author: NETERER, District Judge

text:
    OLYMPIA CANNING CO. v. UNION MARINE INS. CO., Limited.
    (District Court, W. D. Washington, N. D.
    April 14, 1925.)
    No. 8439.
    1. Insurance <@=^403 — Loss of cargo due to improper loading held not caused by “perils of the seas.”
    The sinking of a vessel in ,a calm sea, due to improper loading which caused her to capsize, held not caused by a “peril of the seas,” within a policy on the cargo.
    [Ed. Note. — For other definitions, see Words and Phrases, First and Second Series, Perils of the Sea.]
    2. Insurance <©=3416 — Marine cargo policy held not to cover loss though negligent loading. -
    A cargo policy, insuring against perils of the seas “and all other perils, losses, and misfortunes,” held not to cover a loss due to improper loading, of the vessel which caused her to capsize in a calm sea.
    At Law. Action by the (Jlympia Canning Company against the Union Marine Insurance Company, Limited. On demurrer to affirmative defense.
    Overruled.
    Plaintiff seeks to recover under a contract of marine insurance for goods shipped aboard the steamship Rubaiyat on a voyage from Olympia to Seattle, the material part providing:
    “And touching the dangers and perils which the said company is contented to bear and does take upon itself in the voyage so insured as aforesaid, they are the sea, * * * and all other perils, losses, and misfortunes that have or shall come * * * to the * * * damage of the aforesaid subject-matter of this insurance or any part thereof.”
    All losses and customs are to be adjusted in accordance with the laws and customs of England.
    The defendant admits the shipping of the cargo in harmony with the provisions of the policy; that the vessel was seaworthy when she sailed from the Port -of Olympia; that during the course of the voyage, without any fault or neglect on the part of the plaintiff, the vessel sank, together with her cargo, and became a total loss; admits demand made for the loss by the plaintiff, refusal to pay, and as an affirmative defense states that the vessel sailed from the Port of Olympia bound for Seattle via Tacoma, having on board the cargo set out in the complaint; that at the Port of Tacoma additional cargo was taken which was improperly stowed, and the vessel,, by reason thereof, became “top-heavy, unstable, tender, and unfitted” to continue the voyage; that shortly after leaving the dock at Tacoma she capsized and sank and with her cargo became a total loss; that at thq time the sea was calm, the weather fair, and the sinking was caused solely by her said top-heavy, unstable, tender,' and unfit condition, and was not caused by perils of the seas or any other perils or risks covered by the contract of insurance mentioned.
    The plaintiff has demurred to the affirmative defense.
    Bogle, Bogle & Holman, of Seattle, Wash., for plaintiff.
    Shorts & Denney, of Seattle, Wash., for defendant.
   NETERER, District Judge

(after stating the facts as above). In the absence of adverse proof, it is presumed that the ship foundering at sea is because of the “peril of the sea.” Rule 7, Sehed. 1, Eng. Marine Act 1906; Delanty v. Yang Tsze Ins. Ass’n, 127 Wash. 238, 220 P. 754. Here the cause is known. The ship was seaworthy at the inception of the voyage." The issue is: Was the loss due to a peril of the sea? There is a distinction between “damages arising on the sea” and “perils arising directly from the sea.” Merrill v. Arey, 17 Fed. Cas. 83. Judge Ware, in Merrill, supra, held .that “dangers of the seas” included only those which accrued from the action of the elements and such as are incident to that cause, rather than to those arising on the seas. Circuit Judge Wallace, for the court, in The Warren Adams, 74 F. 413, 20 C. C. A. 486, said:

“All marine casualties resulting from the violent action of the elements, as distinguished from their natural, silent influence, upon the fabric of the vessel; casualties which may,' and not consequences which must, occur.”

Circuit Judge Rogers, for the court, in The Giulia, 218 F. 744, at page 746, 134 C. C. A. 422, 424, said:

“Perils of the seas are understood to mean those perils which are peculiar to the sea, and which are of an extraordinary nature or arise from irresistible force or overwhelming power, and which' cannot be guarded against by the ordinary exertions of human skill and prudence.”

Circuit Judge Hough, for the court, in The Rosalia (C. C. A.) 264 F. 285, at page 288, said:

“ * * * Something so catastrophic as to triumph over those safeguards by which skillful and vigilant seamen usually bring ship and cargo to port in safety.”

Circuit Judge Gilbert, for the court, in Ætna Ins. Co. et al. v. Sacramento-Stockton S. S. Co. (C. C. A.) 273 F. 55, said at page 61:

“We reach the conclusion that by the English law and practice a peril of the sea need not be extraordinary, in the sense of being catastrophic or necessarily the result of uncommon causes, and that severe storms, rough seas, and even fogs may be comprised in the perils of the seas.”

Circuit Justice Washington, in U. S. v. Hall, 26 Fed. Cas. 84, at 85, speaking of perils of the seas, said:

“ * . * * It may safely be laid down, that the accident, which is attributable to this cause, must happen without any fault or negligence of the master, and must occur at sea.”

The King’s Bench .Division, February 19, 1924, 40 Times Law Reports, p. 347, in an action to recover on a policy of insurance on a submarine “covering all and every risk” to the vessel whilst being broken up, during which breaking up, as the result of negligence the vessel sank to the bottom, the court held:

“ * * * That the unintentional admission of sea water into a ship whereby she was caused to sink was a peril of the sea, and therefore, even if the policy was to be read as an ordinary marine policy, so that the court must, find something in the nature of a marine peril before the underwriters could be held liable, the plaintiffs were entitled to recover.”

All matters in the affirmative defense well pleaded are admitted by the demurrer. Eliminating the conclusions from the issuable fact pleaded, it is admitted that there was nothing in the nature of a marine peril which caused the sinking. Ionides v. Universal Marine Ass’n, 9 R. C. 351 (Law Times Report, vol. 8, New Series, 705), is clearly distinguishable from the issue here, as is also P. Samuel & Co. v. Dumas, 26 Eng. Com. Cases 239 (93 Law Journal Rep. 415), King’s Bench Division 1924), in which the court held scuttling a ship not a peril of the sea. The court also said in this case all storms are fortuitous, and “ordinary action of ‘ the waves is not.” In Redman v. Wilson, 14 M. & W. 476, 153 Eng. Rep. 562, Exchequer Book 9, the vessel was unskillfully loaded and sprung a leak, but before stranding was in a tornado, and the court decreed recovery for the loss suffered after the tornado.

A fortuitous event is the happening of that which we cannot resist. Viterbo v. Friedlander, 120 U. S. 707, 7 S. Ct. 962, 30 L. Ed. 776. A happening independently of human will or means of foresight, resulting from unavoidable physical causes. Webster.

If the vessel had sunk at the dock by reason of overloading, or improper loading with “gypsum in sax, plaster in sax and other cargo,” it could not be seriously contended that the sinking was because of a peril of the sea. The C. R. Booth, 171 U. S. 450, 19 S. Ct. 9, 43 L. Ed. 234. The loading being of such a character that within “a few minutes” after leaving the dock she sunk in a calm sea, the weather being fair, by reason of the tender condition occasioned by the improper loading, the same result follows. The policy in issue is the ordinary marine policy, and “the court must find something in the natur.e of a marine peril” before recovery may be had. (40 Times Law Reports, supra), and from the admitted facts this cannot be done. The phrase “all other perils,” etc., in the policy must refer to the “perils of the seas” and be held to have no effect, since there is no doubt as .to. the “specific causes of loss.” Anthony v. Ætna Ins. Co., 1 Fed. Cas. 1046.

Demurrer is overruled.


source: Caselaw Access Project

author: FARIS, District Judge.

license: Public Domain

text:
    PEASE et al. v. SCOTT COUNTY MILLING CO.
    (District Court, E. D. Missouri, E. D.
    March 24, 1925.)
    No. 6473.
    1. Trade-marks and trade-names and unfair competition @=364 — Different classes of marks given different protection. ;
    A distinctive mark or name will be broadly protected as a trade-mark, but general words or names, which have been applied to and used and registered as trade-marks for a large number and variety of products, will be protected only within the range of use on similar goods.
    2. Trade-marks and trade-names and unfair competition @=>64 — Trade-mark for wheat flour may not be extended to stock food, as against prior user on such product.
    The use by defendant of the word “Noxall” f.or a number of years as a common-law trademark, and later as a statutory trade-mark for wheat flour, helé not to invalidate a-later use and subsequent registration by complainant of “Nox-All” as a trade-mark for stock food, and the later use by defendant of its trade-mark on similar stock food held an infringement.
    3. Trade-marks and trade-names and unfair competition @=>98 — Recovery of damages for infringement limited to time since commencement of suit.
    Where there was no willful infringement, but defendant acted in good faith and the belief that it was within its rights, recovery of damages limited to those sustained since commencement of suit.
    In Equity. Suit by Simpson T. Pease and others against the Scott County Milling Company. Decree for complainants.
    Edgar T. Brandenburg, of Washington, D. C., J. F. Brandenburg, of New York City, and. John H. Bruninga, of St. Louis, Mo., for plaintiffs.
    Andrew B. Remick, of St. Louis, Mo., for defendant.
   FARIS, District Judge.

This case was submitted some time ago, but was overlooked by the court. • It came by transfer, pursuant to stipulation, from the Southeastern division, being originally numbered 220, and now numbered 6473, in equity, on the docket of this court.

This is a suit in equity, as forecast by the number, for an injunction and an accounting, bottomed upon an alleged infringement by defendant of the registered trade-mark of plaintiffs, which trade-mark carries the word “Nox-All,” as applied to a mixed or commercial stock food made by plaintiffs, which said trade-mark was duly registered by plaintiffs on. the 30th day of October, 1922. In the beginning, I should have stated that the case was submitted to' the court on an agreed statement of facts; no evidence was taken in it.

The answer of the defendant is an admission of the fact of the issuance of the certificate of registry of the trade-mark to plaintiffs, that plaintiffs are engaged in making and selling stock foods, that defendant is likewise engaged in selling a stock food under the name of “Noxall,” and that plaintiffs heretofore complained of the action of .defendant in the behalf last mentioned. Other facts are denied in substantial effect; that is to say, defendant avers that it has no knowledge or information of the existence of the facts pleaded, and asks that strict proof ther.eof be made and required of plaintiffs. Defendant also sets up a counterclaim, for that, as it is alleged, in the year 1893 its predecessor began using the word “Noxall” as a trade-mark on wheat flour made by its predecessor; that on February 20, 1916, defendant registered this trade-mark, as by law permitted, in the Patent Office; and that both before and after such registration defendant and its predecessor constantly and continuously used such trade-mark on wheat flour made and sold by it and by its said predecessor.

The agreed statement of facts on which the case is submitted to the court, eliminating merely conceded jurisdictional matters, substantially is that, since 1903, plaintiffs and their predecessor have been making and selling a mixed stock food, composed of com, oats, alfalfa meal, and molasses, which they marketed under the trade name of “Nox-All”; that in the year 1915, plaintiffs’ predecessor began selling such stock food, so marked, in interstate commerce; that on October 30, 1922, plaintiffs registered this name as a trade-mark for such mixed stock food in the Patent Office, pursuant to law, and got a certificate thereof, hearing the above date and numbered 146,329; that plaintiffs have extensively advertised such stock food at substantial expense, and during the years 1921, 1922, and the first half of the year 1923 they have sold more than 18, 000,000 pounds of such stock food so marked, in many Southern states; and that plaintiffs were not advised, and had no knowledge of the use by defendant of the word “Nox-all” on flour, or on any other product, until about the month of March, 1921; that defendant’s predecessor, about the year 1893, began to use the word “Noxall” as a trademark for wheat flour made and sold by it, and continuously since that date such predecessor used this trade-mark, until 1904, when it sold out to defendant, and thereafter continuously defendant has used this mark on such flour made and sold by it; that in 1916 defendant procured the registration of this word “Noxall” as a trade-mark for wheat flour; that up to five years ago defendant was not engaged in making and selling food for live stock, but that in 1919 it began selling a live stock food made for it by others, according to a formula and mixture similar in all ways to that of plaintiffs, .that is to say, a stock food composed of com, oats, alfalfa meal, and molasses; that in the year 1921 it built a feed mill and began making and continued selling such stock food, marking it, for the whole five-year term, with the word “Noxall” as a trade-mark; that it began shipping such feed in interstate commerce in 1919, and is now shipping and selling the same in many of the states wherein plaintiffs’ product is sold. It is also agreed that the words “Noxall,” “Nox-All,” and “Noxal” have been registered as trademarks some 30 times, for almost every conceivable product, including poultry cures, paints, clothing, mineral water, starch, beer, meat, wheat flour, and stock food; that, in addition, this word is used as a trade-name by some 15 or 20 concerns, to designate divers articles or manufacture and sale, from cultivators to washing machines.

Upon these facts both sides contend for judgment. In limine, it is plain that, since the plaintiffs have been using the word about which the dispute wages for 22 years as a trade-mark for a mixed stock food, and defendant has been using it for 32 years as a trade-name for wheat flour, and both parties have had it registered as a statutory trademark (defendant in 1916, for wheat flour, and plaintiffs in 1922, for a mixed stock food)', there is no such situation presented as indicates fraud, malice, or intentional infringement, without a fair claim of right.

The ruled cases disclose two lines of decision: A narrow rule of protection in a case wherein the trade-mark in dispute has been, as here, registered under the statute for some 30 times as a trade-mark, for as many different products, and has also been used as a common-law trade-mark as to some 20 other products (Columbia Mills Co. v. Alcorn, 150 U. S. 460, 14 S. Ct. 151, 37 L. Ed. 1144; Pabst Brewing Co. v. Decatur Brewing Co. [C. C. A.] 284 F. 110; Church, etc., Co. v. Buss [C. C.] 99 F. 276; Borden, etc., Co. v. Borden, etc., Milk Co., 201 F. 510, 121 C. C. A. 200; Lawrence v. Sharpless Co. [D. C.] 203 F. 762; Denver, etc., Co. v. Alexander, etc., Co., 50 App. D. C. 207, 269 F. 859; George v. Smith [C. C.] 52 F. 830; Beich Co. v. Kellogg, etc., Co., 49 App. D. C. 186, 262 F. 640; Nulyne Laboratories v. Electro-Alkaline Co., 52 App. D. C. 265, 285 F. 999), and a broad line of protection, where the common-law trade-mark or trade-name, or statutory trade-mark, is original or distinctive (Aunt Jemima Mills Co. v. Bigney & Co., 247 F. 407, 159 C. C. A. 461, L. R. A. 1918C, 1039; Peninsular Chemical Co. v. Levinson Co., 247 F. 658, 159 C. C. A. 560; Florence Manufacturing Co. v. Dowd, 178 F. 73, 101 C. C. A. 565; Enoch Morgan’s Sons v. Wood, 152 F. 690, 81 C. C. A. 616, 12 L. R. A. [N. S.] 729; Anheuser-Busch v. Budweiser, etc., Corporation [D. C.] 287 F. 243; Vogue Co. v. Thompson-Hudson Co. [C. C. A.] 300 F. 509).

This distinction is made clear by what was said in the ease of Pabst Brewing Co. v. Decatur Brewing Company, supra, wherein the words in dispute were the words “Blue Bib-bon,” as applied by plaintiff therein to beer, and by defendant therein to malt extract. The court said:

“It [‘Blue Ribbon’] was shown to have been registered in the Patent Office over 60 times. * * * Such registrations at different times and to different persons would indicate that the Patent Office did not recognize a large measure of inelusiveness in the name. * * * In view of the very wide and general employment of ‘Blue Ribbon’ as a trade-name, we believe the District Court properly concluded that appellant’s right to use it was limited, to its registered product, and whatever other first use it made of it, and that in appellee’s use of it there was no likelihood of any confusion of its product with that of appellant.”

Again, in the ease of Lawrence v. Sharp-less Co., supra, the controversy arose over the use of the picture of a cow as a trademark for plaintiff’s butter. Defendant therein was sued, for that it has used such a picture on its brand of cheese. What the court said bears on both points involved in the instant ease, as witness this excerpt: '

“The use of. the figure of the cow upon the defendant’s prints of butter prior to its use by complainants for cheese would not, in my opinion, invalidate the complainants’ trade-mark. , * * While butter and cheese are both dairy products, they are in such distinctly different classes that neither can be said in.any sense to enter into competition with the other. Similar trademarks put upon cheese as a product of one party could by no possibility deceive the purchaser intending to buy the butter of the other party, and vice versa. The defendant does not claim to have used its trade-mark of the side figure of a cow upon packages of cheese until after it had been nearly thirty years in constant use on cheese by the complainants, and there is no proof that it was used by the defendant on cheese in such a manner as t.o give it any right thereto prior to the registration of the complainants’ trade-mark in 1906. * * * The fact that the defendant was a maker and dealer in dairy products in general would not entitle" it to appropriation of its trade-mark for butter to the whole field of dairy products, nor give it the right, as against its prior use upon cheese, to adopt it as a trade-mark for cheese.”

It is fairly clear that the Patent Office did not consider that wheat flour and a mixed stock food, made of com, oats, alfalfa meal, and molasses, were in the same trade-mark category; otherwise, that office would not have- registered the word “Nox-All” as a trade-mark of plaintiffs for a stock food in 1922, when it had theretofore in 1916 registered this identical word (barring the hyphen) as a trade-mark for defendant’s wheat flour. Even before this it'had registered this identical word as a statutory trademark, for chicken cholera medicine, beer, starch, com cure, meat, and mineral water, not to mention 19 other registrations of the word as . a trade-mark for other manufactured products and articles, running in the alphabetical category from clothing to tents.

A distinctive name, such as' “Kodak,” “Budweiser,” “Eord,” “Aunt Jemima,” “Penslar,” and “Delmonte,” will be broadly protected in all cases where damage will be inflicted by unauthorized use; while words like “Blue Ribbon,” “Star,” and “Noxall,” and other words of like character, will be protected only within the range of use upon similar goods.

Here 'defendant and its predecessor used this word as a common-law mark on wheat flour for some 20 years or more, and as a statutory trade-mark on similar flour for some 6 years, before this action was begun. Plaintiffs and their predecessor have used this word for more than 20 years as a common-law trade-mark, and for some 2 years as a registered statutory trade-mark for a mixed stock food, made from com, oats, alfalfa meal, and molasses. Plaintiffs or their predecessor had been' using the word on stock food some 15 years before defendant went into the business of making or selling a stock food, similar in all respects, to that of plaintiffs.

In the light of the ruled cases, and in common sense, there is such difference existing in composition, manufacture, and use of the two products in question here as to make it fairly plain that neither one necessarily invades the field of the other. I see no reason why the statutory trade-mark of plaintiffs should not be upheld as to the stock food in question, or why, so far as this case is concerned, the trade-mark of defendant should not stand as a trade-mark to designate the wheat flour made by defendant. The finding, therefore, will be for plaintiffs, that their statutory trade-mark is infringed by defendant, as also for plaintiffs and against defendant on defendant’s counterclaim, and this counterclaim will be dismissed.

Plaintiffs may hatfe a decree .for an injunction as prayed, and for an accounting as to damages and profits, since the filing of their bill of complaint herein, on the 13th day of December, -1922, and to this end a master will be appointed, if requested. The court thus limits tbe right of the potential recovery of damages and profits, because the facts and situation do not disclose any actionable recalcitrancy, or any malicious or intentional infringement. The circumstances, as already forecast, indicate that the parties honestly believed that they had the right to use the trade-mark in question.

A decree may be submitted accordingly.


author: THOMPSON, District Judge.

text:
    UNITED STATES v. KATZ et al. (two cases).
    (District Court, E. D. Pennsylvania.
    April 29, 1925.)
    Nos. 1123, 1124.
    1. Conspiracy <§=>40 — One whose concert with another is not necessary for commission of crime may be joined with him in indictment for conspiracy.
    If a person may alone be charged with a crime, another whose concert with him is not necessary for the co'mmission of that crime may properly be joined with him in an indictment for a conspiracy to commit the crime.
    2. Intoxicating liquors <§=>I54(I) — Statute prohibiting sale, without making permanent record, held applicable only to permittees.
    - National Prohibition Act, tit. 2, § 10 (Comp. St. Ann. Supp. 1923, § 10138%e), making1 it a crime to manufacture, purchase for sale, sell, or transport liquor without making a permanent record in manner prescribed by statute, held applicable to sales by permittees only, in view of section 6, tit. 2 (section 10138%c), prohibiting sales without permits, and sections 7, 8, 9, 11-13 (sections 10138%cc-10138%dd, 10138%ee-10138%ff).

      3. Statutes <@=>241 (I) — Penal statutes not to be extended beyond fair meaning of language employed.
    The maxims, “Ex anteeedentibus et eonse-quentibus fit optima interpretatio,” and, _“nos-citur a soeiis,” are to be borne in mind in interpreting a statute, and a penal statute is not to be extended beyond the fair meaning of the language employed.
    4. Indictment and information <§=>111 (3) — Indictment charging conspiracy to sell, without making permanent record, held defective for failure to allege seller holder of permit.
    Indictments charging conspiracy to sell liquor, without making permanent record, required by National Prohibition Act, § 10, tit. 2 (section 10138%e), held defective for failure to allege that seller had a permit to sell liquor; such .allegation being a matter of description and not a defensive negative averment.
    Jacob Katz and George Senn, and Jacob Katz and Herman Feuerstein, were separately indicted for conspiracy to commit tbe offense of selling wbisky without making a permanent record. On motions to quash and demurrer to bills of. indictment. Indictments quashed.
    George W. Coles, U. S. Atty., arid Henry B. Friedman, Asst. U. S. Atty., both of Philadelphia, Pa.
    John R. K. Scott and Benjamin M. Golder, both of Philadelphia, Pa., for defendants.
   THOMPSON, District Judge.

In indictment No. 1123, it is charged that the defendants Katz and Senn conspired to commit an offense against the United States, to .wit, the offense on the part of Katz of selling for the Stewart Distilling Company to Senn 250 eases of whisky, without making the permanent record required under section 10, tit. 2, of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 1013 8%e).

In indictment No. 1124, it is charged that the defendants Katz and Feuerstein conspired to commit an offense against the United States, to wit, the offense on the part of Katz of selling for the Stewart Distilling Company to Feuerstein 25 barrels of whisky, without making the permanent record required under section 10. As the two indictments charge similar offenses in a similar manner, the discussion will be directed only to No. 1123.

Section 10 provides as follows;

“No person shall manufacture, purchase for sale, sell, or transport any liquor without making at the time a permanent record thereof showing in detail the amount and kind of liquoif manufactured, • purchased, sold, or transported, together with the names and ad- • dresses of the persons to whom sold, in case of sale, and the consignor and consignee in case of transportation, and, the time and place of such manufacture, sale, or transportation. The commissioner may prescribe the form of such record, which shall at all times be open to inspection as in this act provided.”

The objection raised to the indictment is that it does not charge that either Katz or the Stewart Distilling Company held a permit to sell, and that section 10 applies only to those holding permits, and therefore no offense is charged because, while Congress prohibits in section 6, tit. 2 (section 1038S^e), the sale of liquor without first obtaining a permit from the commissioner, it was not intended by section 10 that a person .making a sale, unlawful under section 6, because without a permit, should be charged with the separate offense of making such unlawful sale without making a permanent record thereof showing the details set forth in the section.

The pleader has apparently endeavored, in drafting this indictment, to involve the purchaser with the seller in a conspiracy to sell, but was confronted with the rule of criminal law that where an offense is such that a concert of action between two persons is logically necessary to the completion of the crime, that is to say, the crime cannot take place without concert, a charge of conspiracy against the two persons to commit that crime does not lie. 2 Wharton, Criminal Law, § 1339; United States v. Dietrich (C. C.) 126 F. 664; Chadwick v. United States, 141 F. 225, 72 C. C. A. 343; Shannon v. Commonwealth, 14 Pa. 226. Section 10, therefore, suggested á method of overcoming the difficulties of such a charge by setting up a conspiracy to sell without making a record of the sale. It is well settled that, if a person may alone be charged with a crime, another, whose concert with him is not necessary for the commission of that crime, may properly be joined with him in an indictment for conspiracy to commit the crime. Chadwick v. United States, supra; United States v. Rhodes (D. C.) 212 F. 513; Tapack v. United States, 220 F. 445, 137 C. C. A. 39.

If, therefore, one who does not hold a permit may be charged under section 10 with the failure to make records, another conspiring with him to fail to make the records may be indicted with him.

The question then is whether Congress intended to make a violation of section 10 a crime as to one selling liquor, whether or not he held a permit. I fail to see any evidence in the act of any such intention on the part of Congress.. Section 6 prohibits selling without first obtaining a permit. and prescribes details concerning the time when permits to sell shall expire, the length of time permits to purchase shall be in force, provisions as to what the permits shall specify, and prohibits their issue to persons violating the terms of prior permits. It provides for the prescribing by the commissioner of forms of permits and applications, and empowers that official to require bonds, and provides for the review of his decision by a court of equity in the event of a refusal of an application for a permit.

Section 7, tit. 2 (section 10138%ce), provides for permits to physicians.

Section 8 (section 10138%d) directs the commissioner to cause blanks to be printed and furnished to physicians holding permits and directs the manner in which they shall be used. -

Section 9 (section 10138%dd) provides for the citation of those holding permits to appear before the commissioner and authorizes revocation for cause shown.

While section 10 does not describe those who are prohibited from selling without making a record as those holding permits, the final paragraph of that section reads,“The commissioner may prescribe the form of such record which shall be at all times open to inspection as in this act provided," and apparently refers to section 34, tit. 2 (section 10138%u), providing that all records and reports kept or filed under the provisions of this act shall be subject to inspection by the commissioner or other officers designated, and that copies of such records- and reports duly certified may be introduced in evidence.

Section 11, tit. 2 (section 10138%ee), requires manufacturers and wholesale or retail druggists to keep, as part of the records required of them, a copy of all permits-to purchase on which sales are made, and prohibits them to sell except to persons having permits to purchase.

Without going into further details, sections 12 and 13, tit. 2 (sections 10138%f, 10138%ff), are obviously a continuation of the regulatory provisions in relation to those holding permits.

The maxims, “Ex anteeedentibus et consequentibus fit optima interpretatio,” and, “Noseitur a soeiis,” are to be borne in mind in interpreting a statute, and a penal statute is not to be extended beyond the fair meaning of the language employed. United States v. Baltimore & O. S. W. R. Co., 159 F. 33, 86 C. C. A. 223. In that case JudgeSeverens said:

“A good statement of the doctrine as applied to the case before us is contained in 26-A. & E. Eneycl. of L. 616 (2d Ed.), where-it is said:

“ ‘In construing a section of an act, regard must first be had to the language of the clause itself, and, second, to other clauses in the same act, and that construction should be adopted which makes the whole act stand consistently together or reduces the inconsistency to the smallest possible limits.’ ”

Applying the maxims, and the doctrine thus expressed, I am forced to the conclusion that Congress intended section 10 to apply only to sales by permittees, and did not intend to attempt the impossible; that is, to require those violating the law by selling without permits to make a permanent record of their criminal aets and to punish them for not so doing.

It is argued on the part of the government that the indictments should stand because of the provisions of section 32, providing that it shall not be necessary in any affidavit, information, or indictment to include any defensive negative averments. But the offense intended to be charged is not subject- to an exception which may be stated in the negative. If it is rightly concluded that the offense of failing to make a record is confined to those holding permits, it is a matter of description and not of defensive negative averment, and, if the defendants are to be held, it must be because Katz, the seller, is included among those forbidden to sell without making a record; that is, among those holding permits to sell. But there is no averment in the indictment describing Katz as one required to hold a permit, and therefore neither he nor his alleged coconspirator, Senn, are charged with an indictable offense. T think this reasoning is well sustained under the authority of the cases decided under the Harris Anti-Narcotic Act. Swartz v. United States (C. C. A.) 280 F. 115; United States v. Carney (D. C.) 228 F. 163; United States v. Wilson (D. C.) 225 F. 82; United States v. Friedman (D. C.) 224 F. 276; United States v. Woods (D. C.) 224 F. 278.

And finally in United States v. Jin Fuey Moy, 241 U. S. 394, it was settled by the Supreme Court, in an opinion by Mr. Justice Holmes, that an indictment would not lie under section 8 of that act except against those required to register under section 1. The charge in the indictment was a conspiracy of Jin Puey Moy with Willie Martin to have in Martin’s possession narcotic drugs, Martin not being registered with the collector of internal revenue and not having paid the special tax as required under section 1, tit. 2, of the act (section 10138%). Section 8 declares it unlawful for any person who is not registered and has< not paid the special tax to have in his possession or control any of the said drugs. Judge Thomson of the Western District of Pennsylvania was sustained in holding the general words “any person” must be confined to the class of persons with whom the act previously had been purporting to deal; that is to say, those producing, importing, manufacturing, compounding, dealing in, dispensing, selling, distributing, or giving away such drugs.

It is concluded that the indictments fail to-set forth an indictable offense, and the demurrers are therefore sustained, and the indictments quashed.


author: BREWSTER, District Judge.

text:
    UNITED STATES SHIPPING BOARD EMERGENCY FLEET CORPORATION v. ATLANTIC CORPORATION.
    (District Court, D. Massachusetts.
    May 4, 1925.)
    No. 1805.
    1. Courts <©=>359 — Whether banks are chargeable with interest on checking accounts paid to depositor after service of trustee process is determined by local law.
    Whether banks served with trustee process are chargeable with interest on checking account paid to depositor after service of writ must be determined, if possible, by local law.
    2. Banks and banking <©=3l 19 — Title to money in general deposit in commercial bank passes to bank, and bank’s contract is to honor depositor’s' checks.
    Title to money deposited in general deposit in commercial bank passes to bank, and relation of debtor and creditor is created; bank’s, contract being to honor depositor’s checks so lon^ as it has sufficient funds to do so.
    3. Banks and banking <©=> 153 — Special deposit subject to depositor’s check remains property of depositor.
    Fund, deposited in bank for special purpose-subject to depositor’s check, remains property of depositor.
    4. Garnishment <©=3115 — Bank served with trustee process held not liable for interest on checking account subsequently paid to depositor; “absolutely and without any contingency.”
    Where interest was paid on daily balances of checking accounts at rates- subject to modification or termination at any time by bank, and dependent on whether depositor was borrower, interest was not part of original debt nor due “absolutely and without any contingency,” within G. L. Mass. c. 246, § 32, and bank was not liable for interest paid to depositor after service of trustee process.
    At Law. Action by the United States Skipping Board Emergency Meet Corporation against tke Atlantic Corporation. On plaintiff’s motions to charge trustees under trustee process to extent of sum disclosed in answer, and interest accruing thereon, including interest subsequently paid to principal defendant.
    Motions denied.
    ' Chas. P. Curtis, Jr., of Boston, Mass., for plaintiff.
    Tyler, Tucker, Eames & Wright, and C. H. Tyler, all of Boston, Mass., for defendant.
   BREWSTER, District Judge.

By writ dated November 21, 1921, the United States Shipping- Board Emergency Fleet Corporation brought an action 'at law against the Atlantic Corporation, principal defendant, by trustee writ, in which the New England Trust Company of Boston and the National Union Bank of Boston were named as trustees, ’ and on the same day service was duly made on each trustee.

The trustees filed, answers, from which it appears that at the time' of the service of the writ upon it, the New England Trust Company had in its hands and possession credits of the principal defendant amounting to $100j945.21, and that the National Union Bank had at the same time in its hands and possession credits to the amount of $10,847.-33. The credits in each ease consisted of deposits subject to cheek made by the principal defendant in the commercial department of the respective banking institutions.

Subsequently, but prior to the filing of the plaintiff’s motion, hereinafter referred to, the New England Trust Company paid to the principal defendant (the Atlantic Corporation) interest on the deposit disclosed in its answer amounting to $7,698.40, and the National Union Bank paid to the principal defendant, as interest on the deposit disclosed in its answer, the sum of $585.58.

The trustees, through their proper officers, submitted to examination, and, from evidence thus adduced, it appeared with respect to the deposit in the New England Trust Company -that when the company was served with plaintiff’s 'trustee writ, it noted the attachment on its books, and the amount then standing to the credit of the defendant was thereafter held subject to the trustee process and not subject to withdrawal by the defendant. The trust company had no special agreement with this depositor relative to the payment of interest on its deposit, but when the deposits were made the trust company was paying to all of its depositors ' interest at the rate of 3 per cent, -per annum on daily balances of $500 and over subject ■to cheek. This rate of interest continued until- July 1, 1922, when it was reduced to 2 per cent., and notice of the reduction was sent to all the depositors.

The president of the trust company testified that the principal defendant had been told that the deposit would bear interest at the regular current rate paid to all depositors, and that it was the practice of the .trust company to continue to pay interest on attached funds when the depositor was not a borrower. It appeared further from the evidence that, in paying the subsequently accruing interest to the principal defendant, the bank pursued the custom prevailing among banks in Boston; that these payments were made from time to time during the period from November 21, 1921, to February 21, 1924, since, which time the accrued interest had been paid to the plaintiff with the understanding that the payments should not prejudice any rights of the trustee respecting the interest theretofore paid to the principal defendant; that these pay-ihents to the defendant corporation were made with the knowledge of authorized representatives of the plaintiff whose duty it was to audit and approve payments made by and to the defendant corporation in connection with the work which the defendant had undertaken for the plaintiff. No objections were made to these payments, nor did either of. the trustees receive any request from the plaintiff to hold the interest subject to the attachment.

With respect to the deposit in the National Unión Bank, it appeared that the situation was identical with that of the New England Trust Company, except that the rate of interest during the whole period was 2 per cent. Neither of the trustees withdrew the deposit from its general banking funds or made any change with reference to it, other than to “earmark” the account so as to make sure that the amount would be reserved to answer the trustee process. Each of the trustees had, therefore, the use of the funds after the attachmefit to the same extent as it would have enjoyed if the amount had been allowed by the principal defendant to remain on deposit.

It is on this state of facts that the plaintiff asks this court to charge each trustee with the funds in its hands at the time of the service of the trustee process, and also with the interest which had been paid over to the principal defendant. I take it to be beyond controversy that the question whether the trustees are to be charged with this interest must be determined, if possible, by'the laws'of Massachusetts. The'plaintiff’s claim is based largely on the authority of Adams v. Cordis, 8 Pick. (Mass.) 260. In that case, the principal defendant was a banker, and the trustee owed him on an open account a sum of money which the court found to be an interest-bearing debt. The court there held that the trustee was chargeable not only for the principal of the debt, but the interest accruing thereon; the court drawing a distinction between interest given by way of damages for detention of the debt and interest which is a part of the obligation out of which the principal debt arose.

This important distinction has been followed in Massachusetts down to a comparatively recent time in several eases where the courts, following Prescott v. Parker, 4 Mass. 170, have refused to charge the trustee with subsequently accruing interest on the ground that the subsequently accruing interest was not a part of the debt itself. Norris v. Massachusetts Mut. L. Insurance Co., 131 Mass. 294; Bickford v. Rich, 105 Mass. 340; Smith v. Flanders, 129 Mass. 322.

My attention has not been called to any Massachusetts ease where the rule in Adams v. Cordis, supra, has been applied in order to charge a trustee with interest, but in Savings Bank of Danbury v. Loewe, 242 U. S. 357, 37 S. Ct. 172, 61 L. Ed. 360, the Supreme Court of the United States followed Adams v. Cordis, supra, and charged the Savings Bank, summoned as garnishee under a Connecticut statute, with dividends accruing subsequent to the date of the attachment on deposits made by the principal defendants in the Savings Bank. I have found no case where a commercial bank or trust company disclosing, as trustee, deposits subject to check in the usual course of commercial banking, has been charged with interest- accruing subsequent to the attachment.

The contention -of the plaintiff is so opposed to the accepted practice of banks that it becomes a matter of some consequence to determine whether the rule in Adams v. Cordis, supra, should be extended to reach interest on deposits in commercial banks which have adopted the policy of paying interest on daily balances.

If the decision in Adams v. Cordis, supra, rested upon the-faet that the trustee enjoyed the use of the money, it would inevitably follow from the facts appearing in the ease at bar that the trustees would be chargeable with the interest; but the Massachusetts cases leave one somewhat in doubt 'as to whether the use of the funds should be accepted as a ground for charging the trustee with interest.

In Oriental Bank v. Tremont Ins. Co., 4 Metc. 1, 10, we find the Massachusetts Supreme Court using this language:

“We are aware that in the ease of Adams v. Cordis, the fact that the defendant used the money, for which he was chargeable as trustee, in common with his other funds, during the pendency of the process, was mentioned as a reason why the plaintiff should recover interest. But without deciding, in this case, how far the use of the money may be a ground for charging trustees with interest, we think the main reason, upon which the decision in that case rests, is that the debt was one drawing interest, and that the payment of accruing interest was as much a part of the contract, as the payment of the principal.”

The language employed by Chief Justice Parker in Adams v. Cordis, supra, and Mr. Justice Holmes in Savings Bank of Danbury v. Loewe, supra, strongly indicates that the real ground upon which rests the right to charge trustees with interest is the fact that the interest .is a constituent part of the debt, and inseparable from it. - Thus, in Adams v. Cordis, supra, we find this language:

“The interest is the debt as much as the principal,” and again:

“The ease before us is, in regard to interest, the same as if a promissory note had been given for the balance upon interest; for the defendant states that an interest account was kept, and if he had settled with Williams, he should have paid interest; it was therefore included in and a part of the contract.” (Italics mine.)

In Savings Bank of Danbury v. Loewe, supra, we find this language:

“It was admitted at the argument that in the ease of an interest-bearing debt the subsequently accruing interest was held as well as the principal. The obligation to pay the one stands on the same footing as the obligation to pay the other; the two are one, they are limbs of the same contract, and there is no reason for splitting them up.”

In the same case, when before the Circuit Court of Appeals for the Second Circuit (Loewe v. Savings Bank of Danbury, 236 F. 444, 149 C. C. A. 496, L. R. A. 1917B, 938), Judge Rogers says: “Whatever binds the principal binds that which is inseparable from the principal.”

Thus we find the courts, in the leading eases relied upon by the plaintiff, very much in accord on the proposition that the 'trustee is chargeable with interest subsequently accruing, because the interest equally with the principal is the debt owing to the principal defendant. This is the view taken by this court in the ease of Greenish v. Standard Sugar Refinery, 2 Lowell, 553, Fed. Cas. No. 5,776, where Judge Lowell states that, “In Massachusetts, the rule appears to he, that, if the garnishee owes a debt which by its terms bears interest, he will be bound to pay it, as an incident to the principal, though his power of paying was suspended by the misfortune of an attachment.”

If this reason for the rule is adopted as the controlling one, the Massachusetts statute (G. L. c. 246, § 32), which provides that no person shall be adjudged a trustee by reason of money due from him to the defendant unless it is, at the time of the service of the writ upon him, due absolutely and without any contingency, would appear to have, a significant bearing upon the question under consideration. This statute has been considered by the Massachusetts Supreme Judicial Court in several cases. In the recent case of Krogman v. Rice Bros. Co., 241 Mass. 295, 300, 135 N. E. 161, 164, Mr. Justice Jenney states these propositions as settled in Massachusetts:

“Money cannot be attached by trustee process unless when service is made on the trustee it is due absolutely and without any contingency except that of time. * * * It is immaterial that there may eventually be something due from 'the trustee to the defendant or that it is probable that some amount may become payable. The trustee is chargeable only upon the facts existing when the writ was served on it.”

With these propositions in mind, it becomes necessary to survey the situation presented by the trustees’ answers and the facts developed at the hearing with a view of determining: (1) Whether the interest was a part of the principal debt and inseparable from it; and (2) if not a part of the original debt, whether it was due absolutely and without any contingency. '

The result in Savings Bank of Danbury v. Loewe, supra, does not settle these questions, because in that case the deposits attached were in a savings bank, and, as was pointed out by the Circuit Court of Appeals (236 F. 444, 149 C. C. A. 496, L. R. A. 1917B, 938) a savings bank is conducted solely for the benefit of its depositors, the profits inure wholly to their benefit, and, for that reason, as Judge Rogers states, a savings bank “does not stand in the relation of a debtor to a creditor as does an ordinary bank to its depositors.”

The obligation of a commercial bank to its depositors is well settled and springs from the relationship of the parties. In the

case of a general deposit the title to the money so deposited passes from the depositor to the hank, and the relation of debtor and creditor is created; the bank becoming the debtor to the depositor. National Bank v. Millard, 10 Wall. 152, 19 L. Ed. 897; In re Interborough Consolidated Corporation, Bkt. (C. C. A.) 288 F. 334, 32 A. L. R. 932. Its contract is to honor the checks of the depositor so long as it has sufficient funds with which to do so. Castalian v. National City Bank of Chelsea, 244 Mass. 416, 138 N. E. 398, 26 A. L. R. 1484.

If a fund is deposited in a bank for a specific purpose but subject to the depositor’s cheek, it remains the property of the depositor. Continental & Commercial Trust & Savings Bank v. Chicago Title & Trust Co., 229 U. S. 435, 33 S. Ct. 829, 57 L. Ed. 1268; In re Interborough Consolidated Corporation, Bkt., supra.

In neither ease does the deposit create a trust relationship imposing upon the bank the duty as fiduciary to add to the funds. If the bank is under any obligations at all to pay interest on the deposit, it is because, in order to attract depositors, it has adopted a certain policy relating to the conduct of jts business. The obligation thus arising differs essentially from an obligation arising under an interest-bearing contract, such as a promissory note written -with interest. Here the interest together with the principal will become due and payable without any contingency whatsoever. The maker cannot, by his own acts, relieve himself of his obligation to pay interest any more than he can defeat the holder’s right to the principal. But the obligation of a commercial bank to pay interest is of a different character. The obligation may not be coeval with the obligation to pay over, the principal. It may he modified or even terminated, at the will of the bank, and after notice of such modification or termination the depositor’s rights to interest are affected to a corresponding degree. He cannot assert rights' to more. Thus at all times there exists a contingency that the bank will reduce the amount of interest or will elect to pay no interest at all.

It appeared that a depositor’s right to interest on trustee funds depended upon whether the depositor was a borrower or not, and that it was the prevailing custom among banks to pay over interest, accruing subsequent to the attachment, to the principal defendant.

In the absence of any expressed agreement with the depositor relative to the payment of interest, it would seem that his rights to interest must rest upon the practice and usages of the bank in its dealings with depositors, and, that being so, it would follow as a necessary consequence that these rights must be subject to all the limitations of this practice and usage.

The foregoing leads me to the conclusion that interest which a commercial bank elects to pay on deposits is neither a part of the original debt nor is it due absolutely and without any contingency.

But it may be urged that the money, so far as represented by the deposit, is money due absolutely and without any contingency for which the trustee must be held to answer, and that it is immaterial that the element of uncertainty or contingency may exist respecting interest subsequently accruing thereon. This would be a sound contention if the obligation to pay the deposit and the obligation to pay interest arose from the same contract, express or implied; or, to state it differently, if the obligations were deemed to be part of one and the same debt. But it has already been pointed out that the obligation to pay the principal and the obligation to pay interest are not identical. The obligation to pay the one does not stand on the same footing as the obligation to pay the •other. We are not now dealing with a ease where the interest can be said to be inseparable from the principal. The object of the attachment “is a right, regarded as a thing within reach of the process because of the power of the court over the person subject to -the corresponding obligation. * s If the right is vested the attachment reaches the whole of it. * * * ” Holmes, J., in Savings Bank of Danbury v. Loewe, supra.

Under the Massachusetts statute, if the right is subject to any contingency, it cannot be reached. In the case at bar, the right •of the principal defendant in the debt represented by the deposit was vested and free from any contingency, but its right to the interest was neither vested nor free from • contingency at the time of the service of plaintiff’s writ. Its rights respecting interest were more nearly analogous to a stoek.holder’s rights to subsequently declared dividends which, apart from statute, a trustee process would not reach. Savings Bank of Danbury v. Loewe, supra; Bowman v. Breyfogle, 145 Ky. 443, 140 S. W. 694, Ann. Cas. 1914B, 938; 28 C. J. p. 170, § 215.

The question is a very close one, but when we consider that the intent and purpose of a trustee process is to enable an attaching plaintiff to reach, as security for his judgment, credits in the hands of a person other 'than the defendant, it would involve some play of the imagination to hold that the New England Trust Company had in its hands and possession, as a credit belonging to the defendant at the time of the attachment, $7,-698.40, because it elected to pay that amount for the subsequent use of the deposit, when at the time of the attachment the principal defendant could not havé asserted any rights to interest if the bank had elected not to pay interest on deposits, and when.the rate was then uncertain and subject to change.

In view of the results which I have reached and have above indicated, it becomes unnecessary to determine whether the conduct of the plaintiff, in acquiescing in the payments to the principal defendant, would be sufficient to estop it from now asserting a claim to the interest thus paid with its knowledge and apparent consent.

I understand the trustees have paid ’over to the plaintiff the principal sum disclosed in their respective answers, and therefore, if they are not to be charged with interest, there would seem to be no occasion for further action on the part of the court. With that understanding, and for that reason, plaintiff’s motions will be denied.


author: AUGUSTUS N. HAND, District Judge.

text:
    DAMI v. CANFIELD, Federal Prohibition Director of New York.
    (District Court, S. D. New York.
    April 28, 1925.)
    Intoxicating liquors <@=»I08(IO) — Commissioner of Internal Revenue is necessary party defendant in equity proceeding to review cancellation of permit.
    Under National Prohibition Act, §§ 6, 9 (Comp. St. Ann. Supp. 1923, §§ 10138%c, 10l38%dd), Commissioner of Internal Revenue is necessary party to proceeding in equity, under section 9, to review order of Prohibition Director revoking permit granted under section 6.
    Proceeding by William A. Dami against Palmer Canfield, Federal Prohibition Diree'tor of the State of New York, and Charles W. Anderson, as Collector of Internal Revenue for the Third District of New York, to review revocation of permit granted complainant. On motion to dismiss for non-joinder of Commissioner of Internal Revenue as party defendant.
    Motion granted, unless Commissioner be made party within 10 days.
    James F. O’Neill, of New York City, for complainant.

      Emory R. Buckner, U. S. Atty., of New York City (Frederic C. Bellinger, Asst. U. S. Atty., of New York City, of counsel), for defendants.
   AUGUSTUS N. HAND, District Judge.

Motion is made by tbe United States attorney in the above proceeding to dismiss tbe bill of complaint on tbe ground of nonjoinder of tbe Commissioner of Internal Revenue, wbo is a necessary party. Tbe government relies on the ease of Gnerieh v. Rutter, 265 U. S. 388, 44 S. Ct. 532, 68 L. Ed. 1068, where a bill to restrain tbe Prohibition Director from giving effect to a limitation relating to tbe sale of intoxicating liquors contained in tbe complainant’s permit was held defective because tbe Commissioner of Internal Revenue, who was a necessary party, bad not been joined.

Tbe present proceeding is a review in this court of a revocation of a permit, and it is contended by counsel for tbe party seeking tbe review that here tbe Commissioner is not a necessary party because tbe revocation was not by tbe Commissioner, but by tbe Prohibition Director.

In the case of Gnerich v. Rutter, the permit was issued and signed by tbe Prohibition Director and the regulations, as in the present ease, provided for a general agent of the Commissioner of Internal Revenue called a “Prohibition Commissioner,” wbo was authorized to issue and sign permits and also a local agent in each state called a Prohibition Director.

Section 6, title 2, of tbe Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138%e), reads:

“No one shall manufacture, sell, purchase, transport, or prescribe any liquor without first obtaining a permit from tbe Commissioner so to do. * * Every permit shall be in writing, dated when issued, and signed by tbe Commissioner or bis authorized agent. * * * ”

Section 9 (section 10138%dd) relating to tbe revocation of permits provides that:

“If at any time there shall be filed with tbe Commissioner a complaint under oath setting forth facts showing, or if tbe Commissioner has reason to believe, that any person who has a permit is not in good faith conforming to tbe provisions of this act, or has violated tbe laws of any state relating to intoxicating liquor, tbe Commissioner or bis agent shall immediately issue an order citing such person to appear before him on a day named not more than thirty and not less-than fifteen days from tbe date of service upr on such permittee of a copy of the citation,, which citation shall be accompanied .by a copy of such complaint, or in the event that proceedings initiated by the Commissioner with a statement of the facts constituting the violation charged, at which time a bearing shall be had unless continued for cause. Such-bearings shall be held within tbe judicial district and within fifty miles of the place where-the offense is alleged to have occurred, unless-tbe parties agree on another place. If it be found that such person has been guilty of willfully violating any such laws, as charged, or is not in good faith conforming to the provisions of this act, such permit, shall be reyoked, and no permit shall be granted to such person within one year thereafter.
“Should the permit be revoked by the Commissioner, the permittee may have a review of his decision before a court of equity in. the manner provided in section 5 hereof. During the pendency of such action such permit shall be temporarily revoked.”

It seems clear from a comparison of the-provisions of section 6 relating to the granting of permits, and section 9 relating to the revocation of permits, that the Commissioner. is the real official charged with both the is-, sue and revocation of these permits, and that the Prohibition Director or other official who-may act in the issuance or revocation thereof is no more than his agent.

Indeed, the words “Commissioner or his. agent” appear in the first part of section 9 and the word “Commissioner” alone in the latter part, where the section is dealing with the revocation of permits.

So in section 6, relating to the issuance of permits, it is provided at the beginning of the-section that “no one shall * * * sell * * * liquor without first obtaining a permit from the Commissioner so to do”;, whereas, at the end of the section the provision appears that “every permit shall be in-writing, dated when issued, and signed by the Commissioner or his authorized agent.”'

I can see no possible difference between the section relating to the issuance of permits and the revocation of permits which would justify me in departing from the recent decision of the Supreme Court which-I have cited.

The motion is therefore granted, unless the • Commissioner of Internal Revenue'is made a party hereto within 10 days.


author: MORRIS, District Judge.

text:
    AMERICAN TELEPHONE & TELEGRAPH CO. v. RADIO AUDION CO. et al.
    (District Court, D. Delaware.
    May 16, 1925.)
    No. 461.
    1. Patents <@=>319(1) — Finding of validity and infringement is conclusive that complainant has suffered damage.
    The exclusive right conferred by a patent is-property, and an infringement constitutes a torti’ous taking of a part of that property; hence a finding of validity and infringement is conclnsive that complainant has suffered damage, and the question is not open for consideration in accounting proceedings, the question being solely that of the amount of damages.
    2. Patents <@=>319(1) — When reasonable royalty is recoverable as damages.
    When complainant’s damages from infringement are shown to have been substantial, but there is no established royalty nor proof off lost sales or reduced profits, the proper method of assessing the damages is to ascertain what would have been a reasonable royalty for the infringer to have paid.
    3. Patents <@=>3(9(1) — Factors entering into determination of reasonable royalty for use, stated.
    In determining what would be a reasonable royalty under a patent, the nature of the invention, its utility, advantages, and the extent of its use by the infringer are to be considered.
    • 4. Patents <@=>328 — Reasonable royalty for use of radio patents determined.
    A reasonable royalty to be paid by an in-fringer of the De Forest patents, No. 841,387 and No. 879,532, for improvements in radio apparatus, fixed at 80 cents for each tube embodying the patented features made or sold by defendant.
    In Equity. Suit by tbe American Telephone & Telegraph Company against tbe Radio Andion Company and the De Forest Radio Telephone & Telegraph Company. On accounting for infringement.
    William R. Ballard, of New York City, and William G. Mahaffy, of Wilmington, Del., for plaintiff.
    Victor D. Borst, of New York City, William E. Decker, of Jersey City, N. J., and E. Ennalls Berl, of Wilmington, Del., for defendants.
   MORRIS, District Judge.

A decree having been entered in the suit of American Telephone & Telegraph Company against Radio Audion Company and De Forest Radio Telephone & Telegraph Company enjoining, pending tbe suit, the defendants from infringing De Forest patents Nos. 841,387 and 879,532 ([D.C.] 281 F. 200) and that decree having been affirmed upon appeal ([C. C. A.] 284 F. 1020), it was stipulated by tbe parties that tbe pleadings, affidavits, and exhibits constituting tbe record on tbe preliminary application should stand as tbe record upon final bearing, and that a decree should be entered upon that record and upon tbe opinions filed on tbe preliminary application. A decree was thereupon made awarding to tbe plaintiff a permanent injunction against •both defendants and adjudging that tbe plaintiff recover of tbe Radio Audion Company and its receivers tbe profits and damages arising from tbe infringement. . Tbe accounting has been bad before tbe court and not before a master.

In support of its claim for damages, the plaintiff has not shown or attempted to show by tbe evidence an established royalty, or that it has lost any sales or suffered any lessened profits by reason of tbe infringement. It asserts, however, that it may nevertheless recover general damage or, as it is sometimes called, a “reasonable royalty.” The defendants in tbe accounting challenge tbe soundness of this position, in that, as I understand their grounds: (1) It does not appear from the evidence that tbe plaintiff has in fact been injured or suffered damage, and that, consequently, it has no claim for damages as distinguished from profits; and (2) that tbe evidence is not such as to enable tbe court properly to determine what sum would be a reasonable royalty. I am unable to agree with tbe first of these contentions.

It has been conclusively settled that tbe exclusive right conferred by a patent is property, and that an infringement of tbe patent constitutes a tortious taldng of part of that property. Dowagiac Mfg. Co. v. Minnesota Plow Co., 235 U. S. 641, 648, 35 S. Ct. 221, 59 L. Ed. 398; United States Frumentum Co. v. Lauhoff (C. C. A. 6) 216 F. 610, 615, 132 C. C. A. 614. It seems to me inevitably to follow that a finding of validity and infringement is a finding that tbe person whose patent rights have been infringed has suffered damage. It would seem to be equally clear that a decree adjudging a patent to be valid and infringed and directing an accounting is conclusive upon tbe question of whether or not a plaintiff has been injured, and that that question is not open for consideration or discussion in tbe accounting proceedings. With respect to damages the question upon an accounting bad before tbe master, or before tbe court, as tbe ease may be, is solely one of amount. In tbe question of amount there are involved tbe subordinate questions: (1) Were tbe damages sustained nominal or substantial; (2) if substantial, by what standard is the amount thereof to be ascertained? It is, of course, true that if upon an accounting it appear that the patent though legally valid and infringed, is without real commercial value, or that its rank in the art is negligible and insignificant, or if, on the other hand, it appears that the patent is a valuable one, but the infringement was only a mere trifling infraction of plaintiff’s rights, the value of the property of the plaintiff so tortiously taken by the defendant or converted .to his use is nominal and not substantial, and in such eases only nominal damages, as distinguished from profits, can be assessed against the infringer. But if it be made to appear that the patent infringed is a broad one of great merit and value, and that the infringement has consisted of long-continued use upon a large scale by a defendant of the invention of the patent, it is obvious, the patent being property and the infringement, constituting a tortious taking or conversion of that property by a defendant tó his use, that the damages are substantial and not nominal. The amount of such damages cannot, however, be ascertained by pure speculation.

In eases disclosing an established royalty, or that plaintiff has been deprived by defendant’s infringement of sales or profits that he otherwise would have made, the question of the amount of plaintiff’s damages has presented relatively little difficulty. Thq more troublesome problem has been to. find a standard by which the amount of plaintiff’s damages, when shown to be substantial, could be estimated and measured with reasonable certainty and in a sufficiently accurate way when there is no evidence of an established royalty, lost sales, or lessened profits. But that problem, as I understand the cases, has now been solved. The standard determined upon and fixed is that of general damage or reasonable royalty. Dowagiac Mfg. Co. v. Minnesota Plow Co., 235 U. S. 641, 648; United States Frumentum Co. v. Lauhoff, 216 F. 610, 132 C. C. A. 614; Bemis Car Box Co. v. J. G. Brill Co., 200 F. 749, 119 C. C. A. 229; McCune v. Baltimore & O. R. Co., 154 F. 63, 83 C. C. A. 175. The rule has been stated thus:

“Where damages cannot be assessed on the basis of a royalty nor on that of lost sales nor on that of reduced profits, the proper method of assessing them is to ascertain what would have been a reasonable royalty for the infringer to have paid.” Walker on Patents (3d Ed.) § 563.

It is, of course, obvious that even in cases in which the only proper standard for the measurement of the damages is that of reasonable royalty, there may be lacking sufficient evidence to disclose what a reasonable royalty would be. The Dowagiae and Fru-mentum Cases, upon their presentation to the Supreme Court and the Court of Appeals, respectively, were instances of this, type.

The evidence in the ease at bar establishes that the plaintiff had certain rights either as owner or exclusive licensee, in the patents in suit. (D. C.) 281 F. 200. It likewise discloses that those patents were of great value. Mr. Meyers, under whose management the infringing three-electrode tubes were manufactured by the Radio Audion Company and who was a witness for the defendant, testified : “I believe it is generally agreed by the scientific world that, when Dr. De Forest inserted the grid, he gave the world radio.” With respect to the extent of the infringement, it appears that the Radio Audion Company manufactured at least 36,330 infringing tubes. From an application to these facts of the principles hereinbefore ascertained and stated, it follows, I think, that plaintiff’s property rights were of great value; that those rights were wrongfully and extensively converted by the Radio Audion Company to its own use; that such an (extensive wrongful conversion by the Radio-Audion Company to its own use of such valr uable property of the plaintiff resulted in substantial, not nominal, damage to the plaintiff; and that, since there was no established royalty, and since the plaintiff has not lost any sales or suffered- any lessened profits by reason of the infringement, the-only standard of measurement of damages-at all available to the’ plaintiff is that of' reasonable royalty. But that standard is-also unavailable to the plaintiff unless the evidence in the reeord is sufficient in character and amount to disclose what sum. would constitute a reasonable royalty upon a tube embodying the inventions of the patents-in suit.

Does the evidence reveal' what sum would be a reasonable royalty? I think it does. In Suffolk Mfg. Co. v. Hayden, 3 Wall. (70 U. S.) 317, 18 L, Ed. 76, “no sales-had been made of the patent xi^ht by the plaintiff, or of licenses for the use of it, so as to establish a patent or license fee as a criterion by which to ascertain the measure of damages.” The court below admitted evidence-of thé utility and advantage of this improvement over previous methods. In confirming this action, Mr. Justice Nelson said that in. such cases general evidence must necessarily - be resorted to, and added: “ * * * And what evidence could be more appropriate and pertinent than that of the utility and advantage of the invention over the old modes or devices that had been used for working out similar results? With a knowledge of these benefits to the persons who have used the invention, and the extent of the use by the infringer, a jury will be in possession of material and controlling facts that may enable them, in the exercise of a sound judgment, to ascertain the damages, or, in other words, the loss to the patentee or owner, by the piracy, instead of the purchase of the úse of the invention.” Suffolk Mfg. Co. v. Hayden was relied upon and followed by the Court of Appeals for this circuit in McCune v. Baltimore & O. R. Co. 154 F. 63, 64, 83 C. C. A. 175.

In the Dowagiae Case, in which there was no established royalty, the court said: “In that situation it was permissible to show the value by proving what would have been a reasonable royalty, considering the nature of the invention, its utility and advantages, and the extent of the use involved.”

The nature of the inventions of the patents here in suit, their utility and advantages, and the extent of the use involved, are all made manifest by the evidence in the record and have been hereinbefore pointed out. But in addition to such evidence, the record discloses a contract made between the Radio Lamp Company, the rights under which were subsequently acquired by the Radio Audion Company, and the De Forest Company on the 25th day of November, 1919, whereby the De Forest Company purported to grant immunity to the Radio Lamp Company from suit for infringement of the letters patent here involved by the manufacture and sale of apparatus embodying the invention of the letters patent. It was therein provided: “That the minimum sum that Radio shall pay De Forest under the terms of this agreement on any one or more devices or apparatus sold shall be the sum of one dollar ($1.00) each.” It was therein further provided that after December, 1922, the minimum sum payable for each calendar month should be $3,000., Royalty at that rate was paid by the Radio Audion Company to the De Forest Company at least to and including September, 1921. In a contract made on the 29th day of April, 1919, between the De Forest Company and one Moorhead for the manufacture and sale of apparatus embodying the inventions of the patents in suit, it was provided that for sales under 20,000 in any one month the minimum royalty was to be 20 per centum of a sales price of not less than $4, or a minimum royalty of 80 cents. The sales of the Radio Audion Company did not in any one month amount to 20,000. The De Forest Company likewise made a like agreement for like purposes on the 25th day of November, 1919, with one Cunningham, under which the royalty provided was 80 cents per tube with a monthly minimum of $800. In view of the provisions of the contracts under which the De Forest Company and the plaintiff herein acquired and hold their respective rights (see 281 F. 200; De Forest Radio Tel. & Tel. Co. v. Radio Corporation of America [D. C.] 4 F.[2d] 134; Id. [D. C.] 3 F.[2d] 847), I think these three contracts pertinent evidence upon the question of the amount of a reasonable royalty. It is not shown, however, that any profit was obtained by the manufacturer under any of these contracts. Considering, without here reviewing or discussing, all the evidence pertinent to that question, and bearing in mind that the amount of damages assessed should not exceed the amount of damages clearly established by the evidence, I estimate, conclude, and find that a reasonable royalty for each of the infringing tubes made by the Radio Audion Company would have been 80 cents.

I further find that the defendant made from January 1, 1921, to May 2, 1922, 8,650 tubes; from May 3, 1922, to November 30, 1922, 20,868 tubes; from December 1, 1922, to December 31, 1922, and from January 1, 1923, to January 9, 1923, an aggregate of 6,812 tubes. And that the defendant sold from January 1, 1921, to May 2, 1922, 8,570 tubes; from May 3, 1922, to November 30, 1922, 19,194 tubes; from December 1, 1922, to December 31, 1922, 4,951 tubes; from January 1, 1923, to January 9, 1923, 747 tubes. I am of the opinion that the plaintiff is entitled to have its damages of 80 cents per tube assessed against either the number of tubes so found to have been made or the number of tubes so found to have been sold, and that, by reason of the different conditions prevailing with respect to bonds and otherwise in the several periods, such election may be made for each period. As the damages so to be assessed exceed the amount of profits which, as I view the evidence, were made by the defendant and its receivers, it would serve no practical purpose to state with particularity the items of charge and discharge as established by the evidence.


author: MARTIN, Chief Justice.

text:
    LYMAN v. KNICKERBOCKER THEATRE CO. OF WASHINGTON, D. C.
    (Court of Appeals of District of Columbia.
    Submitted March 3, 1925.
    Decided May 4, 1925.)
    No. 4166.
    1. Appearance <§=24(5) — Venue <§=84 — General demurrer to declaration is waiver of objection to venue or service of summons.
    General demurrer to declaration is waiver of objection to venue or service of summons.
    2. Corporations <§=630(1) — Action properly brought against company in corporate name, even after dissolution.
    Under Gorporation Laws Del. art. 1, §§ 40-43 (Rev. Code Del. 1915, §§ 1954-1957), and Code D. C. § 785, action is properly brought against company in its corporate name, even after dissolution.
    3. Trial <§=63(1) — Plaintiff, relying on doctrine of res ipsa loquitur, cannot in rebuttal for first time introduce evidence of specific negligence.
    One suing for death of patron of theater, resulting from collapse of building, who relied on doctrine of res ipsa loquitur in presenting ease in chief, held not entitled to prove in rebuttal inherent faults in architect’s plans and specifications for building, and defects in both material and workmanship.
    4. Theaters and shows <§=6 — Reasonable care required of owner.
    Theater company is required to exercise only that degree of care that a reasonably prudent man engaged in such a business should exercise.
    Appeal from Supreme Court of District of Columbia.
    Action by Josephine T. Lyman, adminis-tratrix of the estate of David Lyman, against the Knickerbocker Theatre Company of Washington, D. C. Decree for defendant, add plaintiff appeals.
    Affirmed.
    J. L. Smith, J. M. Chamberlin, and Gr. L. Munter, all of Washington, D. C., for appellant.
    W. J. Lambert and R. H. Yeatman, both of Washington, D. C., for appellee.
    Before MARTIN, Chief Justice, ROBB, Associate Justice, and SMITH, Judge of the United States Court of Customs Appeals. '
   MARTIN, Chief Justice.

The appellant, as administratrix of the estate of David Lyman, deceased, filed a declaration against the Knickerbocker Theatre Company, claiming damages upon the ground thbt on January 28, 1922, the intestate regularly paid for admission to the company’s theater, and occupied a seat-as a spectator at a public, exhibition given by the company therein, and that while he remained seated, witnessing the performance, the roof, ceiling, and balcony of the theater fell as a result of the negligence of the company in the construction and maintenance thereof, striking the intestate and causing his death. The ease went to trial to the jury upon a plea of not guilty, with verdict and judgment for the defendant. This appeal followed.

The first question to be considered is one raised by the appellee respecting the venue of the action and the service of summons upon the defendant. It is claimed that the Knickerbocker Theatre Company was a Delaware corporation, and that after the time of the accident, but before the commencement of this ease, it was lawfully dissolved and receivers were appointed for it in the state of Delaware, pursuant to the provisions of section 1957 of the Revised Code of Laws of that state. In the present ease the summons was served by copy left with the president of the company, without service upon the receivers, and it is claimed that' the service was. invalid. We think, however, that this objection was waived when the defendant filed a motion and demurrer to the declaration.

The action Was correctly brought against the company in its corporate name, even assuming that it had been lawfully dissolved. Corporation Laws of Delaware, .article 1, sections 40 to 43 (Rev. Code, §§ 1954r-1957); D. C. Code, § 785. A general demurrer to ‘the declaration, filed by counsel who are officially presumed to possess proper authority to represent the defendant in the action, has the effect of waiving all objections to the venue and service of summons.

At the trial the plaintiff introduced evidence that the intestate was killed by the falling of the roof, while a patron of the theater, also testimony concerning his next of kin, and thereupon rested. It was held that this established a prima facie case for a recovery under the rule of res ipsa loqui-tur.

The defendant thereupon introduced evidence tending to show that the building, in question was erected in the year 1917 and was used as a theater until it collapsed in 1922; that the plans and specifications were prepared by a professional architect employed by defendant, which were duly filed-with and approved by the proper officials of the District of Columbia, and were explained; and placed in evidence; that contracts for materials and labor were let to an experienced and competent general contractor; that all construction work was done under careful and competent inspection;' that while under construction, and when completed, it was inspected and approved by the official building inspectors of the District of Columbia ; that no faults or defects in the building were thereby discovered; and that defendant in general exercised reasonable care and prudence in and about the construction and maintenance of the building for its use as a place of publie entertainment. The evidence up to this point did not attempt to locate or explain the cause of the fall'of the roof in 1922.

The plaintiff in rebuttal then called various witnesses, and tendered certain testimony tending to prove the existence of alleged inherent faults in the architect’s plans and specifications for the building, as well as defects both of materials and workmanship in its construction. This testimony, however, was excluded by the court, upon objection, upon the ground that it was evidence in chief, and was not admissible in rebuttal. We think that this ruling was correct. The application of the rule of res ipsa loquitur did not excuse the plaintiff from the duty of introducing in chief all of her evidence in support of the charge of negligence. She was entitled to rest upon that principle when submitting her case in chief, but she was was not thereby permitted to open up the case again when the time came for rebuttal. The issue was accordingly submitted to the jury upon the evidence aforesaid.

Concerning the degree of care exacted of the defendant in the construction of the theater building the court instructed the jury_ in part as follows (several cases being consolidated) :

“In these cases, gentlemen, the question that is to be determined, really, by you, is whether or not this defendant company exercised due care when, on the night of January 28, 1922, it invited these three people to come and pay the admission and take their seats in the theater and witness that performance. Did the Knickerbocker Theatre Company exercise towards them the due care required of it — the due care, the care that a reasonably prudent man engaged in such a business should exercise with respect to the audience that he invites, under such circumstances, into this theater to witness-a performance that he offers to them for their amusement.

“In connection with that doctrine of res ipsa loquitur, I have stated the rule, but I have granted a prayer of the defendants on that subject, which I feel I must read to you, because it, too, states the law which must be your guide in this particular.
“The jury are instructed as matter of law that the maxim 'res ipsa loquitur,’ referred to in these cases, means that the facts of the occurrence furnish circumstantial evidence of negligence; where direct evidence of it may be lacking, but such evidence is not necessarily to be accepted as sufficient, and, when all the evidence is in, the question for the jury to determine is whether or not the preponderance of evidence as to negligence is with the plaintiffs.
“In eases of this ■ character, where the doctrine ol res ipsa loquitur is invoked, the burden of proving negligence, nevertheless, re-mams upon the plaintiff.
“It is upon -the plaintiffs here to satisfy you, by a preponderance of all of the evidence in the ease, that the defendant, the Knickerbocker Theatre Company, did not exercise the kind of care that was due from it to these plaintiffs, and because it did not therefore it is negligent, and the injury suffered •must be compensated for by it.”

The plaintiff objected to these instructions, claiming that they did not exact from the defendant as high a degree of care as was due from it toward the intestate under the circumstances. The plaintiff accordingly prayed the court to instruct the jury that the 'defendant, in the construction, operation, and maintenance of the theater, “was charged with the highest degree of care.” This and other like instructions presented by the plaintiff were refused by the court.

We are of the opinion that the court’s instruction, defining the degree of care which was required of defendant, was correct, namely: “The care that a reasonably prudent man engaged in such a business should exercise with respect to the audience that he invites, under the circumstances, into his theater to witness a performance that he offers to them for their amusement.” The attention of the jury was thus called to the fact that the safety of large numbers of people would regularly depend upon the manner-in which the building was constructed and maintained, and that the defendant was bound to use such care for that purpose as a reasonably prudent man should exercise for the safety of such assemblages of people. This instruction sufficiently - defined the high degree of care which the defendant was bound to' exercise under the circumstances, and its force and effect differed but little, if at all, from the proposed instruction that the defendant “was charged with the highest degree of care.”

“The duty assumed by the owners of places to Which the public thus resort in large num-hers is manifestly analogous to that which the law imposes upon carriers of passengers. Doubtless the true theory is that such persons assume the obligation of exercising reasonable care, and that what will he reasonable care will he a degree of care proportioned to the danger incurred and the number of persons who will he subjected to that danger.” 1 Thompson, Negligence, § 996.

“What is ordinary care must be determined by the danger which its exercise requires to he overcome, for what would he ordinary care under some conditions might under different conditions amount to the grossest kind of negligence. In other words, the standard of care fixed by law-is due care under the circumstances, and this requires a vigilance commensurate with the danger to he apprehended.” 8 Thompson, Negligence, § 25.

“A person, erecting and using a hall for such exhibitions, must use reasonable care in the construction, maintenance, and management of it, having regard to the character of the exhibitions given and the customary conduct of spectators who witness them, and the acts of the plaintiffs must he judged of according to the conduct which ordinarily prudent people show under the circumstances.” Schofield v. Wood, 170 Mass. 418, 49 N. E. 639.

“Though there are decisions to the effect that the proprietor of a scenic railway in an amusement park should he held to the same degree of Care as is required of a common carrier — i. e., the highest degree of care and. caution consistent with the practical operation of the railway — it is the well-settled general rule that the proprietor of a place of amusement is not an insurer of the safety of his patrons, nor is his undertaking so similar to that of a common carrier of passengers as to call for the application of the same rule of responsibility. He is hound to exercise only the degree of care that would he expected of an ordinarily careful and prudent person in his position, and his duty is fulfilled when he makes the place as little dangerous as such a place can reasonably be made, having regard to the contrivances necessarily used in conducting such a place.” 26 E. C. L. 714.

The lower court'' correctly instructed the jury that the plaintiff was not entitled to a verdict against the defendant, unless they found the charge of negligence sustained by a preponderance of the evidence. Under this instruction the jury found for the defendant, and upon the evidence as submitted in the case we cannot say that the lower feourt erred' when it refused to set the verdict aside.

The record presents numerous assignments of error, which we' need not discuss in detail, since the appeal is disposed of upon the foregoing considerations.

The judgment below is affirmed, without costs.


author: ROBB, Associate Justice.

text:
    WASHINGTON TIMES CO. v. HINES.
    (Court of Appeals of District of Columbia.
    Submitted March 3, 1925.
    Decided May 4, 1925.)
    No. 4157.
    1. Libel and slander <@=>19 — Publication construed in its entirety.
    Meaning of alleged libelous publication is to be determined by a reading of it in its entirety.
    2. Libel and slander <@=>19 — Divorce bill construed as whole, in ascertaining whether newspaper report thereof is libelous.
    Meaning of divorce bill must be determined by reading and considering the bill as a whole, in ascertaining whether newspaper report thereof is libelous.
    3. Libel and slander <@=>501/2 — Newspaper report of divorce bill held not libelous.
    Newspaper report of wife’s bill for divorce, stating that she had been “slugged with a salt shaker, struck in the face, eye blackened, and eyeglasses broken, ad lib.,” held as a matter of law not libelous, since bill was not susceptible of any other interpretation than that given it by newspaper, notwithstanding use by newspaper of word “slugged,” instead of “assaulted,” and statement that assaults had occurred “ad lib.”
    Appeal from the- Supreme Court of District of Columbia.
    Action by Alvin Paul Hines against the Washington Times Company. Judgment for plaintiff, and defendant appeals.
    Reversed and remanded.
    W. J. Lambert, of Washington, D. C., for appellant.
    A. P. Hines, of Washington, D. C., for ap-pellee.
    Before MARTIN, Chief Justice, ROBB, Associate Justice, and SMITH, Judge of the United States Court of Customs Appeals.
   ROBB, Associate Justice.

Appeal by the defendant from a verdict and judgment for the plaintiff in the Supreme Court of the District in an action for libel. Plaintiff’s wife had filed a bill for divorce in the court below, in which the following averments were made :

“III. That the defendant in August, 1917, brutally assaulted this plaintiff, striking her in the face, blacking her eye, and breaking her glasses.; that at another time, in August, 1917, defendant again brutally assaulted this plaintiff, throwing a butter dish at her; that in the fall of 1920 the defendant again assaulted this plaintiff with a salt shaker.
“IV. That this defendant has frequently assaulted and abused the plaintiff, deserting and abandoning her for long periods of time, and then returning and asking to be forgiven and to be taken back into the home.”
“VII. That the defendant has willfully deserted and abandoned your petitioner, refusing to resume matrimonial relations with her, although living in the same house and under the same roof; that he would repeatedly go out and spend the greater part of the night in the company of other women and at various summer resorts, beaches, restaurants, and theaters.”

Thereafter the defendant newspaper published the following article, which forms the basis of this action for libel:

“Salt Shaker Broke Wedded Harmony, Wife Declares.
“Slugged with a Salt Shaker, Struck in the
Face, Eyes Blackened, and Eyeglasses Broken, ad lib.
“All of these little things are alleged to have completely spoiled the connubial harmony of Mr. and Mrs. Alvin Paul Hines, according to a petition for divorce filed yesterday in the District Supreme Court by Mrs. Hines.
“The wife declares her husband frequently goes out and spends the greater part of the night in the company of other women. Mr. and Mrs. Hines were married in 1900. They have two children.”

At the trial the plaintiff expressly waived any claim for punitive damages; that is, he conceded the absence of express malice. The defendant, both at the close of plaintiff’s evidence and at the close of all the evidence, moved for a directed verdict upon the ground that the publication, taken as a whole, was a fair and substantially correct reproduction of the bill in equity filed by the wife, and therefore privileged. But the court, over the objection and exception of the defendant, submitted to the jury the question whether the words “Slugged with a Salt Shaker” and “Struck in the Face, Eyes Blackened, and Eyeglasses Broken, ad lib.,” were justified.

As to the words “Slugged with a Salt Shaker,” the court suggested that in the bill filed in the divorce ease “the only allegation in it in connection with the salt cellar is that there was an assault but not an assault and battery.” As to the second statement, the court left it to the jury to say “whether or not the allegations in that bill [divorce ease] are fairly summarized in one respect by saying the thing was done at pleasure; this sort of thing was done at pleasure.”

In Washington Post Co. v. Chaloner, 250 U. S. 290, 293, 39 S. Ct. 448, 63 L. Ed. 987, the following rule stated by Judge Lurton, later a Justice of the Supreme Court of the United States, in Commercial Publishing Co. v. Smith, 149 F. 704, 706, 707, 79 C. C. A. 410, 412, 413, was approved: “A publication claimed to be defamatory must be read and construed in the sense in which the readers to whom it is addressed would ordinarily understand it. - So the whole item, including display lines, should be read and construed together, and its meaning and signification thus determined. When thus read, if its meaning is so unambiguous as to reasonably bear but one interpretation, it is for the judge to say whether that signification is defamatory or npt. If, upon the other hand, it is capable of two meanings, one of which would be libelous and actionable, and the other not, it is for the jury to say, under all the circumstances surrounding its publication, including extraneous facts admissible in evidence, which of the two meanings would be attributed to it by those to whom it is addressed, or by whom it may he read.”

In 17 Ruling Case Law, 312, the rule is thus stated: “The ordinary signification in popular parlance of the statement made is the vital question in each ease, or, in other words, it is a question of the natural and obvious meaning of the words used.” See, also, Peck v. Tribune Co., 214 U. S. 185, 29 S. Ct. 554, 53 L. Ed. 960, 16 Ann. Cas. 1075, Baker v. Warner, 231 U. S. 588, 34 S. Ct. 175, 58 L. Ed. 384, Washington Post Co. v. Kennedy (C. C. A.) 3 F.(2d) 207 (No. 4142, present term), and Ashford v. Evening Star Newspaper Co., 41 App. D. C. 395.

Just as the meaning of the publication in the present ease is to be determined by a reading of it in its entirety (Bathrick v. Detroit Post & Tribune Co., 50 Mich. 629, 641, 16 N. W. 172, 45 Am. Rep. 63), so must the' meaning of the bill in the divorce ease, the contents of which it purported to state, be determined by a reading and consideration of that bill as a whole. Applying these principles, we now will analyse the averments of the bill for divorce.

The third paragraph, it will be noted, is expressed in a single sentence, the first averment of which is that the husband, the plaintiff in this action, “brutally assaulted this plaintiff [the wife], striking her in the face, blacking her eye, and breaking her glasses.” Clearly, “assaulted,” as used in this clause, can mean nothing less than a battery, and must be so understood by any reader. The manner of the assault consisted of “striking her [the wife] in the face, blacking her eye, and breaking her glasses.” The second clause states that the husband, at another time, “again brutally assaulted this plaintiff, throwing a butter dish at her.” Obviously “assaulted” was here used in the same sense as in the* first clause. In the third clause it is averred that the husband, at another time, “again assaulted this plaintiff with a salt shaker.” It is quite obvious that the same signification was intended to be given the word “assaulted” in this clause that it bore in the two other clauses, for that word not only appears in the same sentence, but is preceded by the word “again.”

In the fourth paragraph of the bill in the divorce action it is averred that the husband “has frequently assaulted and abused the plaintiff,” or wife. There, is nothing to indicate that the word “assaulted” was here used in any other sense than in the preceding paragraph, and we think it apparent that such would be the popular understanding.

Turning now to the publication, is it reasonably susceptible of any other interpretation than that we have given the averments of the bill for divorce? We do not think so. Some stress is placed upon the use in the publication of the word “slugged,” instead of “assaulted.” But the word “assaulted,” having been used as including a battery, was synonymous with “slugged.” Certainly any distinction would be too fine and. metaphysical to be appreciated by the average reader. And as to the statement in the publication to the effect that the assaults had occurred “ad lib.,” or at pleasure, this was in substantial accord with the fourth paragraph of the bill in the divorce action, wherein it was averred that the husband had “frequently assaulted and abused” his wife.

Considering this publication as a whole, and comparing'it with the averments of the bill in the divorce action, we are of the view that the meaning it would convey to the average reader is so unambiguous as reasonably to bear but one interpretation. The question, therefore, was one for the court alone. In other words the motion for a directed verdict should have been granted. Accordingly, the judgment is reversed, with costs, and the cause remanded for further proceedings not inconsistent with this opinion.

Reversed and remanded.