author: GARDNER, Circuit Judge. KENYON, Circuit Judge

text:
    WHARTON v. ÆTNA LIFE INS. CO.
    No. 8846.
    Circuit Court of Appeals, Eighth Circuit.
    March 4, 1931.
    Rehearing Denied April 15, 1931.

      KENYON, Circuit Judge, dissenting.
    W. E. Patterson, of El Dorado, Ark., and T. J. Gaughan, of Camden, Ark. (Patterson & Rector and Walter L Goodwin; all of El Dorado, Ark., and Gaughan, Sifford, Godwin & Gaughan, of Camden, Ark., on the brief),. for appellant.
    Lasker Ehrman, of Little Rock, Ark. (Grover T. Owens, of Little Rock, Ark., on the brief), for appellee.
    Before KENYON and GARDNER, Circuit Judges, and MUNGER, District Judge,
   GARDNER, Circuit Judge.

this action appellant as plaintiff be- , , , , rvi . low sought to recover on three life insurance polieies issued by tbe Mtn& Life Insurance Company, appellee, upon 'the life of John Hawkins Wharton. The answer pleaded that false statements and representations had been made by the insured in Ms application for insurance, and that the policies had not become effective because they were not delivered during the good health of the insured. The policies; so far as their provisions are concerned, are all alike, except that two of them are for $10,000 each, wMle the other is for $5,000. They are all of the same date, and the statements in the application for each are identical. The policies all bear date August -^-> 1928, and the applications all bear date 27,1928. The plaintiff is the beneficiary ^ P°^®es> an(f surviving widow of the insured. The insured died November 18, 1928> of aeute nephritis, commonly called Bright’s disease. Each policy contained the „ ,, . x J 8'

“Au statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and no statement shall avoid the policy or be used in defense to a claim under it unless it is contained in ,, ... , , the written application herefor and unless a « -r* va* • ,, , n , copy of such application is attached hereto -C - j when issued.
“This Poliey and the apphcation herefor, a copy of which application is attached her e- / ^ . \\ « w . to and made a part hereof, constitute the en- \ - .. •, ^ tire contract between the parties hereto,-and it sllall be incontestable after it has been in' force during the lifetime of the insured for a period of one year from its date of issue ex-eept for non-payment of premium.”

Each policy had attached an application signed by the insured. At the bottom of the application, over the signature of the insured, appears the following certificate: “I hereby certify that the above answers and statements are made by me, that they are correctly and fully recorded by the Medical Examiner, and that no material circumstance or information has been withheld or omitted concerning my past and present state of health and habits of life.”

It was urged on the trial that the insured had made false answers to interrogatories 9 and 10 contained in the application. The application was on the printed form furnished by the insurance company, spaces being left in which to write the answers to the interrogatories. At the top of the page on which in-, terrogatories 9 and 10 appear in the application, appear the following printed words in large type:

“Application to the ¿Etna Life Insurance Company
«•D . o /TT -B-1 1 T 1 n 1 m U “Part. 2. (Use Black Ink Only. To be Pho ographed).

Subjoined to this, appears the following pertinent part of the application:

“The following answers must be made to and written by the Medical Examiner who should see that each answer is full and satisfactory. Neither the agent nor any third person should be present. If necessary, use space provided under 'Additional and Explanatory Remarks.’

The answers to these interrogatories are in the handwriting of the defendant’s medical examiner, and each application was dated July 27, 1928, and it appears from the evidenee that on that date the insured, who was a resident of Union county, Ark., was solicited by an agent of the defendant company to take out life insurance. He was thereupon examined by the defendant’s examining physician, and in due time the policies issued lmder date August 11, 1928, and were delivered ^he insured August 21, 1928.

At the conclusion of the evidence, the defendant interposed the following motion for a directed verdict: “We have moved for an instructed verdict in this ease on the ground that the applicant John Wharton made material misrepresentations in connection with the application in answer to No. 10, that he ^d notconsulted or been treated by a physicían wl™n years.”

This motion was granted, and the plaintif£ saved an exception. On this appeal a number of assignments of error appear in the record, but counsel have abandoned all of them, except such as relate to the action of C01lx^ i11 directing a verdict,

Where the evidence is of such a character as reasonable men may reach different conclusions, the ease should be submitted to the jury. Mutual Life Ins. Co. v. Hatten (C. C. A.) 17 F.(2d) 889; Crookston Lumber Co. v. Boutin (C. C. A.) 149 F. 680; United States Can Co. v. Ryan (C. C. A.) 39 F.(2d) 445; Gunning v. Cooley, 281 U. S. 90, 50 S. Ct. 231, 233, 74 L. Ed. 720. In eonsidering this question the eourt must assume that the evidence for the party against whom the verdict was directed, proves all that it reasonably may be found sufficient to establish. In other words, it must be accepted as true for the purpose of determining the eorrectness of the court’s ruling. The rule was stated by the Supreme Court in Gunning v. Cooley, supra, as follows: “And in determining a motion of either party for a peremptory instruction, the court assumes that the evidence for the opposing party proves all that it reasonably may be found sufficient to establish, and that from such fae.ts there should be drawn in favor of the latter all the inferences that fairly are dedueible from them. Texas & Pacific Ry. Co. v. Cox, 145 U. S. 593, 606, 12 S. Ct. 905, 36 L. Ed. 829; Gardner v. Michigan Central Railroad, 150 U. S. 349, 360,14 S. Ct. 140, 37 L. Ed. 1107; Baltimore & Ohio R. R. Co. v. Groeger, 266 U. S. 521, 524, 527, 45 S. Ct. 169, 69 L. Ed. 419. Where uncertainty as to the existence of negligence arises from a conflict in the testimony or because, the faets being undisputed, fair-minded men will honestly draw different conclusions from them, the question is not one of law but of fact to be settled oj tne jury.

With this rule in mind, we turn to an examination of the testimony. First, it should be noted that the motion for a directed verdict was limited to one issue, to wit, whether the insured made material misrepresentations in answering interrogatory No. 10. It is the settled rule of this court that, in order to predicate error upon the refusal of a court to sustain a motion or request to direct a verdict, the motion or request “must be based upon a specific ground or grounds stated in apt words and brought sharply to the attention of the eourt. * * * A general motion stating no grounds is not sufficient.” Public Utilities Corporation v. McNaughton (C. C. A.) 39 F.(2d) 7, 8; Mansfield Hardwood Lumber Co. v. Horton (C. C. A.) 32 F. (2d) 851; Denver Live Stock Commission Co. v. Lee (C. C. A.) 20 F.(2d) 531. It would defeat the purpose of the rule and be manifestly unfair to the party against whom directed, if a motion for direction of a verdiet, based upon one or more specified grounds, should be held to embrace all possible grounds upon which the motion might be supported. As stated in Robinson & Co. v. Belt, 187 U. S. 41, 23 S. Ct. 16,19, 47 L. Ed. 65: “While it is the duty of this court to review the action of subordinate courts, justice to those courts requires that their alleged errors should be called directly to their attention, and that their action should not be reversed upon questions which the astuteness of counsel in this eourt has evolved from the reoord. It is not the province of this court to retry these eases de novo.”

This court in Falvey v. Coats, 47 F.(2d) 856, in referring to this rule, said: “It was due to the lower court that its attention be specifically called to the grounds upon which the motion was based; it was due to opposing counsel so that they might have an opportunity, either intelligently to oppose the motion, or ask to reopen the case for the introduction 0f further testimony, or for leave to amend the pleadings, or to move for a nonsuit; it was due the appellate court so as to enable that court to see whether or not the grounds urged were the same as those presented to the trial eourt. Where a motion for a directed verdict, failing to state the grounds upon which it is based, is denied, it is unfair to the trial court and to the appellate eourt; hut where it is granted, it is unfair to the party against whom it is granted.”

We> therefore, put to one side, as not presented by this record, the contention of t]le defendant that the policies were not depvered while the insured was in good health, Considerable testimony was introduced on this issue by appellee. This issue not having been covered by defendant’s motion, we must assume that it was conceded that this was a jury question.

It appears from the record that the assured was forty-three years of age and had for many years been a resident of Union county, Ark., where he was employed as a salesman for a wholesale grocery company, During the five years immediately prior to 1928, with the possible exception of a few days when he was afflicted with influenza, he had lost no time from his work, and was apparently in excellent health. He was a man of good habits and. fine physical appearanee. In the late spring of 1928 he entered a campaign for sheriff of his county. During a strenuous campaign for sheriff he traveled over his county some three times. About the last of February or the first of March, 1928, the insured complained to his brother, Dr. J. B. Wharton, a practicing physician at El Dorado, Ark., that the night before he had a special meat dinner that unstrung him; that he felt very uncomfortable over night and was restless; that the next morning when he got up he seemed to have some disturbanee in his urinary affairs and had trouble with the bladder. He wanted the doctor to see him, and they went to the clinic where an analysis of his urine was made, also an X-ray picture of his urinary tract. Several analyses of the urine were made over about a period of a week. The first disclosed albumin, red blood cells, and pus cells. The doctor prescribed Mexican salts as a bowel eliminator and as a laxative, and this continued for about a week. After the first analysis, the albumin, blood cells, and pus cells disappeared from the insured’s urine, and, although the examination was kept up for a week or. ten days thereafter, there was no return of the conditions first found. During this time the insured did not go to bed and lost no time from his work, and soon after-wards entered the campaign above referred to-

Dr. Wharton, on being asked whether his brother knew there was blood in his urine, said he thought so. A number of witnesses testified to the good physical condition of the insured for a period of five years prior to August, 1928; that he had not complained of feeling badly, and that during the year 1928 he made a very vigorous eompaign for sheriff of Union county, which concluded in August. On cross-examination, Dr. Wharton testified that he had prescribed for his brother on December 23, 1927, February 12, 1928, February 16,1928, May 9,1928, and July 24, 1928. _ These prescriptions consisted of antimalarial caps^ for cold, calomel, rhubarb, soda, and pepsin as a purgative, Epsom salts and citro carbonate as a laxative, Dovers powder, aspirin and caffeine for a cold, and tincture of aconite for a cold. Some of these prescnptions were signed by the doctor, and some were given over the telephone The doctor, m most instances, communicated with hm brother over the telephone. The doctor testified: “He (the insured usually called me up over the phone and asked me to fix up something lake a p^gative for a cold, and I would call up Mr. HaU and send it to him.” The prescriptions were usually given for a cold or a headache, to relieve constipation or some minor disposition or ailment. The doctor, being asked with reference to citro carbonate, said.

“It comes in crystals like effervescing soda. It is pleasant to take. It is a laxative, I gave him that to carry with him. He liked it. I fixed that up and sent it to him at his request. Here is a prescription written on July 24th, Dovers powder, aspirin, caffeine, a few grains of each. He had been in the dust, driving, he said, and his nose and throat were stopped up, had an acute cold. He had just a summer cold and I prescribed that for him.
«Q. He wasn’t sick in ted? A. No; he. was ou{¡ }¿s campaign. He had a summer cold. I recollect now I gave him that. I reamember it now since I recollect what I gave p for. And here is one on the same date,.a little solution for rhinitis, to dry up the membrane, a little syrup of emulsion, put that ip lactate, of pepsin, as a vehicle to take along and take a solution of that to dry that up, to relieve the irritation in the nose andi throat. That is just an ordinary prescription to take for a cold. And here is one in 1927, He must have had a little cold. I gave him Some tincture of aconite, atrophine sulphate mixture ’to alleviate a little cold. That was back in 1927, in November.”

The doctor testified that the prescriptions, ^rere such as were given to well folks as well as s;e]j folks in that country. The examinations and tests made by Dr. Wharton were, made in the Purifoy-Mayfield Clinie, and he was assisted by Mrs. Aerial Goodwin, teehnicistn, employed at the clinic, and it was she wll0 made the urinalysis, as weU as the X-ray pictures. Both Dr. Wharton and Mrs. Good- ^ testified that they did not disclose to the insured the result of the urinalysis, because they wished first to see whether it amounted to anything, and that when they found on the nexfc day that it had cleared up, and there was n0 return of the condition, they themselves thought nothing further about it. ■

^ tion ag to whether or nofc insured waa in d health on the 21st A t 1&28 wllen the policies were deliyered testi was intr;dueed) showing the result of another examination made .of insuxed,g urine on the 22d 23d or 24t]l of Au; 1928 and based Qn result of that examinati which showed albumin, a few eells and anular oastg ts testi_ fled for the defendant that, if on that date the showed albumin and granular east ^ condition of the insured WOuld be thfl game Qn fte 21st o£ A t E rts £or ^ laintíff however denied this contentionj testifying that at least, without a fuller showag to the health and condition of the patient, it could not be said what the condition of his health would be on any preceding day, as the disease with which he died frequently developed very rapidly. On the 25th of August, 1928, the insured left for Hot Springs, Ark., where he was treated, 'and' there is no question but that from that timé' on he suffered from acute nephritis, or Bright’s disease, dying therefrom November 18, 1928.

As before observed, the issue as to whether the insured was in good health when the policies were delivered is not before us because not covered by the motion, but it is clear that the testimony on the question was such as to make it a jury question. '

Referring to interrogatories 9 and 10 the answers to which it is claimed by the defendant were knowingly false, it is again observed that the motion for directed verdict limited the ground to the answer to mterrogatory 10 However, m considering the ques-turn as to whether the answer to interrogatory No. 10 was knowingly false, it is necessary to refer to the answerto 9c, supra, and hence, liberally construed, the motioni may be said to. cover the answers to both of these mterrogatories. Question 9e was whethj he had consulted a physician or had suffered from any ailment or disease of the stomach, intestines, liver, kidneys or bladder, and his answer was “Yes.” . Under the heading “Nameof disease’’ appears theword “Appendicitis”; under the heaffmg “No. of attacks” appears the number “1”; under the heading Date” appears lOlo’ ; under the heading “Duration” appears the words “1 Mo.”; under the heading “Severity” appears the word “Acute”; under the heading “Result (if within five years name and address of each physician consulted)” appears the words “Appendectomy — without drainage — reeovery.” The disease and operation not having occurred within five years, he was not required to give the name of any physician and did not do so. The directions to the medical examiner, printed at the head of the page, were to the effect that the examiner should see that each answer was full and satisfaertory. The examiner who made out the application, although available, was not called Iby the defendant.

.Can it be said that this answer was false The answer was m the affirmative, and that . . , . • was certainly not a false answer, but it is i • 7 ,, , ,, 4. i 'i „ claimed that the answer taken as a whole nee-•i • 7 , 7 , „ essarily meant that the insured had not con-. ,, . , • • . .7 ,. - , sulted a physician at any other time, and had not suffered from any ailment or disease other than appendicitis: The blank being furnished by the insurance company, and the answers being written by its examining physidan and he not being called, and the insured being dead, left this interrogatory and ansyer standing alone for interpretation. The defendant’s examining physician might have aided the court and jury, had he been placed upon the witness stand, and under these eircumstances we are of the view that it cannot be sfid f*at all reasonable men must have, concluded that the answer to this mterrogaknowingly false The jury might haveRelieved from the evidence, and the fa™rabl® inferences that might reasonably have beenA d™ ^ ^ ¡ ments from much the insured had suffered W0 of a tóvial ebaraet sneh ^ cold eon_ sti ti beadacbe> and ^ attack of tbe fllI) anfl mi M bonestly bave been believed by H as well as b Ms esamining pbysieian, to ^ be<m q£ nQ e uenee. It must be bome ^ mind tbat tbe uncontradioted 6vi. dence was to the effect tbat tbe insured was aQ aeti robust, and apparently healthy M(1 tbat be was not advised ^ to the result of ^ urinal is made b Dr. wbar. t(m and Mrg- Goodwin ^ February or March, 1928 and view o£ ae £aet tfiat thereafter be condllcted a strenu0.us campaign and was not eonflned to bed Untu ^ tbe date o£ ^ a lieati tbe jury might reasonably have coneluded t.bat neither he nor his phygieÍ£m realized tbat be was afflieted even in an incipient stage, with the disease which ultimately eaused bis death.

% one o£, tellm°^^le sb°uld be bere ffidered Dr. Wharton, after testifying that.he had_not advised the msOTed 98 to fbat the examination revealed, waa interrogated as follows:

KQ- He told you he had blood in the urine? A. He thought it was.”

This, to a physician, might indicate a serious condition, but apparently even from a medical standpoint the symptom was not neeessarily serious. The insured, however, was a layman. The symptoms disclosed disappeared, and inasmuch as his physician did not seem to consider the symptoms serious, and did not advise the insured that it was serious, but permitted him to continue in a strenuous occupation, whereas, had the doe- , ,, . , . / . ,,, ,. tor thought him afflicted with Bright’s djs- . ° .., ., , , , , ease, he should have prescribed complete rest, ’ ,. . y, . /, . ,. ’ reasonable men might have concluded that ,, ...... neither the insured nor his physician knew . ,. , ... .. , that the symptoms disclosed a diseased con- .... * ■ ^ . dltlon °£ E a T7 S more a trmal disturbance,

Misrepresentations will not void a policy unless the insured knew they were false, or he were chargeable with such knowledge. Seeurity Life Insurance v. Brimmer (C. C. A.) 36 F.(2d) 176, 179; Bankers’ Reserve Life Co. v. Matthews (C. C. A.) 39 F.(2d) 528, 537; Moulor v. American Life Ins. Co., 111 U. S. 335, 4 S. Ct. 466, 28 L. Ed. 447; Mutual Life Ins. Co. v. Hilton-Green, 241 U. S. 613; Northwestern Mutual Life v. Wiggins (C. C. A.) 15 F.(2d) 646; New York Life Ins. Co. v. Griffith (C. C. A.) 35 F.(2d) 945; Adler v. New York Life Ins. Co. (C. C. A.) 33 F.(2d) 827; Metropolitan Life Ins. Co. v. Johnson, 105 Ark. 101, 150 S. W. 393.

In Bankers’ Reserve Life Co. v. Matthews, supra, this court said with reference to misrepresentations alleged to have been falsely made: “Being representations, they do not void the contract, even though untrue in faet, provided they were honestly madé in the belief by insured that they were true. That is, they must be both untrue and knowingly falsely made by insured.”

In Security Life Insurance v. Brimmer, supra, this court said: “Ordinarily false representations will not avoid a policy unless the assured knew they were false, or he were chargeable with sueh knowledge.”

The burden of proof was, of course, upon the defendant, and fraud is not to be presumed. An applicant for insurance is not required, nor indeed expected, to disclose the faet of consulting a physician for slight or temporary ailments such as an ordinary cold, inability to sleep, constipation, headache, or the like. Adler v. New York Life Ins. Co. (C. C. A.) 33 F.(2d) 827, 832; Bankers’ Life Co. v. Hollister (C. C. A.) 33 F.(2d) 72, 74; Connecticut Mutual Life Ins. Co. v. Union Trust Co., 112 U. S. 250, 5 S. Ct. 119, 28 L. Ed. 708; Mutual Reserve Life Ins. Co. v. Dobler (C. C. A.) 137 F. 550; New York Life Ins. Co. v. Cumins (C. C. A.) 24 F.(2d) 1; Ward v. Standard Accident Ins. Co. (C. C. A.) 30 F.(2d) 328, 63 A. L. R. 842; New York Life Ins. Co. v. Moats (C. C. A.) 207 F. 481; Miller v. Maryland Casualty Co. (C. C. A.) 193 F. 343.

In the case of Adler v. New York Life Ins. Co., supra, greatly relied upon by the defendant, it is said: “It may be that failure to remember diseases or treatments or omissions of sueh as are honestly thought to be trivial or not within the meaning of the questions in an application may disprove the presence of fraud.”

Tn Bankers’ Life Co. v. Hollister, supra, the defendant contended that an answer to a similar question was false, and in the course of the opinion it is said: “Furthermore, the application must be liberally construed in favor of the insured, and, under the weight of authority, an applicant for insurance is not required or expected to disclose the faet of employing or consulting physicians or surgeons for slight and temporary ailments which leave no trace of injury to health, such as an ordinary cold or inability to sleep because of occasional excesses, such as existed in this case.”

In the instant case the insured categorically answered the interrogatory in the affirmative. He did not say that the only time he had consulted a surgéon or had any ailment was when he had appendicitis, and he was not required to give the name of the physician unless the consultation had occurred within five years. The jury might, under the evidence, have believed that the insured in good faith believed that, except for~ the appendicitis, all other ailments for which he had consulted a physician were of a trivial character) To void this policy on the ground of false representation, the answer must not only have been untrue, but it must have been with reference to a material matter, and must have been knowingly false. When it is doubtful whether the misrepresentation was material or not, the question of materiality must be submitted to the jury.

Passing now to the answer to interrogatory No. 10, it is observed that by this interrogatory, the insured was asked whether he had consulted or been examined or treated by any physician or practitioner not named above, within the last five years. The record shows that he had not consulted nor been treated by any physician, except his brother, Dr. J. B. Wharton. In the preceding answer, he had stated that he had consulted a physician. He had in faet consulted but one physician; so when, in interrogatory 10, he was in effect asked what physician not named above he had consulted, having in mind that he had consulted only one physician, he answered “None.” This may have left the an-' swer somewhat ambiguous, but not necessarily knowingly false.

What has been said with reference to the materiality of the matter involved in the answer to interrogatory 9 is, of course, equally applicable here. Not only was the printed matter in this application furnished by the defendant, but the written matter was placed therein by defendant’s representative, so that the entire application, printed and written, was prepared by the defendant; If the application then, as .a whole, was ambiguous, this ambiguity was attributable to th© defendant rather than the insured, and as said by this court in Business Men’s Assur. Co. v. Campbell, 32 F.(2d) 995,. 997: “ ‘The rule is settled that in case of ambiguity that construction of the policy will be adopted. which is most favorable to the insured.’ Mutual Life Ins. Co. v. Hurni Packing Co., 263 U. S. 167, 44 S. Ct. 90, 68 L. Ed. 235, 31 A. L. R. 102. In the absence of fraud, the applicant’s failure to disclose facts about which no questions are asked will not avoid a policy.”

We are of the opinion that under the testimony in this case, with such favorable inferences as might reasonably have been drawn therefrom, the most that can be said is that the facts and attendant circumstances were such that fair-minded men might reasonably draw different inferences or conclusions therefrom, and hence the ease was one for the jury and not for the court to decide.

The judgment of the lower court should be and is reversed, and the cause remanded, with directions to grant the plaintiff a new trial.

KENYON, Circuit Judge

(dissenting).

My firm conviction that the trial court was right in directing a verdiet for the defendant in this case forces me to dissent from the opinion of the majority. The motion to direct a verdiet was on the ground that the applicant made material misrepresentation’s in answering question 10 of the-application. I think the assigned reason of the motion is immaterial if the judgment below was in fact a right one. Stipcich v. Insurance Co., 277 U. S. 311, 48 S. Ct. 512, 72 L. Ed. 895.

The insured received from defendant three policies of life insurance, aggregating $25,-000. Applications were signed on July 27, 1928. The policies were dated August 11, 1928, and were delivered to insured on August 21, 1928. The insured died on November 18, 1928. Insured had $7,000 of insurance on his life prior to these policies.

The policies provided in article 10 that statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties. In my judgment there was no absence of fraud in this matter. The evidence seems overwhelming that the whole performance was an ingenious fraud practiced upon the insurance company, and hence the statements were not merely representations. However, that is not of controlling importance. The applications for the policies contained as stated in the majority opinion questions and answers, the important ones being 9 and 10. The application contained the following:

“I hereby certify that the above answers and statements are made by me, that they are correctly and fully recorded by the Medical Examiner, and that no material circumstance or information has been withheld or omitted concerning my past and present state of health and habits of life.
“Dated at, El Dorado Arkansas,, this 27, day of July 1928.
“In presence of L. L. Purifoy, M. D. Proposed Insured must sign here ‘John Hawkins Wharton.’ ”

I refer to some of the evidence. Mrs. Goodwin, who conducted the Purifoy-Mayfield Clinic, testifies that, in the late winter of 1927 or early spring of 1928, the insured came to the clinic in company with his brother (Dr. Wharton); that she made pictures of his urinary tract and 'examined a specimen of his urine; that Dr. Wharton directed her to make X-ray picture of the urinary tract; that insured came to the clinic alone quite frequently and left specimens of urine on different occasions; that she made these examinations for a week or ten days and made the reports to Dr. Wharton; that the next time Dr. Wharton was there was the 22d or 23d of August, 1928; that he brought a specimen for the urinalysis test; that a report on that was made to Dr. Mayfield, and within a day or two insured went to Hot Springs. These tests showed a very bad condition of the-kidneys and bladder, to which reference is hereinafter made.

Dr. Wharton testified as to the general examinations of his brother, the insured, of the making of X-ray pictures of his brother’s urinary tract; that he took him to the clinic the first time he was there; that his brother brought Mrs. Goodwin specimens for analysis of his urine several times, and that Mis. Goodwin was acting for him in making these urinalyses; that his brother told him of having blood in the urine. Dr. Wharton testified there was no doubt that insured had consulted him as a physician during the five-year period. The evidence shows he doetored him for kidney and bladder trouble, and that he was troubled about his brother’s condition right up to the time the policies were issued.

The question involved is not alone the knowing false answers to questions 9 and 10. but whether insured fraudulently withheld material information from the insurance company as to his past or present condition of health. As to the alleged false answers, it is of course true that material false statements in an application for insurance as to consulting a physician relieve an insurance company from liability if the insured knew that the statements were false. New York Life Ins. Co. v. McCarthy (C. C. A.) 22 F.(2d) 241; Security Life Ins. Co. of America v. Brimmer (C. C. A.) 36 F. (2d) 176; Bankers’ Reserve Life Co. v. Matthews et al. (C. C. A.) 39 F. (2d) 528.

Question 9 is as follows:

“Have you consulted a physician or practitioner for or suffered from any ailment or disease of: * * *
“e. Stomach, Intestines, Liver, Kidneys, or Bladder?
“Yes, Appendicitis, 1 attack, Date? 1913, Duration? 1 month. Severity? Acute. Results? Appendectomy — without drainage— Recovery.”

Did the term appendicitis give any information as to his kidney or bladder trouble? Is the answer to question 10 any fairer or more honest? He was asked in 10 if he had been treated by any physician or practitioner not named above. He said, “No.” No physician was named above, and the evidence shows he had consulted his brother frequently, and he consulted other physicians about the time the policy was issued, though perhaps shortly thereafter. He had had many examinations in the five months preceding that time at the Purifoy-Mayfield Clinic. Why did he not say so in answer to interrogatory 10 ? Why did he not tell about the examinations of his blood and urine by Mrs. Goodwin? It cannot be said that his brother was not another physician than referred to in question 9, because there was no particular physician referred to in 9. The answer to 10 is therefore clearly false, though both answers show a considerable cunning in the effort to conceal the truth as to insured’s physical condition. These answers conveyed no information to the company as to his real condition, which he must have known. All he disclosed was that he had been treated for appendicitis. It was a partially true answer, which may be more deceptive than a falsehood. Truth may be concealed, as well as revealed, by language. The purpose of the application was to secure facts as to his physical condition. He carefully.and ingeniously concealed them. How can it be said that no material fact was knowingly withheld from the insurance company by the insured as to the condition of his health? This relationship demanded good faith both from the insured and from the insurance company. The Supreme Court in Mutual Life Insurance Co. v. Hilton-Green, 241 U. S. 613, 624, 36 S. Ct. 676, 680, 60 L. Ed. 1202, said: “Beyond doubt an applicant for insurance should exercise toward the company the same good faith which may be rightly demanded of it. The relationship demands fair dealing by both parties.” The same point is stressed in Stipcich v. Metropolitan Life Insurance Co., 277 U. S. 311, 48 S. Ct. 512, 72 L. Ed. 895; and in Adler v. New York Life Ins. Co., 33 F.(2d) 827, 832, this court says: “Also, the evidence leaves no doubt of the materiality of the matters concealed. In addition, it is difficult to imagine an honest frame of mind in an applicant who thinks it would be immaterial for an insurer to know that he had been under practically continuous treatment for more than two years immediately preceding and at the time of the application.” The language of this court in Mutual Life Ins. Co. of New York v. Hurni Packing Co., 260 F. 641, 645, is interesting: “A chief part of any insurance company’s business is a discrimination in selecting risks lest the natural and average losses may be exceeded. The purpose of the inquiries made as to prior consultations or treatments-by physicians is to furnish to a life insurance company the information, either that the applicant has had continuous prior good health or the names of the practitioners consulted, so that the company may decide what further inquiries should be made in view of such disclosures. That such consultations were for what seemed to the applicant or his physician but trivial ailments is beside the question. It is the materiality to the company’s investigation and decision as to acceptance of the risk that is involved.. Inquiries as to prior attacks necessitating the attendance of physicians may disclose information not to be found by the medical examiner’s own efforts. The history of the patient may be quite essential to supplement a physical examination.”

Could anything be conceived more untruthful in an application, in view of all the facts, than a statement that nothing was concealed from the company concerning the insured’s past and present state of health ? Eor seven months prior to the application he had been consulting his brother, a physician, and having prescriptions given him. Albumin and pus in the urine are not small or trivial matters, as are sometimes referred to by the courts. They are more than colds and headaches, they are symptoms of incipient Bright’s disease, and a man associating so closely with a doctor brother as this insured did and in constant communication with him must have known his condition. It is contrary to human nature to think it was not fully discussed between them. On his first visit to Mrs. Goodwin’s laboratory in the early spring of 1928, she found albumin, blood, and pus cells in his urine. Was not the company in any semblance of fair treatment entitled to know this before issuing policies for $25,000 ?. She reported to Dr. May-field on the 23d or 24th of August, almost exactly the date of the policies, that her tests then showed a heavy increase of albumin. Was a man in this condition a well man on August 22d When the policies were given ? If the insurance, company had known of the first examination and the pus and the blood in the urine, would it have issued the $25,000 of policies on the life of the man who had taken only $7,000 of insurance when he was well? After the discovery at the second examination that the albumin had greatly increased over what it was at the first examination, the insured with his $25,000 policies, which he could not have secured except by deceiving the insurance company, went to Hot Springs, Ark.,for treatment, and within three months died from Bright’s disease, the very thing that the evidence -shows -he had when the policies were issued. Was there no deception' practiced upon the company? The testimony of his own brother, naturally somewhat reluctantly given, condemns the transaction. Insured consulted him within three days preceding the applications for the policies. If that fact had been disclosed in the applications, would any policies have been issued? In Stipcich v. Metropolitan Life Ins. Co., 277 U. S. 311, 322, 48 S. Ct. 512, 515, 72 L. Ed. 895, the Supreme Court said: “But the respondent’s answer sets up that certain answers given in the written application as to the insured’s recovery from his earlier illness, its--recurrence, and with respect to consultation of -physicians, were false and known by him to be false when he signed the application. It is now suggested that Stipcich in his application made a positive misrepresentation regarding a visit to a physician the day before he applied for insurance. If that were clearly established we would consider it necessary to affirm the judgment below, although we think the rulings on which it was based erroneous.”

My mind is unable to reach any other conclusion than that the insured made false answers to interrogatories 9 and 10 of the applications, and that he knew they were false; that his statement that no material circumstance or information had been withheld or omitted concerning his past and present state of health was absolutely false and known by him to be false. Prom the evidence it is also apparent that he was not in good health on the date of the delivery of the policies and that he. knew he was not in good health. It was his duty to make that fact known to the company. This whole transaction smacks of fraud. "When insured was well he needed only $7,000 of insurance; when marked for death by Bright’s disease he secured $25,000 more by fraudulently concealing from the insurance company his true condition. No one would claim that these policies would have been issued if the company had known his true condition of health. It was his business to tell it the truth. He did not do so. Why then should his beneficiaries profit by this fraud? Appellant is not entitled to recover as a matter of law. It seems to me the trial court on this record could not have permitted a verdict for plaintiff to stand, and hence did right in instructing a verdiefc,


source: Caselaw Access Project

author: SIBLEY, District Judge.

license: Public Domain

text:
    NICHOLS et al. v. UNITED STATES.
    No. 6019.
    Circuit Court of Appeals, Fifth Circuit.
    March 30, 1931.

      Jno. W. Gaines, Jr., of Tampa, Fla., for appellants.

      W. P. Hughes, U. S. Atty., of Jacksonville, Fla. (W. P. Hughes, U. S. Atty., and Louis S. Joel, Asst. U. S. Atty., both of Jacksonville, Fla., on the brief), for the United States.
    Before FOSTER, Circuit Judge, and HUTCHESON and SIBLEY, District Judges.
   SIBLEY, District Judge.

Under an indictment in five counts for using the mails to defraud, Claude Nichols and J. W. Nichols were convicted on all counts, J. B. Nichols on three of them, and Nell Sellers Smith on one. Upon their appeal the assignments of error relate to the sufficiency of the indictment, the refusal of the court to direct a verdict of not guilty, the rulings on evidence, and the instructions to the jury.

The fraudulent plan is set forth fully in the first count. The remaining counts do not repeat it, but each after a formal preamble as to the time and venue alleges: “Said defendants so having devised said scheme and artifice to defraud said Central States Life Insurance Company of St. Louis, Missouri, as hereinbefore set forth and described, in pursuance of said scheme, etc.,” used the mails in a stated way. The objection is that the counts, except -the first, set forth no crime because they do not allege any scheme or artifice to defraud; there being no express adoption of the allegations of the first count. That reference may be made to another count to avoid repetition is well settled. Crain v. United States, 162 U. S. 625, 16 S. Ct. 952, 40 L. Ed. 1097. That a reference in the very form above set forth is sufficient was held in Clark v. United States (C. C. A.) 298 F. 293.

The evidence, though circumstantial, was sufficient to carry the case as to each appellant to the jury. It was contended by the prosecution that in 1926, in Lakeland, Fla., Claude Nichols and J. W. Nichols, his brother, planned to take out life and aeeident insurance in favor of .a fictitious person called William Edward Smith, to keep it in force a while, and then have a fictitious accidental death of Smith and collect the policies through a pretended widow. The evidence shows that insurance for $25,000 with double indemnity in ease of accidental death was procured in the Central States Life Insurance Company, payable to the estate of Smith, and the policies were received and the first premium paid by Claude Nichols. Other policies issued by Shenandoah Life Insurance Company were never delivered because Smith was not produced to be re-examined, or to receive the policies in person. All communications by mail about the insurance were to be through a mail box in Lakeland, Fla., rented in the name of William Edward Smith, whom the postmaster did not know, but through one William Elbert Smith, whom he did know. All premiums that were paid were paid by or through the two Nichols, or by cashier’s checks mailed from places where one of them had been. The policies went into default, and, the company not being able to find Smith, a reinstatement was effected through Claude Nichols. Conflicting statements were made by him about the home of Smith. In February, 1929, Claude Nichols made inquiries in Lakeland about the moral character of the stenographer of a friend there, and whether she would like to make a nice piece of money, but the matter was not followed up. The policies again fell into default, and would become-wholly void" on June 16, 1929. On June 9, 1929, Nell Sellers, the stenographer of J. B. Nichols, who was another brother practicing law at Miami, being on vacation at her parents’ home at Jacksonville, went in company with J. W. Nichols and another man through the rain from Jacksonville to Waycross, G.a., where Nell Sellers and the other man under the name of William Edward Smith were married by the judge of the court of ordinary under a license there procured and paid for by Nichols. The ordinary and his son identified this Smith as the William Elbert Smith of Lake-land; he, however, proving a very good alibi. . The bride and groom went hack with Nichols to Jacksonville. The next day the bride returned to her father’s home and the groom and J. W. Nichols went on to Miami, and on June 13th, joined by J, .B: Nichols, went fishing in Biscayne Bay. At dusk, in a rain squall as to whose occurrence there is dispute, the two Nichols claimed that the boat was overturned, and all three men precipitated into the water, where Smith seemed to drown, but without struggle or sinking, the body floating for some half hour with the face downward, and that they were unable to rescue him, though they were expert swimmers. Becoming exhausted, they swam ashore, and the body floated out to sea in their presence and was never recovered. They saved the boat, however, and came back in it and reported the tragedy. The policies 'were found in the office of J. B. Nichols. He and J. W. Nichols made affidavits of the death, and Nell Sellers executed a proof of death and claim as widow for the insurance. Payment was refused. Inquiry in the county in Florida where the application for insurance stated that William Edward Smith was born was without result. Nothing could be ascertained of his existence in Lakeland. No relative, friend, creditor, debtor, or business associate inquired for him at Miami. No trace of any property or papers or business of his could be found. The- apartment of Nell Sellers was searched in her presence, and, though she claimed that Smith had lived there with her whenever he was in Miami for a year before their marriage, no clothing, papers, or effects of his were found there. She could show no photograph, letter, or keepsake from him. A few persons testified to knowing such a man slightly through introduction to him by Nell Sellers or one of the Nichols, and that this acquaintance w.as not William Elbert Smith, who was alive and at the trial. It was testified that the tide was at full ebb or coming in at the time the drowning was claimed to have happened, and that the body, like the boat, would not have gone out to sea, and that except for a narrow ship channel there was no water at the place which could not be waded at low tide. Experts swore that the body of a drowning person sinks after rising two or three times, and remains under water for forty-eight hours or longer, after which it again rises and floats face up; but there was some dispute as to this. The mailing of letters about the insurance premiums by Claude Nichols, of the affidavits concerning the death by J. B. and J. W. Nichols, and of the proof of death and claim for the insurance through the insurance agent, were the uses of the mail relied on for conviction. Neither appellant testified. The evidence thus stated in outline made a question for the jury as to what th,e truth was, and whether there was any reasonable theory of innocence which would explain all the facts. The jury might well conclude that the insurance was fraudulently taken out, and that no drowning occurred; Nell Sellers being taken into the scheme to pretend a marriage and become the sole heir on promise of some sort of division of the money. Although she did not personally mail anything, she executed the insurance claim, intending that it should be mailed to the company by its agent, as it in fact was. She thereby caused the mail to be used to carry out the scheme. She was convicted only on the last count, which relates to the mailing of this paper. There was no error in submitting the case to the jury.

The cashier’s cheeks sent to the insurance company in payment of premiums had nothing on them or accompanying them to show who sent them. Each one came through the post office of a place at which one of the Nichols had resided. The objection that it was not proved that either of them had sent the checks was not good. The payment of the premiums to keep the insurance in force was part of the res gestas, what happened about the insurance. That it was only shown that the Nichols might have paid them rendered the evidence of little weight, but did not make it inadmissible.

The testimony of persons at Lakeland, such as the postmaster, that they had never known of a William Edward Smith there, that his name was not in the city directory or telephone books, and that on inquiry they could not learn of him, was admissible. Had they been persons with no especial opportunity to' know the residents of Lakeland, and had they made no inquiry for Smith, their not knowing him would have proven nothing. But the burden of showing that no such person had lived in Lakeland could have been borne in no other way than by such proof as was offered. While not a demonstration, it was some evidence of the negative fact to be proved. 23 C. J. “Evidence,” §§ 1762, 1790.

Testimony was admitted that J. B. Nichols seemed nervous while investigation was in progress touching the boat used on the fishing trip. This was, of course, as objected, a conclusion or opinion of the witness. But where the impressions giving rise to the conclusion cannot be given to the jury so as to enable them to draw the proper conclusion as well as the witness, the conclusion of the witness in connection with the best details of his observations that he can give is allowable. Mayor v. Wood; 114 Ga. 370, 40 S. E. 239. This rule is constantly applied to interpretations of expression of the face or the demeanor of an observed person. 22 C. J. “Evidence,” § 705.

Evidence that Claude Nichols on his way to Miami in February, 1929, inquired at Lakeland as to the moral character of his friend’s female stenographer, and whether she would be interested in making a nice piece of money, was not irrelevant. It was admitted as tending to show that Claude Nichols was seeking a widow for William Edward Smith, later found in Nell Sellers at Miami.

The testimony of physicians and others who had had long and varied experience with drowning .and drowned persons as to the behavior of the bodies of such was correctly allowed. This was a proper field for expert testimony, and expertness can come through experience as well as special education. 22 C. J. “Evidence,” § 606.

We have examined the instructions to the jury complained of, and find no cause for reversal therein.

Affirmed.


author: NORCROSS, District Judge.

text:
    OLYMPIC SALT WATER CO. v. SHIPOWNERS’ & MERCHANTS’ TUGBOAT CO.
    No. 6208.
    Circuit Court of Appeals, Ninth Circuit.
    March 9, 1931.
    Rehearing Denied April 13, 1931.

      Morrison, Hohfeld, Foerster, Shuman & Clark and Forrest A. Cobb, all of San Francisco, Cal., for appellant.
    Thacher & Jones, of San Francisco, Cal. (Thomas A. Thacher, Harrison A. Jones, and W. Kevin Casey, all of San Francisco, Cal., of counsel), for appellee.
    Before RUDKIN and WILBUR, Circuit Judges, and N0RCR0SS, District Judge.
   NORCROSS, District Judge.

This is an appeal from a deeree of nonliability in favor of appellee as owner of the American tug Sea Ranger, awarded upon its petition for exoneration from and limitation of liability filed in pursuance of the provisions of sections 183-188, 46 USCA. Appellant filed a claim for damages to its wharf and an answer alleging such damage was occasioned by the negligence of said tug and its owner in attempting to tow the disabled steamer Yosemite into San Francisco Bay, on account of which negligence the tow was lost outside the Golden Gate and the wreck came ashore, subsequently colliding with the wharf, causing damages in the alleged sum of $38,000.

The question of negligence is presented in connection with the following main facts:

About 1 o’clock a. m. February 7, 1926, appellee heard that the wooden steam schooner Yosemite was in distress in the vicinity of Point Reyes. At 3:45 a. m. appellee dispatched the tug Sea Ranger to assist or salvage the Yosemite. Four hours later the tug located the then abandoned vessel, which was in a partially submerged condition. A hawser was placed on board and the tug proceeded towards San Francisco with the Yosemite in tow. About 9 p. m. the San Francisco lightship was reached, at which point approximately two-thirds of the towage, had been performed, the destination being Butehertown flats in San Francisco Bay. The bar preceding the main ship channel entrance towards the Golden Gate was crossed at about 12:30 a. m. February 8th. After crossing the bar and proceeding for about two and one-half miles in the main ship channel entrance, the Yosemite, or her after end, sank and touched bottom. About 3:30 a. m. the tug parted the hawser. The sunken vessel was left in the channel and the Sea Ranger returned to San Francisco. At about 7:40 a. m. of the same day, February 8th, the main portion of the hull of the Yosemite was found by the beach patrol of the Coast Guard ashore about one-quarter of a mile south of appellant’s wharf. The vessel remained stranded at that point on the ocean beach for four days and until February 12th, when by reason of a severe storm the hulk was lifted off the beach and floated north, striking and injuring appellant’s wharf.

The court below found:

“That the petitioner’s tug ‘Sea Ranger’ was not negligent in determining to tow the steamer ‘Yosemite’ into San Francisco Bay through the Golden Gate; that there was no negligence in selecting the main ship channel for this purpose; that there was no negligence in attempting the passage of this channel under the conditions of weather and tide then prevailing; that there was no negligence in the conduct of the navigation of tug and tow; and that the grounding and breaking away of the ‘Yosemite’ was not due to any negligence on the part of the ‘Sea Ranger.’ ”

Counsel for appellant contend that practically all the testimony on the issue of negligence is by deposition, including all of appellant’s testimony, and being an admiralty appeal and hence a trial de novo, this court is in as good a position as the trial court to determine such issue. The testimony of Captain Genereaux, who, at the time of the injury, was in command of the Sea Ranger, was taken upon the part of appellee by deposition. The testimony of Captain Clark, who was also at the time in the employ of appellee and on board the Sea Ranger, was taken by deposition upon the part of appellant. It is the contention -that the testimony of Mate Gallagher of the Sea Ranger and that .of Captain Johnson, who at the time was Warrant Officer in the Coast Guard and in charge of the Point Bonita Coast Guard station, “contribute nothing to the facts”; that “they were used especially as experts”; that “it is on the testimony of Captain Genereaux and Captain Clark alone that the facts bearing on the issue of negligence must be determined.”

The contention that the facts bearing on the issue of negligence must be determined alone from the depositions of Captains Genereaux and Clark is not supported by the record. Captain Johnson, who had been in the Coast Guard Service on the Pacific Coast for thirty-six years, fifteen of which had. been spent in and about the Bay of San Francisco, was not only qualified as an expert, but was a witness to most of the occurrences from the time the towage started. He was aboard the tug at the time it crossed the bar and at the time it parted the hawser. He then returned to his power launch, which had been accompanying the tow, stating he would stand by to warn traffic of danger.

This case is not within the rule applied by this court in the case of The Santa Rita, 176 F. 890, 893, 30 L. R. A. (N. S.) 1210, where it was observed “that libelant’s principal witnesses, * 'i: * testified by depositions,” but comes within the general rule re>ferred to in the opinion in that case and frequently applied by thi% court in other eases, to the effect that the findings of the trial court upon conflicting testimony should not be disturbed except for manifest error. Sorenson v. Alaska S. S. Co. (C. C. A.) 247 F. 294; The Beaver (C. C. A.) 253 F. 312; The Hardy (C. C. A.) 229 F. 985; The Yucatan (C. C. A.) 226 F. 437.

Error is assigned in the failure of the court to find that the petitioner “negligently abandoned the ‘Yosemite’ without attempting to secure her or to anchor her, or to prevent her from breaking up.”

The court below found from the evidence “that the grounding and breaking away of the ‘Yosemite’ was not due to any negligence on the part of the ‘Sea Ranger.’ ” There' is, no showing that the Sea Ranger or its owners failed to perform any duty required subsequent to parting the hawser. The Yosemite sank, and further towage was out of the question. The officer in charge of the Coast Guard station was on the scene, and stated he would stand by in his power launch to warn any traffic of danger from the sunken vessel. The next morning the main portion of the hull of the sunken vessel was found by the Coast Guard on shore. The vessel was a wreck. The following day the owners of the Yosemite abandoned her and surrendered the vessel’s documents at the United States Custom House at San Francisco. After abandonment the wreck was subject to removal by, the United States. 33 USCA § 409.

In the case of Red Star Towing & Transportation Co. v. Woodburn (C. C. A.) 18 F.(2d) 77, 79, the court said:

“A tugowner is no more responsible for the eventual collision, when he himself suffers from his earlier fáult, than when another is the victim. The statute establishes a new duty arising after the sinking, and demanding as its condition nothing but the fact and notice of it to the wreck owner. Though the tug be a guilty party to the original mishap, the duty is not ordinarily upon her to provide against further loss; the statute imposes the duty upon the owner alone, and absolves the tug from subsequent consequences, which conceivably might otherwise be thought to be the proximate result .of her original fault”.

See, also, the ease of The Anna M. Fahy (C. C. A.) 153 F. 866.

Deeree affirmed.


text:
    NAGLE, Commissioner of Immigration, v. LIM FOON.
    No. 6200.
    Circuit Court of Appeals, Ninth Circuit.
    March 16, 1931.

      Geo. J. Hatfield, U. S. Atty., and Albert C. Wollenberg, Asst. U. S. Atty., both of San Francisco, Cal., for appellant.
    Stephen M. White, of San Francisco, Cal., for appellee.
    Before BUDKIN and WILBUR, Circuit Judges, and NORCROSS, District Judge.
   NORCROSS, District Judge.

This is an appeal from an order and judgment granting a writ of habeas corpus and discharging the petitioner, appellee, from the custody of appellant.

The proceeding was heard upon the allegations of the petition. The salient faets therein alleged are as follows:

The petitioner is of Chinese descent, bom in China. In June, 1908, he was admitted to the United States by the immigration authorities of the port of San Francisco under the status of a minor son of a lawfully domiciled Chinese merchant. In June, 1915, the petitioner pleaded guilty to the crime of murder in the first degree before the superior court of San Joaquin county, Cal., and was by that court sentenced to life imprisonment at the State Penitentiary at San Quentin, from which institution he was paroled in 1925. From the date of his admission in 1908, petitioner resided and remained in the United States until November, 1927, when he departed through the port of San Francisco for a temporary visit to China. At the time of his departure he was in possession of a so-called laborer’s return certificate, form 432, issued to him by the immigration authorities for the Port of San Francisco on the 18th day of October, 1927. Prior to the issuance of such certificate, the matter of petitioner’s prior conviction, prison service, and parole was investigated and known to the authorities issuing the certificate. In July, 1928, petitioner returned from his visit to China to the port of San Francisco, and, upon presenting his said certificate to the immigration authorities, was permitted to enter the United States. Following his admission last mentioned, petitioner continued to reside and remain in the United States until September 21,1929, when he departed therefrom through the port of San Francisco on a round trip voyage on the steamship Malolo as a member of its crew. At the time of his last-mentioned departure, he was in possession of a so-called laborer’s return certificate, form 432, issued to him by the immigration authorities. The steamship Malolo was a vessel of American registry and ownership. The round trip voyage was completed on the 20th day of December, 1929'. Upon arrival at the port of San Francisco, petitioner was taken into custody by the immigration authorities. Upon a hearing before the Board of Special Inquiry, he was denied admission and ordered deported to China upon the following ground:

“That he is an alien and not admissible to the United States for the reason that he is one of a class who has been convicted of and has admitted having committed a felony or other crime or misdemeanor involving moral turpitude, to-wit: murder in the first degree, and that he was convicted of said crime and sentenced to serve for the period of his natural life, in the State Prison, of San Quentin, as contemplated in Section 3 of the Immigration Act of 1917.

Upon appeal to the Secretary of Labor, the order of deportation was affirmed.

Three questions of law are presented upon the record, and they will be considered as and in the order stated in appellant’s brief,

“(1) Does a laborer’s return certificate under the Chinese Exclusion Act, exempt the holder thereof from the provisions of the General Immigration Act?”

In the case of Hee Fuk Yuen v. White, 273 F. 10, 13, this court had under consideration the question whether a merchant’s return certificate was conclusive of the question of right to readmission. From the opinion in that case we quote the following excerpt: “The purpose of readmission certificates is to avoid detention and to facilitate the readmission of Chinese aliens who are entitled to return to the United States under the Chinese Exclusion Laws. They have no binding effect as adjudications of the right to return.”

In addition to the authorities cited in the Hee Fuk Yuen Case may be cited the case of Hom Yuen v. United States, 214 F. 57, 59, wherein the Circuit Court of Appeals for the Second Circuit in its opinion stated: “The proposition that there is any finality about the 'return certificate’ is wholly unfounded.”

It is also well settled that the general immigration laws are coexistent with the Chinese Exclusion Acts, and alien Chinese are subject also to the provisions thereof. United States v. Butt, 254 U. S. 38, 41 S. Ct. 37, 65 L. Ed. 119; United States v. Wong You, 223 U. S. 67, 32 S. Ct. 195, 56 L. Ed. 354.

The question considered is answered in the negative.

“(2) Is the excluding provision of Section 3 of the Immigration Act of February 5, 1917, relating to aliens convicted of a erime, limited to aliens who were convicted of a crime outside the United States?”

Section 3 of the Immigration Act of February 5, 1917 (8 USCA § 136), provides as follows: “That the following classes of aliens shall be excluded from admission into the United States; * * * persons who have been convicted of or admit having committed a felony or other crime or' misdemeanor involving moral turpitude.”

Taking thB ja^guage of section 3 by b-sejf; may be conceded that it is sufficiently generaj ^ be inclusive of aliens convicted q£ a erime either within or ^thout the United stateg>. ^ seetiorl) boweverj is to be eonstrued wia referenee to the act as a whole and the purposes occasioning its enactment. Wong Yow v. Weedin (C. C. A.) 33 F.(2d) 377. This and other sections of the Act of February 5, 1917, are re-enactments with slight changes or modifications of prior legislation on the same subject. This statute also may be said to have been enacted in the light of the construction placed on prior acts by the courts. Looe Shee v. North (C. C. A.) 3.70 F. 566.

Considering the purpose of such enaetments, this court, in Haw Moy v. North, 183 F. 89, 91, said:

“The general objeet of the immigration statutes is not only to prevent the admission of undesirable and forbidden classes of aliens, but to remove from this country all such aliens who may have succeeded in effecting an entry, That Congress has power to legislate as to both classes of aliens has been settled by many decisions of the courts and is not now open to investigation. Each class is equally undesirable, and each is equally inimical to the best interests of the country at large. In the Immigration Act of February 20, 1907 (34 Stat. 898), which is the latest expression of the legislative will upon the subject, Congress has provided, in section 2, that certain classes of aliens therein enumerated shall be excluded from admission to the United States. * * * Sections 19, 20, and 21 provide for 3he deportation of aliens found in the United States in violation of law. * * *
“It will be seen from this legislation that Congress intended to exercise its admitted jurisdiction not only in excluding defective and undesirable aliens who might be seeking entry into this country, but also to deport those who, having entered, were found to be unlawfully here.”

Section 19 of the Act of 1917 (8 USCA § 155), provides as follows: “ * * * any alien who, after February 5, 1917, is sentenced to imprisonment for a term of one year or more because of conviction in this country of a crime involving moral turpitude, committed within five years after the entry of the alien to the United States “ * * ; any alien who was convicted, or who admits the commission, prior to entry, of a felony or other crime or misdemeanor involving moral turpitude; * * * shall, upon the warrant of the Secretary of Labor, be taken into custody and deported. * * * The provision of this section respecting the deportation of aliens convicted of a crime involving moral turpitude shall not apply to one who has been pardoned * * * ; nor shall any alien convicted as aforesaid be deported until) after the termination of his imprisonment.”

It is dear that the purpose of section 3 was to exdude certain classes of aliens therein described. It is also clear from the provisions of section 19 that its purpose was to provide for deportation of certain aliens for certain reasons. No reason appears why an alien who has committed an offense within the United States involving moral turpitude subsequent to five years’ lawful entry and residence is not subject to deportation, and yet may be subject to a denial of entry upon a return permit and deported when that fact appears. If he committed such an offense without the United States, it is immaterial when the same was committed; he is subject to deportation. The right to deport in the ease of an alien denied admission is incident to such denial. In the case of the appellee, however, there is in section 19 an express prohibition of his deportation until after termination of imprisonment. A mere parole is not a termination of imprisonment. It is subject to revocation at any time. In this ease the court below remanded the appellee “to the custody of the prison authorities of the State of California.” The two sections should be construed in the light of each other, and so construed section 3 (8 USCA § 136 (e) is not inclusive of a felony or other crime or misdemeanor involving moral turpitude committed within the United States subsequent to five years after an original lawful entry. See Wilson v. Carr (C. C. A.) 41 F.(2d) 704.

“(3) Is an alien seaman subject to the excluding provisions of section 3 of the Immigration Act of February 5, 1917, upon his return from a round trip foreign on an American vessel?”

This question is answered in the negative by the decision of this court in Weedin v. Banzo Okada, 2 F.(2d) 321.

The case of United States v. Day, 279 U. S. 398, 49 S. Ct. 354, 73 L. Ed. 758, relied on by appellant, is not in conflict with the Weedin Case. The court in that ease expressly stated that it was dealing only with the question of entry.

Order and judgment affirmed.


author: THOMPSON, Circuit Judge.

text:
    STOVER v. VALLEY NAT. BANK OF CHAMBERSBURG, PA., et al.
    No. 4484.
    Circuit Court of Appeals, Third Circuit.
    March 10, 1931.

      John McD. Sharpe and Walter K. Sharpe, both of Chambersburg, Pa., for appellant.
    Edmund C. Wingerd, Edwin D. Strite, and Minehart & Crider, all of Chambersburg, Pa., for appellees.
    Before BUFFINGTON, WOOLLEY, and THOMPSON, Circuit Judges.
   THOMPSON, Circuit Judge.

This ease is here on appeal from an order and decree of the District Court dismissing the appellant’s exceptions to an order of a referee in bankruptcy disallowing two claims of the appellant based upon mortgages upon real estate of the bankrupt as preferred claims and allowing them only as unsecured claims under the following circumstances:

On August 16, 1927, Emmert Sheely was adjudged a bankrupt and the cause referred to a referee in bankruptcy. The appellant) John P. Stover, filed with the referee a claim for $6,000 based upon a mortgage executed March 31, 1924, and a claim for $4,000 based upon a mortgage dated March 13, 1925. Both mortgages were recorded in the office of the recorder of deeds for the proper county on June 29, 1927, which was within four months of the filing of the petition and adjudication in bankruptcy. The mortgagee claimed a preference in the amount of the mortgages, with interest, out of the proceeds of the sale of the real estate described in the mortgages. Stover’s claims were allowed by the referee then in office.

The Valley National Bank of Chambers-burg, appellee; had, on July 11,1927, entered judgment upon a judgment note, payable on demand, dated April 14, 1921. The Citizens’ National Bank of Greeneastle, appellee; and other creditors held claims based upon notes and upon judgments entered after the recording of Stover’s mortgages. There were no other mortgages against the land mortgaged to Stover.

The referee who allowed the claims having died, the Valley National Bank of Chambersburg, a creditor, presented a petition to the referee who succeeded him to reconsider and disallow the claims as preferences and to hold that they are entitled to no preference or priority in the distribution of the proceeds of the sale of the real estate. After hearing, the referee entered an order disallowing both claims as preferred and allowing each claim as an unsecured claim with interest. To that order Stover excepted, whereupon the matter was brought before the court upon a certificate for review. The District Judge dismissed the exceptions and sustained the dis-allowance of the claims as preferred claims.

It is not disputed that the two mortgages were executed and delivered for present and valuable consideration in the principal amounts thereof; that at the time they were executed and delivered, Sheely, the bankrupt, was solvent; that, at the time they were recorded, there were no other mortgages, judgments, or liens of record against the real estate covered by the mortgages; and that at the time of recording, Sheely was insolvent and Stover had reason to believe that he was insolvent.

The District Judge followed the conclusions reached in the cases of In re Dundore (D. C.) 26 A. B. R. 100, and English v. Ross (D. C.) 140 F. 630. In his opinion the learned judge said, in construing section 60, paragraphs a and b, of the Bankruptcy Act (11 USCA § 96 (a, b):

“The application of paragraphs a and b above quoted depends upon the meaning to be given to the phrase in paragraph a ‘if by law such recording or registering is required.’
“The Act of Assembly of Pennsylvania of April 27,1927, P. L. 440, § 1 (21 PS § 622), provides for the recording of mortgages, as follows:' ‘ * * * No mortgage, or feasible deed in the nature of a mortgage, shall be a lien, until such mortgage or defeasible deed shall have been recorded, or left for record, as aforesaid.’ ”

Under the act of Assembly of Pennsylvania, cited above, we agree with the court below that the recording of the mortgages as transfers was “required” in order for them to become liens upon the real estate of the mortgagor. What their status would have been without recording is not before us. The question is whether the transaction constituted the two mortgages voidable preferences as against any other creditors of Sheely’s estate in bankruptcy represented by the trustee. It is undisputed that, at the time of recording, there were no other creditors, having liens upon the real estate in question, who would, by judgment or otherwise, be regarded in the law as creditors of the same class.

In Bailey v. Baker Ice Machine Co., 239 U. S. 268, 36 S. Ct. 50, 60 L. Ed. 275, the Supreme Court construed section 47a, cl. 2, of the Bankruptcy Act, 11 USCA § 75 (a) (2) vesting the trustee with all the rights, remedies, and powers of a judgment creditor holding an execution duly returned unsatisfied as meaning that, when not otherwise provided, the rights, remedies, and powers of the trustee in bankruptcy are determined with reference to the conditions existing when the petition is filed, and that a trustee in bankruptcy cannot, under section 47a, cl. 2, of the Bankruptcy Act, 11 USCA § 75 (a) (2), assail a contract of conditional sale filed prior to, but within four months of, the petition on the ground that he has the status of a creditor fastening a lien under the provisions of a state law on the property prior to the recording of the contract; and this because the trustee acquires that status only from the filing of the petition. See Dudley v. Easton, 104 U. S. 99, 26 L. Ed. 668.

And in Carey v. Donohue, 240 U. S. 430, 36 S. Ct. 386, 389, 60 L. Ed. 726, L. R. A. 1917A, 295, the court said: “The limitation of the provision to those transfers which are ‘required’ to be recorded under the applicable law is not to be taken to be an artificial one by which the rights of creditors are made to depend upon the presence or absence of local restrictions adopted, alio intuitu, in the interest of others. Rather, as we have said, we deem the reference to be to requirements of registry or record which have been established for the protection of creditors, — the persons interested in the bankrupt estate, and in whose behalf, or in whose place, -the trustee is entitled to act. And where, as in this case, there is no such requirement, and the transfer was made more than four months before the filing of the petition in bankruptcy, there can be no recovery under § 60 [11 USCA § 96].”

In Martin v. Commercial National Bank, 245 U. S. 513, at page 519, 38 S. Ct. 176,178, 62 L. Ed. 441 it is said:

“The word ‘required’ in section 60b [11 USCA § 96 (b)] refers directly to statutes in many states relating to recording which through various forms of expression seek to protect creditors by providing that their rights shall be superior to transfers while off the record. Recognizing the beneficial results of these enactments and intending that rights based thereon might be utilized for the advantage of bankrupt estates, Congress inserted (amendment of 1910) the clause ‘or of the recording or registering of the transfer if by law recording or registering thereof is required.’ In Carey v. Donohue we pointed out that purchasers are not of those in whose favor registration is ‘required,’ but that the reference is to persons concerned in the distribution of the estate, i. e., ‘creditors including those whose position the trustee was entitled to take.’ And we think it properly follows that before a trustee may avoid a transfer because of the provision in question he must in fact represent or be entitled to take the place of some creditor whose claim actually stood in a superior position to the challenged transfer while unrecorded and within the specified period.

“The Georgia statute imposes the requirement of registration only in favor of a creditor who fixes a lien on the property before recording takes place. Here there is no such person; the trustee occupies the status of one who acquired a lien after that event. No one concerned in the distribution of the estate actually held rights superior' to the mortgage while off the record.”

See, also, Bunch, Petitioner, v. Maloney, Trustee, 246 U. S. 658, 38 S, Ct. 425, 62 L. Ed. 925, where, in a per curiam decision, a decree of the Circuit Court of Appeals of the 8th Circuit (233 P. 967) was reversed upon the authority of Martin v. Commercial National Bank, supra.

The situation in the present case is on all fours with the facts briefly stated in the foregoing citation. The trustee has no lien except that derived under section 47a (11 USCA § 75 (a) under which he is “deemed vested with all the rights, remedies, and powers of a judgment creditor holding an execution duly returned unsatisfied.” And his lien is fixed as of the date when the petition in bankruptcy was filed. The recording of the mortgages, therefore, gave the mortgagee liens superior to that of the trustee.

The order and decree of the court below is reversed, with direction that the claims of the appellant be allowed as preferred claims, as against the fund derived from the sale of the mortgaged real estate.


author: WOOLLEY, Circuit Judge.

text:
    BALTIMORE & PHILADELPHIA STEAMBOAT CO. et al. v. NORTON, Deputy Commissioner, et al.
    No. 4457.
    Circuit Court of Appeals, Third Circuit.
    March 25, 1931.
    Louis Wagner, Thomas Clary, and R. A. Smith, all of Philadelphia, Pa., for appellants.
    Paul Ereeman, Asst. U. S. Atty., and Geo. C. Krewson, both of Philadelphia, Pa. (Walter W. Warwick, of Washington, D. C., of counsel), for appellees.
    Before BUFFINGTON and WOOLLEY, Circuit Judges, and THOMPSON, District Judge.
   WOOLLEY, Circuit Judge.

Emil Bruno Gube, an employee of the Baltimore & Philadelphia Steamboat Company, on descending from a boat of this company, then in navigable waters of the United States, fell and sustained an injury- to- his left arm. He instituted proceedings against his employer for compensation under the Longshoremen’s and Harbor Workers’ Compensation Act, approved March 4, 1927, 44 Stat. 1424 (33 USCA §§ 901-950). The Maryland Casualty Company was joined as insurance carrier for the Steamboat Company.

At a hearing before the Deputy Commissioner for the proper Compensation District it appeared that the claimant was totally disabled for a period of 34 weeks and that, thereafter, he was permanently disabled by a partial loss of use of his arm, estimated at 40%. It also appeared that his regular weekly wages were $31.50 and his average weekly wages including wages for overtime were $36.06. On the Deputy Commissioner’s award of compensation for 146 weeks at the weekly rate of $24.04, being two-thirds of the average weekly wages, the Steamboat Company and Casualty Company filed a bill for review in tbe District Court of tbe United States averring that tbe Deputy Commissioner should not have included the claimant’s overtime earnings in tbe wage factor of compensation and that instead of tbe claimant being entitled to 146 weeks’ compensation, be was entitled to compensation for only 125.6 weeks. Tbe District Court sustained tbe findings and award of tbe Deputy Commissioner both in respect to tbe amount of weekly compensation and tbe period of payment. 40 F.(2d) 530. Tbe Steamboat Company and tbe Casualty Company join in this appeal. Three questions are involved: two raised by tbe appellants and one arising out of an inquiry of our own as to whether tbe questions are moot in view of tbe fact that tbe Steamboat Company, tbe employer, has paid its injured employee tbe compensation awarded.

Of course if tbe questions in this ease were moot we should not decide them:' If moot as to one party, we think they are not' as to tbe other. True, tbe Baltimore & Philadelphia Steamboat Company paid its employee tbe compensation awarded, as it was bound to do, without awaiting an appeal. Section 21 of the act (33 USCA § 921). If tbe Steamboat Company were tbe only party to tbe action tbe question might, conceivably, be moot. But there are two parties; tbe Steamboat Company, tbe principal, and tbe Maryland Casualty Company, tbe assurer on tbe obligation to tbe employee. The Casualty Company is a real party here. It still desires and has a right to demand that tbe question of proper payment as affecting its liability to its principal be decided. If tbe Steamboat Company unwisely or improvidently paid a compensation claim which in law it was not required to pay, that is not a reason why tbe Surety Company should pay tbe Steamboat Company and, similarly, that is not a reason why tbe Surety Company should not have tbe question tried out and decided so as to fix its legal liability. We bold tbe questions are properly here for review; and they are two, both dealing with compensation, one reckoned in dollars and tbe other in weeks.

Tbe first is whether in estimating tbe compensation to be paid weekly to tbe injured employee his weekly wages ($31.50) under a contract as to days and hours should control, or tbe amount of actual wages earned and paid ($36.06) which include not only bis weekly wages but also wages earned outside tbe time of tbe contract. Stated differently, tbe question is whether tbe compensation should be based on regular weekly wages fixed by contract of employment or on actual weekly wages earned for a period long enough to determine an average. As tbe statute accords tbe injured employee compensation for wages lost, we think tbe compensation should conform to actual wages which, but for tbe accident, be would have earned. And so, evidently, thought tbe learned district judge, whose finding in this regard is afT firmed.

Tbe next question calls for an interpretation of tbe vital part" of tbe Longshoremen’s and Harbor Workers’ Compensation Act because it is tbe money part of tbe act. The purpose of this act, as its title denotes, is to provide compensation to an injured longshoreman for bis “disability,” or incapacity occasioned by an injury, to earn the wages be bad been receiving. ' Section 2, subd. 10 of tbe act (33 USCA § 902, subd. 10). Tbe provision of tbe act pertinent to this case is section 8 (33 USCA § 908) which provides a method of computing such compensation to employees who have suffered injuries of different kinds resulting in disabilities of different characters and different qualities. First stating these differences in injuries and in their characters and qualities, tbe statute then deals with an employee’s compensation (in dollars) for lost wages reckoned by weeks. As tbe statute speaks in figures rather than in words, we find it difficult to construe its terms in tbe abstract and feel compelled to follow its own structure and devote our interpretation more to figures than to words, believing that out of tbe figures which the Congress used and out of the order in which it used them its intent will stand out clearly and, we think, with certainty.

Section 8 provides compensation for different degrees of disability:

(a) Permanent total disability;

(b) Temporary total disability;

(e) Permanent partial disability; and

(d) Temporary partial disability.

We are not concerned in this case either on tbe facts or in interpreting tbe law with (a) permanent total disability or (d) temporary partial disability. The claimant was totally disabled for a time and partially disabled for all time. Therefore we are concerned only with (b) and (c), temporary total disability and permanent partial 'disability, for it is manifest that these two things can happen, as they did in this case, to one individual as a result of tbe same accident.

Subsection (b) of section 8 of the act, 33 USCA § 908, subsec. (b), dealing with temporary total disability alone, provides that:

“In case of disability total in character (which means that the man is wholly incapacitated to earn a wage) but temporary in quality (which means that though total for a time, the disability may later become partial or disappear altogether) 66% per centum of the average weekly wages shall be paid to the employee during the continuance thereof.”

But a man may suffer a permanent partial disability without suffering a temporary total disability. In that event subsection (c) of section 8, 33 USCA § 908, subsee. (e), pars. 1 and 19, provides:

“In case of disability partial in character but permanent in quality the compensation shall be 66% per centum of the average weekly wages, and shall he paid to the employee as follows:
“(1) Arm lost, three hundred and twelve weeks’ compensation. * * *
“(19) Partial loss or partial loss of use: Compensation for permanent partial loss or loss of use of a member [in this case an arm] may be for proportionate loss or loss of use of the member. [In this ease found to be 40 per centum.]”

Yet a man may suffer both a temporary total disability, which is sometimes referred to as the healing period, and a permanent partial disability as in this case. On that combined event paragraph 22, subsection (e) of section 8, 33 USCA § 908, subsec. (e), par. 22, provides that:

“In ease of temporary total disability and permanent partial disability, both resulting from the same injury, if the temporary total disability continues for a longer period than the number of weeks set forth in the following schedule, the period of temporary total disability in excess of such number of weeks shall be added to the compensation period provided in subdivision (e) of this section: Arm, thirty-two weeks. * * * ”

“The compensation provided by subdivision (e)” for permanent partial disability to an arm is, as we have seen, 312 weeks. The excess of temporary total disability over the 32 weeks provided by paragraph 22 of subsection (c) is in this case 2 weeks, making 34 weeks of temporary total disability. As only the “excess” of 32 weeks is to be “added” to the 312 weeks, it is clear that the 32 weeks healing period is included in the 312 weeks’ compensation period for loss of an arm or of its use. Adding the excess of total disability (2 weeks) to the latter period, the figures in this ease stand as follows: 312 weeks plus 2 weeks equal 314 weeks. This figure of 314 weeks now includes disability of both kinds. Compensation for each measured in weeks must be separated in this total because the law deals with them differently. The 34 weeks for temporary total disability must be picked out and set aside. To determine the period of payment for permanent partial disability the 34 weeks of temporary total disability must be deducted from the total of 314 weeks. This leaves 280 weeks compensation for permanent partial disability. This is for the reason that temporary total disability stands alone; the disability being total, compensation is allowed for it, without deduction or apportionment (section 8, sub-see. (b), to the full % of the man’s weekly wages. But compensation for the remainder of the term (280 weeks), which represents the weeks following temporary total disability and constitutes all the period of permanent partial disability for which compensation is allowed, is subject to apportionment of loss provided by paragraph 19 of subsection (e) of section 8 which has in this case been determined to he 40% of the use of the arm. Now it is just here that, for the first time, apportionment of loss enters into the calculation, and it enters, as it must, at the place in the calculation where subsection (c) (19) puts it, namely; under the heading of “permanent partial disability” (280 weeks). Thus there are two separate and distinct figures in the calculation, each a resultant of different subsections of section 8 in question. One, under subsections (b) and (e), (temporary total disability), is 34 weeks, on which the claimant gets all the law allows without deduction or apportionment, and the other under subsection (e), (permanent partial disability), where he gets only 40% of what the law allows if the disability were total, whether temporary or permanent.

If this method of computation were not pursued but that of the appellants followed, namely; adding the two weeks excess healing period (e) (22) to the total 312 weeks (e) (1), and then apportioning the sum of these items, there would be: an apportionment of 40% on the 34 weeks of temporary total disability with respect to which the statute requires no apportionment.

This would defeat the intent of the Congress to allow full compensation when the disability is total and for “the continuance thereof.” The practical or money difference in the two theories of calculation is the differenee between 146 weeks and 125.6 weeks and is more clearly disclosed by tbe following, tables:

We figure thus:

The appellants figure thus:

The appellants interpret the statute, and, indeed, some authorities interpret a similar state statute, on the theory that although, a man may suffer two kinds of injury from the same accident, he cannot claim compensation for both temporary total disability and permanent partial disability, but must elect the compensation payable for one or the other as suits him best. As we read the statute we see in it the plain intent of the Congress to provide compensation for five situations, four occurring with single disabilities as in section 8 (a), (b), (e) and (d), and tbe fifth, (e) (22), 33 USCA § 908, subsecs, (a-d), and (c), par. 22, where temporary total disability and permanent partial disability occur jointly when both result from the same injury. Following that intent, it is clear that, two kinds of disabilities having been suffered, the compensation applicable to each should be paid so long as, within the statute’s limitations, disabilities of these two characters continue 'respectively; and it is equally clear that as the statute distinguishes between the character of the disabilities and the time of their duration, the compensation should conform to each respectively; and that where, as in temporary total disability, the statute provides no deduction or apportionment, none should be made, and in the other (permanent partial disability) where it provides an apportionment, one should be made yet only for the period of weeks to which compensation for disability of that “character” relates.

Another sentence in paragraph 22 of subsection (e) of section 8 which it is thought has a hearing on the interpretation of the statute is the following:

“In any case resulting in loss or partial loss of use of arm * * * where the temporary total disability does not extend beyond the periods above mentioned [32 weeks] for such injury, compensation shall be limited to the schedule contained in subdivision (e).”

This provision, it would seem, was inserted to meet a situation, not covered by the previous paragraphs and subsections. However that may be*, the temporary total disability in this ease did extend beyond the period (32 weeks) previously provided and, accordingly, the quoted paragraph has no bearing on the matter in hand. ■

The decree of the District Court dismissing the bill is affirmed.