATRICK, District Judge.

text:
    TRAINOR CO. v. ÆTNA CASUALTY & SURETY CO.
    No. 15318.
    District Court, E. D. Pennsylvania.
    Feb. 2, 1931.
    Motion for Rehearing Denied June 18, 1931.

      David L. "Oilman, of Philadelphia, Pa., for plaintiff.
    J. W. Henderson (of Rawle & Henderson), of Philadelphia, Pa., for defendant.
   KIRKPATRICK, District Judge.

This is a suit by an obligee against the surety upon a bond for the completion of a building operation. The trial was to the court without a jury.

Findings of Fact.

1. The Trainor Company, plaintiff, on October 13, 1927, conveyed certain real estate to Copley Homes, Inc., a corporation organized to carry out a proposed house buffering operation. The details are unimportant, but it may be taken (a) that as a result of the transaction Copley Homes owed the Trainor Company $28,000; (b) that this sum was a part of the purchase price of the real estate; and (c) that it was all profit to the Trainor Company, accruing to it without any capital investment on its part,' simply by turning the land' over to Copley Homes at an advance over the price at which it was able to buy it for itself. This last fact was not disclosed to the defendant at any time prior to the execution of the bond in suit.

2. In order to finance its building operation, Copley Homes borrowed inoney from the Sun Mortgage- Company and its subsidiary, Realty Bond & Finance Corporation, two corporations organized to finance building operations, giving to the Sun Mortgage Company as collateral security a separate first mortgage of $4,500 upon each of the 52 lots comprising the operation; and, to Realty Bond & Finance Corporation, a blanket second mortgage of $88,000 covering the entire tract, which mortgage had a release clause of $2,000 per house'. The amounts borrowed were less than the amounts of the mortgages placed and assigned as collateral security, so that the net result of the financing was, in substance and without entering into all of the details, that each of the lots had against it a first mortgage of $4,500 and what amounted to a second mortgage of $2,-000, and that there was a small equity in the first mortgage (which may be disregarded) and an equity in the second mortgage over and above the amount borrowed upon it amounting to approximately $636 per lot. Copley Homes paid the Trainor Company the $28,000 due it by giving to the Trainor Company its note for that amount and assigning to it as collateral the equity in the second mortgage.

3. On the day of the general settlement (October 13, 1927) the bond in suit was executed by Copley Homes as principal and the ¿Etna Casualty & Surety Company, the defendant, as surety. The obligees were the Land Title & Trust Company (through (he medium of which the Sun Mortgage Company made its loan, and which was to act as its agent in handling the funds and paying contractors as the work progressed), Realty Bond & Finance Corporation, and the Trainor Company, the plaintiff. The bond had three conditions, the first of which was, in substance, “that, if within ten months , within the date hereof each of the lots * * * shall be fully improved and completed with a building, together with the other improvements (such as paved streets, sidewalks, driveways, gas, water, sewerage, etc.,), in keeping with and as shown by the aforesaid Plans, Specifications, and Conditions, Building Plats and Surveys, * * * then, in the event that all of the above-and below-mentioned conditions are fully performed, this Bond shall be Void; otherwise it shall remain in full force and effect in law.”

4. Copley Homes immediately began building 52 houses on the lots. On August 13, 1928, the date for completion fixed by the bond, 24 houses had been fully completed. The remaining 28 were not far from completion, but sufficient work remained to be done upon them to require a finding (and I so find) that they had not .been completed in accordance with the plans and specifications either fully or substantially.

5. Neither the plaintiff nor Copley Homes nor the defendant ever completed the operation. It was, however, ultimately completed on December 27, 1929, by the Sun Mortgage Company, holder of the first mortgages.

6. The value of the 28 uncompleted houses, as of August 13, 1928, was $6,700 each. This amount is in excess of the sum of the amount of the plaintiff’s mortgage on each house and all prior liens. In arriving at this value, in addition to the testimony of expert witnesses, the following facts were considered and may be taken as found:

(a) The work actually remaining to be done consisted principally of installation of plumbing accessories such as spigots and shower curtains and rods, painting (which was about 75 per cent, complete), papering, installation of gas ranges and minor details in connection with carpenter work, plastering, and brickwork. The record of work remaining to be done made by the representative of the Land Title Company about August 13, 1928, is accepted as substantially correct.
(b) The original contract price for full completion of all the houses amounted to about $4,200 for each house (disregarding the slightly larger price for the comer houses). This was the price of building and did not include cost of land or financing.
(c) The price of the land without the houses to the Trainor Company was $76,000 or about $1,461 for each lot, and to Copley Homes $104,000' or $2,000 for each lot.
(d) Subsequent to August 13, 1928, the total sum of $26,071 was spent in completing the operation. Of this amount $4,000 went for street improvements and the balance, or $22,071, was spent in completing the houses. This would amount to approximately $788 for each house. How much of the total amount as expended went for work contracted for or actually installed prior to August 13, 1928, the testimony does not disclose. In addition, it is probable that some of the expenditures went for repairs to or replacement of work already done, since an operation which is allowed to stand uncompleted for so long a period is bound to deterioriate to some extent. It is also probable that the amount spent for completion under the new contract represents a smaller proportion of the whole work than an equal amount in the original contract price would have represented.
(e) Twenty of the completed houses were sold for the price of $7,950 each, 10 before August 13, 1928, and 10 after. The plaintiff concedes that the completed houses as of that date were worth $7,950 each.
(f) During 1928, 1929, and 1930 the value of real estate, generally and in the locality in which this operation was, declined steadily.

7. On July 24, 1929, 28 houses being still uncompleted, the defendant made an agreement with the Sun Mortgage Company, which effected the settlement of a number of matters arising out of various surety bonds which the defendant had written for operations in which the Sun Mortgage Company and its subsidiaries were interested, including the Copley Homes operation. One of the terms of that agreement was that the Sun Mortgage Company would complete the Copley Homes operation in accordance with plans and specifications. Thereafter the Sun Mortgage Company did complete the operation, as has been found. In entering into the settlement and in completing the houses the Sun Mortgage Company did not act as agent or in any other capaeitv for the plaintiff.

8. On January 25, 1930, the Sun Mortgage Company foreclosed its first mortgages buying in all the properties for .the sum of $50 and thus wiping out the second blanket mortgage of the Realty Bond & Mortgage Company and the equity of the Train- or Company therein.

9. The plaintiff has received $13,026.02 from Copley Homes on account of its obligation to pay $28,000.

Conclusions of Law.

1. The bond is a bond of guaranty, and, there having been a breach, the plaintiff is entitled to judgment.

2. The measure of damages in this case is so much of the difference between the value of the property as of August 13, 1928, with the houses uncompleted, and the value it would have had on that date had the houses been completed as would have been necessary to pay the plaintiff’s mortgage debt as well as all prior liens. Since the value of the property as of August 13, 1928, was more than the sum of the plaintiff’s ’mortgage and prior Kens, the plaintiff is not entitled to any substantial damages.

3. The plaintiff was not bound to disclose to the defendant the fact that the $28,-000 of purchase price owing to it by Copley Homes represented profit made by it without capital investment and arising from merely increasing the price of land which it was in a position to acquire at a lower figure.

4. The so-eaUed settlement agreement of July 24, 1929, had no effect whatever upon the legal rights of the parties so far as they are involved in this suit.

Discussion.

The first question is as to the measure of damages. In order to reach the essence of this question, the facts found may be condensed into the foKowing statement:

The plaintiff is the obligee upon a bond given by the owner of certain real estate, the condition of which is that a building operation thereon will be completed by a certain date. The plaintiff’s interest in the property consists of what amounts to a third mortgage. The, buildings were only partially completed on the day for completion. The property with the operation in its uncompleted state on that day had a value which exceeded the sum of the plaintiff’s mortgage and prior liens.

The defendant’s position is that, since the value of the property when the breach occurred was sufficient to eover the plaintiff’s third mortgage and all prior liens, the plaintiff is entitled to nominal damages only. The plaintiff’s position is that, regardless of the relation between the value of the property with the uncompleted operation on it and the amount of its mortgage and prior liens, it is entitled to recover the difference between the value of the property as it was at the time of the breach and as it would have been had the buildings been fully completed in accordance with the contract on that day. It may be noted that, in spite of this contention, the plaintiff in his statement claims only so much of the difference as will, with what he has been paid, equal the amount of the money due it and secured by its mortgage.

In fixing the amount of money damages for breach of contract, the general purpose of the law is to give compensation — that is, to put the injured party in as good a position as he would have been if the party in default had kept his contract. A limitation upon this rule is that the plaintiff may not ordinarily recover compensation for injurious consequences of the breach which he might reasonably 'have avoided. Implicit in the rule is the policy of the law that a plaintiff may not through the medium of damages improve his position beyond his injury, or make a profit from the defendant’s fault or misfortune.

Applied to building contracts these general principles allow the owner of the land, in case of a default by the builder, after partial performance, to recover the difference between the value of his property with the building in its uncompleted state and its val-, ue as it would have been had the contract been fully performed. Or, if completion is reasonably possible and does not involve unnecessary economic waste, then as a method of ascertaining his damages he may complete the building at his own expense, and recover the reasonable cost of so doing. In either case, if the builder has given bond, the owner’s recovery against the surety would be the same as againsj; the principal.

A mortgagee of land upon which buildings are to be erected is, however, not in the same position as the owner. Except as it affects the security for his loan he has no genuine interest in the completion of the work. Obviously, the contention of the plaintiff in this case that the mortgagee like the owner is entitled to the difference in the value of the completed and the uncompleted job, regardless of the value of the land or the amount of the mortgage, is unsound. If that were so, the holder of a mortgage secured ten times over by the value of the land alone, and having no other .interest, could recover from a surety large damages for the breach of a contract to build an expensive structure upon it. The fundamental principles and policy of the law above stated forbid such result.

True, there are eases in which mortgagees or their insurers have at their own expense completed the contract and been allowed the cost of so doing. Among these are Equitable Trust Co. v. National Surety Co., 214 Pa. 159, 63 A. 699, 6 Ann. Cas. 465, and Zane v. Citizens’ Trust & Surety Co., 117 F. 814 (C. C. A. 3). In both of these cases, however, if the facts be carefully considered, it will be seen that the value of the mortgage was impaired or threatened by failure to complete. In the Equitable Trust Co. Case the completion by the obligee at its own expense of the contract of a subcontractor guaranteed by the surety was the means by which the ultimate damages were in all probability greatly reduced, since thus the disorganization of the whole operation' and consequent extensive loss were avoided. In Zane v. Citizens’ Trust & Surety Co., it is clear that the default impaired the value of the mortgage more than the penalty of the bond, which was the amount recovered. Even if the cost of completion should be in excess of the loss to the mortgagee, the mortgagee would not profit, since the buildings go upon the land of another, and all that he gets is security for his debt. In such case, the only question that might be raised would be whether completion by the mortgagee would result in unnecessarily increasing the damages to the defendant.

In the case at hand, however, we have a mortgagee who has elected not to complete, but who has sued for money damages. Parenthetically, it may be said that the operation never was completed by either of the original parties, so that the question whether time is of the essence does not enter into' the case. Under the rule of compensation the mortgagee can recover only to the extent that his interest in the subject-matter has been adversely affected by the breach. The weight of authority is to the effect that that is the amount by which the value of his mortgage has been impaired. Specifically, the amount is to be ascertained by finding the difference between the value of the houses as they were uncompleted at the time of the breach and their value as of that time if they had been then completed in accordance with the contract and allowing so much of this difference as, added to the uncompleted value, would equal the amount of the mortgage.

In Norway Plains Savings Bank v. Moors, 134 Mass. 129, a ease of a guaranty bond, on all fours with the instant ease, the court said: “The measure of damages is the difference between the value of the houses as they were in fact built, and the value they would have had if built in conformity to the agreement, or so much of this difference as would have been necessary, with the value of the houses as built, to 'have paid the mortgage debt and interest then due. * * * ” And the court goes on to say that the time for determining these values was the time when the plaintiff did know or should with reasonable diligence have known of the breach.

In Province Securities Corporation v. Maryland Casualty Co. (Mass.) 168 N. E. 252, 257, the court said: “Except that, as the mortgagee holds the property for security only, he cannot recover more than the difference between the value of the property in the condition in which it is left and the amount due on his mortgage.” The case was reversed, not because the court below had adopted an incorrect measure of damages, but because it accepted the price at the foreclosure sale as conclusive of the value at the time of the breach.

In the latter ease the bond was an indemnity bond and not an absolute guaranty of completion. The plaintiff has made much of the distinction between these two classes of bonds, but, so far as I can see, there is no substantial difference in the measure of the damages. In the one case it is compensation measured by anticipated loss, in the other actual loss. In the case of a guaranty bond the right of action accrues upon the breach. In the case of an indemnity bond the plaintiff has no right of action until he actually has incurred a money loss; or, in other words, on a guaranty bond he must show loss or else be limited to nominal damages, while on an indemnity bond, if he fails to show loss, he will be out of court altogether.

Two New York eases (Kidd v. McCormick, 83 N. Y. 391, and Sachs v. American Surety Co., 72 App. Div. 60, 76 N. Y. S. 335) appear to state the rule as though the mortgagee is not limited by the extent of his interest, but it will be seen by reference to the later ease of Schwartz & Co. v. Aimwell Co., 227 N. Y. 184, 124 N. E. 892, that the principle of damages for compensation only has not been disregarded. That case was- a suit upon a bond of guaranty, and it was held that the complaint, which did not set forth loss to the plaintiff, failed to state a cause of action. The same is true of United Real Estate Co. v. McDonald, 149 Mo. 605, 41 S. W. 913. The point involved there was the failure of the plaintiff to show any difference between the work, completed and uncompleted, and what was said as to the measure of damages was necessarily dictum. In Stuart v. Carter, 79 W. Va. 92, 70 &. E. 537, L. R. A. 1918D, 1070, the only question was whether the plaintiff could sue on a guaranty bond before he had actually paid liens against the property, and, since he had sued to recover only the amount of the lien, the measure of damages was not involved.

In Folz v. Tradesmen’s Trust, etc., Co., 201 Pa. 583, 51 A. 379, a suit on a bond of guaranty, the plaintiff had loaned the principal money to finance his contract with the city, and held no mortgage or other lien. After default the surety completed the contract. The recovery was for the amount of the bond, but, by reference to the earlier case of Folz v. Amweg, 191 Pa. 157, 43 A. 204, it will be seen that that was also the amount borrowed. It is also evident that, because of his default, the contractor was wholly unable to pay the plaintiff. In other words the plaintiff’s recovery was the amount of his loss. The referee said (page 588 of 201 Pa., 51 A. 379, 382) that, whichever way the ease was decided, “the losing party suffers a loss equal to the amount of the judgment.” The value of the work in its uncompleted state is nowhere considered or mentioned, nor is it material, since the plaintiff had no lien.

A somewhat similar situation was presented in Union Trust Co. v. Citizens’ Trust & Surety Co., 185 Pa. 217, 39 A. 886. In that case the plaintiff was the owner of the ground. It loaned a contractor $2,000 which was to be used for building two houses on the land, and took an indemnity bond with the defendant as surety to protect it against loss. The fact that the plaintiff raised the money by means of mortgages on the land is immaterial. The plaintiff’s position was not that of a mortgagee^ hut of an owner who had loaned money to the contractor. The damages allowed were the penalty of the bond ■ which represented the plaintiff’s actual loss. ■ The court rejected the defendant’s offer to -show- the value of the lots. Obviously this was not a relevant fact, since the plaintiff was not the holder of a debt secured by the land, and his loss was the money loaned to • the contractor which had nothing to do with • the land. ■

But the plaintiff argues that the mortga- ' gee’s interest in the subject-matter is not necessarily measured by tbe face value of his 'mortgage, that he has contracted for a mortgage secured by an adequate margin, that so secured his mortgage might conceivably in times of cheap money be worth a premium, and that for these reasons he is entitled to the full amount necessary to bring the property 'up to the value it would have had had the ' houses been completed, regardless of the amount of his mortgage. This argument has . some merit. The trouble is that it is utterly impossible to do more than guess at an ' amount which will compensate the plaintiff upon this theory, or to avoid enriching him -at the defendant’s expense. Thus, if we should say that a mortgage ought to be secured by a margin of safety of 40 per cent, ’and allow him that amount as damages, the • plaintiff, in a ease in which the value of the property just equals the amount of the mortgage, might subsequently foreclose and have ■ his original investment back, plus a profit of ■ 40 per cent, already allowed as damages. Considerations of this nature no doubt have moved the courts to limit the plaintiff to so much of the difference in the value of the completed and uncompleted operation as will bring his mortgage up to its face value. In German-American Title, etc., Co. v. Citizens’ Trust, etc., Co., 190 Pa. 247, 42 A. 682, the plaintiff’s interest consisted of a ground rent. The measure of damages approved by the court in that ease (the loss in the market value of the ground rents due. to the failure to complete the buildings) obviously arose from the necessities of the situation. The general rule could not well be applied, since the plaintiff’s lien did not have any face or principal value. There is no suggestion that the rule stated was intended to apply to anything other than ground rents, and (as applied to the facts of the instant case)'the difficulties in the way of arriving at a fair market value for third mortgages secured by .a margin, comparatively narrow at best, are obvious.

The fact in the instant ease that nearly a year and a half after the breach the holder of the first mortgages'foreclosed and wiped out the plaintiff’s security does not affect the situation. Default in the first 'mortgages might have occurred at any time, even before the completion date. Even assuming that the houses had been completed in accordance with the contract, it is problematical whether, in the event of a default, it would have been wise for the plaintiff to have protected itself by bidding the amount of all the liens. Moreover, any number of things totally unconnected with the building operation or with the failure to complete the houses and not reasonably to be foreseen at the time of the giving of the bond might have intervened to depress the value of the property by the time the foreclosure took place. If the value of the property had suddenly increased after the breach, no one would suggest that such fact would affect the plaintiff’s right to damages. The plaintiff could have completed and held the defendant for the cost. Zane v. Citizens’ Trust & Surety Co., supra. It did not elect to do so, and very likely, in view of its position, would have gained nothing if it had. In such ease the only sound and practically applicable measure of damages is that adopted by the courts as set forth herein.

The conclusions reached as to the meas-ure of damages make it unnecessary to discuss in detail the other defenses raised. I have disposed of them in the findings of fact and conclusions of law. The breach being proved, the plaintiff will be entitled to nominal damages, and I therefore find for the plaintiff and fix the damages at $5.

Judgment may be entered accordingly.


author: NETERER, District Judge

text:
    UNITED STATES v. PRAXULIS et al. SAME v. CASCIATO et al.
    Nos. 40863, 40963.
    District Court, W. D. Washington, N. D.
    March 6, 1931.

      In cause No." 40863, the defendant was by another judge ordered into the custody of the Attorney General, or his agents, for imprisonment in the county jail for the period of one year, and it is further ordered that after the defendant had served three months of this sentence that probation be granted, on condition that defendant abide by the laws. The marshal is instructed to carry the sentence into execution.
    In cause No. 40963, a similar order was entered. The defendant was placed by the Attorney General in the Road Camp at Camp Lewis.
    After having served three months and after the expiration of the term of court in which sentence was imposed, each defendant moves the court (giving the period of service and demand for, and refusal to, release after three months) and prays “summary order directed against the keeper of the prison at Fort Lewis, Washington.”
    It is stipulated by the United States attorney and the attorney for the defendants, movants herein, that the motion shall be treated as a petition to show cause why writ of habeas corpus should not issue.
    The government moves to dismiss. The government contends that the part of the judgment “that probation be granted” is surplusage and was beyond the power of the court to impose; while the defendants contend that the statute provides that “the courts of the United States shall have power “ * 31 to place the defendant upon probation for such period and upon such terms and conditions as they may deem best”; and this provision is comprehensive, remedial, and should he liberally construed.
    Anthony Savage, U. S. Atty., and Cameron Sherwood, Asst. U. S. Atty.,'both of Seattle, Wash.
    Henry Clay Agnew, of Seattle, Wash., for defendants.
   NETERER, District Judge

(after stating the facts as above).

This court has always exercised control of its judgments during the term, and has on occasion, on extraordinary circumstances, where the court was not fully advised as to indigent circumstances of defendant’s family, reduced a sentence by amendment; this being a judicial act. This power has "been approved^ by the Supreme Court of the United States in United States v. Benz, 282 U. S. 304, 51 S. Ct. 113, 75 L. Ed.- (decided January 5, 1931).

This court has in the commitments suggested that if the behavior of the defendant warrants, he be paroled when one-third of the sentence is served. The Parole Act (title 18, §§ 714-72.3, USCA) and the Probation Aet (title 18, §§ 72A-727, USCA) have each a special function. The Parole Act may become operative after one-third of the sentence is served (section 1 [18 USCA § 714]). The Probation Act may be invoked after conviction (section 1 [18 USCA § 724], supra), and the court may revoke or modify any condition of probation, not to exceed five years. United States v. Murray, 275 U. S. 347, at page 353, 48 S. Ct. 146, 72 L. Ed. 309. The court has such jurisdiction only as is expressly conferred and by section 724, supra, is limited, after conviction, (a) to suspend imposition of sentence, or (b) execution of the sentence and place the defendant on probation for such period and upon such terms and conditions as it may deem best. United States v. Murray, 275 U. S. 347, 48 S. Ct. 146, 72 L. Ed. 309. See, also, Ex parte United States, 242 U. S. 27, 37 S. Ct. 72, 61 L. Ed. 129, L. B. A. 1917E, 1178, Ann. Cas. 1917B, 355; United States v. Mayer, 235 U. S. 55, 35 S. Ct. 16, 59 L. Ed. 129. Execution was not suspended, but execution was expressly directed, and after a stated period execution to be arrested. The court has not power to arrest execution of sentence after the sentence is closed, and defendant having passed from the court’s jurisdiction by delivery to the Marshal to carry sentence to execution, by a restrictive provision to take effect in the future, which amounts to a commutation of sentence or conditional pardon, which is the province of the Executive Department. - Article 2, § 2, el. 1, Const., gives the President the power to grant pardons, and by this grant of power he may grant conditional pardon. In re Wells, 59 U. S. (18 How.) 307, 15 L. Ed. 421. In United States v. Murray, 275 U. S. 347-358, 48 S. Ct. 146, 72 L. Ed. 309, the Supreme Court says:

“ ‘The parole laws and pardoning power of the President are not adequate to meet the need for a probation system. * * * The result of long experience with the probation system shows that it is far easier to reclaim an unhardened early offender without commitment to a prison than after it. * * *’ * * *
“The great desideratum was the giving to young and new violators of law a chance to reform and to -escape the contaminating influence of association with hardened or veteran criminals in the beginning of the imprisonment. Experience had shown that there was a real locus poenitentiae between the conviction and certainty of punishment, on the one hand, and the actual imprisonment and public disgrace of incarceration and evil association on the other. * * * The avoidance of imprisonment at time of sentence was therefore the period to which the advocates of a Probation Act always directed their urgency. Probation was not sought to shorten the term. Probation is the attempted saving óf a man who has taken one wrong step and whom the judge thinks to be a brand who can be plucked from the burning at the time of the imposition of the sentence. The beginning of the service of the sentence in a criminal ease ends the power of the court even in the same term to change it. Ex parte Lange, 18 Wall. 163 [21 L. Ed. 872]. Such a limit for probation is a natural one to achieve its end.”

See, also, White v. Burke (C. C. A.) 43 F.(2d) 329.

The remedy which the Congress sought by the Probation Act is fully disclosed by the Supreme Court in United States v. Murray, supra; and the Probation Act was intended by the Congress to supply a deficiency, and not to supérsede or trespass upon the Parole Act or pardoning power. The judgment of the court, being a judicial act, is “in the breast of the court,” making it, subject to be amended and modified or vacated by the court during the term. Goddard v. Ordway, 101 U. S. 745, 25 L. Ed. 1040. The court has not power to make an order by reservation, to take effect at a future time when the court, at such future time, would be powerless to make the order. This is inferred in United States v. Benz, supra.

The remedy of defendants is by parole or pardon. Writs denied.


author: COSGRAVE, District Judge.

text:
    In re GUARANTY BUILDING & LOAN ASS’N.
    No. 15807.
    District Court, S. D. California, Central Division.
    April 15, 1931.

      Bryan, Button & Cummins, of Hollywood, Cal., and Holbrook, Taylor, Tarr & Horton and O’Melveny, Tuller & Myers, all of Los Angeles, Cal. (A. Ronald Button, of Hollywood, Cal., and W. Sumner Holbrook and Louis W. Myers, both of Los Angeles, Cal., of counsel), for bankrupt.
    Joseph L. Lewinson, Kyle Z. Grainger, Gold, Quittner & Kearsley, and Russell B. Seymour, all of Los Angeles, Cal. (A. S. Gold, of Los Angeles, Cal., of counsel), for creditors.
   COSGRAVE, District Judge.

The motion to dismiss directed against the involuntary petition in bankruptcy is granted.

The involuntary petition in bankruptcy was filed on December 13, 1930, and petition for appointment of temporary receiver in bankruptcy was filed at the same time. A day or two subsequent thereto petition was filed for a receiver in equity. The magnitude of the matters at issue, being the affairs of the Guaranty Building & Loan Association, affeeting more than 22,000 depositors in that institution whose deposits exceeded twenty millions of dollars, assumed serious proportions. The entire community sought its best and safest business counsel as to the best method of meeting the emergency, it being generally understood that heavy losses would be suffered by the depositors. The best talent the city afforded was sought to lighten the loss so evidently faced by the thousands of depositors in the institution. The result Was that a receiver in equity was by almost unanimous consent deemed the wisest plan, and such receiver was appointed as the best method, in the first place to insure public confidence, and, second, at a minimum of expense to save what could be saved from the wreck of the institution.

A receiver in equity was appointed who, it was expressly stated on the hearing of this motion, has fulfilled in generous measure the expectations entertained at the time of his appointment. The receiver has vigorously prosecuted the duties of his trust; has rejected all unprofitable elements, vigorously asserted his rights to everything that promised return, and has already announced a plan by which an economical settlement of the affairs of the association may be had. So far as this court is advised, such plan is approved by the shareholders and depositors with the exception of some half dozen of the entire 22,000 that have appeared in support of the involuntary petition in bankruptcy on the hearing of this motion. From December 19, 1930, being the date , of the appointment of the receiver in equity, to March 12, 1931, almost three months, no dissent of the equity receivership plan was voiced by any creditor of the Guaranty Building & Loan Association.

Objection is made to the sufficiency of the petition itself, and brief mention will be made of the grounds of this objection. In the first plaCe the creditors named in the involuntary petition are claimed to be such by reason of their being holders of investment certificates and of being what might be called passbook creditors. It is claimed oru behalf of those named as creditors in the involuntary petition that their character as; creditors is established in this, circuit by decision of the Circuit Court of Appeals ini the matter of the Continental Building &; Loan Association, 232 F. 828. It is undeniable that the decision holds a building and! loan association of a character similar to the one under consideration here is subject to .bankruptcy, and that shareholders therein, in which term I include all of the petitioners in the involuntary petition, are creditors with the right to vote for a trustee in bankruptcy. The inquiry of the Circuit Court is thus expressed: “We 'therefore inquire whether the referee was correct in ruling that the stockholders were creditors entitled to-vote for a trustee.” 232 F. page 831. Doubt, however, is expressed by the court as to whether jurisdiction exists when the petition, upon which the order of adjudication-was based, named as creditors only those who were merely shareholders. My study of' the case convinces me that this doubt is expressed because the court does not decide that shareholders, prior to adjudication in bankruptcy, are clothed with the character of creditors sufficiently to entitle them to be deemed the basis on which the adjudication rests, and the reference in the decision to Central Trust Co. v. Chicago Auditorium Association, 240 U. S. 581, 36 S. Ct. 412, 60 L. Ed. 811, L. R. A. 1917B, 580, confirms this opinion. They become invested with the character of creditors upon the adjudication in bankruptcy which is the equivalent of an anticipatory breach of an executory contract.

In the brief time allowed for the consideration of the matter presented, my study of the decision of the Circuit Court of Appeals leads me to believe that the doubt expressed as to the jurisdiction when only creditors, being such by reason of their character as shareholders, are considered, means that until the adjudication in banlcruptcy they do not have such character and consequently cannot be deemed creditors for the purpose of filing an involuntary petition. If this supposition is correct, then an involuntary petition joined in by those who are creditors only by reason of their being members of the association is insufficient.

With reference to what I term passbook creditors, it appears by provisions of the.act under which the association exists that the passbook is recognized only as evidence of purchase of shares in the association, and both classes of the creditors mentioned in the petition therefore stand upon the same footing.

The acts of bankruptcy, in my judgment, are insufficiently stated. The .first act charges the taking possession of the association by Charles A. Whitmore, building and loan commissioner, as a receiver or trustee and the appointment of a custodian. No presumption can be indulged on this score, because, by the provisions of the Building and Loan Commission Act of the state of California (St. 1911, p. 607, as amended), such proceeding may be had when several contingencies arise, one of which is the violation of the laws of the state provided for the government of similar institutions and the refusal on the part of the association to comply with the orders of the commissioner with respect thereto.

Another act of bankruptcy is the alleged preference of certain creditors while insolvent, but this act is alleged wholly in general terms and is therefore held insufficient. This, I believe, was admitted on the hearing. The third act charges defalcations by employees, but no participation on the part of the corporation is charged. This, it seems to me, is not an act of bankruptcy.

My conclusions therefore are that the motion to dismiss is well founded. While the shareholders have the character of creditors, they do not become such until the adjudication in bankruptcy, and therefore are not qualified' petitioners; that the acts of bankruptcy are insufficiently charged.

The motion to dismiss should be granted, and it is so ordered.


author: STRUM, District Judge.

text:
    COOPER v. McNAIR.
    No. 660.
    District Court, S. D. Florida.
    May 12, 1931.

      Charles P. Cooper, of Jacksonville, Fla., in pro. per.
    Frank D. Upchurch, of St. Augustine, Fla., for defendant.
   STRUM, District Judge.

This is a suit in equity, a ihotion to dismiss the bill being now under consideration.

While it was a going concern, the First National Bank of St. Augustine employed plaintiff, an attorney, to represent it in certain litigation against the receiver of Farmers’ Bank & Trust Company of West Palm Beach, seeking to establish a preferred claim in favor of the St. Augustine Bank against the assets of the Farmers’ Bank, the latter bank being then in process of liquidation.

Plaintiff instituted suit pursuant to his employment by the St. Augustine Bank, his duties therein requiring considerable skill and work extending over a long period of time. The suit was not concluded when the St. Augustine Bank suspended and a receiver was appointed to wind up its affairs.

The receiver of the St. Augustine Bank requested plaintiff to continue the prosecution of the suit against the receiver of the Farmers’ Bank, but upon the condition that plaintiff’s compensation would be subject to the approval of the Comptroller of the Currency, whose decision would be final. Plaintiff declined to assent to such condition, whereupon the receiver of the St. Augustine Bank discontinued plaintiff’s services and continued the conduct of the suit through other counsel, carrying the same forward from the point to which plaintiff had brought it as counsel for the St. Augustine Bank.

Plaintiff then brought the present suit against the receiver of the St. Augustine Bank to recover for his services, both past and prospective. Plaintiff’s theory is that since the defendant receiver adopted and continued the suit against the receiver of the Farmers’ Bank as a part of the defendant’s. administration of the affairs of the St. Augustine Bank, the defendant receiver obtained the benefit of all the prior proceedings in the first mentioned suit, thus accepting plaintiff’s services; that it thereupon became the receiver’s suit from the beginning, and as much a part of the administration of the affairs of the St. Augustine Bank as if the receiver had originally commenced said suit after he became receiver. From this premise plaintiff contends that he is entitled to compensation for his services as an expense of administration, and payment thereof ahead of general creditors of the St. Augustine Bank.

We are not now concerned with the value of plaintiff’s services. The question now presented is whether or not plaintiff, as against the receiver, is entitled to a lien or other right of preference cognizable by a court of equity.

In the absence of statute, federal courts recognize no lien in favor of attorneys beyond that given by the local law. 6 C. J. 766, and eases cited.

The receiver takes the bank’s property and rights as he finds them, thereafter liquidating-the same as his judgment dictates for the benefits of the interests he represente, subject to the supervisory authority of his superior administrative officers, and, perhaps, in very rare eases subject to judicial intervention. Ordinarily, a receiver is not obligated to carry out the executory contracts of the owner of the estate being administered, unless the receiver elects to be bound thereby, which election may sometimes be found in the acceptance by the receiver of the benefits of an existing contract. 23 R. C. L. 74.

The situation here, however, differs vitally from that in Girard Life Ins. Co. v. Cooper, 162 U. S. 529, 16 S. Ct. 879, 40 L. Ed. 1062, relied upon by plaintiff, wherein a receiver elected to continue an existing executory contract for the construction of a building in course of construction when/the receivership commenced, and in doing so deliberately accepted the benefits of prior construction work, in which situation the receiver was held liable for both prior and subsequent work. See also South Carolina & G. R. Co. v. Carolina, etc., Ry. Co. (C. C. A.) 93 F. 558.

A party has a general right to change his attorney, leaving to the attorney the advantage of any lien he may have upon the fruits of his labor or upon papers or moneys in his hands as security for his services, a client always being responsible, of course, for the consequences of breaching his contract with ibis attorney. Texas v. White, 10 Wall. 483, 19 L. Ed. 992. In such a situation, the attorney has his action at law, or a timely suit ;in equity to impress an attorney’s charging lien upon the fruits of his labor. 6 C. J. 676.

The bank itself "could have discontinued plaintiff’s services, leaving plaintiff to the re-courses just stated. The same course is open to the receiver.

When the bank suspended, plaintiff was a common creditor thereof, with an inchoate right to a charging lien. Intervention of the receivership neither diminished nor enlarged plaintiff’s status as a creditor. Discontinuance by the receiver of plaintiff’s services operated neither to plaintiff’s prejudice nor to his advantage so far as his recovery1 for past services is concerned. As plaintiff himself argues in his brief, the receiver’s status “is only that of the Bank in the suit.” The same observation necessarily applies to plaintiff’s compensation. Having elected to discontinue plaintiff’s services, as he had a right to do, the receiver’s liability is the same as that of the bank. Plaintiff cannot create for his prior services to the bank the status of a preferred expense of administration merely because the receiver elected to proceed through other counsel with the suit originally brought by plaintiff. The bank itself could have discontinued plaintiff’s services just as the receiver did, subject to the recourses already stated. Such action would not have raised the dignity of plaintiff’s status as a creditor of the bank. Appointment of a receiver, and his election to further prosecute the suit, of itself, adds nothing to plaintiff’s rights.

Plaintiff’s services were performed prior to the appointment of a receiver. Plaintiff’s fee for past services did not accrue during the existence of the receivership, nor did the receiver assume its payment, nor did he elect to perform the bank’s executory contract with plaintiff. For the receiver to proceed with the suit instituted by plaintiff is not such an acceptance of the benefits of plaintiff’s executory contract with the bank as to create a liability against the receiver for plaintiff’s past services, such qs the acceptance of the benefits of a building contract by continuing the executory contract for the construction thereof, because the nature of the relation between attorney and client is such that the client may always discontinue the services of his attorney, leaving the attorney to the recourses already stated for his past services. 6 C. J. 676.

The receiver, however, takes the bank’s estate cum onere. Therefore, the asset represented by the suit against the Farmers’ Bank passes to the receiver subject to its burdens.

By timely action, plaintiff may seek the establishment and enforcement of the same attorney’s charging lien he would have had, as against the bank, upon the product of his labor. Interpreted, however, as a bill to establish an attorney’s charging lien, the bill is premature. An attorney employed to proseeute a demand has a lien for his fees or compensation upon any judgment or recovery obtained through his services, which lien will be protected in equity against any unfair dealings of the client. Carter v. Davis, 8 Fla. 183; Texas v. White, supra, and note thereto in 19 L. Ed. page 992. Until there has been a recovery, however — and there had been none when his suit was brought — there is nothing to whieh an attorney’s charging lien can attach. See cases cited in note to Texas v. White, supra; also, 6 C. J. 778.

Plaintiff urges that his services contributed to the enhancement of the assets passing to the receiver, since the receiver secured the benefit of plaintiff’s prior labor. This question, however, can be answered only when that litigation has been concluded. Whether' plaintiff’s services in the suit against the Farmers’ Bank — though undoubtedly skillful and able — will result in benefit to the interests represented by the receiver was undetermined when this bill was filed, since there had been no recovery.

In Louisville, etc., R. Co. v. Wilson, 138 U. S. 501, 11 S. Ct. 405, 34 L. Ed. 1023, relied upon by.plaintiff, there has been a “recovery” through the efforts of the plaintiff, which recovery had benefited the estate in the hands of a receiver. Consequently, an equitable lien in the nature of an attorney’s charging lien was decreed. The attorney’s compensation there involved was not held to be an expense or obligation of the receivership.

The bill also asserts a lien in the nature of an attorney’s retaining lien against certain documents pertaining to the suit against the Farmers’ Bank, which documents were delivered by the St. Augustine Bank to the plaintiff and are now in plaintiff’s custody. Such a retaining lien, however, like other mere possessory liens, is purely passive, being a bare right to hold possession until payment. It cannot be actively enforced. It is of value to the attorney only in proportion to the extent that such retention by him will embarrass the client. In re Wilson (D. C.) 12 F. 235, 238; In re Eighth Avenue, 82 Wash. 398, 144 P. 533; Adams v. Fox, 40 N. Y. 577; Fowler v. Lewis’ Adm’r, 36 W. Va. 112, 14 S. E. 447; 6 C. J. 803, 766, 770.

The motion to dismiss should be granted. So ordered.


author: BYERS, District Judge.

text:
    THE NEW ZEALAND. Petition of ATLANTIC LIGHTERAGE CORPORATION.
    No. A-11381.
    District Court, E. D. New York.
    March 17, 1931.
    Alexander, Ash & Jones, of New York City (Lawson R. Jones, Edward Ash, and Max Taylor, all of New York City, of counsel), for petitioner.
    Harry S. Austin, of New York City, for claimant.
   BYERS, District Judge.

In this limitation proceeding, it becomes necessary to determine whether the sole claimant, Charles A. Berg, being in the employ of the petitioner, was injured by reason of his own lack of care, or because the lighter upon which he was working was unseaworthy for 'the task in which it was engaged, to the knowledge of the petitioner; and, if the foregoing be resolved in favor of the claimant, the nature and extent of his injuries, and the consequent award to be made to him.

The facts are found to be as follows:

On January 8, 1929, Berg was in charge of the petitioner’s lighter New Zealand, lying alongside, bow inshore, at Pier 38, Brooklyn; the starboard side of the lighter being alongside the pier.

Fifteen hundred bales of jute, weighing four .hundred pounds each, were being laden from the pier, and all but about one hundred and fifty were in place, when the accident happened.

The loading platform of the lighter is about seventy-three feet in length, and the beam of the vessel'is about thirty-three feet. The mast is stepped aft of the loading platform, being separated therefrom by about forty inches. Aft of the mast is the deck housing, containing the hoisting gears and power, and a cabin. There is a window on the starboard side in front of the housing, through which the man at the engine saw the bales of jute from the time they were hand-trucked from the interior of the pier to the string-piece, from which they were hoisted and brought aboard the lighter.

Three men were on the pier, doing the trucking, and each in turn placed the hooks attached to the fall into the bale that he had delivered to the string-piece of the pier. Berg was doing the stowing unassisted, and Housman was running the engine.

The loading platform was roughly divided into five blocks, fore and aft, and each was finished before the next was begun, and the bales were laid .from port to starboard. Each block, when finished, contained seven tiers of bales, laid six abreast in seven rows, making about 300 bales to a block.

The first four bloeks had been completed, as had three tiers of the fifth; two or three bales in the fourth tier had been placed, but the port • comer aft had not been filled. Salin, one of the longshoremen, fixed the hooks, and watched the bale swing toward Berg, who was standing on the port side, near the mast. The pick-up was “hasty,” and, as the tide was low, the deck of the lighter was about ten feet below the pier.' The bale started about, five feet ahead of the mast, and, as it neared Berg, the swing was in an arc, toward the aft port corner of the stow; Berg tried to ward off the bale, to prevent its striking him, but was unable to withstand the momentum whieh the bale had gained, and was pushed back and forced to step down to the deck, a matter of about four or five feet. The impact of his left heel was so severe as to cause a compressed fracture of the eleventh dorsal vertebra, causing a partial permanent disability.

The swing of the bale was not normally athwartship, because of the following condition of the gear: The mast is held in place, and enabled to take the ultimate strain of the loading, by six stays, two on each side, and two astern. The stays are engaged in chain-plates, bolted into the hull.

Customarily the port and starboard stays are made fast in the forward chain-plates, which are twenty feet forward of the stern, and five feet forward of the mast. The aft chain-plates are eleven and one-half feet forward of the stern, and hence three and one-half feet aft of the mast.

The boom whieh rests» in the gooseneck on the mast, and from the tip of which the fall runs, is controlled in its fore and aft play, as well as laterally, by guys, also called vangs, whieh likewise engage the chain-plates.

In August, 1928, the forward starboard chain-plate was completely broken, and rendered incapable of receiving the starboard stays, or the vangs; therefore, they had to be attached to the aft chain-plate, three and one-half feet astern of the mast.

This condition was formally made known to the operating head, and directing vice president of the petitioner, as he testified. He stated that he did not consider the matter sufficiently important to cause repairs to be made. The lighter spent one and a half days in the repair yard in October of that year, over two months before the accident, but no repair to the forward starboard ehain-plate was authorized. Such was made, however, in February, 1929, about one month after the injury to Berg.

The placing of bales in such a stowage as was here conducted involves, as to the first block, the extension of the boom, so that the fall will plumb conveniently to enable the bales to be placed as described. The completion of each block required the raising of the boom for accommodation to space nearer the mast; in the fifth block the boom was close to the mast. It was “topped” by Berg just prior to taking the draft whieh caused the injury, as he was working then in an area which so required. The vang controlling the fore and aft movement of the boom (whieh was necessarily swinging in a restricted zone), being made fast to the aft chain-plate, was unequal to the task of controlling the tendency of the boom to swing back, as well as across the lighter, and it was this tendency which Berg was unable to repel by his hands. Thus he was exposed to a hazard whieh would not have been present if the vang could have been made fast in the forward chain-plate.

When the vice president of the petitioner assumed the responsibility of deciding that the faulty condition whieh was called to his attention by Berg, both in writing and verbally, was not sufficiently important to require attention, he did that which iii fairness should be visited upon the company for which he was acting, unless some rule of law operates to the contrary.

The contentions offered.by the petitioner will now be examined, as a basis for the conclusions of law upon which the decision herein will rest.

First, it is urged that the doctrine of assumption of risk deprives the claimant of all right to recover, and the following cases are cited:

Stewart v. Brune (C. C. A.) 179 F. 350. Plaintiff operated a derrick, and applied excessive power to accomplish a purpose entrusted to him. The power was in his control alone. The court decided that plaintiff must have appreciated the danger of applying power beyond the capacity of the derrick and therefore assumed the risk.

Southern Ry. v. Hermans (C. C. A.) 44 F.(2d) 366. Reversal and new trial ordered, in a death case, the jury having found a verdict for plaintiff. The decedent, a deck hand on a tug, was caught between it and a barge, in changing a line. The Fourth Circuit Court of Appeals says that the jury should have been instructed that, even though the captain of the tug were negligent, the plaintiff could not recover if the decedent clearly understood the risks attendant upon such negligence and voluntarily assumed them.

The Scandinavia (D. C.) 156 F. 403. Decedent, fireman on a tug, knew that a landing ladder with a broken end was unsafe with that end down, but not if it was up. He placed the broken end down, when boarding the tug from a wharf. Held that decedent assumed the risk of what he did.

New York, etc., R. Co. v. McDougall (C. C. A.) 15 F.(2d) 283. Plaintiff was a brakeman on a freight train, operating in Cleveland, where there are numerous overhead bridges. He stood up on a freight ear to give a signal, and was struck by one, and injured. A judgment recovered by him was reversed, because he was bound to know of constantly recurring danger from such an aet as he performed.

Norfolk & Western Ry. Co. v. Collingsworth (C. C. A.) 32 F.(2d) 561., A switch oiler on a railroad was struck by a “cut” of freight cars being drilled by a yard engine; the cars had no lookout on the leading ear, nor was there a lantern thereon. The court set aside plaintiff’s verdict, because there was no proof of negligence, and incidentally remarked that plaintiff assumed obvious risks of employment.

Delaware, etc., R. R. Co. v. Koske, 279 U. S. 7, 49 S. Ct. 202, 73 L. Ed. 578. Plaintiff, employed in defendant’s roundhouse, apparently was riding on an engine step, to a coal chute, where he intended to turn a switch; he jumped from the engine into a ditch, and it was so "dark he couldn’t see.” The Supreme Court reversed plaintiff’s recovery under the Federal Employers’ Liability Aet (45 USCA §§ 51-59), because he did not prove breach of any duty owed to him by defendant in respect of the place where he was injured. And he assumed the ordinary risks, and also extraordinary risks of his employment if fully known and appreciated.

These eases fairly present the petitioner’s contention that Berg assumed the risk or hazard of the broken chain-plate, and the attachment of the starboard vang to the after chain-plate, in conducting the operation in which he was engaged.

It is thought that the rule of assumption of risk, as laid down, does not meet the situation disclosed by the evidence here. The swing of the bale aft as well as athwartship was not so inevitably to be anticipated as to constitute an ordinary risk of the employment, because it did not occur when the boom was topped up to meet the successive requirements of the first four blocks of this stow; nor for the early three tiers of the fifth block. Only when the boom was topped to within a foot or two of the mast, just prior to the receipt on board the lighter of the bale that did the damage, was there a tendency on the part of the boom to swing the bale aft. To say that this should have been anticipated, and therefore avoided, is the teaching of hindsight.

Having in mind that the doctrine of assumption of risk may be said to rest in contract (See McAdoo v. Anzellotti [C. C. A.] 271 F. 268), it would seem that one against whom the rule is to be invoked should be shown to have, or to be chargeable with, something approaching knowledge of what he agrees or engages to assume. To such purport are the cases cited by the petitioner, but its argument is not persuasive that Berg must be held to have been able to see and. appreciate the likelihood that the rigging of the starboard vang to the aft chain-plate would cause this or any other bale to swing aft as well as toward the offshore side of the lighter.

. The second contention is that, even under the Jones Law (41 Stat. 1007, § 33 [46 USCA § 688]), the claimant could not recover, if he assumed the risk in question. It may be so conceded.

The third contention is that the negligence was that of Berg, and not of the petitioner. It has been seen that Berg did all that an employee could reasonably do, to procure the repair of the broken chain-plate. Unless it was negligence on his part to remain in the employ of the lighterage company at all after Mr. Briody had decided, without so informing Berg, that this was so trivial a matter as not to require attention, .or unless such failure of the directing head of the employing company, which was persisted in, is to be imputed to the employee by some process of reasoning not now disclosed, it becomes difficult to follow this argument.

Petitioner reasons that, because Salin, the longshoreman, testified that the boom struck the mast, or the stay, in swinging one or more bales prior to the one that did the damage, Berg is chargeable with negligence in continuing the operation under these conditions.

The court heard the witnesses, and has reflected upon the testimony, and the opportunity possessed by Salin to observe prior occurrences.

It is unable to conclude that the testimony reveals negligence on Berg’s part; clearly the opposite is true of the conduct of tiie petitioner, in so important a matter as tne proper anchorage for stays and vangs, upon which the lighterage operations depended.

Again, it is urged that the starboard stay and vang would have required shifting to the aft ehain-plate, even if the broken chain-plate had been in good repair. There is no evidence to sustain this contention, which rests in speculation only, and is contrary to what the prior experience of Berg on this lighter makes clear, when the broken ehainplate was functioning. ci

Further, it is urged that Berg has admitted in writing that he merely stepped backwards, and, having failed to add that he was caused to do that by the impact of the bale against his outstretched hands, his credibility is impaired. Eeliance principally is placed upon a statement procured by one Adams, in the employ of Federal Indemnity Company, carrying insurance for the petitioner. Adams testified that the language of the statement was his, not Berg’s, and that it was procured while the latter was lying on his back in the hospital to which he was taken on the day of the aeeident, and that this was within a week or two afterward.

Berg testified that he did not read the statement before he signed it. The document has received the consideration to which it is thought to be entitled.

It is represented that the injury to claimant is not permanent, but the medical testimony of the doctor representing the petitioner is to the contrary effect. Berg is wearing a steel spinal brace or corset, is lame and uses a cane, and cannot do heavy work.

Before the injury, he earned on an average of $140 per month. He still has earning capacity, but manifestly it is substantially impaired.

Finally, petitioner urges that, in any event, it is entitled to limitation, because the broken chain-plate is not shown to have been the sole proximate cause of the injury.

If what has been set forth fairly portrays the evidence, it results that claimant has shown that the sole proximate cause of his injury was the failure of the starboard vang to hold the boom to a lateral sway on the port side of the lighter, and that this was due to the placing of that vang in the aft chain-plate, which would not have been necessary if the broken one had been capable of functioning.

The case is close and opinions might well differ as to what the evidence discloses, but, in the belief that it preponderates in claimant’s favor, on all the issues discussed, he will be awarded $12,500 damages, with interest from January 8, 1929, and a decree may be settled on notice, denying the limitation.

If the foregoing be deemed an insufficient compliance with Admiralty Eule 46% (28 USCA § 723), findings and conclusions may be settled on notice.