author: WOOLLEY, Circuit Judge.

text:
    HEFFERMAN v. UNITED STATES.
    No. 4503.
    Circuit Court of Appeals, Third Circuit.
    May 7, 1931.

      Franklin J. Graham, of Upper Darby, Pa., for appellant.
    Michael J. S. Stoney, U. S. Atty., and Paul Freeman, Asst. U. S. Atty., both of Philadelphia, Pa.
    Before BUFFINGTON and WOOLLEY, Circuit Judges, and THOMPSON, District Judge.
   WOOLLEY, Circuit Judge.

The indictment contains five counts for violations of the National Prohibition Act and concludes with allegations that the defendant had twice been convicted for like offenses. Two counts charge unlawful sale of intoxicating liquor, two unlawful possession, and one the maintenance of a common nuisance.

At the trial the government offered evidence tending to prove a sale of whisky by the defendant in a building in Chester, Pennsylvania, the issuance of search warrants on evidence of that sale, and execution .of the warrants by a search of the building and discovery of a barroom of the ordinary type and seizure of a fifty gallon barrel of whisky, one-half barrel of unlabeled beer on tap, and seven hundred and twenty bottles of beer. The government then put in evidence the criminal docket of the same court to prove prior convictions.

The defendant offered no evidence. After one count for a sale had been withdrawn, the jury found the defendant guilty on all other counts and also found two previous convictions as alleged. This appeal followed.

The defendant assigns several errors in the trial of which the first is the action of the court in admitting evidence obtained under the search warrants. This assigned error is based on three grounds, the first being that the liquor so seized, with the exception of samples retained, had all been destroyed at the time of the seizure, and that, in view of the provision of the Act that “property so seized shall be subject to such disposition as the court may make thereof” (Title 2, § 25 [27 USCA § 39]), the agents, though lawfully entering upon the premises, became trespassers ab initio when they unlawfully destroyed the liquor; that they thus lost the protection and authority conferred upon •them by the search warrants; that, therefore, the seizure of the liquor, both that destroyed and that retained as evidence was illegal and prohibited by the Fourth Amendment and that this and other evidence so procured became inadmissible because violative of the Fourth and Fifth Amendments to the Constitution.

This question is not new. It was for a time vigorously disputed and differently decided in lower courts, but in the case of McGuire v. United States, 273 U. S. 95, 47 S. Ct. 259, 71 L. Ed. 556, the Supreme Court resolved the question against the defendant with finality. The law of the McGuife decision was applied in this circuit in United States v. Griffin (D. C.) 17 F.(2d) 811, and, of course, rules this case.

The defendant next attacks the search warrants and the admission of evidence procured under them on the ground that, because of inaccuracies in describing the premises, it appears, as he contends, that the property searched was not the one described in the search warrants and the property described in the search warrants was not the one described in the indictment.

There is no doubt in law that a search warrant is a command to search the place named therein and it must be strictly obeyed. United States v. Innelli (D. C.) 286 F. 731. It does not authorize a search of some other place. While, admittedly, there is con-fusion in the descriptions of the place in this ease, it does not follow that the place is uncertain or that the various acts alleged were done at different places.

The record shows this situation: The place, howsoever described, was in Chester, Pennsylvania. The sale was made at No. 600 Morton Avenue. In the first search warrant the building is described as located at East Sixth and Ontario Streets and Morton Avenue, and in the second search warrant as the Northwest Comer of Sixth Street and Morton Avenue. The first search warrant was executed at Sixth Street and Morton Avenue and Potter Street, the sécond at the Comer of Sixth Street and Morton Avenue, No-. 600 Morton Avenue. The indictment names the premises as “Sixth Street, Morton Avenue and Potter Street (600 Morton Avenue)”.

Though the defendant now attacks the warrants, their execution and the indictment as containing fatal variances, he did not take the stand, nor did he offer to prove by the testimony of others that the place* described in one instrument was not the place described in the others. The confusion is explained by the fact that the one building at which the sale took place, the search was made and the indictment laid the offenses stood on a triangular lot formed by three streets one of which (Potter Street or Ontario Street) was perhaps erroneously named. Yet this error was cured, both in one of the search warrants and in the indictment, by putting in the street number — 600 Morton Avenue. That the slight inaccuracy in describing the property without destroying its identity does not invalidate a search warrant is sustained by Steele v. United States, 267 U. S. 498, 503, 45 S. Ct. 414, 69 L. Ed. 757; Rothlisberger v. United States (C. C. A.) 289 F. 72 and Giacolone v. United States (C. C. A.) 13 F.(2d) 108:

And, finally, the defendant contends that the search warrants were invalid because not based on ‘probable cause shown to exist at the time they issued as required by law. There was a lapse of twenty-one days between the sale (probable cause) and the issuance of the first warrant. We recognize, of course, that a search warrant must issue, if at all, upon an existing cause, that is, that action which constitutes probable cause on one date might not alone support a élaim of continued existence of that same situation at a much later daté. We shall not, however, decide this question by matching the lapse of time in this ease with lapses of time in the eases cited but hold that the search warrants were not in the circumstances invalid for want of existing probable cause. Dandrea v. United States (C. C. A.) 7 F.(2d) 861; Rupinski v. United States (C. C. A.) 4 F.(2d) 17; Hawker v. Queck (C. C. A.) 1 F.(2d) 77; Murby v. United States (C. C. A.) 2 F.(2d) 56; United States v. McKay (D. C.) 2 F.(2d) 257; People v. Chippewa, 226 Mich. 326, 328, 197 N. W. 539, 540.

The last two errors assigned arise out of the section of the National Prohibition Act which prescribes heavier sentences for second offenses. Title 2, § 29 (27 USCA § 46). This court considered the meaning and operation of this provision in Singer v. United States, 278 F. 415, 419, 420, holding in Substance that the Congress regarded a second offense against the Act as a distinct offense for which it provided increased punishment, and that in order to establish an offense of this character it provided that the prior conviction must be pleaded. It follows that pri- or conviction as an element of a second offense, being pleaded, must be proved. Becker v. United States (C. C. A.) 36 F.(2d) 472. To be effectually proved, identity of the two offenses and identity of the accused as the same person in each prosecution must be established. Evidence to prove these essentials of a second offense is, contrary to the defendant’s contention, admissible by force of the Act and falls under an entirely different rule from that which forbids proof of a previous conviction to show that the accused would be likely to commit the same crime again. Mansbach v. United States (C. C. A.) 11 F.(2d) 221, 224. On this state of the law, the United States Attorney in his opening to the jury spoke of the provision of the Act which requires in a prosecution for a second offense that the prior offense be pleaded and of the law which requires that it be proved. The defendant at once moved that a juror be withdrawn and on the court’s refusal was allowed the exception on which he now bases this assignment of error.

We find nothing wrong in what the United States Attorney said for all that he did was to state the character of the offense, what the law requires shall be pleaded, what, accordingly, the law requires shall be proved and that he would prove it. In doing so he tactfully, and we think successfully, avoided the rule against evidence of a prior offense in proof of the commission of an instant offense by saying:

“Of course, that has no bearing, I want to have you understand clearly, upon the guilt or innocence of the defendant in this proceeding. In other words, the fact that he may have been eonvieted at an earlier time of a similar offense does not mean that he was guilty this time.”

To identify the offenses and the defendant the government introduced the record of two prior convictions in the same court of a man of the same very unusual name for the same offenses of selling liquor and maintaining a nuisance at the same address (600 Morton Avenue) in the same city and in the same judicial district. There was no other identification of the offenses or the defendant; yet this, we hold, was prima facie identification of both within the law discussed in Commonwealth v. John Doe, 79 Pa. Super. Ct. 162, 168, 169; State v. Aime, 62 Utah, 476, 220 P. 704, 32 A. L. R. 375; Files v. State, 16 Okl. Cr. 363, 182 P. 911; State v. Bizer, 113 Kan. 731, 216 P. 303; State v. Court, 225 Mo. 609, 125 S. W. 451. As the defendant introduced no evidence to the contrary, the prima facie evidence of identity stood undisturbed.

The judgment is affirmed.


source: Caselaw Access Project

author: WILBUR, Circuit Judge.

license: Public Domain

text:
    PACIFIC DOCK & TERMINAL CO. v. LOS ANGELES DOCK & TERMINAL CO. et al.
    No. 6337.
    Circuit Court of Appeals, Ninth Circuit.
    May 25, 1931.

      Gregory, Hunt & Melvin, T. T. C. Gregory, William H. Hunt, and Wallace Sheehan, all of San Francisco, Cal., and Farrand & Slosson and Leonard B. Slosson, all of Los Angeles, Cal., for appellant.
    Walter M. Campbell and Anderson & Anderson & Sheahan, ail of Los Angeles, Cal., for appellee.
    Before RUDKIN, WILBUR, and SAW-TELLE, Circuit Judges.

      Rehearing denied July 22, 1931.

   WILBUR, Circuit Judge.

This action was brought by the appellant, hereinafter referred to as the Pacific Company, assignee of D. M. Reynolds, to compel the conveyance to it of 75 acres of land in the Long Beach Harbor district, and to have the court determine the amount of money by way of damages that should be paid by the appellant to the defendant Pacific Southwest Trust & Savings Bank, hereinafter referred to as the Trust Company, for the appellee, the Los Angeles Dock & Terminal Company, hereinafter referred to as the Los Angeles Company, as a condition precedent to such conveyance in view of the admitted breach of an agreement by the appellant to construct a blast furnace for the manufacture of pig iron upon or adjacent to such land and within the city of Long Beach.

The principal question involved in the case is the proper construction of the terms of a separate agreement accompanying the delivery in escrow of a deed of such land from the appellee, Los Angeles Company, to the Trust Company, in the light of contemporaneous agreements between the parties and of surrounding circumstances. The trial court was very liberal in permitting evidence of oral and written negotiations between the parties leading up to the execution of the agreements referred to, at one time stating, in reply to an objection, “ * * * this is an information gleaning process and a good deal has been admitted that, of course, is not very material. So the witness may answer.*’ It is claimed by the appellant that much of this evidence was inadmissible for the purpose of interpreting the written agreements, and that such evidence should have been excluded upon the ground that the written agreements themselves superseded all previous negotiations, written or oral. Cal. Civ. Code, § 1625. The assignments of error do not quote the full substance of the evidence objected to as required by our rules (Rule 3); hence, the error in the admission of this testimony cannot be considered, although appellant’s brief. contains frequent assertions that such evidence was improperly admitted over its objections. For this reason we will approach the problem presented by the record with a view of ascertaining the intent of the' parties from the written agreements if it can be done without the aid of such testimony as to the negotiations between the parties. The agreement above referred to is as follows:

“Pacific-Southwest Trust and Savings Bank,
“Los Angeles, California.
“Gentlemen:
“Enclosed herewith find a deed from Los Angeles Dock and Terminal Company to you bearing date the 19th day of December, 1924, conveying certain real property in the City of Long Beach, County of Los Angeles, State of California, and containing 75 acres, more or less.
“This title you shall hold in trust until July 8,19-27 (unless any liens on said property shall in the meantime have been foreclosed and such title divested), at which time you shall sell the same, or so much thereof as may be necessary to realize the amount of five hundred thousand ($500,000) dollars, and shall pay said five hundred thousand ($5001,-000) dollars to the Los Angeles Dock and Terminal Company, and shall reconvey the remaining lands, if any, to Pacific Dock and Terminal Company, a corporation, as successor in interest to D. M. Reynolds.
“Upon receiving from Pacific Dock and Terminal Company, a corporation, either — •
“1. Contracts of sale upon lands formerly owned by Los Angeles Dock and Terminal Company on Long Beach Harbor, with payments still to be made thereon of at least seven hundred fifty thousand ($750,000) dollars, provided, however, that at the time said contract shall be offered for the purposes hereof the entire purchase price of two million ($2,000,000) dollars shall have been paid to Los Angeles Dock and Terminal Company under contract of sale between said company and D. M. Reynolds, now assigned to said Pacific Dock and Terminal Company, a corporation.
“2. A conveyance of lands formerly belonging to Los Angeles Dock and Terminal Company and by it conveyed to Pacific Dock and Terminal Company, a corporation, aa successor in interest to D. M. Reynolds, having a value at the time of the conveyance to you of not less than seven hundred fifty thousand ($750,000) dollars, according to the release prices set forth in the agreement by and between Los Angeles Dock and Terminal Company and D. M. Reynolds, under which this trust is created, a copy of which agreement with amendments thereto is hereto attached and made a part hereof.
“3. Upon the deposit of sufficient securities of the reasonable market value of not less than seven hundred fifty thousand ($750,-000) dollars you shall convey said property to Pacific Dock and Terminal Company, holding the substituted security for the purposes hereof.
“The value of the securities in the third ease above mentioned to be subject to the appraisal and approval of the Pacific-Southwest Trust and Savings Bank, if not agreed to between the parties hereto.
“In the event that Pacific Dock and Terminal Company, its successors or assigns, shall, on or before the 8th day of July, 1927, construct a blast furnace for the making of pig iron at or adjacent to the property described in said conveyance herewith delivered and within the city limits of the City of Long Beach, the said real property described in said conveyance shall be thereupon conveyed to the Pacific Dock and Terminal Company, a corporation, its successors or assigns, in its entirety, and if the same should have been theretofore conveyed upon the substitution of other security, as hereinbefore provided, then the substituted security shall thereupon be conveyed and delivered to said Pacific Dock and Terminal Company.
“It is further provided that said lands, or any part thereof, described in said conveyance, may be used, enjoyed, leased or occupied by the said Pacific Doek and Terminal Company, subject to being divested by enforcement of any liens against the same, but all of said lands shall be subject to the harbor changes provided for in said contract and amendments and to taxes thereon and to costs and expenses of this trust, all of which shall be paid ,by the said Pacific Dock and Terminal Company.
“These instructions and declaration shall bind and benefit the successors and assigns of the respective parties hereto.
“Los Angeles Dock & Terminal Company.
“By [signed] C. J. Curtis, President.
“By [signed] Walter M. Campbell, Secretary.
“Pacific Dock & Terminal Company.
“By [signed] T. T. C. Gregory, Vice-President.
“By [signed] Wallace Sheehan, Secretary.
“Accepted this - day of -, 19-. ' '■
“Pacific-Southwest Trust & Savings Bank.
“By-, Vice-President.
“(Endorsed): Piled Jul. 8, 1927. R. S. Zimmerman, Clerk, by L. J. Cordes, Deputy Clerk.”

This agreement superseded an agreement dated November 8, 1923, giving similar instructions as to a deed for 100 acres to D. M. Reynolds in place of the later one for 75 acres to the appellant.

It is contended by the appellant that the deed and instructions to the Trust Company provide for the payment of a penalty for failure upon the part of Reynolds or his assignee to construct a blast furnace on or before the 8th day of July, 1927, that therefore, in legal effect, the agreement is one giving security to pay to the appellee, the Los Angeles Company, the amount of actual damages sustained by it because of the failure of D. M. Reynolds and his assignee, the appellant, to construct said blast furnace, and that the amount of this damage should be fixed by the court in accordance with the evidence, and that the evidence showed that the damage suffered by the appellee is only nominal. As an alternative appellant claims that at most the agreement is one for the payment of liquidated damages for such failure and is not valid or enforceable for the reason that there was no damage suffered or in any event if there is an appreciable damage, that such damage is not “incapable of ascertainment,” and that therefore the contract is void in so far as it attempts to fix the actual amount to be paid for the breach of the contract. In these contentions appellant relies upon sections 1670, 1671, Cal. Civ. Code, which are as follows:

“§■ 1670. Contract fixing damages, void. Every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void, except as expressly provided in the next section.
“§ 1671. Exception. The parties to a contract may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the ease, it would be impracticable or extremely difficult to fix the actual damage.”

The appellee takes an entirely different view of the situation, claiming that the $5001,-000 mentioned in this agreement is a part of the purchase price of 220 acres of land (of which the 75 acres in question is a part) agreed to he conveyed b$ the Los Angeles Company to the Pacific Company, and that the agreement in question, above set forth, was an alternative agreement to pay $500,000 or to erect a blast furnace, recognized by sections 1448,1440, of the California Civil Code, which are as follows:

“§ 1448. Who has the right of selection. If an obligation requires the performance of ' one of two acts, in the alternative, the party required to perform has the right of selection, unless it is otherwise provided by the terms of the obligation.
“§ 1449. Right of selection, how lost. If the party having the right of selection between alternative acts does not give notice of his selection to the other party within the time, if any, fixed by the obligation for that' purpose, or, if none is so fixed, before the time at which the obligation ought to be performed, the right of selection passes to the other party.”

The above-quoted agreement was given in connection with and as part consideration for the purchase of 220 acres of land in the Los Angeles Harbor fronting upon channels 2 and 3, and the turning basin of said harbor.

In order to understand the situation presented by the failure of the appellant to build the blast furnace, it will be necessary to state the history of the negotiations and agreements of the parties as shown by the record.

The Long Beach Harbor was made by dredging channels and a turning basin in the tide lands immediately east of the Los Angeles Harbor at a point where, in 1913, the flood waters of the Los Angeles and San Gabriel rivers flowed into the Pacific Ocean. It is sufficient to say that at the time of the floods in 1913 the flood waters of these rivers, heavily laden with silt, emptied into the Long Beach Harbor and filled the channels theretofore dredged by the Los Angeles Company at a cost to it of $850,000, so that they were no longer deep enough for large seagoing vessels. It was necessary, therefore, that these channels be dredged again before the land belonging to the Los Angeles Company was available as water front property, and it was desirable also that the permanence of the harbor be assured by diverting the waters flowing in the two rivers in time of flood so that they would empty into the Pacific Ocean without flowing into the harbor. To accomplish this, large expenditures were necessary.

As early as 1921 the Los Angeles Company granted an option to Isadore B. Doek-weiler as trustee for the sum of $2,000,000 and Doekweiler, in pursuance thereof, tendered to the city of Long Beach an option for the purchase of said lands for said amount, such sum tó be paid on or before June 1,1922, from the proceeds of a bond issue by said city. This option was not exercised and is of no importance in this case except as indicating that at that time the Los Angeles Company was willing to sell its Long Beach Harbor property, containing 244.535 acres, including the afore-mentioned 220 acres, for $2,000,000. On April 9, 1923, for the sum of $5,000, D. M. Reynolds was given an option to purchase for $2,000,000 220 acres of the 240 acres previously optioned to the city. D. M. Reynolds at that time was a stockholder in the Los Angeles Company and had entered into negotiations with representatives of the Pacific Company which was thereafter to be formed and the option was secured by representations that the proposed purchaser with whom Reynolds was negotiating was a steel company. Reynolds claims to'have represented both sides in this present transaction. The terms and time of payment of the $2,000,000 fixed in the option to Reynolds were as follows: The payment of $100,000 upon the exercise of the option, which was for 30 days; within 90 days thereafter an additional $150,000; nine months thereafter $250,000, the balance at the rate of $100,000 per month, deferred payments to bear interest at the rate of 5 per cent. This option recites that one of the principal considerations for the granting of the option was the representation that the option, if exercised, would be exercised “by a steel company made up, by consolidation, or otherwise, of a number of steel, iron and coal companies and properties, and that a steel plant will be located on said real property to the advantage of other properties owned by the party of the first part in the vicinity thereof; and it is hereby covenanted that this option shall not be transferred or assigned to any person or corporation other than such steel company, without the consent in writing of the party of the first part [Los Angeles Company] first had and obtained.”

The option of April 9th provided it could be extended from month to month to July 9,1923, by the payment of $5,000 per month. On July 9, 1923, this original option was modified by providing, among other things, ■ that upon the payment of $10,000 the option was to be extended to August 8,1923, and upon the payment of an additional $10,000 should be further extended to September 8th, and by the payment of an additional $10,000 should be extended to October 8th. The installments on the purchase price were to be paid as provided in the first option of April 9th and were to date from the exercise of the option except that interest was to be paid from July 9, 1923. On the same date, July 9, 1923, D. M. Reynolds, with the consent of both parties hereto, entered into a contract with the city of Long Beach for the development of the harbor and the channels, and turning basin in the immediate vicinity of the property covered by the option. This agreement provided for a change in the lines of channels 2 and 3 and the turning basin in the Long Beach Harbor, and dedicated certain of the land under option for the purposes of a channel therein designated as parcel 1, containing 10.1 acres, and parcel 2, containing .36 acre. It also provided for the filling in of a parcel of submerged land numbered 3 containing 11.80 acres. It was agreed that the city would dredge and maintain parcels Nos. 1 and 2 to a depth of 32 feet, and should deposit the material therefrom in parcel No. 3. It was also agreed that the eity should maintain that depth in the channels and turning basin contiguous to the property of Reynolds and would either enter into a contract for said dredging or procure dredges of its own to complete such work. It was also provided as follows:

“Such contract with said dredging operators shall contain a clause permitting cancellation of such contract or contracts after the performance of one-half of such work (including that for which contracts have just been let, amounting to approximately $150,-000) amounting to approximately $250,000, and the first party [City of Long Beach] shall not be obligated to expend in excess of said $250,000 toward the completion of such work until the second party [Reynolds] shall have executed a good and sufficient bond and undertaking in favor of the first party in the penal sum of $250,000, conditioned that such improvement shall be completed within two years thereafter by the second party or that the second party shall undertake to complete such dredgihg to the amount of said $250,-000; provided, however, that the party of the first part shall not be required to dredge parcels No. 1 and No. 2 or fill in parcel No. 3 or that portion of channel No. 1, to be abandoned, unless and until the consent of the War Department of the United States shall first have been obtained and the completion bond in the penal sum of $250,000' shall have been duly executed.
; “6. The party of the second part proposes to construct improvements including one or more blast furnaces and by-product ovens in the manufacture of pig iron for steel-making purposes upon the lands herein described or upon other lands in the Long Beach harbor district and within the corporate limits of the city of Long Beach at a cost of not less than $5,000,000.
“7. It is further agreed that the party of the first part will maintain said turning basin and said channels numbers two and three to a depth of thirty-two feet below mean lower low-water so long as the party of the second part shall maintain and operate blast furnaces and other improvements.”

On October 8, 1923, another agreement was entered into between the Los Angeles Company and Reynolds modifying the previous options by extending the option to November 8, 1923, by providing for the payment of $100,000 on exercise of the option, and the second installment of $150,000 ninety days thereafter; but requiring that all other deferred payments should be made at the times and in the amounts fixed by the option of April 9th as modified July 9th “as if said option had been exercised on the 8th day of October, 1923.”

On October 16, 1923, Reynolds entered into a supplemental agreement with the city of Long Beach providing that the eity would execute contracts with responsible dredging operators or acquire dredges and complete such dredging by January 9, 1926, that the city would dredge an entrance channel direct from the sea or a channel connecting Long Beach Harbor with Los Angeles Harbor at the option of the city; it was provided that the obligation of the city was to be effective only in event that Reynolds should exercise his option to purchase lands from the Los Angeles Company on or before January 9, 1924; it is further agreed that the following provisions should be substituted for the corresponding agreement above quoted in the agreement of July 9th:

“That the party of the' second part [Reynolds] proposes, in the event that the Atchison, Topeka & Santa Fe Railroad Company will construct a branch line from a point near Gallup, New Mexico, to the coal areas of the San Juan Basin, and establish a rate for the transportation of coal to Long Beach harbor at a figure not in excess of $4.50 per net ton, to construct improvements, including one or more blast furnaces, in the manufacture of pig iron for steel-making purposes upon the lands herein described or upon other lands in the Long Beach harbor district and within the corporate limits of the city of Long Beach at a cost of'not less than five million ($5,000,000) dollars.
“It is further provided that the second party will execute a good and sufficient bond or undertaking in favor of the first party in the penal sum of two hundred and fifty thousand ($250,000) dollars, conditioned that such improvement shall be constructed within two (2) years thereafter by the second party, or that the second party shall undertake to complete such dredging to the said amount of two hundred and fifty thousand ($250,000) dollars.
“It shall be further provided in said bond or undertaking that where any amount or sum of money shall be obligated or required to be paid under the conditions thereof, that the second party may at its option turn over and convey a title to said land, which it possesses, but free and clear from all taxes, liens and encumbrances, to lands in parcel number three on said map shown as containing 14.941 acres of land, beginning at the easterly end thereof, at the present value of adjoining lands which is hereby fixed for this purpose only at the rate of two hundred fifty ($250) dollars per channel foot, fronting on channel number three and extending in depth to Seventh street and having a frontage on ’ Seventh street in the proportion as the Seventh street frontage of said parcel bears to the frontage of said parcel on channel number three, or 1000/1508ths, in discharge of such obligation.
“It is further provided, however, that if at the end of said period of two years the said plant should be in substantial course of . construction, but not completed; that a reasonable time thereafter shall be permitted for such completion before such forfeiture shall become operative.”

It will be observed that by this instrument D. M. Reynolds, plaintiffs’ assignor, obligated himself to either construct “one 6r more blast furnaces in the manufacture of pig iron for steel-making purposes,” etc., valued at $5,000,000, or to pay half the expense of dredging the harbor, amounting to $250,000; that this agreement was to be secured by the conveyance of about ten acres of the land under option to appellant, having an estimated value of $250,000, in lieu of a bond, if so desired.

On November 8, 1923, a new option replacing all prior options was given Reynolds by the Los Angeles Company, requiring the payment of $100,000 on that day to exercise the option. This agreement expressly refers to and cancels previous agreements. (Che essential portions of this agreement are as follows :

“Now, therefore, this agreement wit-nesseth:
“(1) That said agreements of April 9th, July 9th and October 8th, all of the year ■ 1923, are hereby cancelled, and that the rights and obligations of the respective parties in respect to the real property herein designated shall be as in this agreement set forth, and not otherwise,
“(2) That the party of the second part now has, and the party of the first does hereby confirm and grant to the party of the second part the option to purchase the real property hereinafter described by payment of two million ($2,000,000) dollars to the party of the first part as follows: One hundred thousand ($100,000) dollars on or before the 8th day of November, 1923; thereafter and on or before the 8th day of February, 1924, an additional sum of one hundred and fifty thousand ($150,000) dollars shall be due and payable, and thereafter and on or before July 8th, 1924, an additional sum of two hundred and fifty thousand ($250,000) dollars shall be due and payable, with interest upon the purchase price at the rate of five (5) per cent per annum, payable quarterly from July 9th, 1923, and the further consideration mentioned and secured by the trust agreement this day entered into by the parties hereto. * * *
“The title to the westerly one hundred acres of Tract No. 1 mentioned above shall be conveyed by the party of the second part to and held by the Pacific-Southwest Trust & Savings Bank, as trustee, under trust agreement to be contemporaneously executed by the parties hereto.
“(4) At the time of the delivery of said . deed the said party of the second part or his assigns, as hereafter mentioned, shall execute and deliver to the party of the first part a promissory note for one million, four hundred eighty thousand ($1,480',000) dollars. » * as »

The option provided that Reynolds, upon the payment of $100,000, should be entitled to the possession of all the land mentioned in the option, including the 100 acres of land described in the original agreement ‘and in the first instructions, dated November 8,1924, to the Trust Company, and provided that Reynolds could sell any portion of the land covered by the option except said 100‘ acres, upon the payment to the Los Angeles Company of the entire purchase price fixed for such portion in the agreement, “all to apply upon the installment of the purchase price of two million dollars next becoming due and payable,” etc. The agreement further provided for the alteration of the lines of the harbor channels and lots in conformity with the agreement with the city of Long Beaeh. The option of November 8th then provides for the transfer of the aforementioned ten acres by the Los Angeles Company to a bonding company to secure it for its bond to be given to the city of Long Beaeh, as above mentioned, to insure the erection of a blast furnace as mentioned above in the agreement between Reynolds and the city of Long Beaeh, or the payment of $250,000' toward the harbor improvement. This provision is as follows: “It is further provided that upon the exercise of this option the party of the first part [Los Angeles Company] shall cause to be released from its deed of trust securing its present bond issue [$500,T 000] the easterly portion of Tract No. 3, fronting on Channel No. 3 for one thousand feet and extending in depth to Seventh street, and having a frontage on Seventh street in the proportion as the Seventh street frontage of said parcel bears to the frontage of said parcel on Channel No. 3 [about ten acres] and shall convey the same to a bonding company which shall become surety upon the bond of the party of the second part [Reynolds] in favor of the city of Long Beaeh for $250,000 under the contract between the party of the second part and said city, which property the said bonding company shall hold in trust until the said party of the second part shall have fulfilled his obligations to said city of Long Beach, and, in the event of the surrender or cancellation of said contract and bond prior to the fulfillment thereof by the said party of the second part, then said real property shall be reconvéyed by said bonding company to the party of the first part, but upon the fulfillment of said contract and bond, then said property shall be conveyed to said party of the second part or his assigns.”

It will be observed then that this option of November 8th provides that upon the exercise of the option Reynolds shall pay the Los Angeles Company $100,000, that the Los Angeles Company will at once transfer to a bonding company a portion of Tract No. 3 as security to it for its proposed obligation upon a bond to the city of Long Beaeh, the payment of $250,000 toward the expense of dredging of said channels or the erection of blast furnaces costing approximately $5,000,-000; that this land, ten acres, a portion of Tract No. 3 so conveyed, shall be released from a deed of trust of the entire property securing a $500,000 bond issue; that this release would no doubt require a substantial payment to the trustee from the first $100,-000 paid by Reynolds to the Los Angeles Company upon the exercise of the option; that immediately upon the exercise of the option to Reynolds the city of Long Beach became obligated to him by its contract with him to go forward with dredging of the Long Beach harbor, estimated to cost $500,000, of which it was to pay $250,000 and Reynolds $250,000, unless Reynolds built the blast furnaces, etc., as agreed, in which event the city was to pay the entire cost of dredging, amounting to $500,000. In short, the Los Angeles Company obligated its property worth $250,000 to either pay $250,000 toward the cost of dredging the harbor or to erect the aforementioned blast furnaces, etc. The appellant, Los Angeles Company, also agreed to convey another 100 acres, included in the option (subsequently decreased to 75 acres, worth about $750,000) described in the above-quoted instructions addressed to the Trust Company, the terms and effect of which agreement we are now considering. It will be observed that , at the initial stage of the proceedings that the $250,000 obligation of the Los Angeles Company to the city of Long Beaeh to build a blast furnace was secured by property of the estimated valué of $250,-000, while the obligation of the Pacific Company, the purchaser, to it to build a blast furnace was secured by an equity in the 100-acre tract of not more than one-fourth that value, that is, $60,000 at that time. There was no direct agreement on the part of the purchaser to pay more than $2,000,000 for the 220 acres. The agreement to pay the balance of the purchase price thereof specified in the contract as $1,480,000, matured January 8,1925> while the obligation to build the blast furnace or the steel plant did not accrue until about two years thereafter. At the time of making the final payment of $1,480,000, assuming that the money was paid as agreed and as it actually was in fact paid, the value of the land conveyed to seT cure to the city upon the conditional obligation to either pay $250,000 or build a steel plant, was $250,000 plus any increase in value due to the improvements and the value of 75 acres conveyed by the Los Angeles Company was approximately $750,000. It would seem that the purpose of the instructions now under consideration with relation to the 75-aere tract was to protect the Los Angeles Company upon its obligation to pay $250',000 toward the improvement of the harbor arising from a failure of appellant to erect a $5,000,000 blast furnace, etc. Consequently that the damage to the Los Angeles Company from a failure of the appellant to build the blast furnace, etc., would not exceed $250,000 in the event that the city of Long Beach called for that sum under its contract secured by the aforesaid 10-acre tract. Here it should be stated that the freight rate of $4.50 per ton for coal was not obtained, and this made the construction of the blast furnaces economically impractical, hence the general scheme for the erection of a great steel plant, entertained in good faith, was abandoned. The harbor improvements were made by the city, however, and no demand was made upon the parties hereto for any sum as a result of the failure to construct a steel plant or blast furnace. Hence, no damage is claimed by the Los Angeles Company by reason of its agreement with the city to build or cause to be built such a steel plant or blast furnace, which agreement is now secured to the city by property owned by the appellant.

The claim of the appellee is that by the agreements of November 8th the purchase price of land was in effect increased to $2,-500,000, subject to rebate in the event appellant built a blast furnace for the manufacture of pig iron. This view seems to us to be inconsistent with the entire framework of the agreements. In the various agreements the purchase price of land is repeatedly stated to be $2,000,000, with installments and times of payment of interest thereon expressly provided. No mention whatever is made in the option agreement of an additional $500,000 to be paid for the land, and the only references to the escrow instructions in such option agreement are those above quoted referring to the trust agreement or escrow instructions as a part of the consideration for the land. Thus, far from saying that the $500,000 mentioned in the trust agreement was a part consideration for the land, as appellee contends, the only purpose of the references thereto apparently was to make plain that'the option agreement was the consideration for the es,erow instructions or trust agreement which we have referred to herein as “the instructions to the Trust Company,” or vice versa, and to take care of the situation ■arising upon completion of the payment of the $2,000,000 purchase price because of the lien upon the 100 acres of land covered by the option.

In interpreting the “instructions” under consideration, the resolution passed by the board of directors of the Los Angeles Company on November 2, 1923, authorizing the agreements of November 8th, is significant. It is set forth in the bill, and admitted by the answer, to be as follows: The president and secretary are authorized to enter into a new agreement with Reynolds granting to him option to purchase the property described in the original option at the price of $2,000,-000, payable as follows: $100,000 on or be- , fore November 8, 1923; $150,000 on or before February 8, 1924; $250,000 on or be- *, fore July 8, 1924; and $1,480,000 on or before January 8, 1925 — -“said last named amount being the balance after crediting thereon the $20,000 paid to the company for the original option to purchase said property.” It is further provided that when $500,-000 had been paid by the purchaser the president and secretary are authorized to convey the property to Reynolds and to take back “a deed of trust to secure the balance of the purchase money.” It will be observed that nothing contained in the resolution deals with any other purchase price than the amount of $2,000,000. It was also provided that the president and secretary of the Los Angeles Company were authorized to convey to the Fidelity & Deposit Company of Maryland, on request of the purchaser, the 1,000 feet of frontage hereinabove estimated to have a value of $250,000, said Fidelity & Deposit Company of Maryland to execute a declaration of trust showing that:

It holds said property “in trust for the purpose of conveying the same to the city of Long Beach in the event of a breach of the condition of a bond to be entered into by and between said D. M. Reynolds and the city of Long Beach, or to convey the same to said D. M. Reynolds upon the compliance by the said D. M. Reynolds with the conditions of said bond, or to reeonvey the same to this company in the event of the cancellation or surrender of said bond, or its being declared to be invalid prior to the fulfillment of its conditions by the said D. M. Reynolds.

“Be it Further Resolved, that after the execution and delivery-of the deed to said D. M. Reynolds or assigns, as provided for in said agreement and the receipt of the note and deed of trust therein mentioned fox the balance of purchase money, the said officers be and they are hereby authorized to enter into a trust agreement with the Pacific-Southwest Trust and Savings Bank, a corporation, and said D. M. Reynolds, or assigns, under which the said D. If. Reynolds shall convey to said bank 100 acres of land described in said agreement, to be by said bank held in trust as security for the payment to this company of $500,000 in the event of the failure of said D. M. Reynolds or assigns to construct a blast furnace for the making of pig iron on or adjacent to the property described in said agreement of option, and within the city limits of the city of Long Beach, on or before July 8th, 192-7, with the right to the said D. M. Reynolds to substitute certain other security in lieu of the title to said lands, a draft of which agreement of trust was read and approved by the board of directors on this date. • p * * ”

According to this resolution the conveyance of the 100 acres (afterwards 75) was to be made at the time of the exchange of deeds between the parties, which was to occur at the time of the payment of $500,000 by appellant to the Los Angeles Company, so that the equity of the purchaser in the 100 acres at that time was somewhat less than half that amount, or less than $250,000'. That is to say, the margin of security to the city upon the ten acres deeded to secure the obligation to it was slightly greater than that to the Los Angeles Company for the construction of a blast furnace, etc. In this connection D. M. Reynolds testified that “we” signed a bond with the city of Long Beach and that Mr. Curtis, the president of the Los Angeles Company, wanted the same thing, that is, a bond to pay $250,000 to it “if we didn’t build a steel plant.” He testified that because of the cost of a surety bond “they worked it out this other way.” “We spoke of them both as bonds.” “The conversation in substance was that the city of Long Beach had a bond and they wanted one.” T. T. C. Gregory, who conducted the negotiations for D. M. Reynolds and the Pacific Company, testified that the Los Angeles Company wanted a bond in the sum of $500;-000 and that the final agreement as to that matter was the “escrow instructions” now the subject of our consideration. On the other hand, Walter M. Campbell, secretary of the Los Angeles Company, and its attorney, testified that he told Mr. Gregory that 'he would not recommend to the Los Angeles Company to eliminate the building of a steel plant unless they would pay $500,000 additional compensation, “to which Mr. Gregory consented.” This witness recalls no discussion “about giving any bond to secure this ¡$500,000.” This is corroborated by the testimony of Mr. Curtis to the effect that Mr. Campbell “stated that he thought Mr. Gregory’s company should pay an additional $500,000 if the steel plant was not built,” to which Mr. Gregory replied, “Very satisfactory.” Mr. Gregory, in. rebuttal, admitted that the proposal was made that his company pay an additional $500,000, but testified that he did not reply that the proposal was satisfactory, nor any words to that effect. This evidence, although received over objection, was incompetent to change or affect the terms of the written agreement between the parties, and was apparently ignored by the trial court in its opinion and findings. This conflict of testimony as to these negotiations serves no purpose in the consideration of this ease other than to illustrate the wisdom of the rule excluding such testimony where it conflicts with the written agreement resulting from such negotiations.

We find no indication whatever in any of these agreements that it was intended that the purchaser was to pay $2,500;000 for the property purchased, with a rebate of $500;-000 in ease it built a blast furnace. The agreements were drawn by competent attorneys after prolonged and detailed negotiations, and nothing could have been simpler than to express such an intent by adding $500,000 to the purchase price, fixing the time of its payment, and the rate of interest thereon, and authorizing a rebate of $500,000 if and when the blast furnace was completed. They had an alternate form of contract before them in the condition of the bond to be given the city. The whole situation of the parties as disclosed by their agreements indicates a purpose to require security from the purchaser to protect the vendor from loss due to a breach of his agreement to erect a blast fuinaee; that the $500,000 was a penalty and that the condition secured by &e conveyance was the agreement to build a blast furnace. Hence, the Los Angeles Company is entitled, within the limits of that penalty, to the actual damage suffered by reason of the failure of the appellant to comply with its agreement, unless, perchance, it should be determined that these damages are so incapable of exact determination that the $500,000 may be treated as liquidated damages. Both appellant and appellee take the position that if the trust agreement is one of indemnity the damage apprehended and secured against was the depreciation of or damage to the market value of the lands retained by the Los Angeles Company due to the breach of the agreement to erect a blast furnace, etc. The parties directed their evidence to the effect of a blast furnace and of a steel plant upon market value of the land in the vicinity retained by the appellee, the Los Angeles Company, estimated by the trial court to be worth $600,-000. Appellant tried to establish by its evidence that there was no such damage, and the appellee sought to establish by its evidence that there was such damage, but that it was so uncertain that it could not be ascertained, and therefore that the penalty should stand as an agreement to pay liquidated damages expressly authorized in such eases. Upon this question it should be stated that the market value of real estate is practically always capable of exact ascertainment. See discussion in San Diego Land, etc., Co. v. Neale, 78 Cal. 63, 20 P. 372, 3 L. R. A. 83. This does not mean, of course, that it can be readily ascertained. The evidence may be highly complicated and conflicting, the experts may disagree and the estimate of values take a wide range, nevertheless a court or jury is always considered capable of determining the market value of land if it has a market value, and its actual value, if it has not. The damages accruing to the remaining lands of the Los Angeles Company by reason of the breach of the agreement in question is the difference in their market value resulting from the failure to erect the improvements as agreed. However, it has been held that the damage from the failure to drill an oil well in undeveloped territory may be so uncertain and speculative as to justify an agreement for liquidated damages. Escondido Oil & Dev. Co. v. Glaser, 144 Cal. 494, 77 P. 1040; McComber v. Kellerman, 162 Cal. 749, 124 P. 431; Blodget v. Columbia Live Stock Co. (C. C. A.) 164 F. 305; Rispin v. Midnight Oil Co. (C. C. A.) 291 F. 481. These eases, however, are based upon the speculation involved in ascertaining whether or not oil underlies the land subject to the drilling operations, while in the case at bar the agreement is to erect a definite structure on the land for a definite purpose. That the loss of market value of these lands, if any, due to the breach of ,the agreement to make these improvements is a matter of dispute or a subject of widely varying estimates and opinions, does not mean that damages are incapable of ascertainment within the meaning of the law concerning liquidated damages and that, therefore, the $500,000 may stand as liquidated damages. As the decree cannot be sustained on the theory of an additional alternative consideration for the purchase of the land sold appellant, nor on the theory of liquidated damages, the decree must be reversed.

If the appellee, Los Angeles Company, suffered any damage in the market value of its remaining lands, it can, no doubt, be ascertained upon a new trial. If not, appellee must fail for lack of proof of substantial damage. One of the controverted points in the ease is whether the damage to the market value of the Los Angeles Company’s remaining land should be determined with relation to the effect thereon of a failure to erect a blast furnace of 100 tons, or one costing five or six million dollars, having a capacity of 600 tons. The question is not important on this appeal, but will arise.on a new trial, hence ^it should be stated that we think appellant is correct in his interpretation of the escrow instructions as to the 75 acres that the blast furnace required to be erected by the escrow instructions under consideration was one of a reasonable size to be commercially operated. If that size were one of 100 tons daily, capacity the erection thereof would comply with the contract, although we do not intend to express any opinion on that subject, which is to be determined on a new trial from the evidence adduced thereon. If it is contended on such trial, as it has been on this appeal, that the instructions contemplated a five or six million dollar unit, capable of turning out 600 tons of pig iron daily, it would no doubt require a reformation of the contract as a basis for such contention unless it can be established by the evidence to the satisfaction of the court that a blast furnace of such size and cost is reasonably necessary to economically and commercially produce pig iron. Furthermore, it should be stated that the parties in introducing their evidence upon the last trial called upon the witnesses to assume a plant actively operating and employing many men. There was no doubt a confident expectation by all concerned that the plant so constructed would be so operated, but the agreement under consideration contains no requirement that the plant should be operated at all. The question of the operas tion of the plant was no doubt purposely left to be determined by the economic situation as it developed, and the effect of the failure of the appellant to erect the plant must be determined in the light of that fact.

Decree reversed, and case remanded for further proceedings not inconsistent herewith.

SAWTELLE, Circuit Judge, concurs.


author: HICKENLOOPER, Circuit Judge.

text:
    OSTRANDER-SEYMOUR CO. v. GRAND RAPIDS TRUST CO. et al.
    No. 5649.
    Circuit Court of Appeals, Sixth Circuit.
    June 9, 1931.
    Meyer Abrams and Vincent G. Gallagher, both of Chicago, 111. (Gallagher, Shulman & Abrams, of Chicago, 111., and Knappen, Uhl & Bryant, of Grand Rapids, Mich., on the brief), for appellant.
    B. M. Corwin and G. C. Fuller, both of Grand Rapids, Mich. (Corwin, Noreross & Cook, of Grand Rapids, Mich., on the brief), for appellees.
    Before DENISON, HICKS, and HICK-ENLOOPER, Circuit Judges.
   HICKENLOOPER, Circuit Judge.

On August 16, 1926, appellant sold certain chattel property comprising an engraving plant and equipment to the Powers-Tyson Corporation, a Michigan corporation, reserving a security title for approximately $7,-500 of the purchase price.' On January 13', 1928, the circuit court for Kent county, Mich., appointed a receiver for the Powers-Tyson Corporation, a Delaware corporation, which had theretofore succeeded to the possession of the engraving plant. Appellant intervened- in that action by filing a petition to reclaim the engraving plant upon the assumption that it had been held under a conditional sales contract and title was in the intervener. This action was prosecuted to the Supreme Court of Michigan, where it was held that the instrument, whereby it was alleged title had been retained, was a chattel mortgage, void as against creditors for want of compliance with the recording statutes. Appellant thereupon brought the present action in trover, claiming that the circuit court of Kent county was without jurisdiction to appoint a general receiver for the Deleware corporation under the allegations of the bill; that the Supreme Court of Michigan had so decided (245 Mich. 669, 224 N. W. 609); and that the original sale was to the Michigan corporation, and neither the receiver nor the purchaser of the, assets of the Delaware corporation acquired title to the goods and chattels of the Michigan corporation, but both are liable in conversion.

The obvious fallacy in plaintiff’s position is twofold: First, it assumes that the question of jurisdiction is not a question of a judicial nature so as to fall within the doctrine of res judicata (to the contrary see Baldwin v. Iowa State Traveling Men’s Ass’n, 51 S. Ct. 517, 75 L. Ed. —, decided May 18, 1931); second, it assumes that the Supreme Court of Michigan held the circuit court of Kent county to be without jurisdiction of the subject-matter, that is, without jurisdiction to appoint the receiver. A perusal of the opinion shows the second assumption to be clearly without merit. The judgment of the circuit court denying relief to the present plaintiff, relief which could only be sought under a claim of title, was affirmed, with costs. All but one judge of the Supreme Court specifically based the decision upon the insufficiency of the unrecorded chattel mortgage to effect a retention of title, and as a basis for the relief sought. This was, in itself, a recognition and an exercise of jurisdiction — not a denial of it.

Much might here be said upon such subjects as the election of remedies, acquiescence, and estoppel, collateral attack upon judgments, the effect of intervention, the difference between jurisdiction of subject-matter and general equity jurisdiction, and the like, all more or less touched upon by counsel in their briefs, but we think a consideration of these matters unnecessary. The plaintiff invoked the jurisdiction of the state court to regain possession of the engraving plant or its value. Properly or improperly, it also asserted that court’s lack of jurisdiction to appoint the receiver. The question of jurisdiction then became a justiciable issue in the - case. When it was decided adversely to plaintiff, plaintiff prosecuted añ appeal to the Supreme Court, challenging the decree both for error and for lack of jurisdiction. The ease being again decided against it, plaintiff seeks to relitigate both questions in this court. Such procedure is contrary to all reason and authority. The cause of action in which plaintiff is directly interested, that resting upon its claim of title to the engraving plant, forms the basis of both the former and the present actions. That principles of res judicata and estoppel by judgment should apply is well established. Forsyth v. Hammond, 166 U. S. 506, 17 S. Ct. 665, 41 L. Ed. 1095; Chicago Life Ins. Co. v. Cherry, 244 U. S. 25, 37 S. Ct. 492, 61 L. Ed. 966; Baltimore S. S. Co. v. Phillips, 274 U. S. 316, 47 S. Ct. 600, 71 L. Ed. 1069; Norton v. San Jose Fruit-Packing Co., 83 F. 512 (C. C. A. 9); Davis, Trustee v. Mabee et al., 32 F.(2d) 502 (C. C. A. 6); Steele v. Walker, 115 Ala. 485, 21 So. 942, 67 Am. St. Rep. 62.

Nor can plaintiff derive comfort from the fact, here seemingly presented for the first time, that the original sale was to the Michigan corporation while the receiver was appointed for the Delaware corporation. This claim is belated. The estoppel of the former judgment operates not only as against a re-examination of the questions and grounds for recovery then and there asserted, but also as against all grounds which might have been urged. Davis, Trustee v. Mabee et al., supra; Baltimore S. S. Co. v. Phillips, supra. Had the point been raised in due time, it probably would have been met by a showing of transfer from the Michigan to the Delaware corporation. Plaintiff took ' such transfer for granted when it recognized the possession of the receiver and intervened. It is now too late to assert the elaim, which, in any event, has no bearing upon plaintiff’s title to and right lib possession of the plant, or the1 proceeds of the sale. The adverse prior adjudication of this question of title is alone sufficient to defeat the present action.

The judgment of the District Court is affirmed.


author: SAWTELLE, Circuit Judge.

text:
    SIX WHEEL CORPORATION v. STERLING MOTOR TRUCK CO. OF CALIFORNIA et al.
    No. 6326.
    Circuit Court of Appeals, Ninth Circuit.
    May 18, 1931.

      Frederick S. Lyon, Leonard S. Lyon, and Lewis E. Lyon, all of Los Angeles, Cal., for appellant.
    William L. Connor, of Los Angeles, Cal., for appellees.
    Before RUDKIN, WILBUR, and SAW-TELLE, Circuit Judges.
   SAWTELLE, Circuit Judge.

This is a suit in equity brought by the appellant corporation as purported assignee of United States letters patent No. 1,655,481, granted to David L. Yan Leuven on January 10, 1928, application having been filed on February 18, 1925. In its bill of complaint, the plaintiff-appellant sought to obtain an injunction and damages against the defendants-appellees, relative to the sale and the use by the latter of a type of running gears of motor vehicles; such type being by the parties hereto referred to as “six-wheel attachments.” These devices, so sold and used, the appellant alleged, infringed upon the patented invention of Yan Leuven.

The lower court held that the patent was valid, but that, because of the limited nature of the claims relied upon by the plaintiff, there was no infringement; whereupon the plaintiff appealed.

Though the ease was argued on several grounds by counsel for each side, on appeal as well as in the court below, we are met in limine by the crucial question of jurisdiction, in relation to the sufficiency of the appellant’s title to the patent in suit, and its consequent capacity to maintain the present action.

In the answer filed by the defendants in the court below, appellees herein, it was denied that Yan Leuven had assigned his patent to the plaintiff company. The trial judge did not discuss this issue of fact and of law, but based his decision upon other grounds. Those other grounds, in the view that we take of the ease, it is not necessary here to consider.

According to the contention of the appel-lees, the defense that the plaintiff has no title to the asserted right of action may be raised on appeal, though not urged in the court below. This view is supported by the case of Sterrett v. Second National Bank of Cincinnati, Ohio, 246 F. 753, 758, 3 A. L. R. 256 (C. C. A. 6); affirmed, 248 U. S. 73, 39 S. Ct. 27, 63 L. Ed. 135. In that case, Circuit Judge Knappen used the following language: “It follows that in the present state of the record the defendant is entitled to a dismissal of the suit, notwithstanding its apparent failure to call to the attention of the court below the proposition on which our decision is based; for, if plaintiff had no title and no right of action in the court below, that court was without power to render decree in his favor. See Gt. Western Mining Co. v. Harris, supra, at pages 577, 578 of 198 U. S., 25 S. Ct. 770, 49 L. Ed. 1163. A defense that plaintiff has no title to the asserted right of action is always open.”

Judge Knappen then points out the substantial importance of determining a jurisdictional question, in language that is pertinent to the present case; “A disposition by this court of the appeal without determination of the merits is unfortunate, and it is with reluctance that we have reached the conclusion that there is no escape from it. But lack of title in plaintiff is not a mere ‘technicality,’ in the ordinary meaning of that term for there is always, theoretically at least, a possibility that defendant may be subjected to further suit by the owner of the title and right of action.”

In view of the answer of appellees in the lower court, however, it may be soundly argued that the jurisdictional question of the plaintiff-appellant’s title was indeed put in issue before that tribunal, even though the issue thus raised was not considered by the trial judge. In this connection, the language of Mr. Justice Day in North Pacific Steamship Company v. Soley, 257 U. S. 216, 42 S. Ct. 87, 88, 66 L. Ed. 203, is in point: “In the present ease the issue was raised by answer, and, therefore, it became necessary for the court to determine the question of jurisdiction upon the facts presented, and when brought directly here, it is the duty of this Court to review the decision upon the testimony as one presenting a jurisdictional question.”

Though in the North Pacific Case the jurisdictional question was one of the amount involved, the reasoning is applicable to the jurisdictional facts in the instant ease. See, also, Gilbert v. David, 235 U. S. 561, 567, 35 S. Ct. 164, 59 L. Ed. 369 (citizenship of parties); Roberts v. Lewis, 144 U. S. 653, 658, 12 S. Ct. 781, 36 L. Ed. 579 (same).

We are therefore of the opinion that, in the instant ease, there is ample authority to warrant our considering the sufficiency of the appellant’s title under the purported “assignment,” as bearing upon the jurisdictional question of its ability to maintain the present suit.

Before determining what constitutes an assignment of a patent sufficient to enable the transferee to bring suit in his own name, it is necessary to ascertain what are the rights of the assignor; i. e., the inventor himself. Obviously he cannot assign more than he has; and the crucial question here, to be discussed later, is how much less he can grant and still term the transfer an assignment.

The right of an inventor to the product of his'talent is recognized by the common law. A learned discussion of the origin and extent of this fundamental right — a right with which the instant suit is directly concerned — is found in the case of In re Brosnahan, Jr., 18 F. 62, 64 (Circuit Court, W. D. Mo.):

“It is to be observed that no constitutional or statutory provision of the United States was, or ever has been, necessary to the right of any person to make an invention, discovery, or machine, or to use it when made/or to sell it to some one else. Such right has always existed, and would exist now if all, patent laws were repealed. It is a right which may be called a natural right, and which, so far as it 'may be regulated by law, belongs to ordinary, municipal legislation; and it is unaffected by anything in the constitution or patent laws of the United States.
“The sole object and purpose of the laws which constitute the patent and copyright system is to give to the author and the inventor a monopoly of what he has written or discovered, that no one else shall make or use or sell his writings or his invention without his permission. * * * ”

We now turn to the source of the inventor’s exclusive right to his device, the Constitution of the United States: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Article 1, § 8, cl. 8.

Defining the constitutional sanction for patent right, the Supreme Court has said: “It [the patent right] is a true monopoly, one having its origin in the ultimate authority, the Constitution. * * * If the patent be for a machine, the monopoly extends to the right of making, selling, and using, and these are separable and substantial rights. In Bloomer v. McQuewan, 14 How. 539, 547, 14 L. Ed. 532, 536, it is said that the grant is of ‘the right to exclude everyone from making, using, or vending the thing without the permission of the owner.’ ” Henry v. A. B. Dick Company, 224 U. S. 1, 27, 32 S. Ct. 364, 371, 56 L. Ed. 645, Ann. Cas. 1913D, 880.

This exclusive right of the inventor to “make, sell and use” his invention has been further defined by statute, passed under the authority of the organic law.

“All exclusive rights in the nature of patents are created, and must be controlled by statutory provisions, and, therefore, it must appear that all the essential requisites of the law. have been complied with.” Latta v. Shawk, Fed. Cas. No. 8,116.

The present statute on the subject is found in 35 USCA § 40': “Every patent shall contain * * * a grant to the patentee, his heirs or assigns, for the term of seventeen years, of the exclusive right to make, use, and vend the invention or discovery throughout the United States, and the Territories thereof.”

At least two Chief Justices of the Supreme Court have interpreted these constitutional and statutory rights of the inventor to make, use, and sell the patented res. In Gayler et al. v. Wilder, 51 U. S. (10 How.) 477, 494, 13 L. Ed. 504, Chief Justice Taney said:

“Now the monopoly granted to the pat-entee is for one entire thing; it is the exclusive right of making, using, and vending to others to be used, the improvement he has invented, and for which the patent is granted. The monopoly did not exist at common law, and the rights, therefore, which may be exercised under it cannot be regulated by the rules of the common law. It is created by the act of Congress; and no rights can be acquired in it unless authorized by statute, and in the manner the statute prescribes.
“By the eleventh section of the act of 1836, the patentee may assign his whole interest, or an undivided part of it. But if he assigns a part under this section, it must be an undivided portion of his entire interest under the patent, placing the assignee upon an equal footing with himself for the part assigned.”

If it is argued that Chief Justice Taney was interpreting merely an old statute that has since been superseded, the answer is that these same doctrines of patent law have been repeatedly re-enunciated in later Supreme Court decisions. These more recent expressions were voiced after the passage of the Act of July 8, 1870, upon which the present statute is based.

In the ease of Crown Die & Tool Company v. Nye Tool & Machine Works, 261 U. S. 24, 36, 43 S. Ct. 254, 256, 67 L. Ed. 516, Chief Justice Taft used the following language : “It is the fact that the patentee has invented or discovered something useful and thus has the common-law right to make, use and vend it himself which induces the government to clothe him with power to exclude every one else from making, using or vending it. In other words, the patent confers on such common-law right the incident of exclusive enjoyment and' it is the common-law right with this incident which a patentee or an assignee must have. * * * A patent confers a monopoly. So this court has decided in the Paper Bag Case [210 U. S. 405, 28 S. Ct. 748, 52 L. Ed. 1122], supra, and in many other cases. The idea of monopoly held by one in making, using and vending connotes the right in him to do that thing from which he excludes others.”

In Woodbridge et al. v. United States, 263 U. S. 50, 55, 44 S. Ct. 45, 47, 68 L. Ed. 159, Chief Justice Taft again said: “The purpose of the clause of the Constitution concerning patents is in terms to promote the progress of science and the useful arts and the plan adopted by Congress in exercise of the power has been to give one who makes a useful discovery or invention a monopoly in the making, use and vending of it for a limited number of years.”

From the foregoing; it will be seen that the irreducible „ quantum of the inventor’s right in the res, even under the common law, is that of making, using, and vending. The Federal Constitution and the statutes passed thereunder simply make that right exclusive. The statutes certainly do not curtail the natural right; they enlarge it.

The right of an inventor or his assignee to bring suit for infringement, flowing as it does from the statutory right to “make, use and vend” exclusively as against the rest of the world, is likewise granted by statute: “Damages for the infringement of any patent may be recovered by action on the ease, in the name of the party interested, either as patentee, assignee, or grantee.” 35 USCA § 67.

The appellant herein is suing as “assignee.” But the label that parties may give themselves is not conclusive; the actual legal effect of the agreements through which they seek to be clothed with authority must be determined by the court, regardless of the terminology used in designating the parties. In other words, the appellant must establish that it is an assignee in law and in fact, as well as in name. The purported assignee produces documents which profess to effect an assignment; but it is incumbent on the court to ascertain whether, as a matter of law, the provisions contained in those documents actually constitute an assignment.

The essentials of a patent assignment are obviously that an assignee should receive substantially those powers, rights, and privileges that the granting inventor himself has heretofore possessed'. Again we find enlightenment from the Supreme Court in the leading ease of Waterman v. Mackenzie, 138 U. S. 252, 255, 11 S. Ct. 334, 335, 34 L. Ed. 923: “The monopoly thus granted is one entire thing, and cannot be divided into parts, except as authorized by those laws [of the United States]. The patentee or his assigns may, by instrument in writing, assign, grant, and convey, either (1) the whole patent, comprising the exclusive right to make, use, and vend the invention throughout the United States; or (2) an undivided part or share of that exclusive right; or (3) the exclusive right under the patent within and throughout a specified part of the United States. Rev. Stat. § 4898. A transfer of either of these three kinds of interests is an assignment, properly speaking, and vests in the assignee a title in so much of the patent itself, with a right to sue infringers. In the second ease, jointly with the assignor. In the first and third eases, in the name of the assignee alone. Any assignment or transfer, short of one of these, is a mere license, giving the licensee no title in the patent, and no right to sue at law in his own name for an infringement.”

• Rev. St. § 4898, cited above, since amended, reads in part as follows: “Every patent or any interest therein shall be assignable in law by an instrument in writing, and the patentee or his assigns or legal representatives may in like manner grant and convey an exclusive right under his patent to tho whole or any specified part of the United States.” 35 USCA § 47.

Mr. Justice Gray, speaking for the court in Waterman v. Mackenzie, went on to say in that ease: “In equity, as at law, when the transfer amounts to a license only, the title remains in the owner of the patent; and suit must be brought in his name, and never in the name of the licensee alone unless that is necessary to prevent an absolute failure of justice, as where the patentee is the in-fringer, and cannot sue himself.”

Nor is the label that the parties may place upon the transfer controlling; for, in the same opinion, at page 256 of 138 U. S., 11 S. Ct. 334, 335, we find the following language, extremely pertinent to the case at bar: “Whether a transfer of a particular right or interest under a patent is an assign'ment or a license does not depend upon the name by which it calls itself, but upon the legal effect of its provisions. * * * The grant of an exclusive right under the patent within a certain district, which does not include the right to make, and the right to use, and- the right to sell> is not a grant of a title in the whole patent-right within the district, and is therefore only a license.” (Italics our own.)

The repetition of the word “right” in the foregoing passage indicates the emphasis that Justice Gray laid upon the threefold essentials of a true assignment of a patent.

The Waterman Case is cited with approval in the Crown Die Case, supra, in E. W. Bliss Company v. United States, 253 U. S. 187, 192, 40 S. Ct. 455, 64 L. Ed. 852, and in Richmond Screw Anchor Company v. United States, 275 U. S. 331, 345, 48 S. Ct. 194, 72 L. Ed. 303, with Chief Justice Taft speaking for the court.

In-still another opinion by the same Chief Justice, in United States v. General Electric Company et al., 272 U. S. 476, 489, 47 S. Ct. 192, 196, 71 L. Ed. 362, in which the principle enunciated in Waterman v. Mackenzie, is again approved, the following language is used: “Conveying less than title to the patent or part of it, the patentee may grant a license * * * for any royalty, or upon any condition the performance of which is reasonably within the reward which the patentee by the grant of the patent is entitled to secure.”

In the recent case of Deitel v. Chisolm et al., 42 F.(2d) 172, 174 (C. C. A. 2.), Circuit Judge Mantón carefully distinguished the cause before him from Waterman v. Mackenzie, which in reality re-enuneiates the principles set down more than three-quarters of a century ago by Chief Justice Taney in Gayler et al. v. Wilder, supra. After more than eight decades of copious patent litigation, the soundness of those principles to-day remains unchallenged.

We are now brought to the crucial jurisdictional question in the present suit; namely, does the purported assignment by the inventor Van Leuven meet the criteria laid down by the Supreme Court?

Plaintiff’s Exhibit 2 discloses an “assignment” by D. L. Van Leuven, “transferring” to the plaintiff-appellant full and exclusive interest in Van Leuven’s “invention in running gear.” The “assignment,” however, contains a fatal qualification. It specifically sets forth that the grant is- “subject to” and “part of” an “assignment agreement” entered into on the same date as the “assignment” itself, namely, November 4, 1927.

At the very beginning of this “assignment agreement” we find language that clearly indicates the inventor’s desire to retain a firm proprietary grasp on his invention: “Whereas, the Inventor * * * 'is desirous of having said invention exploited and the licensing and use thereof managed and controlled for him (italics our own), and whereas said Company has been organized and created for said purpose.”

Then, after granting to the plaintiff-appellant company, in sweeping language, “the full and exclusive right, title and interest in and to said invention,” Yan Leuven again proceeds so to qualify his grant as actually to leave the purported assignee but a mere shell of title: “Subject to the condition that said Company shall not itself manufacture, use or sell any device or devices embodying or containing said invention or engage in the sale of such devices, but shall grant licenses to others to make, use and sell the same, and that all licenses or rights to manufacture, use or sell devices embodying said invention shall be at all times upon the same uniform terms and conditions to each and all licensees.”

In other words, the appellant merely received a license to license, so to speak. The company was but an agent of the inventor, to grant licenses on a royalty basis, licenses to others to do acts that the licensing company itself was not permitted to perform.

It is 'clear that the inventor himself retained the real ownership of the entire patent, an ownership that he definitely planned to safeguard: “The herein contained grant by the Inventor is upon the express condition that, in order to protect the interests of the Inventor in and to said invention, the right of the Company to license another or others is limited to the sale and offer for sale by all licensees of devices embodying said invention at uniform prices, and the Company agrees that it will not grant any license except upon said terms, and the Company shall from time to time establish the sales prices at which the manufacturer shall sell devices embodying said invention, which prices shall at all times be reasonable, due consideration being given to maintaining such a price as will render a reasonable profit to the manufacturer.”

The document, indeed, is denominated an “Assignment Agreement”; yet its terms are a direct negation of a true assignment. It is as if A were to receive a deed to the entire city of San Francisco, with the saving clause that -“this grant shall be subject to the condition that title to only Lot X, Block Y, shall actually pass to A.” Far-fetched as this analogy may seem at first glance, it in reality understates the situation. In our sup-posititious deed, A is given some land, at least; under the “assignment agreement” in the instant case, the purported assignee has received, in unqualified ownership, not even a fraction of the granting patentee’s common-law, constitutional, and statutory right “to make, use and vend” the invention. We say common-law right, because, under the agreement, the plaintiff-appellant company has not even the authority to manufacture, use, or sell the invention in competition with others.

The “assignment agreement” closes with elaborate provisions for placing the plaintiff-appellant company in default for failure to make its guaranty payment to the inventor, with thirty days’ notice. At the end of such thirty days, it is set forth that “this contract shall be thereby canceled and rescinded, and all rights in and to said invention and Letters Patent shall revert to said Inventor. * * * J?

A patent “assignee” who is deprived of even the common-law right to make, sell, and use; who is restricted as to the contracts he shall make concerning the res; who must constantly keep in mind the “interests” of the purported grantor; who can lose the res, such as it is, for being in arrears with his guaranty — such an “assignee” is one by label only, for he does not enjoy that irreducible minimum of control over the patented article which has been defined by the Supreme Court as the true assignee’s inalienable prerogative.

We are therefore of the opinion that the transfer of rights under the patent was not an assignment of the title or of the asserted right of action, and that plaintiff-appellant herein is -without capacity to maintain this suit in its own name.

Reversed, with instructions to dismiss the suit.

WILBUR, Circuit Judge, concurs.


author: MUNGER, District Judge.

text:
    BELCHER v. UNITED STATES.
    No. 9048.
    Circuit Court of Appeals, Eighth Circuit.
    May 10, 1931.

      Don G. Mullan, of Sioux City, Iowa, (Max E. Duckworth, of Sioux City, Iowa, on the brief), for appellant.
    Harry M. Reed, U. S. Atty., of Waterloo, Iowa (B. E. Rhinehart, Former U. S. Atty., of Anamosa, Iowa, andD. C. Browning,'Asst. U. S. Atty., of Sioux City, Iowa, on the brief), for the United States.
    Before VAN VALKENBURGH and BOOTH, Circuit Judges, and MUNGER, District Judge.
   MUNGER, District Judge.

Appellant was found guilty under three counts of an indictment, the first of which charged illegal possession on December 9, 1929, of intoxicating liquor; the second an illegal possession on December 4, 1929, alleged to be a second offense;' and the third charged him with maintaining a nuisance on February 4,1930, in a building where intoxicating liquor was sold. The defendant was sentenced to imprisonment in jail for six months.

Assignments of error allege that his motions for an instructed verdict on each count were erroneously overruled. There was evidence that there was a soft -drink parlor in a second story room over a theater at 617 Fourth street in Sioux City, Iowa. A stairway led from the street to a landing at the top, and there a door opened to the left into this soft drink parlor, and another door opened into a room at the right over a drug store located at 619 Fourth street. In the soft drink parlor there was a bar. There was undisputed testimony by four prohibition agents that on December 7, 9, 21, and 26, 1929, and on January !, 6, and 25, 1930, they had purchased intoxicating liquor at this bar. There was a bartender who served some of these liquors, but the defendant was present at all but one of these sales, and himself sold liquor at this place to the agents on December 21, December 26, and January 6. Drinks were also furnished to other persons. A* pitcher of alcohol was usually kept on a shelf behind the bar, and drinks were poured from this. On February 4, 1930, prohibition officers served a search warrant on the defendant, and the defendant admitted to three of the officers that he was in charge of the place. At the time of this search the officers seized some highball glasses, and an alcohol hydrometer, but found no liquor in the room where the soft drink parlor was. A gallon can half full of alcohol was found in the adjacent room over the drug store. The appellant does not contend that there was not sufficient .evidence to warrant a conviction under the count charging the maintenance of a nuisance-. He claims that there was not sufficient proof of the offenses charged in counts 1 and 2. There was ample evidence from which the jury could find an unlawful possession, at or about each of the dates alleged. There was no evidence offered to show that the defendant was guilty of a second offense, as alleged in the second count, hut it is pot perceived how this could prejudice him.

The sentence was general, and was within the limits permissible on the charge of maintenance of a nuisance, under section 21 of title 2 of the National Prohibition Act (27 USCA § 33). It is therefore unnecessary to consider whether the sentence could he sustained under either of the other counts, even if such counts were defective. Claassen v. United States, 142 U. S. 140, 146, 12 S. Ct. 169, 35 L. Ed. 966; Evans v. United States, 153 U. S. 584, 595, 14 S. Ct. 934, 38 L. Ed. 830; Evans v. United States, 153 U. S. 608, 609, 14 S. Ct. 939, 38 L. Ed. 839; Debs v. United States, 249 U. S. 211, 216, 39 S. Ct. 252, 63 L. Ed. 566; United States v. Trenton Potteries Co., 273 U. S. 392, 402, 47 S. Ct. 377, 71 L. Ed. 700, 50 A. L. R. 989, or if the evidence did not support the verdict under such counts, Putnam v. United States, 162 U. S. 687, 707, 714, 16 S. Ct. 923, 40 L. Ed. 1118; Roberts v. United States (C. C. A.) 248 F. 873, 876; Baird v. United States (C. C. A.) 279 F. 509, 511; Mills v. United States (C. C. A.) 294 F. 77, 79; Wisconsin Cent. Ry. Co. v. United States (C. C. A.) 169 F. 76, 80; Norton v. United States (C. C. A.) 205 F. 593, 602; Brand v. United States (C. C. A.) 236 F. 219, 220; Blackstock v. United States (C. C. A.) 261 F. 150, 152; Miller v. United States (C. C. A.) 295 F. 602, 604. íhe general principle of these cases is stated in Pierce v. United States, 252 U. S. 239, 252, 40 S. Ct. 205, 210, 64 L. Ed. 542, as follows:

“The conceded insufficiency of the first count of the indictment does not warrant a reversal, since the sentences imposed upon Pierce, Creo, and Zeilman did not exceed that which lawfully might have been imposed under the second, third, or sixth counts, so that the concurrent sentence under the first count adds nothing to their punishment. Claassen v. United States, 142 U. S. 140, 146, 12 S. Ct. 169, 35 L. Ed. 966; Evans v. United States (two cases) 153 U. S. 584, 595, 608, 14 S. Ct. 934, 939, 38 L. Ed. 830, 839; Putnam v. United States, 162 U. S. 687, 714, 16 S. Ct. 923, 40 L. Ed. 1118; Abrams v. United States, 250 U. S. 616, 619, 40 S. Ct. 17, 63 L. Ed. 1173.”

The can containing alcohol was received in evidence, and this is assigned as error. The evidence shows that the room at the head of the stairs, the door of which was five or six feet from the door opening into the soft drink parlor and in which this can was found, was not occupied by any one. The door into this room was unlocked. When the can was offered in evidence, the defendant objected to it on the ground that it was illegally seized. It does not appear that the defendant has ever claimed the premises where the can was seized or has claimed ownership or possession of the can or of its contents. He therefore could make no valid objection that it was illegally seized. McMillan v. United States (C. C. A.) 26 F.(2d) 58; Rosenberg v. United States (C. C. A.) 15 F.(2d) 179; Graham v. United States (C. C. A.) 15 F.(2d) 740; McShann v. United States (C. C. A.) 38 F.(2d) 635; Hogg v. United States (C. C. A.) 35 F.(2d) 954; Remus v. United States (C. C. A.) 291 F. 501; Hale v. Henkel, 201 U. S. 43, 26 S. Ct. 370, 50 L. Ed. 652.

A prior objection had been made to the offer of the can in evidence, assigning no grounds for the objection, and falling within the condemnation of such objections made in Waddell v. United States (C. C. A.) 283 F. 409, and seems not to have been ruled upon.

Prior to the offer in evidence of the can containing alcohol, a prohibition agent, who had been called as a witness for the United States, had testified to making the search, and had twice stated that he had found this gallon can about half full of alcohol. No objection was ever made to the reception of this evidence, and no motion was made to exclude it from the consideration of the jury. There was no evidence offered on the part of the defendant to dispute the evidence of the officer as to what he found and seized. A similar situation was presented in the case of Segurola v. United States, 275 U. S. 106, 48 S. Ct. 77, 79, 72 L. Ed. 186. The defendant in that ease was convicted of the unlawful transportation of i intoxicating liquor, and contended that the trial court erred in failing to sustain his motion, made during the trial, to suppress the use of the liquor as evidence. . In passing upon this objection, the Supreme Court noted that no objection was made to the evidence of the officers and of others that liquor was found in the automobile which the defendant was driving, and that no evidence to dispute these facts was offered by the defense. The court then said:

“The results of the search and 'seizure, were shown by the testimony of the chief of police and of the other witnesses without any objection on behalf of the defendants; and thus was disclosed the fact that the defendants had been engaged in transporting a large amount of liquor in the Buick. No motion was made to strike that evidence out, and no evidence was introduced to contradict what was disclosed by the statements of the chief of police and other witnesses upon this point. The only objection made toward the close of the evidence for the government was that, when it was proposed to introduce the liquor, it had not been properly identified, but there was ample evidence to show that it had. The motion made thereafter to suppress the liquor as evidence, on the ground that there had. been an illegal search, did not include a motion to strike out the evidence of the witnesses as to what occurred when the ear was stopped. The objection to the seizure was plainly an afterthought.
“As there was no evidence introduced by the. defendants to refute or deny the testimony unobjeeted to, which clearly showed the illegal transportation of the liquor and sustained the verdict, the admission in evidence of the liquor and the refusal to permit cross-examination of Ceballos worked no prejudice for which a reversal can be granted.”

Applying the principles of that case to the facts in this ease, it is not perceived how any prejudice resulted to the appellant from the introduction in evidence of the can and its contents, over his objection to its alleged illegal seizure, when the .uncontradieted testimony of the officer who seized the can, describing it and its contents, and given without objection, fully apprised the jury of all the facts that the introduction of the exhibits disclosed.

Complaint is made that the court refused to receive the testimony of a railway conductor as to the condition of one of the prohibition agents after 6 p. m. on January 6; the purpose having been tp prove that he was then intoxicated. The substance of the evidence is not set out in the assignment of errors or in the brief, as required by the rules of this court, but the offered evidence was immaterial, as no time of the day had been fixed for the prohibition agent’s visits to this soft drink parlor.

The judgment will be affirmed.