author: RUDKIN, Circuit Judge.

text:
    CRAIG v. UNITED STATES.
    (Circuit Court of Appeals, Ninth Circuit.
    April 9, 1925.)
    No. 4350.
    Banks and banking <®=257(I) — Indictment against officer held not to charge misapplication of funds.
    An averment, in an indictment against an officer of a national bank, that a fund to his credit in a special account was transferred to Ms general account and applied on an overdraft, held not to state facts constituting a willful misapplication of funds of the bank, under Rev. St. § 5209, as amended September 26, 1918 (Comp. St. Ann. Supp. 1919, § 9772); no loss to the bank or depletion of its funds being shown.
    In Error to the District Court of the.United States for the District of Montana; Charles N. Pray, Judge.
    Criminal prosecution by the United States against William T. Craig. Judgment of conviction, and defendant brings error.
    Reversed, with instructions.
    Sterling M. Wood, of Billings, Mont., for .plaintiff in error.
    John L. Slattery, U. S. Atty., and W. H. Meigs, Asst. U. S. Atty., both of Helena, Mont., and Francis A. Silver, Asst. U. S. Atty., of Butte, Mont., for defendant in error.
    Before GILBERT, HUNT, and RUD-KIN, Circuit Judges.
   RUDKIN, Circuit Judge.

The indictment in this case contained eight counts. The court withdrew the even numbered counts from the consideration of the jury and the latter returned a verdict of guilty as to count 1, but not guilty as to counts 3, 5, and 7. The first count was based on section 5209 of the Revised Statutes, as amended by the Act of September 26, 1918 (40 Stat. 972 [Comp. St. Ann. Supp. 1919, § 9772]). The section as amended provides that any officer, director, agent, or employee of any Federal Reserve Bank or of any member bank, who embezzles, abstracts, or willfully misapplies any moneys, funds, or credits of such Federal Reserve Bank or member bank, with intent to injure or defraud such Federal Reserve Bank or member bank, or any other company, body politic or corporate, or any individual person, or to deceive any officer of such Federal Reserve Bank or member bank, or the Comptroller of the Currency, or any agent or examiner appointed to examine the affairs of such Federal Reserve Bank or member bank, or the Federal Reserve Board, shall be guilty of a misdemeanor.

The count now in question purports to eharge a misapplication of funds, moneys, and credits within the meaning of this section. The facts relied upon to show the misapplication are these: Craig was president of the First National Bank of Ingomar, Mont. In his official capacity, as president, he borrowed from the First National Bank of For-syth the sum of $800, for which he executed the note of the Ingomar Bank, securing the payment of the note by a deposit of securities belonging to the Ingomar Bank. The $800, thus obtained, was deposited in the Ingomar Bank in an account headed, “W. T. Craig, Special.” Thereafter this special account was transferred to the general account of Craig, and the $800 was applied on his overdraft in the bank amounting, at the time, to the sum of $1,800. No money was withdrawn from the bank, and the only injury to the bank, if any, was the transfer of the special account to the general account and an appropriate reduction of the overdraft of Craig from $1,800 to $1,000. The question presented is: Was this a misapplication of funds within the meaning of the statute?

In United States v. Britton, 107 U. S. 655, 666, 2 S. Ct. 512, 522 (27 L. Ed. 520), the term “misapplication” is defined as follows:

“We think the willful misapplication made an offense by this statute means a misapplication for the use, benefit, or gain of the party charged, or of some company or person other than the association. Therefore, to constitute the offense of willful misapplication, there must be a conversion to his own use or the use of some one else of the moneys and funds of the association by the party charged.”

To the same effect, see United States v. Northway, 120 U. S. 327, 7 S. Ct. 580, 30 L. Ed. 664; Evans v. United States, 153 U. S. 584, 14 S. Ct. 934, 38 L. Ed. 830; Coffin v. United States, 156 U. S. 432, 15 S. Ct. 394, 39 L. Ed. 481; United States v. Heinze, 218 U. S. 532, 31 S. Ct. 98, 54 L. Ed. 1139, 21 Ann. Cas. 884.

In Dow v. United States, 82 F. 904, 27 C. C. A. 140, the Circuit Court of Appeals for the Eighth Circuit -said:

“In the several counts in the indictments charging a misapplication of the funds of the Commercial National Bank it is averred that the misapplication was made with the intent to injure and defraud the association, meaning the national bank, and it is clear, under the ruling of the Supreme Court in the cases just cited, that the charges of misapplication contained in these indictments could not be made out unless it appeared that the funds of the bank had been depleted, withdrawn, or diminished in some form by reason of the action of Dow, aided and abetted by MeClurken and Miller. The jury were instructed that the fact that Miller received credit in his account on the books of the bank for checks drawn on that hank or on other banks constituted a flagrant misapplication of the funds of the Commercial Bank, within the meaning of section 5209; yet it is apparent that merely giving credit to Miller on the books of the hank for the amount of the checks did not lessen the funds held by the bank, nor in fact defraud the association, in any form. To complete a misapplication of the funds of the bank, it was necessary that some portion thereof should be withdrawn from the possession or control of the hank, or a conversion in some form should be made thereof, so that the bank would be deprived of the benefit thereof. It is not necessary in all eases that the money should be actually withdrawn from thfe bank. Thus if, by connivance between a bank official and a customer of the bank, the latter is allowed to draw cheeks on the bank, when the drawer has not the funds to meet the cheeks, and the same are given by the drawer to third parties in payment of claims due them, and the third parties, instead of getting the cash on the checks, have them credited up to their accounts in the bank, this completes the misapplication of the funds of the bank, because the bank has become bound for the payment of the sums thus credited to the third parties; and the result is just the same as though the holders of the chéeks had obtained the money thereon, and had subsequently deposited it to their, credit. In such eases the funds of the bank would be lessened, and thereby the criminal misapplication might be completed. If, however, the customer presents the checks himself, and has the same credited on his account, the crime of misapplication is not completed thereby, because the- bank is not under legal obligation to pay out any of the amounts wrongfully credited to the customer, and may refuse to pay cheeks drawn against the inflated account, and may at any time charge back against the customer the^ amounts of the checks upon which nothing was in fact realized by the bank. To complete the criminal misapplication of the bank funds in the supposed case, some sum must be paid by the bank to the customer, or to third parties on his order, or must be credited to third parties under such circumstances that the bank becomes bound for the payment thereof. If the jury had been instructed that, if the evidence showed that Dow, as president of the bank, had knowingly permitted Miller’s account with the bank to be inflated by crediting him with large amounts of false or fictitious cheeks, or cheeks drawn by parties who had no funds in the bank against which to draw, and Dow had furnished Miller with certified checks on the Commercial Bank, or had otherwise permitted him to draw large sums from the bank, so that in fact the funds of the bank had been depleted or withdrawn, and this was done under circumstances showing an intent on part of Dow to defraud the bank by thus allowing its funds to be depleted, a ease of misapplication of the funds, within the meaning of the statute, had been made out, no just exception could have been taken thereto. The positive instruction, however, that merely crediting up on Miller’s account the cheeks in question amounted to a misapplication of the funds of the bank, within the meaning of the statute, was clearly contrary to the construction placed on the statute by the Supreme Court, and we are compelled, therefore, to sustain the exceptions taken to the several parts of the charge, wherein it was stated that the reception and crediting of the cheeks on Miller’s account constituted a violation of the statute.”

Again, in McCallum v. United States, 247 F. 27, 159 C. C. A. 245, the same court said:

“A consideration of the various counts has convinced that the first count charging the misapplication of the $227 cannot be sustained because it contains no averment that the credit of $227 which it avers that MeCal-lum took with the bank ever injured the bank or caused it any loss. There is no allegation in the count that he ever checked this money out of the bank, or that the bank in any way was deprived of it.”

Donegan v. United States, 296 F. 843, from the Circuit Court of Appeals for the Fifth Circuit, may seem in conflict with the decisions from the Eighth Circuit. It was there said:

“A deposit to one’s credit in a bank of checks is a means of bringing about the withdrawal of the amounts of the checks from the balances to the credit of the makers thereof and placing such amounts to the credit of the depositor. An amount to the credit of one bank depositor may be abstracted as a result of his cheeks'being deposited to the credit of another depositor. The allegations charge the doing of acts ordinarily having the result of transferring credits from one or more depositors to another. We think that each of the counts sufficiently shows how the alleged abstraction or misapplication was effected, that they could be so effected,- and that error was not committed in overruling the demurrers to those counts.”

But the indictment in the latter case charged that the money was abstracted from and was wholly lost to the bank. Furthermore, if the mere transfer of funds from one account to another subject to check amounts to a misapplication, which is questionable at best, that rule can have no application here, because the balance in the special account was simply credited on the overdraft in the individual account, leaving nothing in the latter account subject to check or other withdrawal. Again, the government does not claim that the mere deposit of the money in the special account amounted to a misapplication.. It relies entirely upon the transfer of the fund from the special account to the general account. The reason for this is obvious; for, had the government relied- upon the deposit in the special account as a misapplication, it was met with the objection that its own testimony showed clearly and beyond controversy that the deposit in the special account was so made without the knowledge or consent of the plaintiff in error.

For these* reasons, we are of opinion that the bank has suffered no loss; that the plaintiff in error has gained nothing by the transaction except a mere paper credit of $800, to which he was not entitled; and that there has been no misapplication of any moneys, funds, or credits belonging to the bank.

The indictment therefore does not support the judgment, and for that reason the judgment must be reversed, with instructions to quash the indictment. It is so ordered.


source: Caselaw Access Project

author: KNAPPEN, Circuit Judge.

license: Public Domain

text:
    GERBER et al. v. BORDERLAND COAL SALES CO.
    (Circuit Court of Appeals, Sixth Circuit.
    April 6, 1925.)
    No. 4205.
    1, Contracts <§=3I6(6) — Acceptance of performance after breach not waiver of right to recover damages for breach.
    Acceptance of performance after breach may opera'te as a waiver of the right to treat the contract as terminated by the breach, but is not per se a waiver of the right of^ action to recover damages'therefor.
    2. Trial <§=>250 — Submission to jury of question not in issue held error.
    \ Submission to the jury of the question whether buyer had waived the right to recover damages for seller’s breach of the contract sued on held error, on the ground that the question was not in issue under the pleadings or evidence.
    In Error to the District Court of the United States for the Western Division of the Southern District of Ohio; Smith Hicken-looper, Judge.
    Action at law by Edward F. Gerber and others against the Borderland Coal Sales Company. Judgment for defendant, and plaintiffs bring error.
    Beversed, and new trial ordered.
    Walter M. Shohl, of Cincinnati, Ohio (Dinsmore, Shohl & Sawyer, of Cincinnati, Ohio, on the brief), for plaintiffs in error.
    O. W. Bennett and Charles J. Hunt, both of Cincinnati, Ohio (Hunt, Bennett & Utter, of Cincinnati', on the brief), for defendant in error.
    Before DENISON, DONAHUE, and KNAPPEN, Circuit Judges.
   KNAPPEN, Circuit Judge.

This suit is brought by plaintiffs in error to recover damages for defendant’s failure to deliver coal under two contracts between defendant, as the seller, and United Coal Mines, Inc., as the buyer. The first contract was made June 29, 1922, and provided for the purchase and sale of 300 cars (approximately 15,000 tons) of Elkhorn mine run coal at $3.30 per ton, to be delivered at the rate of 100 cars per month during June, July, and August. The other contract, made July 8, 1922, called for 150 cars (approximately 7,-500 tons) of Williamson coal at the same price, deliveries during substantially the same period, and to be completed October 5, 1922. Each contract provided for deposit by the buyer of $1 per ton, viz. $15,000 under the first contract and $7,500 under the “second, to be applied at the rate of,$l per ton of coal as delivered — the remaining $2.30 per ton to be paid thereafter. The deposits were duly made. There were delivered during the contract period 96 cars under the first contract and 54 cars under the second contract. Later 45 cars were delivered under the first contract and 8 under the second. Plaintiffs, who sue as assignees of the United Coal Mines, Inc., claim that these later deliveries, aggregating 53 ears, were made to apply, at $3.30 per ton) • upon plaintiffs’ damages, reducing the net amount claimed to practically $48,000.

Defendant denies liability for delays in delivery on the grounds, first, that the failures to deliver were caused by mining strikes and other contingencies not under their control and claimed to be covered by the contracts of purchase and sale; and, second, that nondelivery was justified by the failure of the United Coal Mines, Inc., to keep its deposits good, in that the last-named company, from time to time during the contract period, incurred indebtedness to defendant in the net amount of about $18,000 by way of trade accommodation acceptances. Defendant not only denied all liability to plaintiff, but sought recovery for the $18,000 plus, including interest, together with the unpaid balance on coal actually delivered, amounting in all to upwards of $28,000. It is conceded that defendant was entitled to that amount, if plaintiffs had no claim for damages for failure to make delivery. The verdict and judgment denied recovery by plaintiff, and awarded defendant its claim as stated.

1. Plaintiffs’ main complaint is that the court’s charge permitted the jury to find against plaintiffs’ claim on the ground that damages for a breach of the contract had been waived by plaintiffs by proceeding with the contract as if the breach had not occurred. The court, in summing up, said: “If a party does not rest upon an alleged breach by the other party, but continues the performance of the contract, and both sides go on as if there had been no such breach, such breach cannot be made the predicate of either recovery or defense, because, having been waived, it is as if it had never happened.” This instruction was given in response to a request by the jury that previous instructions "relative to waiver or violation of contract as to subsequent right of action for damages on said contract” be again given. The speedy rendition of verdict following the instruction makes it fairly inferable that it was based upon the theory of waiver.

Passing the question whether the defense of wajver was precluded by failure to plead it, as well as the question whether plaintiffs' exception was broad enough to challenge the definition applied by the court, the correctness of which plaintiffs deny,* we think plaintiffs entitled to complain that the broad subject of plaintiffs’ complete waiver of damages was submitted at all to the jury. We find nothing in the record which we think fairly suggests that the subject of waiver of plaintiffs’ damages was raised by defendant on the trial; and a careful examination of the record fails, we think, to indicate any substantial evidence tending to show that the plaintiffs waived claim for damages for breach of the contract of sale as distinguished from waiver of the right to treat the breach as terminating the contract. On the contrary, the United Coal Mines, on August 23, 1922, in writing, notified defendant that “we propose to hold you responsible for the shortage, and to charge you back with the difference between our contract price and the ruling market price.” Again, one of the plaintiffs testified that on October 10, 1922, at a meeting between him and representatives of the defendant and the Williamson Pond Creek Coal Company, for the purpose of trying to settle plaintiffs’ damage claim against defendant for diversion of coal, and the latter’s claim against the Williamson Company, arising out of the contracts, he notified defendant that plaintiffs proposed to hold it for whatever claims plaintiffs had, which seem to have covered not only coal diverted, but generally that not shipped under the contract, and that defendant’s representative stated that defendant would get all the coal that the Williamson Company would ship defendant, turning it over to plaintiff, payment therefor to apply against plaintiffs’ claim for damages, “to be deducted upon an amicable settlement which we were trying to arrive at.”

■ The witness also testified that on October 17, 1922 (the Williamson Company failing to appear), he again went over plaintiffs’ account with the defendant, which was checked over by defendant’s representative, and that the claim sued upon, viz. about $58,000, was the same as the statement cheeked and verified in that conference with defendant’s representative. While that representative denied that any agreement was made that plaintiffs were damaged, and that coal was to be shipped on account thereof, we find nothing fairly indicating any suggestion of waiver of plaintiffs’ claim. On the contrary, defendant’s representative admits that, after a conversation with one of the plaintiffs, inferably after one of the alleged October interviews, he made claim against the Williamson Company that the market values were much in excess of the $3.30 per ton, and began suit against that company.

We are constrained to think that, upon this record, the 53 cars delivered to plaintiffs after October 10th can be treated only as having been supplied and received by way of actual performance, pro tanto, of the contract here involved, and, in the absence of anything to the contrary, should be considered as allocable to the July shortage, and that their acceptance does not tend to show waiver of any damages for nondelivery of other ears, or to show that any new contract was made after October 7th for the later delivery of all the cars in default, especially as each party seems to have understood that the full shortage could not be made up; and in the absence of agreement for making up either the full shortage or any definite part thereof, there could have been no effective waiver of damages, except as to the number of cars actually so delivered. The instant case is thus not brought within Kalamazoo Fuel Co. v. Gerber, 4 F.(2d) 235, decided by this court December 8, 1924. These conclusions require a reversal of the judgment.

2. Plaintiffs complain that verdict was not directed in their favor. We think there was sufficient evidence to justify submitting to the jury the defenses other than waiver, to which reference has been made.

3. After issue was joined, plaintiffs’ receiver was substituted as party plaintiff. Error is alleged upon the rendition of verdict and judgment against plaintiffs personally under defendant’s cross-petition. Without intimating whether or not we regard this complaint as substantial, we think we are not called upon now to consider it. It may never arise upon a new trial. It is even conceivable that defendant may seek to offset its claim against plaintiffs as against a'’ possible judgment against defendant.

For the error in submitting the question of plaintiffs’ waiver, the judgment of the District Court is reversed, and a new trial ordered.

       Defendant asserts in this connection that at the time of making the first contract, by telephone, it advised plaintiff that, on account of the small margin (10 cents per ton) on which it handled the coal, it was not to be held for any liability if the mines from which defendant was to get the coal failed to deliver.

       Acceptance of performance after breach may operate as a .waiver of the right to treat the contract as terminated by the breach, but is not (per se) a waiver of the right of action to recover damages therefor. Frankfurt, etc., Co. v. William Prym Co. (C. C. A. 2) 237 F. 21-28, 150 C. C. A. 223, L. R. A. 1918A, 602; 5 Page on Contracts (2d Ed.) par. 3067; 2 Williston on Contracts, § 703.

       The market price on September 30th and on October 5th was $5.50. Later prices do not directly appear, although it is open to inference that the market in the latter part of October was close to the contract price of $3.30.

       It happens that the market price at the end of July ($8.50 to $9.50) was much higher than at the end of either of the other months of the contract period.


author: BINGHAM, Circuit Judge.

text:
    PALES v. PAOLI.
    (Circuit Court of Appeals, First Circuit.
    April 14, 1925.)
    No. 1700.
    1. Criminal law <@= 102 — Insular courts having original jurisdiction of crime were not ousted therefrom regardless of whether defendant had right to transfer case to federal court.
    Insular 'courts of Porto Rico have jurisdiction of prosecution for . aggravated assault under Rev. St. and Codes of Porto Rico 1911, §§ 5664 — 5666, and were not ousted therefrom whether defendant had or had not a right to transfer case to federal court by removal, by habeas corpus' or otherwise.
    2. Intoxicating liquors <@=249 — Prohibition officer justified in using reasonable means to stop automobile to effect seizure, if facts would have warranted reasonably prudent man in believing that automobile driver was transporting liquor.
    If federal prohibition officer had learned of facts by the use of his senses and from other sources that would have warranted a reasonably prudent man in believing that automobile driver was transporting liquor in his presence in violation of National Prohibition Act, tit. 2, § 26 (Comp. St. Ann. Supp. 1923, § 10138%mm), he would have been justified in using reasonable means to stop the car to effect a seizure, having first disclosed his official capacity.
    3. Habeas corpus <@=25(l) — Prohibition agent held not to have been acting in pursuance of law of United States within statutes as to issuance of writs of habeas corpus.
    Where prohibition director received information that consignment of liquor was to be landed on certain point on coast and was to be brought into certain city by automobile over certain road on certain night, a prohibition agent was not warranted, withbut knowledge of other facts, in concluding that driver of automobile along such road on such night was transporting liquor, and his act in shooting at automobile and occupants was illegal and not within the scope of his authority or in pursuance of a law of the United States within Rev. St. § 753 (Comp. St. § 1281), providing for issuance of writ of habeas corpus where petitioner was acting in pursuance of law of the United States.
    4. Habeas corpus <§=4— District Court’s refusal to discharge prohibition agent convicted of aggravated assault held not abuse of discretion.
    Where prohibition agent was convicted of aggravated assault in violation of Rev. St. and Codes of Porto Rico 1911, §§ 5664-5666; in municipal court of Porto Rico after shooting at automobile and occupants without knowledge of facts which would have warranted reasonably prudent man in concluding that liquor was being transported therein and was temporarily in the custody of jailer because of voluntary withdrawal of bond, pending appeal to the Supreme Court of Porto Rico, so that he might apply for writ of habeas corpus, the federal District Court did not abuse its discretion or err in holding that there was no such urgency as required agent’s discharge, since authority and operations of national government would not be injuriously affected or seriously, or if at all, disturbed by reason of his confinement; the agent’s remedy being appeal to Supreme Court of Porto Rico and writ of error from Supreme Court of the United States under Judicial Code, § 237 (Comp. St. § 1214), and section 246, as amended by Act Jan. 28, 1915 (Comp. St. § 1223), or removal tb' federal District Court under Judicial Code, § 33 (Comp. St. § 1915) and Act Oct. 28, 1919, tit. 2, § 38 (Comp. St. Ann. Supp. 1923, § 10138%y), and Organic Act Porto Rico, § 42 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3803r).
    Appeal from the District Court of the United States for the District of Porto Rico; Carlos Franco Soto, Judge.
    Petition for writ of habeas corpus by Jesus Pales y Diaz against Manuel Paoli. From a decree dismissing writ and remanding petitioner, he appeals.
    Affirmed.
    James Foster Henry, Sr., of Roxbury, Mass., for appellant.
    Archibald King, of Washington, D. C., for appellee.
    Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.
   BINGHAM, Circuit Judge.

This is an appeal from a decree of the federal District Court of Porto Rico dismissing a writ of habeas corpus and remanding the petitioner, appellant, to the custody of the respondent, the district jailer of San Juan.

There is substantially no dispute about-the facts out of which the controversy arises. It appears that the prohibition director of Porto Rico, on receiving information that a eon-signment of liquor was to be landed at a certain point on tbe coast of tbe island and was to be brought into San Juan by automobile over the Bayamon Road on the night of June 14, 1923, directed two prohibition agents, the petitioner and one Dewane, to go out on the road and stop and search every ear coming into town that night, in order to seize the liquor and arrest the persons transporting it; that in obedience to these directions, the petitioner and Dewane stationed themselves a short distance apart on the road in question; that they stopped and searched several cars; that about 10:30 p. m., an automobile containing Horace Miller and a young lady approached; that Dewane and the petitioner, each holding a pistol in one hand and a flash light in the other, attempted to stop the car by calling out, “Hold up !” in Spanish and in English, without disclosing that they were federal officers; that neither of them had a search warrant or any other authority except sueh as pertained to their appointments and they were not in uniform; that Miller did not stop, and, after he had passed, the petitioner fired two shots at the car, one of which hit the gasoline tank and the other the rear of the ear; that neither of the occupants was hit; that on reaching San Juan, Miller found a policeman, and returned to the scene of the firing, where he ascertained who the persons were that undertook to stop him, and that it was the petitioner who fired the shots; that Miller had no liquor in his ear and there was nothing to indicate that he had ever transported liquor; that a few days after the shooting, Miller swore out a complaint against the petitioner and Dewane for aggravated assault, under section 678 of the Act of March 10, 1904 (sections 5664, 5665, 5666, R. S. and Codes of Porto Rico 1911); that the petitioner was found guilty in the Municipal Court of Rio Piedras, and Dewane was acquitted; that the petitioner appealed to the District Court of San Juan, was there found guilty and sentenced to pay a fine of $200; that he appealed to the Supreme Court of Porto Rico, was admitted to bail pending appeal, but oh September 6, 1923, withdrew his bond and surrendered himself to the custody of the respondent, the district jailer; and thereupon brought this habeas corpus proceeding.

In the court below the petition was dismissed for the following reasons: (1) That the insular courts had plenary jurisdiction of the case against the petitioner, which was awaiting final decision on appeal to the Supreme Court of Porto Rico; (2) that it was not a case of urgency calling upon a federal court to exercise its discretion and discharge the petitioner while the cause was awaiting final determination before a territorial court; and (3) that the petitioner was not acting and did not act within the scope of his authority as a federal agent or officer on the night of June 14, and therefore was amenable to the insular courts for any violation of the laws of Porto Rico.

The insular courts had original jurisdiction of the crime charged against the petitioner and were not ousted therefrom, whether the petitioner had or had not the right to transfer the case to the federal court by removal, by habeas corpus, or otherwise. R. S. and Codes of Porto Rico 1911, §§ 5664, 5665, 5666; United States ex rel. Drury v. Lewis, 200 U. S. 1, 26 S. Ct. 229, 50 L. Ed. 343. It is conceded that in a proper case the federal District Court of Porto Rico may issue a writ of habeas corpus to bring before it a prisoner held by the 'insular authorities, either before or after conviction, and may discharge him from custody; and that sections 751, 753, and 761 of the Revised Statutes of the United States (Comp. St. §§ 1279, 1281, 1289) are applicable to Porto Rico and to the federal District Court of Porto' Rico, by virtue of sections 9 and 41 of the Organic Act of Porto Rico, 39 Stat. L. 954, 965 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3803ecc, 3803qq); that the Eighteenth Amendment and National Prohibition Act (Comp. St. Ann. Supp. 1923, § lOlSS^ et seq.) are in force in Porto Rico (section 9 of the Organic Act, 39 Stat. L. 954; 42 Stat. L. 993); and that “the right to be secure against unreasonable searches and seizures” prevails there (Organic Act, § 2, 39 Stat. 951 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3803aa]; Weems v. United States, 217 U. S. 349, 367, 30 S. Ct. 544, 54 L. Ed. 793, 19 Ann. Cas. 705).

Two questions are presented: (1) Whether, under the circumstances disclosed, the petitioner was acting in pursuance of a law of the United States (Rev. St. § 753), and within the scope of his authority as a federal officer, in attempting to stop and search Miller’s ear, and in shooting at the ear and its occupants; and (2) whether this is a ease of extreme urgency where a federal court, having heard the facts in a habeas corpus proceeding, should, in the exercise of its dis-' eretion, have discharged the petitioner.

If the petitioner, a federal prohibition officer, had learned of facts, by'the use of his senses and from other sources, that would have warranted a reasonably prudent man in believing that Miller was transporting liquor in his presence (National Prohibition Act, tit. 2, § 26, 41 Stat. L. 315; Park v. United States (C. C. A.) 294 F. 776; Carroll et al. v. United States, 45 S. Ct. 280, 69 L. Ed. -, decided March 2,1925), he would have been justified in using reasonable means to stop the ear to effect a seizure, having first disclosed his official capacity; but as the offense of transporting liquor is a misdemeanor (National Prohibition Act Oct. 28, 1919, tit. 2, § 29, 41 Stat. L. 315; Penal Code March 4, 1909, § 335, 35 Stat. L. 1152 [Comp. St. § 1059]), he probably would not be warranted in shooting at the car and its occupants when trying to avoid arrest by flight, to effect his purpose. United States v. Clark (C. C.) 31 F. 710, 713; North Carolina v. Gosnell (C. C.) 74 F. 734, 738; State v. Cunningham, 107 Miss. 140, 65 So. 115, 51 L. R. A. (N. S.) 1179; Thomas v. Kinkead, 55 Ark. 502, 18 S. W. 854, 15 L. R. A. 558, 29 Am. St. Rep. 68.

But the evidence in this case shows that the petitioner had not learned of facts, by the use of his senses or otherwise, that would warrant a reasonably prudent man in concluding that Miller was committing in his presence the crime of transporting liquor. Such being the case, he was not acting in pursuance of a law of the United States, and within the scope of his authority as a federal officer, in undertaking to effect a. seizure — much less in shooting at the car and its occupants with a view to accomplishing his purpose. His conduct was wholly illegal and unauthorized.*

We are also of the opinion that, on the facts disclosed, the District Court did not abuse its discretion or err in holding that there was no such urgency as required the petitioner’s discharge. He • was temporarily in the custody of the district jailer of Sán Juan, because of his voluntary withdrawal of bond, pending appeal tp the Supreme Court of Porto Eieo, so that he might apply for habeas corpus. This, taken in connection with his minor official position and the fact that he was not acting pursuant to a law of the United States and within the scope of his authority at the time of the attenipted seizure, does not show that the authority and- operations of the national government would be injuriously affected, or< seriously, if at all, disturbed, by reason of his confinement. Drury v. Lewis, 200 U. S. 1, 26 S. Ct. 229, 50 L. Ed. 343; Castle v. Lewis, 254 F. 917, 166 C. C. A. 279. He was, therefore, rightly left to exhaust his remedies of appeal to the Supreme Court of Porto Eieo and of writ of error from the Supreme Court of the United States (Judicial Code, § 237 [Comp. St. § 1214], and section 246, as amended by the Act of January 28, 1915, 38 Stat. L. 804 (section 1223); Urquhart v. Brown, 205 U. S. 179, 27 S. Ct. 459, 51 L. Ed. 760), or of removal to the federal District Court (Judicial Code, § 33 (section 1015), and section 38, tit. 2, of the Act of October 28,1919 [Comp. St. Ann. Supp. 1923, § 10138%y]; section 42 of the Organic Act of Porto Eieo, 39 Stat. L. 966 [Comp. St. 1918, Comp.. St. Ann. Supp. 1919, § 3803r]).

Had he been acting pursuant to a law of the United States and within the scope of his authority, but his action chanced to be a violation of an insular law, his imprisonment might find probably would constitute an urgency authorizing his discharge on habeas corpus, without first exhausting his other remedies. It was apparently so held in Ohio v. Thomas, 173 U. S. 276, 284, 285, 19 S. Ct. 453, 43 L. Ed. 699. But this is not such a case.

.The decree of the District Court is affirmed.


author: MANTON, Circuit Judge.

text:
    In re NO. 191 FRONT STREET, BOROUGH OF MANHATTAN, CITY OF NEW YORK. KIRVIN v. UNITED STATES.
    (Circuit Court of Appeals, Second Circuit.
    December 19, 1924.)
    No. 117.
    I. Intoxicating, liquors i§=>248 — Warrant held without' probable cause, in so far as it au« thorized "seizure of records.
    Affidavit for issuance of search warrant, under National Prohibition Act, tit. 2, § 25 (Comp. St. Ann. Supp. 1923, § 10138%m), and Espionage Act June 15, 1917, tit. 11, §§ 3, 15, 16 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 1049614c, 10496%o, 10496%p), not describing record, papers, or memoranda of any kind, and not referring to use of records in connection with sale of liquor, except in so far as it stated that affidavit was made to procure warrant for search of described premises and for seizure of “liquors found therein, together with any books, papers, records, or documents pertaining to the sale, possession, or transportation of intoxicating liquors,” neither identified records nor alleged probable cause for their seizure, so that warrant issued thereon, so far as it' authorized seizure of such records, violated Const. Amend. 4.

      2. Intoxicating liquors <§=>248 — Testimony before commissioner could not supply facts omitted from affidavit.
    'Insufficiency of affidavit for issuance of search warrant, under National Prohibition Act, tit. 2, § 25 (Comp. St. Ann. Supp. 1923, § 1013S%m), and Espionage Act June 15, 1917, tit. 11, §§ 3, 15, 16 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 10496%e, 10496%o, 10496%p), could not be cured by testimony taken before commissioner as to facts omitted from affidavit.
    3. Intoxicating liquors <@=>249 — Warrant for search of premises for liquor did not authorize seizure of records on theory that they were means or instrument of crime.
    Warrant for search of premises issued on affidavit as to use of premises for possession and sale of liquor, without statement of facts as to use of records in connection with liquor, did not warrant seizure of records pertaining to the sale, possession, or transportation of liquors on theory that records were means or an instrument of crime.
    4. Searchs and seizures <@=>7 — Constitutional rights equally enforced in favor of guilty and innocent.
    The constitutional rights guaranteed by Const. Amend. 4, must be equally enforced in favor of the guilty and the innocent.
    5. Searches and seizures <@=>7 — Sufficient facts must be shown under oath to support finding of probable cause.
    Unless sufficient facts are shown under oath to support finding of probable cause, the right of a person to be secure from unreasonable searches and seizures, under Const. Amend. 4, must not be violated.
    6. Searches and seizures <@=>3 — Documents which are only evidence of crime are immune from seizure.
    Not every kind of property may be seized under search warrant, and, while warrant may be issued with privilege to seize such property as was used as the means of committing a felony, all papers and documents which afford evidence that a felony has been committed, but which were not the means of committing it, are immune from seizure.
    7. Searches and seizures <@=>3 — Officers. lawfully on premises under warrant authorizing search for liquor had no authority to seize records.
    Where warrant was valid in so far as it authorized search of premises for liquor, but was void in so far as it authorized seizure of records relating to .possession and sale of liquor, the officers executing the warrant had no authority to seize the records, on theory that they were lawfully on the premises.
    8. Intoxicating liquors <@=>249 — Officers executing warrant for search for liquor not authorized to seize records found in house, though owner at time of seizure was under arrest.
    Where search warrant was valid in so far as it authorized a search of premises for liquor, but was void, because issued without probable cause, in so far as it authorized seizure of records found on premises, the officers executing the warrant had no authority to seize records, on theory that owner at time of seizure was under arrest; the records being in the house, and not on the owner’s person.
    9. Searches and seizures <@=>3 — Search warrant cannot be extended beyond privileges granted in issuance.
    A search warrant cannot be extended beyond the privileges granted in its issuance.
    10. Intoxicating liquors <@=>253 — Action of commissioner in vacating search warrant reviewable by District Court.
    Action of United States commissioner in vacating search warrant, under Espionage Act June 15, 1917, tit. 11, §§ 3, 15, 16 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 10496%c, 10496%o, 10496%p), after liquor and records had been seized by officers executing warrant for use as evidence, held reviewable by District Court, since such court, under National Prohibition Act, tit. 2, § 25 (Comp. St. Ann. Supp. 1923, § 10138%m), had the right to dispose of the property.
    In Error to the District Court of the United States for the Southern District of New York.
    Application by Harold A. Kirvin to quash, vacate, and set aside search warrant affecting premises No. 191 Front Street, Borough of Manhattan, City of New York, and for return of records seized thereunder. Order of commissioner, sustaining application, was reversed by the District Court, and applicant brings error.
    Reversed, with directions.
    Sanford H. Cohen, of New York City (George Cohen, of New York City, on the brief), for plaintiff in error.
    William Hayward, U. S. Atty., of New York City (Elmer H. Lemon, Sp. Asst. U. S. Atty., of Middletown, N. Y.; of counsel), for the United States. <
    Before ROGERS and MANTON, Circuit Judges, and LEARNED HAND, District Judge.
   MANTON, Circuit Judge.

The search warrant here considered was issued upon two affidavits, on the 18th of December, 1923, by one of the United States commissioners for the Southern district of New York. One affidavit alleges that one of the affiants visited the premises in question, and had a conversation with the plaintiff in error, and inquired if he would sell him a gallon of alcohol, which he did; that on the following day, December 18, 1923, he had a conversation with a brother of the plaintiff in error, asked for a gallon of alcohol, and carried away with him an, empty can, in which he obtained the alcohol, paying $5.50 therefor. This affidavit is corroborated by the second affidavit, made by an agent of the United States government, saying that he saw the first affi-ant enter the premises with a can and come ont with the alcohol, which was turned over to the government agent. The affidavit set forth that the can had a quantity of alcoholic content of intoxicating liquors which contained more than one-half of 1 per cent, alcohol by volume and was fit for beverage purposes. It says that a search of the prohibition director’s office failed to find any permit for the possession of liquors on these premises, and it then alleges that this affidavit is “made to procure a search warrant to search said premises No. 191 Front street, borough of Manhattan, city of New York, including any safe, or desk, closet, container, receptacle, storeroom, basement, or subcellar, or rooms connected or used in connection with said building, and to seize all intoxicating liquors found therein, together with any books, papers, records, or documents pertaining to the sale, possession, or transportation of intoxicating liquors.”

The search warrant recites that the same is issued on the affidavits in question and “that certain intoxicating liquors (and records) containing more than % of 1 per cent, of alcohol by volume and fit for use for beverage purposes is unlawfully held and possessed in the entire- five-story brick building situated at No. 191 Front street, borough of Manhattan, Southern district of New York.” It directs the officers to whom the warrant was issued to enter the premises and search diligently “for said liquor and records,” and then directs the making of a return after any seizure under said warrant. A seizure was made, and resulted in obtaining a quantity of iiquor, and also a large list of books, papers, and records, consisting of memoranda, telegrams, invoices, receipts, and various letters. A motion was made for the return of the records and liquors before one of the United States commissioners of the Southern district of New York, and to vacate and set aside the search warrant, for the reason that the affidavit upon which it was based did not set forth facts showing probable cause for the issuance thereof; that it did not name and describe the person and particularly describe the property and place to be searched; that it was illegal, because it required the seizure of records without any supporting affidavit therefor, and without showing and naming the record desired, or that they were illegally used, and that no provision of law permitted the seizure of the records;- that such seizure as was made was in violation of the Fourth and Fifth Amendments of the Constitution; that it was not issued in accordance with the provisions of Espionage Act, tit. 11 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 10212Í, 10496i/4a-10496%v).

On hearing this motion, the commissioner took testimony and rendered a decision sustaining the motion. An application was then made to the District Judge'for an order directing a return of the books, papers, and memoranda, and all other documents thus seized, and to suppress any information received therefrom. The defendant" in error opposed upon the ground that it desired the records as evidence upon the trial of a conspiracy charge. The court reversed the order of the commissioner, reinstated the search warrant, and ordered the government to retain the property seized as evidence against the alleged conspirators. It is the order thereon that the plaintiff in error' seeks to review by this writ. It is now sought to obtain a release of the records thus seized,, but not the liquor.

The National Prohibition Act (Comp. St. Ann. Supp. 1923, § ÍOISS^ et seq.) provides for the issuance of a search warrant under the Espionage Act of June 15, 1917 (40 Stat. 228 et seq.), in so far as it is applicable to the National Prohibition Act, by a judge of the United States District Court or by a United States commissioner wherein the property sought is' located. Section 3 provides that “a search warrant cannot be issued but upon probable cause, supported -by affidavit, naming or describing the person and particularly describing the property and the place to be searched.” Provision is made by section 15 for the examination of witnesses under oath, and requiring their affidavits or depositions to be reduced to writing and subscribed by the persons making them. It provides for the issuance of the warrant and its delivery to a person to execute the same, and the delivery of a copy and receipt when the property is taken, and for the making of a return thereon. Section 16 provides that, if the property or liquor taken is not the same as that described in the warrant, or where there is no probable cause for believing the existence of the grounds on which the warrant was issued, the judge or commissioner must cause it to be restored to the person from whom it was taken. If it appears that the property or paper taken is the same as described in the warrant, and there is probable cause for believing the existence of the grounds, then the judge or commissioner shall order the same retained in the custody of the person seizing it, or to be otherwise disposed of according to law. Title 2, § 25, of the National Prohibition Act provides:

“It shall be unlawful to have or possess any liquor or property designed for the manufacture of liquor intended for use in violating this title or which has been so used, and no property rights shall exist in any such liquor or property. A search warrant may issue as provided in title XI of public law numbered 24 of the Sixty-Fifth. Congress, approved June 15, 1917, and such liquor, the containers thereof, and such property so seized shall he subject to such disposition as the court may make thereof. If it is found that such liquor or property was so unlawfully held or possessed, or had been so unlawfully used, the liquor, and all property designed for the unlawful manufacture of liquor, shall be destroyed, unless the court shall otherwise order. No search warrant shall issue to search any private dwelling occupied as such unless it is being used for the unlawful sale of intoxicating liquor, or unless it is in part used for some business purpose such as a store, shop, saloon, restaurant, hotel, or boarding house. The term 'private dwelling’ shall he construed to include the room or rooms used and occupied not transiently but solely as a residence in' an apartment house, hotel, or boarding house. The property seized on any such warrant shall not be taken from the officer seizing the same on any writ of replevin , or other like process.”

It will be observed from the foregoing section that the property seized shall be subject to such disposition as the court may make thereof.

It is contended here that, as to the records seized, the search 'warrant was issued without probable cause. We need not consider the sufficiency of the allegations as to the liquor seized for that seizure is not now questioned. The affidavit in no place refers to any records being used in connection with the sale of the alcohol, and there is no description of the records, papers, or memoranda of any kind. The only reference to it is in the last few lines in the affidavit, which says, “and to seize all intoxicating liquors found therein, together" with any papers, books, records or documents pertaining to the sale, possession, or transportation of intoxicating liquors.” This allegation does not warrant the seizure of papers nor could any testimony before the commissioner supply what is here missing.

We cannot agree with the government’s argument that the records were means or an instrument of crime. They might he some evidence of crime. Gouled v. U. S., 255 U. S. 310, 41 S. Ct. 261, 65 L. Ed. 647. The legality of the search warrant may become the very foundation upon which the successful prosecution of a guilty defendant depends. The constitutional rights guaranteed by the Fourth Amendment of the Constitution must be equally enforced in favor of the guilty and innocent. Unless sufficient facts are shown under oath to support the ’finding of a probable cause, the right of a person to be secure from unreasonable searches and seizures must not be violated. Silverthorne Co. v. U. S., 251 U. S. 385, 40 S. Ct. 182, 64 L. Ed. 319; Weeks v. U. S., 232 U. S. 383, 34 S. Ct. 341, 58 L. Ed. 652, L. R. A. 1915B, 834, Ann. Cas. 1915C, 1177; Boyd v. U. S., 116 U. S. 616, 6 S. Ct. 524, 29 L. Ed. 746. A search warrant must be as broad, and no broader, than justifying the basis of fact. It is not every kind of property that may be seized under a search warrant. It is intended that the warrant be issued with the privilege to seize such property as was used as the means of committing a felony. All papers and documents which afford evidence that a felony has been committed, hut which were not the means. of committing it, are immune from' seizure. Veeder v. U. S., 252 F. 414, 164 C. C. A. 338.

It is next contended that the officers who were executing the warrant were lawfully on the premises, and that, being there, they might seize the papers. But as to the records they had no search warrant. They were as trespassers in taking these documents. It is further argued that the plaintiff in error was arrested at the time the papers were seized and therefore the seizure was lawful. U. S. v. Kraus (D. C.) 270 F. 579. But the papers were not on his person, and the distinction has been recognized between what one carries about on his person and what one keeps in his house. A search warrant cannot be extended beyond the privileges granted in its issuance. Nothing further may be included. There was neither identification of the records, nor probable cause alleged’in the affidavits for the seizure of the records, and their taking was illegal, and therefore void.

The question of the authority of the District Court to review the action of the commissioner in vacating and setting aside the search warrant is presented. When the warrant is quashed upon the application of a petitioner, under section 16, title 11, of the Espionage Act, he may apply for the return of the property to a judge or commissioner who issued the warrant, and who directed the quashing of the warrant. Section 25 of the National Prohibition Act gives the disposition of all liquors into thé .hands of the court. The plaintiff in error argues that the application for the return should not be to the court, but to the commissioner, and his determination is not reviewable by the District Judge. Since the commissioner quashed the warrant, it is necessary under section 25 to apply to the court for the disposition of the property. There could be no return of the records, except the decision is in some way reviewed by the court. This because the statute gives a remedy under sections 15, 16, of title 11, Espionage Act. A judge may make a warrant returnable before a commissioner (Grin v. Shine, 187 U. S. 181, 23 S. Ct. 98, 47 L. Ed. 130), and so a commissioner may make a warrant returnable before a judge. It has been held that a commissioner, when he issues warrants of arrest in a preliminary hearing, is not a judge of the United States within the constitutional sense, and a preliminary examination before him is not a proceeding in any court of the United States. Todd v. U. S., 158 U. S. 278, 15 S. Ct. 889, 39 L. Ed. 982. It has also been held that in a proceeding before a commissioner the District Court may review the decision, for the reason that, when sitting, the commissioner is not holding an inferior •court, but is acting in a ministerial capacity. U. S. v. Berry (D. C.) 4 F. 779. The Supreme Court has held that a District Judge might review a proceeding before the United States commissioner, under the court’s authority to assume control in the preliminary stages of matters of which it has the final decision. Collins v. Miller, 252 U. S. 364, 40 S. Ct. 347, 64 L. Ed. 616. The seizure of the liquors and the records, which are evidence of the crime charged, are in fact a matter preliminary to the trial, or at least might be. Silverthorne Co. v. U. S., 251 U. S. 385, 40 S. Ct. 182, 64 L. Ed. 319. With this case in the preliminary stages to the determination of the guilt of the plaintiff in error in the District Court, the seizure of the liquors and records' on the search warrant must be regarded as intended to be used as evidence of crime. The same would be true if the liquors were to be seized on a libel, or.to be disposed of by any other order of the court, as provided for in section 25. Therefore we hold that the District Judge had authority to review the action of the commissioner (Collins v. Miller, supra), and that the warrant and the supporting affidavits were insufficient. The warrant was insufficient to include the search and seizure of the records referred to in the return, and it is vacated, and the records thus seized are directed to be returned.

Order reversed, with directions to the District Court to enter an order in conformity with this opinion.


author: HUNT, Circuit Judge.

text:
    FIFER et al. v. WILLIAMS.
    (Circuit Court of Appeals, Ninth Circuit.
    April 20, 1925.
    Rehearing Denied May 25, 1925.)
    No. 4465.
    1. Banks and banking <@=>287(3) — District court’s order approving sale of national bank’s assets by receiver not reviewable by Circuit Court of Appeals at instance of bank’s creditors.
    District Court’s order approving sale of national bank’s assets, on receiver’s application, under Rev. St. § 5234 (Comp. St. § 9821), is not reviewable by Circuit Court of Appeals, on appeal, under Judicial Code, § 128 (Comp. St. § 1120), by bank’s creditors, since such proceeding is an ex parte proceeding to which the bank’s creditors are not entitled to be parties and in which they have no right to be heard, and not a suit, and since funds to be collected from sale are not subject to disbursement by court, but by Comptroller, by whom receiver was appointed and is controlled.
    2. Banks and banking <@=>287(1) — National bank receiver does not submit himself and bank’s assets to control of court by application for approval of sale of assets.
    Application by receiver of national bank appointed by Comptroller of Currency under Rev. St. § 5234 (Comp. St. § 9821), to District Court for approval of sale of assets, does not subject the receiver and the affairs of the bank to the jurisdiction of, or place assets of bank under control of, the court in the sense that receiver appointed by court and assets in his possession are under court’s control.
    Appeal from the District Court of the United States for the District of Montana; Charles N. Pray, Judge.
    Proceeding by Fred D. Williams,- as receiver of the First National Bank of Fergus County, in Lewistown, for authority to sell bank’s assets. From an order authorizing sale and approving plan of reorganization, E. J. Fifer and other creditors appeal.
    Appeal dismissed.

      S. C. Ford, Frank Woody, and Wellington D. Rankin, all of Helena, Mont., for appellants.
    E. K. Cheadle, of Lewistown, Mont., T. B. Weir, of Helena, Mont., and William F. Humphrey and Robert M. Light, both of San Francisco, Cal., for appellee.
    Before GILBERT, HUNT, and RUDKIN, Circuit Judges.
   HUNT, Circuit Judge.

In December, 1923, the First National Bank of Fergus County, Mont., a national bank, suspended business and was declared insolvent by the Comptroller of the Currency, who appointed F. D. Williams receiver. Williams took charge of the assets, and in 1924 the receiver applied to the District Court of the United States for'the District of Montana for authority to sell all of the assets of the bank which then or might thereafter come into his hands as receiver, on terms and conditions set forth in his petition. The plan was as follows: (1) The assets were to be sold for a certain sum, approximately, $2,106,000, representing the sum of the indebtedness of the insolvent bank to the Federal Bank, the preferred claims against the insolvent bank, and 50 per cent, of the unsecured claims. (2) All of the assets were included except stock assessments and cash necessary to pay receivership expenses, such assets being divided into two groups. Title to the assets was to vest immediately in the purchaser. One kind of assets was to be held by three trustees for the purpose of transferring the same at a specified value, or the proceeds thereto, to the purchaser in satisfaction of certificates of indebtedness bearing interest at the rate of 2% per cent, per annum, in the amounts of the difference between the total purchase price and the value of the assets comprised in another schedule C. (3) The terms of the sale stipulated for payment by the buyers of the preferred claims against the insolvent bank and of the debts due to the Federal Reserve Bank, and for the payment of the three trustees by certificates bearing interest at the rate of 2% per cent, per annum in the amount of 50 per cent, of the unsecured claims. The trustees were authorized to deliver these certificates to the creditors entitled to the same as advances upon the claims of such creditors, or to collect the same at maturity and pay the proceeds to the creditors. Certificates were to mature in five installments and mature on the 1st day of December of the years 1925, 1926, 1927, and 1928, respectively. (4) The purchaser was to be a new national bank to be organized at Lewistown, Mont., with a paid-in capital of $150,000, and surplus of $30,000.

Section 5234 of the Revised Statutes (Comp. St. § 9821) provides that the Comptroller of the Currency may appoint a receiver and require of him such bond and security as he deems proper. The duty of the receiver is, under the direction of the Comptroller, to take possession of the hooks and assets of every description of the hank; collect all debts due and claims belonging to it; “and upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and on a like order may sell all the real and personal property of such association on such terms as the court shaE direct, and may, if necessary to pay debts of such association, enforce the individual liabEity of the stockholders. Such receiver shall pay over all moneys so made to the Treasurer of the United States, subject to the order of the ComptroEer, and also make report to the ComptroEer of aE his acts and proceedings.”

The court set the petition for hearing and ordered general notice to be given. After general notice and at the time fixed for the hearing, several creditors and depositors objected in writing to any order of sale being made and to the proposed plan set forth by the receiver, basing their objections upon the ground that under the National Banking Act the proposed plan and agreement was not authorized. The court heard witnesses in support of the petition and in support of the objections thereto, and thereafter in a written memorandum held that the sale and reorganization proposed by the petitioning receiver was legal, and that as the plan proposed was recommended by the ComptroEer of the Currency, the governor of the Federal Reserve District, the chief examiner, and the receiver of the bank, and many individual depositors, as for the best interest of the depositors, the receiver was authorized and directed to make the sale of all assets excepting unpaid stock assessments, cash collected on stock assessments, cash sufficient to pay the expenses of the receivership up to the date of taking effect of the sale, and aE rights of action against the directors of the First National Bank of Fergus County, of which petitioner was receiver. Accordingly, an order was made. The order provides in detaE how payment shaE be made and how certain trustees shall be appointed, and how the assets in certain designated schedules shaE be turned over by the new bank to such trustees to be administered by them, as dirested by tbe order. Tbe court reserved the power at any time to remove any or all of the trustees and to appoint a successor or successors thereto* and ordered that jurisdiction should be retained until the trusteeship should finally be closed, and that petitioner report to the court his proceedings, together with an account thereof for such further order as may be proper.

The objecting creditors filed notice of appeal from the order of the District Court. The court allowed the appeal, fixed a bond for costs, and for a supersedeas.

We are of the opinion that we are without authority to review the order of the District Court. In Cook County National Bank v. United States, 107 U. S. 448, 2 S. Ct. 561, 27 L. Ed. 537, the court held that > the act (title 62, Revised Statutes, p. 992 et seq.) authorizing the formation of national banks constituted by itself a complete system both for establishment as well as government of such banks, including their liability to be put in the hands of a.receiver, “and the manner, in such event, in which their af-. fairs shall be wound up, their circulating notes redeemed, and other debts paid or their property applied toward such payment.” The court continued: “Everything essential to the formation of the banks, * * * the winding up of the institutions, and the distribution of their effects, are fully provided for, as in -a separate code by itself, neither limited nor enlarged by other statutory provisions with respect to the settlement of demands against insolvents or their estates.”

It seems clear that the order involved in this proceeding was a step in the winding up of the affairs of the bank, and although made by a court of record of competent jurisdiction, still the funds collected from the sale are not subject to disbursement by the court, but by the Comptroller, by whom the receiver was appointed and controlled. In Kennedy v. Gibson, 75 U. S. (8 Wall.) 498, the court held that the receiver of a suspended national bank is the instrument of the Comptroller in whom rests the decision when it is necessary to institute proceedings against the stockholders to enforce their personal liability, and that the stockholders cannot controvert the Comptroller’s decision in a litigation that may ensue. Casey v. Galli, 94 U. S. 673, 24 L. Ed. 168. In Ex parte Chetwood, 165 U. S. 443, 17 S. Ct. 385, 41 L. Ed. 782, it was held that the receiver of an insolvent national bank is not the officer of any court, but is the agent and officer of the United States, and that while under section 5234, when he deems it desirable to sell or compound bad or doubtful debts, it devolves upon him to procure the order of a court of competent jurisdiction, nevertheless, the funds collected are disbursed by the Comptroller as in the instance of other cob-lections. The authority referred to as vested in the Comptroller is not a vesting of judicial power. In Bushnell v. Leland, 164 U. S. 684, 17 S. Ct. 209, 41 L. Ed. 598, it was contended that under the National Banking Act the Comptroller of the Currency had no power to appoint a receiver of an insolvent national bank or to call for a ratable assessment of the' stockholders of such bank , without a previous judicial ascertainment for the necessity of the appointment of a receiver, and of the existence of the liabilities of the bank, and that giving authority to the Comptroller to appoint a receiver or to make a ratable call is tantamount to investing that officer with judicial power in violation of the Constitution. But the court dismissed the contention as long since settled and not open to further discussion.

In the present matter, as in the Chetwood Case, supra, the application was entitled “In the matter” of the receivership of the insolvent bank. By the application the receiver did not submit himself and the affairs of the bank to the jurisdiction of the court; nor did the presentation of the application operate to make the receiver an officer of the court, or place the assets of the bank under the control of the court “in the sense in which control is acquired where a receiver is appointed by the court.” In re Chetwood, supra. He belongs to the executive branch of the government, and his custody of assets is not that of the court. Farrell v. Stoddard (D. C.) 1 F.(2d) 802. The procedure outlined by the statutes did not contemplate a trial in court. And no case is cited which lends support to the view that the statute intended that an objecting creditor could litigate with the receiver — who represents creditors and the insolvent bank — the question determined by him as to the advisability of disposing of the assets of the insolvent institution. There is no suit; no parties in the legal understanding of the term; no process must issue; no one is authorized to appear on behalf of the receiver or any one else, or to subprana witnesses. It is an ex parte proceeding, and, though by the will of Congress put under judicial cognizance, is not by its own nature a judicial controversy. The fact that, when the receiver filed his application, the judge sought information and directed that notice be published that the court would hear persons interested in the insolvent bank npon tbe question of tbe proposed sale, does not change tbe administrative character of tbe proceeding. Tbe course followed was, evidently, out of a cautious wish to gain advice that would be helpful in finally determining whether or not tbe order applied for by the receiver should be granted. Ex parte Cockcroft, 104 U. S. 579, 26 L. Ed. 856. No statute gave to tbe objectors any legal right to demand to be beard or to be made parties to tbe proceeding; nor is there any statutory provision for" an appeal from an order for tbe sale of tbe assets of an insolvent national bank. Eor an attempt to make an illegal or fraudulent sale, doubtless, a remedy by suit would lie, and from a decision in such a suit appeal could be taken to this court; but that is aside from tbe matter before us. Section 128 of tbe Judicial Code (Comp. St. § 1120), which applies to ordinary civil actions at law or in equity, does not, as a rule, extend to tbe order made herein under special statutory proceedings. Tbe motion to dismiss tbe appeal is sustained.

Dismissed.


author: HUNT, Circuit Judge ROSS, Circuit Judge

text:
    HEAD et al. v. BRAINARD.
    (Circuit Court of Appeals, Ninth Circuit.
    April 20, 1925.
    Rehearing Denied May 25, 1925.)
    No. 4383.
    1. Judgment <§=725(3) — Adjudication adverse to claimants in ancillary bankruptcy proceedings held conclusive as to title of bankrupt’s estate in trustee’s action against claimants for conversion.
    District Court’s order, in ancillary bankruptcy proceedings, confirming report of the master that title to certain property was in bankrupt, and was not held by claimants in good faith, or under color of title, and that possession of property belonged to ancillary receiver, helé an adjudication that title to the property was in bankrupt estate, conclusive as to title in trustee’s subsequent action against such claimants to recover value, of property alleged to have been converted by claimants, notwithstanding challenge to jurisdiction of court in ancillary proceedings by reason of claimants’ assertion of title, since question raised by challenge to jurisdiction could not be decided 'without adjudication as to whether claim was in good faith and with legal foundation.
    2. Bankruptcy <§=304 — Instruction on value held warranted by evidence.
    In action by trustee in bankruptcy for conversion of stock of merchandise and fixtures, instruction on value of property helé warranted by evidence.
    3. Bankruptcy <§=282 — Nonpayment of fee by foreign corporation held no defense in trustee’s action for conversion of property on theory that property was taken while in constructive possession of court. ■ ■
    In action by trustee in bankruptcy of foreign corporation for value of property on theory that property while in constructive possession of court was unlawfully taken from ancillary receiver and converted by defendants, nonpayment of fee by corporation under Or. L. § 6886, prohibiting maintenance of action in state by foreign corporation which has not paid fee, helé no defense.
    Ross, Circuit Judge, dissenting.
    In Error to tbe District Court of tbe United States for tbe District of Oregon; Robert S. Bean, Judge.
    Suit by G. W. Brainard, trustee in bankruptcy of tbe Pacific Co-operative League Stores, bankrupt, against E. R. Head and others. Judgment for plaintiff, and defendants bring error.
    Affirmed.
    This was a suit by tbe trustee in bankruptcy of tbe estate of Pacific Co-operative League .Stores, a corporation, bankrupt, against Head, tbe Modern Cash Store, and others, to recover tbe value of a stock of merchandise and fixtures at La Grande, Or., alleged tp have been converted by defendants. Trial, and, verdict in favor of tbe trustee.
    Upon tbe trial tbe trustee, to support bis complaint, introduced the pleadings, orders, and reports of a special master in ancillary bankruptcy proceedings of tbe Pacific Cooperative League Stores which bad been brought in tbe United States District Court for tbe District of Oregon, to obtain possession of tbe stock of goods and fixtures heretofore referred to, from Head, the Modern Cash Store, and tbe others, defendants in tbe present action. In tbe ancillary proceedings tbe issue was whether or not the defendants were bolding tbe property under a mere pretense of color of title and in bad faith. In tbe record of those proceedings, in reply to an order to show cause, if any they could, why tbe property referred to held by them should not be turned over to tbe ancillary receiver, Head and tbe others appeared and answered, claiming to bold tbe property adversely under claim of title. Tbe court referred tbe matter to a special master to take testimony and to recommend whether or not tbe claim made by Head and others to tbe stock of goods and fixtures was made in good faith and under colorable title. Tbe master found that Head and tbe others held in bad faith under mere pretense and that title was in tbe Pacific Co-operative League Stores. Tlje District Court confirmed the report of the master and held that the possession of the property belonged to the ancillary receiver and was,not held by claimants in good faith nor under color of title, and that since the date of filing and serving the petition for order to show cause, the larger part of the property had been disposed of, so that “the said property as it existed at the date of the filing of said petition was not in the possession of said above-named claimants, having been disposed of in whole or in part by .them or on their behalf.” The court then referred the matter back to the special master to determine the value of the property at the date of the taking of possession thereof by the defendants. The master reported the value. Head and others excepted to the report and moved to modify the order of the court which had been previously made by discharging Head and two others from liability and to allow the Modern Cash Store to deliver the property that they then had as a compliance with the previous court order. The judge modified the order by revoking so much thereof as had sent the matter .back to the special master to determine the value of the property. He also declined to confirm the finding of the master as to the value of the property, on the ground that the court could not make a determination of that matter in the summary proceeding. The court, however, refused to make further modification, taking the view that the property or a large portion thereof was not then in possession of Head and the others, but had been 'disposed of by them since the order to show cause had been made.
    Over objections by defendants below, the court ruled that the ownership of the property had been adjudicated in the bankruptcy proceeding, and that the only question involved in this plenary action was the value of the property.
    With respect to that question the trustee introduced in evidence a motion and affidavits in support thereof, which had been filed by Head and the Modern Cash Store and others, in the ancillary bankruptcy proceedings, heretofore referred to, wherein Head and others had asked for an order directing the ancillary receiver to accept, in lieu of the property determined hy the court to have been withheld by them, certain other property then tendered. The affidavits which Curtis, Head, and others had filed set forth that the value of the property at the. time of the bankruptcy proceedings, turned over by the defendants to the Modern Cash Store, was $4,080.02. The affidavits also set forth the value of the goods on hand at the time of the filing of the motion and tender to the trustee. No testimony was offered by the defendants. The court treated the statements of affiants as admission of value, and directed the jury to find for the plaintiff and against the defendants for $4,080.02, with interest. Judgment was entered, motion for new trial was overruled, and writ of error was sued out by Head, Modern Cash Store, a corporation, and two others.
    E. R. Ringo and Cochran & Eberhard, all of La Grande, Or., for plaintiffs in error.
    Sidney Teiser, of Portland, Or., for defendant in error.
    Before ROSS, HUNT, and RUDKIN, Circuit Judges.
   HUNT, Circuit Judge

(after stating the facts as above). Plaintiffs in error contend that the District Court made no decision upon the question of title and was without pow- • er to make such determination in the present action; that the trustee could not maintain this action; that it was error for the court to refuse to permit defendants below to prove ownership of the property and to direct a verdict in favor of plaintiff below.

In our opinion the court by its order of confirmation of the master’s report in the ancillary bankruptcy proceedings adjudged that the bankrupt estate had title to the property in question, and that the claimants thereto, who were these plaintiffs in error, did not hold the property by right or assertion of right made in good faith. No steps to review that order in the summary proceedings were taken by Head and others affected. There was a challenge by the respondents in the ancillary proceedings to the jurisdiction, but that step did not oust the court of jurisdiction, or do more than to impose upon it the duty to cite claimants ho show cause why they should not yield possession of the property to the trustee, and to inquire whether the claim of title was genuine and adverse and made in good faith. Cohen v. Hessel (C. C. A.) 278 F. 929. Repeated decisions have recognized the obvious proposition that before jurisdiction of the District Court can be ousted by mere assertion of title by a claimant, there must be a hearing and a decision whether the claim interposed is in good faith and real, or is without actual merit or legal foundation. If the decision is the one way, the bankruptcy court should decline to try the issue summarily; but if it be decided that the claim is wholly without merit and is not filed in good faith, then the court has power to make an order requiring the wrongful holder to surrender to the trustee and to direct administration. In re Eilers Music House (C. C. A.) 270 P. 917, certiorari denied 257 U. S. 613, 646, 42 S. Ct. 53, 55, 66 L. Ed. 397, 414. In Taubel, etc., Co. v. Fox, 264 U. S. 426, 44 S. Ct. 396, 68 L. Ed. 770, the court held that under the act of 1898 the bankruptcy court had power to adjudicate, without consent, controversies concerning the title arising under either sections 67e, 60b, or 70e (Comp. St. §§ 9651, 9644, 9654), where the property was in possession of the court, but that while possession was essential to jurisdiction, it need not be actual, but was sufficient if constructive, and in giving several instances wherein the court might exercise jurisdiction, Justice Brandéis includes those “where the property is held by one who .makes the claim, but the claim is colorable only.” The court also held that as the bankruptcy court must have power to determine whether it has possession, actual or constructive, “it may conclude, where it lacks actual possession, that the physical possession held by some other persons is of such a nature that the property is constructively within the possession of the court.” Myers v. International Trust Co., 263 U. S. 64, 44 S. Ct. 86, 68 L. Ed. 165, also has a bearing. There the trust company entered its appearance in an application for discharge filed by Myers Bros., claiming tljat Myers Bros, had obtained a loan from the trust company upon a materially false statement. • The District Court discharged the bankrupts upon the ground that the statement was not materially false, but was true.. Subsequently the trust company sued Myers Bros, for damages for deceit in having obtained credit upon false statements of their, fipaneial condition,. The trust 'company obtained judgment against Myers Bros. Upon the trial, evidence of the record of the proceedings in the bankruptcy court in the matter of the discharge was offered as evidence of estoppel by judgment against 'the plaintiff therein as to the fact of falsity, and the trial court excluded the record. The Supreme Court reversed the judgment, holding that the trust company was estopped, as between itself and the bankrupts, in respect of the relevant facts determined in the controversy exactly as if the proceeding in opposition to the composition and discharge had been an ordinary civil suit by it against them. Applying that ruling to the present ease, by the introduction of the record of proceedings in the bankruptcy court upon the question of the taking of the property by Head and the other defendants, the judgment was an estoppel exactly as if the proceeding had been an ordinary civil suit against them.

We-are also of opinion that there was sufficient before the court to justify the instruction upon value. The affidavits stated that the cost price as of February 25, 1922, when the property was taken possession of by Head and other elaimaiits, was $4,080.02. Petition in involuntary bankruptcy was filed in California on that date. It appeared, too, upon the motion for an order allowing the property to be turned over, that a bill of sale for the stock and fixtures was made about February 22, 1922, to Head, Garland, and Curtis; that Head took possession, and that about March 14, 1922, he made an inventory'and delivered the bill of sale for the stock and fixtures to the Modern Cash Store, a corporation. The testimony showed that Head, Curtis, and Garland, defendants below, had subscribed to 99 of the 100 shares of stock of the Modern Cash Store, a corporation, at $50 par value per share, and that they had transferred to the corporation the property of which they had taken possession, in payment of their subscriptions to the 99 shares of stock.

It is said that the trustee of a bankrupt corporation which has not conformed to the Oregon, statute, section 6886, relative to a foreign corporation transacting business in Oregon, cannot maintain an action in that state. By section 6886 it is provided that a plea that a corporation has not paid the fee required by the state, and which is then due and payable, may be interposed before trial upon the merits, and if issue be joined upon such plea the same shall be first tried, and that such plea cannot be made at any time by the delinquent corporation. The statute, however, is not pertinent, for this is not an action by a foreign corporation to recover property withheld or taken from it, but is one instituted by a trustee in bankruptcy to recover the value of property converted by defendants from an ancillary receiver and the trustee in bankruptcy. The theory of the present action is that the property was always in constructive possession of the court, and that while in such constructive possession was unlawfully taken by the plaintiffs in error from the ancillary receiver and converted.

We find no error, and affirm the judgment.

ROSS, Circuit Judge

(dissenting). I respectfully dissent. My views regarding the main point involved in the ease, were expressed in the opinion of this court in the case of Cooney v. Collins et al., 176 F. 189, 99 C. C. A. 543, and in my dissenting opinions in the case of In re Eilers Music House (C. C. A.) 270 F. 915, 925, and in the case of the same title reported in (C. C. A.) 274 F. 330, 335; to which views I still adhere.


author: HUNT, Circuit Judge

text:
    UNITED STATES ex rel. FINCH v. ELLIOTT, United States Commissioner.
    (Circuit Court of Appeals, Ninth Circuit.
    April 27, 1925.)
    No. 4446.
    1. Intoxicating liquors <§=»249 — Commissioner exercises judicial power in finding probable cause and issuing warrant.
    Commissioner, in finding probable cause for issuance of search and in issuing warrant, exercises judicial power granted by National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138% et seq.) and Act June 15, 1917, tit. 11 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 10496%a et seq.).
    2. Certiorari <§=>5(1) — 'Writ not granted where relator has adequate remedy by appeal or otherwise.
    Writ of certiorari will not be granted where relator has a plain and ' adequate remedy by appeal or otherwise.
    3. Intoxicating liquors <§=>253 — Certiorari held not available fo'r review of proceedings of commissioner in issuing search warrant.
    Certiorari is not available to review proceeding of United States eommissoner in issuing a search warrant at instance of relator; who claims that there was no showing! of probable cause to believe that petition was violating National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138% et seq.), and that warrant directed search and seizure of documents not particularly described, since relator’s remedy under Rev. St. § 1014 (Comp. St. § 1674), National Prohibition Act, tit. 2, § 2 (Comp. St. Ann. Supp. 1923, § 10138%a), and Act June 15, 1917, tit. 11, §§ 3, 6, 11, 13, 15, 16 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 10496%e, 10496%f, 10496%k, l()496%m, 10496%o, 10496%p), is right to controvert grounds on hearing before commissioner and proceedings for restoration of property seized if not prescribed in warrant or if there was no probable cause.
    Appeal from the District Court of the United States for the Northern Division of the Western District of Washington; Jeremiah Neterer, Judge.
    Certiorari' by the United States, on the relation of J. L. Finch, against H. S. Elliott, a United States Commissioner for the Western District of Washington. Writ denied by District Court (3 F.[¿d] 496), and relator appeals.
    Affirmed.
    This is an appeal by Finch from an order of the District Court denying petition for writ of certiorari to review the proceedings of United States Commissioner Elliott for the Western District of Washington in issuing a search warrant for search of premises and seizure of intoxicating liquor and papers and memoranda. The petition alleges that on November 21, 1924, one Cor-win, claiming to be a federal prohibition agent for the state of Washington, complained against relator Finch, and others, charging violation of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 10138% et seq.), and praying for a warrant for the search of the offices of Finch in room 1026, L. C. Smith Building, Seattle, and of the furniture, safes, receptacles, cabinets, desks, and equipment of such offices; that thereupon Elliott, acting wholly in excess of jurisdiction, issued a warrant for the search of the offices of relator; that before the issuance of the warrant no showing of probable cause supported by affidavit was made, nor were any facts set forth tending to establish grounds for the application, or probable cause for believing such grounds existed, except by affidavits attached to the complaint; that under and by virtue of the color of authority conferred upon them by said warrant, Corwin and others entered the offices of the relator at rooms 1025 and 1026 in the L. C. Smith Building, and over his prótesis made search of hi's-offices and of the safe, desks, files and papers, and equipment therein, and took and carried away therefrom certain papers and files; that relator is a lawyer of years of practice, and has kept in his possession valuable mem-oranda, papers, files, letters, receipts, bills, and other papers of importance, some of which belong to him personally, and some of which belong to clients; that no intoxicating liquor was found in his offices, nor has any been kept there for sale; that the whole proceeding was oppressive and a subterfuge to gain unlawful advantage, and was a clear abuse of the process; that unless the papers seized are impounded, those who hold them will make unlawful use thereof to the irreparable harm of relator; that relator is without any plain, speedy, or adequate remedy in the ordinary course; that he believes that no return will be made to the warrant within the time prescribed by law or within any reasonable time and that no hearing or motion to (jnash the warrant or of the facts or bases for the issuance of such warrant, if controverted before tbe respondent, could or would be heard within such period of time as will prevent irreparable injury to relator.
    In the application and affidavit for the warrant, Corwin set forth that he was a federal prohibition agent; that Finch and others named, proprietors and employees, on November 17,1924, and thereafter, were possessing and selling- intoxicating liquor for beverage purposes; that the premises are not a dwelling house or private residence: that affiant has heard the persons named state that the premises were their offices; that the premises are described as room 1026, L. C. Smith Building, and connecting rooms, in Seattle, “including all furniture, safes,' receptacles, cabinets, desks and equipment and on the premises used, operated and occupied in connection therewith and under control and occupancy of said parties.” Affiant prayed that search warrant issue directing and authorizing a search of the persons of the named persons, and of the premises described, and seizure of any and all of the described property and intoxicating liquor, materials, containers, papers, and means of committing the crime aforesaid. By a supporting affidavit, Corwin also set up that in July, August, and September, at Seattle, he had heard Finch state that he had intoxicating liquor on the premises described and had heard Finch and.two others arrange for the traffic of intoxicating- liquor, and that “the books and documents relating to said intoxicating li'quor were in said premises,” and that he had heard some of the parties make arrangements with “reputed bootleggers” to transact business in the premises “relating to the sale, transportation and possession of intoxicating liquor.”
    Elliott, as United States commissioner, issued the search warrant, in the name of the President, addressed to the marshal of the United States for the Western district of Washington and to his deputies or either of them, and to any federal prohibition officer of the state of Washington, and to the Commissioner of Internal Revenue, his assistants, deputies, agents, or inspectors. The warrant, after reciting that whereas the commissioner is satisfied of the existence of the grounds for the application, and that there is probable cause to believe their existence commands the officials to enter the premises in the daytime or nighttime and diligently investigate and “search the same and into and concerning said crime, and to search the person of said above-named persons, and from him or her, or from said premises, seize any and all of the property, documents, papers and materials so used in or about the commission of said crime, and any and all intoxicating liquor and the containers thereof, and then and there take .the same into your possession, and true report make of your said acts as provided by law.” The record contains receipts given by Corwin to Finch for a large number of documents, among which are letters, income tax returns, receipts, abstracts of title, deeds for property, memoranda, telephone bills, all taken by virtue of the search warrant.
    J. L. Finch, of Seattle, Wash., in pro. per.
    Thos. P. Revelle, U. S. Atty., and C. T. McKinney, Asst. U. S. Atty., both of Seattle, Wash., for appellee.
    Before GILBERT, HUNT, and RUDKIN, Circuit Judges.
   HUNT, Circuit Judge

(after stating the facts as above). Appellant has argued the relationship of a commissioner to the-courts, and what is the grant of power under which he acts in issuing a search warrant and holding a hearing after seizure made. But upon that question we need go no further than to express the opinion that a commissioner in finding probable cause and issuing a search warrant exercises judicial power granted directly to him by Acts of Congress known as the National Prohibition Act (St. L. 1919 [Comp. St. Ann. Supp. 1923, § 10138j4 et seq.]) and the Espionage Aet (title 11, Act June 15, 1917, 40 St. L. 217, 228 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 1049614a et seq.]).

We may say, too, that if the allegations of the petition of Finch presented to the District Court are well founded, the issuance of the warrant directing search and seizure of papers and documents, none of which is particularly described, and the seizure of the documents, papers, and memoranda under the asserted authority of the warrant, present questions of unusual importance. On the other hand, if appellant Finch has a plain and adequate remedy by appeal or otherwise) the writ of. certiorari will not be granted, and that he has a clear remedy seems apparent. Under section 2, tit. 2, National Prohibition Act, supra (Comp. St. Ann. Supp. 1923, § 1013814a), section 1014 of the Revised Statutes (Comp. St. § 1674) is made applicable to the enforcement of the Prohibition Act, and a commissioner, being an officer mentioned in section 1014, is authorized to issue search warrants under the limitations of title 11 the Espionage Aet, already cited. One of the grounds upon Which search warrant may issue is: When the property sought has been used as a means of committing a felony, in which ease it may be taken on the warrant from any house or any place in which it is concealed, or from the possession of the person by whom it was used in the commission of the offense, or by any other person in whose possession it may be. Section 3 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 10496j4c) prohibits the issuance of a search warrant, but upon probable cause supported by affidavit, “naming or describing the person and particularly describing the property,” and the place to be searched. Section 6 (section 10498j4f) provides that if the commissioner is satisfied, after examination of the affidavits or depositions filed, of the existence of the grounds of the application, or that there is probable cause for believing their existence, he must issue a search warrant to a civil officer of the United States duly authorized to enforce or assist irf enforcing any law thereof, stating the particular ground or probable cause for its issuance, * * * and commanding him forthwith to search the person or place named “for the property specified” and to bring it before the judge or commissioner. By section 11 (section 10496j4k)j the search warrant must be executed or returned to the judge or commissioner within ten days after its date, and after the expiration of such time the warrant, unless executed, is void. By section 13 (section 10496%m), the officer is required to return the warrant to the commissioner. • Sections 15 and 16 (sections 10496y^o, 10496:(4p) lay down the procedure where, if the grounds upon which the warrant has been issued are controverted, the duty of the commissioner is to take testimony in relation thereto and requiring the testimony of each witness to be reduced to writing and subscribed by each witness. Furthermore, if it appears that the property or paper seized is not the same as that described in the warrant, or that there is no probable cause for believing the existence of the grounds on which the warrant was issued, then the eommisioner must cause the property or paper to be restored to the person from whom it was taken; but if it appears that the property or paper is the same as that described in the warrant, and that there is probable cause for believing the existence of the grounds upon which the warrant was issued, then the commissioner shall order the same retained in the custody of the person seizing it or to be otherwise disposed of according to law.

These several sections and provisions are explicit, and when construed in connection with the Fourth Amendment, they not only define the limits of the power of the commissioner - in issuing a search warrant, but they also clearly imply that one may go before the commissioner and controvert the grounds upon which the warrant was issued, and, if it appears that the property or paper which has been seized is not that which was described in the warrant, or that there was no probable cause for believing the existence of the grounds upon which the commissioner issued the warrant, may have such property or paper restored to him by order of the commissioner.

Appellant herein advances no sufficient reason for not having followed the course outlined. He therefore makes no cause for the issuance of a writ of certiorari.

The order is affirmed.