author: BOOTH, Circuit Judge.

text:
    JENSEN et al. v. NEW YORK LIFE INS. CO.
    No. 9018.
    Circuit Court of Appeals, Eighth Circuit.
    May 9, 1931.
    C. C. Fraizer, of Aurora, Neb., for appellants.
    William C. Michaels, of Kansas City, Mo. (R. M. Switzler, of Omaha, Neb., C. A. Randolph, of Kansas City, Mo., Louis H. Cooke, of New York City, and Meservey, Michaels, Blaekmar, 'Newkirk & Eager, of Kansas City, Mo., on the brief), for appellee.
    Before VAN . VALKENBÜRGH, BOOTH, and GARDNER, Circuit Judges.
   BOOTH, Circuit Judge.

This is an appeal from a decree canceling a policy of life and disability insurance.

The facts are shortly as follows: The appellant Jensen, defendant below, made application for the lioliey to Mr. Tucker, a soliciting agent of the plaintiff, about January 7, 1928. The application contained the following provisions: “It is mutually agreed as follows: 1. That the insurance hereby applied for shall not take effect unless and until the policy is delivered.to and received by the applicant and the first premium thereon paid in full during his lifetime, and then only if the applicant has not consulted or been treated by any physician since his medical examination; * * * 3. That only the President, a Vice-President, a Second, Vice-President, a Secretary or the Treasurer of the Company can make, modify or discharge contracts, or waive any of the Company’s rights or requirements; that notice to or knowledge of the soliciting agent or the Medical Examiner is not notice to or knowledge of the Company, and that neither one of them is authorized to accept risks or to pass upon in-surability.”

On January 13th, Jensen was examined by the company’s physician. Two days afterward he was gored by a bull, and on the same day consulted a physician on account of the injury, and received medical treatment.

The policy was written by the company and sent to its agent Tucker, who delivered it to Jensen on February 12th. The mother of Jensen was the beneficiary of the life insurance provisions.

A copy of the application was attached to the policy; and. the policy contained, among other provisions, the following:

“The Contract. — The Policy and the application therefor, copy of which is attached hereto; constitute the entire contract. All statements made by the Insured shall, in absence of fraud, be deemed representations and not warranties, and no statement shall avoid the Policy or be used in defense to a claim under it, unless it is contained in the written application and a copy of the application is indorsed upon or attached to this Policy when issued. No agent is authorized to make or modify this contract, or to extend the time for the payment of premium, or to waive any lapse or forfeiture or any of the Company’s rights or requirements. All benefits under this Policy are payable at the Home Office of the Company in the City and State of New York.”

Tucker, on February 12th and prior thereto, knew of the accident that had happened to Jensen, and that he had been treated for the injury. The first premium was paid.

On December 18, 1928, Jensen made out and sent to the company a written claim for disability benefits under the policy, stating that he had become disabled on January 15, 1928, by reason of the injury. The physician who had attended him made a written statement also. These claim papers were received by the company about December 22, 1928, and the contention of the company is that then foi‘ the first time it learned of the injury and of the treatment given by a physician on January 15, 1928. The company thereupon wrote Jensen, calling his attention to the provision above quoted, contained in the application, and stating that the insur-,anee applied for never took effect. The company tendered back the amount of the premium, with interest. Jensen, through his attorney, refused to accept the attempted refund of premium, declared his intention to consider the policy in full force and effect, and asked for settlement of total permanent disability benefits. The present suit against Jensen and his mother followed, the bill being filed April 29, 1929.

Both before and at the trial, Jensen offered to return the cheek of the company covering the premium paid, and interest.

In the trial court, a motion to dismiss the bill was made on the ground that the matter in controversy did not exceed, exclusive of interest and costs, the sum or value of $3,000. The motion was denied (D. C.) 38 F.(2d) 524.

An answer was interposed, setting up, among other matters, a plea in abatement based upon a suit commenced by Jensen against appellee, five days after the commencement of the present suit. The later suit was brought in the state district court of Hamilton county, Neb. The plea in abatement alleged that the suit in the state court involved the issue whether the insurance under the policy ever took effeet; that a decree had been entered in the state court suit in favor of Jensen; but that the Insurance Company had appealed from the decree to the rtate Supreme Court, where the cause was still pending. This plea in abatement was overruled.

On the merits, the lower court found the facts in favor of the plaintiff Insurance Company, and entered a decree canceling the policy.

In this court, the first question which arises is that of jurisdiction. It is contended by appellant that $3,000 is not involved, since only benefits accruing by reason of the injury have been demanded by Jensen from the Insurance Company, and that these benefits amount to less than $3,000; and that this amount of the benefits demanded determines the question of jurisdiction. The appellee Insurance Company, however, contends that the amount involved or the “matter in controversy” is fixed by the face of the policy itself.

In New York life Ins. Co. v. Swift, 38 F.(2d) 175, 176 (C. C. A. 5), the court said:

“The policies in suit are contracts by which the insured agrees to pay the premiums and the insurer agrees to pay the full face value of the policies on the death of the insured, an event bound to happen. With the uncertainty of life, it may occur at any time; and is an ever-present liability, which the insurer can' do nothing to avert, except by seeking relief from a court of equity to cancel the policies on legal grounds. The policies are riot voidable at the option of the insurer, nor is it optional with the insurer to compel the insured to accept either the loan or cash surrender value of the policies or to take policies of paid-up insurance. The only fixed and definite liability of the insurer is to pay the face of the policy. That amount measures the loss that plaintiff will suffer if the policies are not canceled. • * •
“It would not do for the plaintiff to wait until death had occurred or the insured had elected to take the cash surrender value of the policies or paid-up insurance, as, after the lapse of two years, they would be incontestable on any ground.”

A similar ruling had been made by the same court in Massachusetts Protective Ass’n v. Kittles, 2 F.(2d) 211, and by the district court for the Western district of New York in the ease of Judson v. Knights of the Maccabees of the World, 220 F. 1004.

In the case at bar, the policy contained a two-year incontestable clause, and the minimum face liability of the policy was shown to be $7,500.

In the case of Mutual life Ins. Co. v. Thompson (D. C.) 27 F.(2d) 753, 754, Judge McDowell, with forceful reasoning, reached the conclusion that in a suit to cancel an insurance policy, if the bill alleged that the “value of the object sought by the bill,” exclusive of interest and costs, exceeded the sum of $3,000, this was sufficient to confer jurisdiction.

In the case at bar; such an allegation as suggested by Judge McDowell is contained in the bill.

The trial court, in the ease at bar, in passing upon the matter of jurisdictional amount, said: “The amount in controversy is alleged to exceed $3,000 exclusive of interest and costs. There is a showing on file that this amount is involved because the amount from which the insurance company seeks relief is $10,974.29, the reserve which the company must maintain against liability under this policy, until it is finally satisfied. The amount in controversy is sufficiently alleged and established.” (D. C.) 38 F.(2d) 524.

In Elliott v. Empire Nat. Gas. Co., 4 F.(2d) 493, 497, an injunction ease, this court, after reviewing many authorities, held that the “value of the matter in controversy” in Judicial Code § 24 (28 USCA § 41), means the pecuniary result to either party which the judgment entered in the ease would directly produce, either at once or in the future.

Whether we apply, therefore, the test as laid down in the Fifth circuit, or the test suggested in the Fourth circuit by Judge McDowell, or 'the test suggested for analogous eases by this court in the Elliott Case, supra, and apparently followed by the trial court in the case at bar, the same result is reached that the requisite jurisdictional amount is involved, and that jurisdiction of the federal court existed

We come next to the matter of abatement.

At the time of the trial in the federal court, the suit in the state court was still pending in the Supreme Court of the state. It was on this ground that the federal court held that the plaintiff, in the suit before it, might proceed with the trial of its ease. The question of the federal court enjoining Jensen from prosecuting his suit in the state court was not raised by the then counsel for the company.

Upon the hearing of the appeal in this court, counsel for appellant has advised us that the appeal in the state Supreme Court has been determined, and that the judgment in the state court in favor of Jensen has become final.

If such be the fact, then the question arises whether that final judgment in the state court is pleadable in bar in the present suit in the federal court.

It is important that these matters should be considered before the final determination of the present suit now pending in this court on appeal.

These matters, however, cannot properly be determined by this court upon the present record; so that the question of appropriate further procedure must be considered.

We might determine the present appeal upon the merits as disclosed by the record transmitted. If no error was found, we might, in afiirming the decree, provide that the affirmance should be without prejudice to the beginning of an original suit by Jensen to set aside the decree in the federal court because of the final judgment in the state court. A suggestion as to such a course is found in United States v. Shelby Iron Co., 273 U. S. 571, 579, 47 S. Ct. 515, 71 L. Ed. 781. See, also, Woodward v. Boston, etc., Co., 63 F. 609 (C. C. A. 1); Hazeltine Corp. v. Wilder-muth, 35 F.(2d) 733 (C. C. A. 2); Seymour v. White County, 92 F. 115 (C. C. A. 7).

Or .we might reverse the decree and remand the cause to the district court for further pleadings and proceedings. This was the course followed in the Shelby Iron Company Case, supra, and is quite usual. See Levy v. Arredondo, 12 Pet. 218, 9 L. Ed. 1062; Butler v. Eaton, 141 U. S. 240, 11 S. Ct. 985, 35 L. Ed. 713; Wiggins Ferry Co. v. O. & M. Ry., 142 U. S. 396, 413, 416, 12 S. Ct. 188, 35 L. Ed. 1055; Scott v. Armstrong, 146 U. S. 499, 512, 13 S. Ct. 148, 36 L. Ed. 1059; Murdock v. Ward, 178 U. S. 139, 149, 20 S. Ct. 775, 44 L. Ed. 1009; United States v. Rio Grande Irrigation Co., 184 U. S. 416, 423, 22 S. Ct. 428, 46 L. Ed. 619; Lincoln Gas Co. v. Lincoln, 223 U. S. 349, 365, 32 S. Ct. 271, 56 L. Ed. 466; Berry v. Davis, 242 U. S. 468, 37 S. Ct. 208, 61 L. Ed. 441; Watts, etc., Co. v. Unione Austriaca, 248 U. S. 9, 21, 22, 39 S. Ct. 1, 63 L. Ed. 100, 3 A. L. R. 323; The Carbonero, 106 F. 329, 336 (C. C. A. 1); E. I. Du Pont, etc., Co. v. Richmond Guano Co., 297 F. 580 (C. C. A. 4); Dillingham v. T. B. Allen & Co., 205 F. 146 (C. C. A. 5); Chemical Nat. Bank v. Armstrong, 65 F. 573, 28 L. R. A. 231 (C. C. A. 6); see Id., 176 U. S. 622, 20 S. Ct. 498, 44 L. Ed. 611; Barber v. Coit, 118 F. 272 (C. C. A. 6); Dietz v. Horton Mfg. Co., 170 F. 865 (C. C. A. 6); Fifth Third Nat. Bank v. Johnson, 219 F. 89 (C. C. A. 6); Ransom v. City of Pierre, 101 F. 665 (C. C. A. 8); Ellis v. Reed (C. C. A.) 258 F. 919, also Id., 238 F. 341 (C. C. A. 9).

Or we might follow one of the different methods of procedure shown in Mossberg v. Nutter, 124 F. 966 (C. C. A. 1); Cimiotti, etc., Co. v. American, etc., Co., 99 F. 1003 (C. C. A. 2); Baltimore S. S. Co. v. Phillips, 9 F.(2d) 902 (C. C. A. 2); Wagner v. Meccano, 235 F. 890 (C. C. A. 6); also Id. (C. C. A.) 246 F. 603, all following an expression in Roemer v. Simon, 91 U. S. 149, 23 L. Ed. 267; Marden v. Campbell, etc., Co., 67 F. 809 (C. C. A. 1); also Id. (C. C.) 70 F. 339, 340; Greene v. United Shoe Machinery Co., 124 F. 961 (C. C. A. 1); Firestone, etc., Co. v. Seiberling, 245 F. 937 (C. C. A. 6); Mutual Ins. Co. v. Lipp, 28 F.(2d) 863 (C. C. A. 9); Pagel v. MacLean, 51 S. Ct. 416, 75 L. Ed. -, opinion filed April 13, 1931.

Still another course is open: To retain the present appeal in this court, but remand the cause to the trial court and grant leave to Jensen to apply to that court to reopen the case for the filing of a supplemental pleading and the introduction of evidence on the issue as to the effect of the judgment in the state court.

The cause can again be brought to this court on appeal from the later decree entered on the supplemental issue, and this court can then determine the whole cause, whether based upon the original or the later decree. Such a course has obvious advantages. It disposes of the whole cause in one suit; and it does away with the necessity of retrying, in the District Court, issues already adjudicated by a decree. It obviates the necessity of passing upon the question of the merits of the suit at this time, a question which may possibly not be necessary for this court to pass upon at all.

The course thus outlined was adopted by this court in the ease of D. W. Bosley Co. v. Wirfs, 20 F.(2d) 629, and Id., 30 F.(2d) 667. In that ease the questions involving the merits and arising on the first appeal were retained by this court for determination until a new question which had arisen should be determined by the trial court, for which purpose the cause was remanded to that court. The records on both appeals were before the court on the final hearing.

In a prior case, Drainage Dist. No. 7 v. Sternberg, 15 F.(2d) 41, and Id., 16 F.(2d) 598, this court had adopted a similar course of procedure, and in its opinion, the court reviewed numerous authorities. After eliminating certain of the cases cited, the court said [page 46 of 15 F.(2d)]: “The other federal cases are to the effect that a federal court of equity may, in its discretion and in the furtherance of justice, remand a case oi; an issue or item therein to the trial court for amendment of pleadings or for further evidence.”

Similar procedure was followed in Ballard v. Searls, 130 U. S. 50, 56, 9 S. Ct. 418, 32 L. Ed. 846; Finefrock v. Kenova, etc., Co. (C.C.A.) 22 F.(2d) 627; also Id., 37 F.(2d) 310 (C. C. A. 4); St. Louis, etc., Co. v. Nix, 272 F. 977 (C. C. A. 8); Levinson v. United States, 32 F.(2d) 449 (C. C. A. 6); see also Kirkpatrick v. McBride, 203 F. 449 (C. C. A. 4).

We think the procedure last above outlined as approved by this court should be followed in the ease at bar; especially so, as the matters which it is sought to bring to the attention of the court have occurred subsequent to the taking of the present appeal.

An order will, accordingly, be entered that leave is hereby granted to appellants, defendants below, to make a motion to the United States District Court below to open the case and allow reframing of the pleadings so as to present the issue of the existence of the alleged final judgment in the state court, and the effect thereof upon the suit in the federal court; and leave is hereby granted to said United States District Court to hear, consider, and decide such motion; and if, upon consideration of the evidence and the arguments of the respective parties on that motion, said United States District Court decides to grant-said motion, then thereafter to admit sueh competent and relevant evi-deuce as any of the parties to this suit may present relative to the existence of the alleged final judgment in the state court, and the effect thereof upon the present cause in the federal court; and thereafter to consider and determine the case upon the record thereof thus supplemented. Meanwhile, the present appeal will remain in this court.


source: Caselaw Access Project

author: NETERER, District Judge

license: Public Domain

text:
    SANTIS v. ESOLA.
    No. 6354.
    Circuit Court of Appeals, Ninth Circuit.
    June 8, 1931.
    Joseph Edward Connolly, of San Francisco, Cal., for appellant.
    George J. Hatfield, U. S. Atty., and Albert E. Bagshaw, Asst. U. S. Atty., both of San Francisco, Cal., for appellee.
    Before WILBUR and SAWTELLE, Circuit Judges, and NETERER, District Judge,
   NETERER, District Judge

(after stating the facts).

The judgment entered was an adjudication and pronouncement upon the subject-matter of the litigation between the United States and the defendant. The penalty to be assessed upon conviction was in the discretion of the court, but limited by statute to a maximum amount. And the exercise of the discretion and making pronouncement thereof by the court was a judicial act and final determination. “At law, a judgment is yea or nay, for one party and against the other ” Freeman on Judgments, § 2. A judgment on a verdict or plea of guilty must be certain and final. Morris v. State, 1 Black. (Ind.) 37. This judgment was certain and final. The defendant was committed until the fine was paid or he was otherwise released by operation of law. The judgment was also subject to civil execution. Pierce v. U. S., 255 U. S. 398, 41 S. Ct. 365, 65 L. Ed. 697. The power or control of the court ended when the judgment was satisfied by payment. United States v. Murray, 275 U. S. 347, 48 S. Ct. 146, 72 L. Ed. 309.

The court has power only in such case as it is expressly conferred by statute, and after conviction and judgment it is limited by the Probation Act (18 USCA § 724) to (a) suspend imposition of sentence, or (b) suspend execution of sentence and place defendant upon probation for such period and upon such terms and conditions as it may deem best. United States v. Murray, supra. The Probation Act is only operative when there is an unsatisfied judgment. The court may (1) commit the defendant until the fine is paid, etc.; (2) direct civil execution; or (3) suspend execution and place defendant upon probation; and (a) require payment of fine in installments, and also have defendant-submit to restricted conduct through the court’s parole officer, or (b) suspend payment altogether during good behavior. “Probation” simply means enlarging a person subject to commitment by suspension of sentence, during the regularity of conduct, and imposing conditions, and on default thereof arrest and commit until imprisonment is served or the judgment is satisfied. The Probation Act, supra, provides: “That the courts of the United States * * when it shall appear a *' * that the ends of justice and the best interests of the public, as well as the defendant, will be subserved thereby, shall have power, after conviction * * * for any crime or offense not punishable by death or life imprisonment, to suspend the imposition or execution of sentence and to place the defendant upon probation for such period and upon such terms and conditions as they may deem best; or the court may impose a fine and may also place the defendant upon probation in the manner aforesaid.” (Italics supplied.)

In the instant ease, not only was sentence not stayed, but defendant was committed until the fine was paid or he was otherwise released. Upon payment of the fine he was released. The judgment being satisfied, his liberty unrestricted was a matter of right. There is no provision of law that any condition may attach to a sentence as such. Imprisonment and fine under the statute bear the same relation to probation. In one, the imprisonment is stayed, and in the other the payment of the fine is stayed; and, when either the imprisonment is entered upon or the fine is paid, the power of the court ends.

The part of the judgment placing the defendant on probation after payment of fine and requiring him to report to the probation officer at stated intervals is brutum fulmen.

The order is reversed, and the case remanded, with instructions to issue the writ.


author: BINGHAM, Circuit Judge.

text:
    UNITED STATES v. DAVIDSON.
    No. 2549.
    Circuit Court of Appeals, First Circuit.
    June 10, 1931.

      Charles H. Eden, Asst. U. S. Atty., of Providence, R. I. (Henry M. Boss, Jr., U. S. Atty., of Providence, R. I., on the brief), for the United States.
    Daniel T. Hagan, of Providence, R. I. (James H. Hagan, Jr., of Providence, R. I. on the brief), for appellee.
    Before BINGHAM, ANDERSON, and WILSON, Circuit Judges.
   BINGHAM, Circuit Judge.

This is a libel of information filed in the District Court of Rhode Island to forfeit the gas screw yacht Eaglet, licensed December 23, 1929, as a pleasure vessel of the United States, to George Davidson, her sole owner. In the libel, among other things, it is alleged that the Eaglet was seized by the Coast Guard on the 1st day of June, 1930, on the navigable waters of the United States, to wit, on the east side of Kickemuit river, at or near its ¡junction with Mount Hope Bay, in said district, and within the admiralty and maritime jurisdiction of the court; that on June 4 the vessel was turned over to the collector of customs of the port of Providence in said district, who, before the filing of the libel, adopted the seizure and now holds said Eaglet in said district and within the admiralty and maritime jurisdiction of the court as forfeited for violation of section 4214 of the Revised Statutes, as amended, and section 4377 of the Revised Statutes.

The allegations of the first count of the libel are that before and at the time of said seizure (June 1, 1930, the Eaglet, being licensed and enrolled as a pleasure vessel as provided in section 4214, as amended (title 46, USCA § 103), was engaged in transporting merchandise for pay contrary to the provisions of said section, and that, by reason of the foregoing and the provisions of said section 4214 as amended, said Eaglet became liable to seizure and forfeiture.

In count 2 it is alleged that before and at the time of the seizure the Eaglet, being then and there licensed and enrolled as a pleasure vessel, was employed in a trade other than that for which she was licensed, in that she was employed in the trade of unlawfully transporting intoxicating liquor containing more than one-half óf 1 per cent, of alcohol fit for beverage purposes, and that, by reason of the foregoing and the provisions of section 4377 of the Revised Statutes (46 USCA § 325), the Eaglet became liable to seizure and forfeiture.

June 17,1930, George Davidson appeared and filed a claim as owner. In it he asked the court to release the vessel on bond, under section 938 of the Revised Statutes (title 28 USCA § 751), and supported his claim by an affidavit that he was the sole owner, and that, at the time of the seizure, no person was arrested in connection with the charge against the vessel. July 2,1930, an order was entered for the release of the vessel on bond, and on July 30, 1930, the appellant excepted to the order.

‘ August 4, 1930, the claimant filed an answer and exceptions, in which he admitted that the Eaglet was licensed and enrolled as a pleasure vessel of the United States: denied that she was seized on the navigable waters of the United States within the District by the Coast Guard; denied that before the filing of the libel the collector of customs had adopted the seizure, and that, at the time of the filing of the libel, held the Eaglet within the district and within the admiralty and maritime jurisdiction of the court.

As to the first ground of forfeiture, the claimant denied that before and at the time of the seizure the Eaglet was engaged in transporting merchandise for pay, and that she became liable to seizure and condemnation by reason of section 4214, and denied that all the allegations were true and within the civil, admiralty, and maritime jurisdiction of the court.

As to the second ground, the claimant denied that before and at the time of seizure the Eaglet was employed in a trade other than that for which she was licensed, that is to say, that, being licensed as a pleasure vessel, she was then and there employed in an illegal trade, to wit, the trade of transport-! ing intoxicating liquor, etc. ; denied that, by; virtue of the foregoing and the provisions of section 4377 of the Revised Statutes, she' became liable to seizure and forfeiture; and denied that all and singly the premises were true and within the civil, admiralty, and maritime jurisdiction of the court; and, as an exception, alleged that the vessel was not seized on the navigable waters of the United States and that the court was without jurisdiction in admiralty.

A hearing was had on the libel and answer. The claimant presented no evidence. The government’s evidence was that, at about five minutes of 4 on the morning of June 1, 1930, the Eaglet was observed running without lights into a slip at Pall river; that immediately thereafter trucks were observed on the dock beside the slip and men were seen unloading sacks from the vessel to one of the trucks; that the Coast Guard vessel C. G. 283, having her searchlights turned on, attempted to enter the slip, and, when twenty-five feet away fired one blank from her gun for the Eaglet to stand to; that the Eaglet got under way and collided with the Coast Guard 283 in leaving the slip; that, as she was leaving the slip, men on board the Eaglet were seen throwing sacks overboard into the slip; that the Eaglet was pursued into the Kiekemuit river in Rhode Island; that in the pursuit the Coast Guard 283 ran aground on a point of land; that the Eaglet rounded this point and after being out of sight of the 283 for fifteen minutes she was found beaehed in Rhode Island; that her crew had departed; and that the Coast Guard seized and took possession of the Eaglet at 5 a. m. Coast Guardsman Pressel testified that, when he first boarded the Eaglet in the morning, she was wholly in the water, and at 5:30 that morning, when the Coast Guard left her, she was afloat in the waters of Kiekemuit river; that, on the morning of the seizure, 243 saeks were taken from the bottom of the river at a point about 200 feet astern of the Eaglet; that, in the afternoon of the same day, Coast Guardsmen Beaudoin and Pressel returned to the Kiekemuit river and found the Eaglet with her bow on shore and the aft part of the vessel in the water. There was no testimony that any member of the Coast Guard had been on board the boat since they left her in the morning, when she was out in the stream, until they returned in the afternoon. No liquor was found on board the vessel. Two days following the seizure, Edgeeomb, one of the Coast Guard on C. G. 283, recovered seven saeks of liquor from the slip at the place where he had seen the crew of the Eaglet drop saeks overboard. He testified that none of the Coast Guard saw any of the saeks thrown from the Eaglet in Kiekemuit river which they found at a point about 200 feet from her stern. The deputy collector of customs, to whom the saeks were turned over, testified that the seven saeks recovered from the slip bore the brand “William Penn Whiskey,” and that the brand on these saeks corresponded with the brand on the 243 saeks recovered from the Kiekemuit river.

At the hearing one of the seven saeks was opened; none of the seven saeks had been previously opened. The bottles in this sack were marked “William Penn Whiskey.” None of the bottles had been opened, and the district attorney asked permission to open one so that the court might smell it, but was not permitted to do so. The deputy collector, called as a witness and having one of the bottles before him, was asked: “What is it? Do you know?” and answered: “That is William Penn Rye Whiskey.” Two bottles , of the. William Penn whisky were offered in evidence, but, on objection, were excluded, to which exception was taken. There was also testimony that all of the seven saeks were marked “William Penn Whiskey,” the same as the one that was opened.

At the close of the testimony the claimant moved to dismiss the libel on the ground that the court was without admiralty jurisdiction, claiming that the vessel was seized by the Coast Guard when she was boarded in the afternoon, at whieh time she was partially out of water. This motion was denied.

A further motion to dismiss was made “on the ground that there was no evidence to sustain the allegations of the libel (1) that the vessel was transporting merchandise for pay, and (2) was unlawfully engaged in transporting intoxicating liquor.” This motion was granted on the ground that “there was no evidence to sustain the allegations' of the libel, in that the liquor recovered from the slip could not be connected with the Eaglet.”

The final decree dismissing the libel was: “It is ordered, adjudged and decreed that the libel herein be and the same hereby is dismissed without costs, and that the bond given in accordance with order of this court in connection with the release of said vessel on bond, be discharged.” It is from this decree that the appeal is taken. The errors assigned and here relied on are that the court erred (1) in ordering the,vessel released on bond; and (2) in dismissing the libel.

The question of admiralty jurisdiction depends upon whether the seizure was made on land or on the navigable waters within the district of Rhode Island. The order of the District Court denying the motion to dismiss for want of admiralty jurisdiction includes a finding that the seizure was made on navigable waters within the District and was justified, if there was any evidence to support such finding. That there was such evidence cannot be questioned, for it appeared that, at the time the vessel was boarded and Seized on the morning of June 1, she was afloat in the navigable waters of Kickemuit river in the district of Rhode Island. How she came to be beached between the time of the seizure in the morning and when the Coast Guard returned in the afternoon, the evidence does not disclose. She may have been washed ashore by the tide. It does not appear that any one took her ashore. We are of the opinion and find that the seizure was made in the navigable waters of the United States within the district of Rhode Island.

The main question, so far as count 1 is concerned, is whether there was any evidence from which it could be found that before and at the time of the seizure the Eaglet was engaged in transporting merchandise for pay and in violation of section 4214, as amended; she having been licensed and enrolled as a pleasure vessel. This section, as amended, reads as follows:

“The Secretary of Commerce may cause yachts used and employed exclusively as pleasure vesssels “ * * to be licensed on terms which will authorize them to proceed from port to port of the United States and to foreign ports without entering or clearing at the customhouse; such license shall be m such form as the Secretary of Commerce may prescribe. Such vessels, so enrolled and licensed, shall not be allowed to transport merchandise or carry passengers for pay. Such vessels shall have their name and port placed on some conspicuous portion of their hulls. Such vessels shall, in all respects, except as above [entering and clearing], be subject to the laws of the United States, and shall be liable to seizure and forfeiture for any violation of the provisions of this chapter.” 46. USCA § 103.

We are of the opinion that there was adequate evidence to warrant the finding, and we find that the Eaglet had engaged in transporting merchandise for pay; that on the morning of the seizure she had had on board and had transported not only the sacks seen on the trucks at the dock and the seven sacks found in the slip, marked “William Penn Whiskey,” but the 243 sacks similarly marked and found within 200 feet of her stem in the Kickemuit river. It is true there was no direct evidence that the Eaglet was engaged in transporting merchandise for pay, but, inasmuch as she had on hoard and transported more than 250 sacks, which, with the bottles they contained, were marked “William Penn Whiskey,” and which, after discovery by the Coast Guard and during her flight, she undertook to free herself of by throwing overboard, there can he no reasonable doubt that she was transporting this large quantity of merchandise for pay. This was the finding and ruling in The Herreshoff (D. C.) 6 F.(2d) 414, and in The Conejo (D. C.) 10 F.(2d) 256. Both of these cases arose under the same provisions of law as are here drawn in question in count 1. The latter case was brought to this court for review. The Conejo, 16 F.(2d) 264. In the opinion of the court, written by Judge Anderson, affirming the decision of the District Court, it was said :

“The evidence shows conclusively that the Conejo was engaged in rum-running off the coast of Maine; that in August, 1925, she landed a cargo of several hundred cases of whisky at Freeport, Me. This was a breach of her license, by transporting merchandise for pay, as the court below held in this ease, and as Judge Morton held in a like ease in The Herreshoff (D. C.) 6 F.(2d) 414.”

A forfeiture should have been ordered under the first count.

We also are of opinion that the court was in error in granting the motion to dismiss as to count 2. Under this count, the claimant having failed to introduce any evidence, all the government was required to show, to entitle it to a judgment of forfeiture, was probable cause for instituting the proceeding. This count was based on a violation of section 4377 of the Revised Statutes (46 USCA § 325) which bears the same title as section 4380 (46 USCA § 328).

Section 4380 of the Revised Statutes provides :

“All penalties and forfeitures which shall be incurred by virtue of this Title may be sued for, prosecuted, and recovered as penalties and forfeitures incurred by virtue of the laws relating to the collection of duties, and shall be appropriated in like manner; except when otherwise expressly prescribed.”

In The Chiquita (D. C.) 41 F.(2d) 842, 843, it was held that libels prosecuted under section 4377, by virtue of the provisions of section 4380, were entitled to “be heard upon and under the same rules of evidence and procedural advantages as are ordained by section 615 of the Tariff Act of 1922 (19 USCA § 525),” and the Court of Appeals for the Ninth Circuit, in 44 F.(2d) 302, apparently approved the holding’ of the District Court as to this matter.

The evidence in this case was sufficient to warrant a finding of probable cause for the institution of the proceeding under the second count, and we so find. See Vincent v. United States (C. C. A.) 19 F.(2d) 344, and United States v. Blackwood, 47 F.(2d) 849, decided by this court March 10, 1931.

The remaining question is whether in this admiralty proceeding' the vessel should have been released on the application of the-owner and his furnishing a bond for the appraised value of the vessel, under the provision of section 938 of the Revised Statutes (28 USCA § 751).

The offenses alleged to have been committed by the vessel are violations of sections 4214, as amended, and 4377, both of which are customs provisions relating to the “enrolling and licensing of vessels.”

Section 938 of the Revised' Statutes (28 USCA § 751), provides:

“See. 938. Upon the prayer of any claimant to the court, that' any vessel, goods, wares, or merchandise, seized and prosecuted under any law respecting the revenue from imports or tonnage, or the registering and recording, or the enrolling and licensing of vessels, or any part thereof, should be delivered to him, the court shall appoint three proper persons to appraise such property, who shall be sworn in open court, or before a commissioner appointed by the district court to administer oaths to appraisers, for the faithful discharge of their duty; and the appraisement shall be made at the expense of the party on whose prayer it is granted. If, on the return of the appraisement, the claimant, with one or more sureties, to be approved by the court, shall execute a bond to the United States for the payment of a sum equal to the sum at which the property prayed to be delivered is appraised, and produce a certificate 'from the collector of the district where the trial is had, and of the naval officer thereof, if any there be, that the duties on the goods, wares, and merchandise, or tonnage duty on the vessel so claimed, have been paid or secured in like manner as if the same had been legally entered, the court shall, by rule, order such vessel, goods, wares, or merchandise to be delivered to such claimant; and the said bond shall be lodged with the proper officer of the court. If judgment passes in favor of the claimant, the court shall cause the said bond to be canceled; but if judgment passes against the claimant, as to the whole or any part of such vessel, goods, wares, or merchandise, and the claimant does not within twenty days thereafter pay into the court, or to the proper officer thereof, the amount of the appraised value of such vessel, goods, wares, or merchandise so condemned, with the costs, judgment shall be granted upon the bond, on motion in open court, without further delay.
“See. 939. All vessels, goods, wares, or merchandise which- shall be condemned by virtue of any law respecting the revenue from imports or tonnage, or the registering and recording, or the enrolling and licensing of vessels, and for which bonds shall not have been given by the claimant, shall be sold by the marshal or other proper officer of the court in which condemnation shall be- had, to the highest bidder, at public auction, by order of such court, and at such place as the court may appoint, giving at least fifteen days’ notice (except in eases of perishable merchandise) in one or more of the public newspapers of the place where such sale shall be; or if no paper is published in such place, in one or more of the papers published in the nearest place thereto; for which advertising, a sum not exceeding $5 shall be paid. And the amount of such sales, deducting all proper charges, shall be paid within ten days after such sale by the person selling the same to the clerk or other pfoper officer of the court directing such sale, to be by him, after deducting the charges allowed by the court, paid to the collector of the district in ,wliieh such seizure or forfeiture has taken place, as hereinbefore directed.” 26 USCA § 752.

In the Admiralty-Rules of Practice, promulgated by the Supreme Court on December 6, 1920, to take effect March 7,1921, Rule 12.(28 USCA § 723) provides:

“Where any ship shall be arrested, the same shall, on the application of the claimant, be delivered to him either on a due ap-praisement, to be had under the direction of the court, or on his filing an agreement in writing to that effect signed by the parties or their proetors of record, and on the claimant’s depositing in court so much money as the court shall order, or on his giving a stipulation for like amount, with sufficient sureties, or an approved corporate surety, conditioned as provided in the foregoing rule; and if the claimant shall unreasonably neglect to make any such application, then the court may, on the application of either party, on due cause shown, order a sale of such ship, and require the proceeds thereof to be brought into court or otherwise disposed of.”

It will be noted that section 938, under which the bond was given, in no way refers to or provides for the giving of a bond where forfeiture is sought for a violation of the internal revenue laws, as was the ease in United States v. One Dodge Coupe (D. C.) 17 F.(2d) 661, or for a violation of the neutrality laws of the United States, as was the case in The Three Friends, 166 U. S. 1, 17 S. Ct. 495, 41 L. Ed. 897, and The Mary N. Hogan (D. C.) 17 F. 813, but that it does, among other causes, refer to forfeitures for violations of law relating to “the enrolling and licensing of vessels,” which is the specific, ground of forfeiture relied upon in both counts of the present libel. It is undoubtedly true that, where forfeiture is sought for a violation of the internal revenue laws or a violation of the neutrality laws, or some other cause not mentioned in section 938, the question of release on bond is discretionary, as was held in United States v. One Dodge Coupe and in The Three Friends, above cited. But where, as in this ease, the violation of law charged concerns the enrolling and licensing of vessels, and the claimant requests a release of the vessel upon giving a proper bond under section 938, it is the duty of the court to release the vessel. The statute, in such case, is mandatory, as is Admiralty Rule 12.

Section 941 of the Revised Statutes (28 USCA § 754), has no relation to the matter here in question. It simply limits the authority of the marshal in taking bonds-to cases other than those of “seizures for forfeiture under any law of the United States.” See The Lynx II (D. C.) 14 F.(2d) 697; In re Jackson (D. C.) 35 F.(2d) 931; United States v. One Dodge Coupe (D. C.) 17 F.(2d) 661; The California (D. C.) 12 F.(2d) 270 — all of which hold that the duty of the eourt to release on bond, in the cases mentioned in section 938, is mandatory.

No act of Congress has been called to our attention, and we have found none, wherein, the mandatory provisions of section 938 have been altered or amended. But section 939, which provides that “all vessels, * * * which shall be condemned by virtue of any law respecting the revenue from imports or tonnage, or the registering and recording, or the enrolling and licensing of vessels, and for which bonds shall not have been given by the claimant, shall be sold by the marshal or other proper officer of the court,” etc., is necessarily amended by chapter 438, section 2, of the Act of March 3, 1925 (27 USCA § 42), which provides:

“See. 2. Upon application therefor by the Secretary of the Treasury, any vessel or vehicle forfeited to the United States by a decree of any eourt for violation of the customs laws or the National Prohibition Act may be ordered by the eourt to be delivered to the Treasury Department for use in the enforcement of the customs laws or the National Prohibition Act, in lieu of the sale thereof under existing law.”

While section 2 of the Act of 1925 necessarily modifies the power of the eourt under section 939 to order the sale of a vessel condemned by decree of eourt, 'for which bond shall not have been previously given by the claimant, and authorizes the transfer of the property, under the conditions named in that section, to the Secretary of the Treasury, it does not direetly or by necessary implication repeal or modify the provisions of section 938, which requires the eourt, upon the request of the claimant for delivery of the property seized and his giving bond in compliance with the terms of said section, to order the property delivered to such claimant. If Congress had intended to amend the mandatory provisions of section 938 relating to release on bond and make the power of the eourt discretionary, it could easily have done so, but it did not. It has simply seen fit to modify the provisions as to' sale after a decree of forfeiture, where the property has. not been previously released on a bond.

The decree and judgment of the District Court dismissing the libel and discharging the bond are vacated, and the case is remand-1 ed to that eourt, with directions to enter a decree of forfeiture and a judgment upon the, bond as provided in section 938.


text:
    LELAND et al. v. COMMISSIONER OF INTERNAL REVENUE.
    No. 2550.
    Circuit Court of Appeals, First Circuit.
    June 10, 1931.
    Before BINGHAM, ANDERSON, and WILSON, Circuit Judges.
   BINGHAM, Circuit Judge.

This is a petition to review decisions or orders of the Board of Tax Appeals in three different matters which were consolidated and brought here as a single case, as each involved the same question. ’ The petition questions the determination of the Board of Tax Appeals of the ineome taxes of William H. Leland for the years 1922 and 1924, and of Albert G. Gifford for the latter year. The sums upon which the ineome taxes for these years were assessed were distributions made in the respective years by the Leland-Gif-ford Company to Leland and Gifford, of which they and one Nikoloff were the sole stockholders Gifford, and Leland each owning a five-twelfths interest and Nikoloff a two-twelfths interest in the outstanding shares of the corporation.

The statutes involved are section 201 (a), (b), and (e) of the. Revenue Act of 1921, 42 Stat. c. 136, p. 227; and section 201 (a), (b), and (e) of the Revenue Act of 1924, 43 Stat. c. 234, p. 253 (26 USCA §, 932).

It appears that, for a number of years prior'to January 1, 1921, the two petitioners and Nikoloff conducted a business at Worcester, Mass., as partners, in which Gifford and Leland each owned a five-twelfths interest and Nikoloff two-twelfths; that the partnership was successful and accumulated a large capital surplus; .that during the years of the partnership each partner reported his distributive share of the profits in his tax return and paid the tax thereon, whether such profits were distributed or not; that on January 1, 1921, the three partners organized a Massachusetts corporation under the name of Leland-Gifford Company with an authorized capital stock of $500,000, represented by 5,000 shares of a par value of $100 each; that only'4,800 shares were issued to subscribers ; that Gifford and Leland subscribed for 2,000 shares each, or ten-twelfths of the stock issued, and Nikoloff subscribed for 800 shares, or two-twelfths of the stock issued; that the stock was paid for by the partners transferring to the corporation certain real estate, which included two mill buildings and about 2% acres of land for 1,750 shares, and machinery and equipment for 3,050 shares; that the partnership had other quick assets such as merchandise, cash, accounts receivable, securities, and the like, of the value of $861,875.48; that these assets were turned over to the corporation and were entered on its books as paid-in surplus, which was used in the business during the periods involved; that there was no formal bill of sale or conveyance of these liquid assets as there was of the land, buildings, machinery, and equipment, and no note or notes were given by the corporation evidencing the transaction.

During the year 1921 the corporation made a loss amounting to $61,360.21; in 1922 it made a profit of $266,606.97; in 1923 a profit of $210,287.37; and 1924 a profit of $19,785.86.

On December 28,1922, the directors of the corporation passed the following resolution:

“It was voted to distribute the sum of $120,000 as a partial distribution of the paid-in surplus belonging to the company, which surplus was paid in by the original stockholders to the corporation immediately after said corporation was formed; said sum to be distributed among the stockholders in proportion to the number of shares held by them.”

And on January 31, 1924, the directors passed a like resolution reading:

“It was voted to withdraw the sum of $480,000 as a partial distribution of paid-in surplus belonging to the company, which surplus was paid in by the original stockholders to the corporation immediately after said corporation- was formed, said sum to be distributed among the stockholders in proportion to the number of shares held by them.”

On the books of the corporation these distributions were credited to the surplus account and charged to the stockholders’ accounts. Neither petitioner, in making his individual income tax returns for 1922 and 1924, returned any part of such payments. But the commissioner, after auditing their income tax returns, held that the amounts distributed in the respective years to each petitioner were dividends, and, to the extent that the corporation had current earnings, these distributions were paid out of the current earnings and were taxable to the respective petitioners for the year in which they were received.

On December 31,1922, when the $120,000 was distributed, the earnings of the corporation then available for distribution were $205,256.76, and on December 31,1924, when the distribution of the $480,000 was made, the earnings of the corporation available for distribution were $315,329.99.

The by-laws of the company provided that the directors could declare dividends only from the surplus profits of the corporation, that is, not from paid-in surplus, which can only be regarded as an addition to capital; and the directors, in making the distribution of $120,000 in 1922 and of the $480,000 in 1924, did not intend or understand tha^ they were distributing dividends but. were distributing a part of the paid-in surplus or capital represented by the $861,875.48 of quick assets turned over by the stockholders in January, 1921; and the question is whether, notwithstanding what the directors intended and understood they were doing, the distributions were dividends out of the net earnings or profits of the corporation on hand at the time, by force of the provisions of section 201 (a) and (b) of the Revenue Acts of 1921 and 1924.

Section 201 (a) and (b) of the Revenue Act of 1921 (42 Stat. 228), provides:

“See. 201 (a) That the term ‘dividend’ when used in this title * * * means any distribution, made by a corporation to its shareholders or members, whether in cash or in other property, out of its earnings or profits accumulated since February 28, 1913. * # *
“(b) For the purpose of this Act every distribution is made out of earnings or profits, and from the most recently accumulated earnings or profits, to the extent of such earnings or profits accumulated since February 28, 1913. * * *”

In the Revenue Act of 1924, section 201 (a), (b), 43 Stat. 254 (26 USCA § 932), provides:

“See. 201 (a) The term ‘dividend’ when used in this title * * * means any distribution made by a corporation to its shareholders, whether in money or in other property, out of its earnings or profits accumulated after February 28,1913.
“(b) For the purposes of this Act every distribution is made out of earnings or profits to the extent thereof, and from the most recently accumulated earnings or profits. * *»

While the language employed in these sections of the two acts is not exactly the same, its meaning is the same, and that is that, so long as a corporation has on hand earnings or profits accumulated since February 28, 1913, and available for distribution, every distribution made by the corporation to its stockholders is made from the most recently accumulated earnings or profits, and in effect creates a conclusive presumption that the distribution was so made.

Such was the holding in Douglas v. Edwards, 298 F. 229, 237 (2d Cir.), construing a similar provision in the Revenue Act of 1916, as amended in 1917. It was there said:

“We think it was the purpose of the statute that any distribution made to shareholders should be conclusively presumed to have been made from the most recently accumulated undivided profits or surplus, and that it was intended that the corporation should not be permitted to determine to what year or period or to what fund it would allocate such distribution.”

This ease was taken to the Supreme Court and is reported in 269 U. S. 204, 46 S. Ct. 85, 70 L. Ed. 235. In that court the decision of the Circuit Court of Appeals, as to its holding that the distribution was a dividend from earnings or profits, was not questioned. The question reviewed was whether the dividends paid in 1917 should be deemed to have been paid out of earnings of that year or out of an accumulated surplus built up in 1916 and earlier years. The Court of Appeals for the Second Circuit had held that the dividends should have been treated as paid out of the 1916 surplus earnings, at the 1916 rate. As to this the Supreme Court held that the Court of Appeals erred; that the statute required the distribution to be made out of the most recently accumulated earnings, which were the earnings of 1917, and at the 1917 rate, which was much larger than the 1916 rate, the year 1917 being the year in which the distributions were made.

It thus appears that in that ease the Court of Appeals for the Second Circuit held that it was conclusively presumed that distributions made by a corporation to its shareholders, at a time when it had on hand earnings or profits accumulated since 1913, were made out of such earnings and that the distributions were dividends; and that the Supreme Court held that if, at the time the distributions were made, the corporation had on hand earnings or profits that had accumulated in the year in which the distributions were made (1917), as well as earnings and profits that had accumulated in 1916 and prior years, it was to be conclusively presumed that the distributions were from the earnings or profits of 1917, the year in which the distributions were made.

Then again, as the Leland-Gifford Company had on hand, at the time the distributions were made, earnings or profits that had accumulated since 1913, we do not think that the provisions of section 201 (c) of the Revenue Acts of 1921 and 1924 are applicable.

Nor do we think that Congress exceeded its constitutional power by providing that, so long as a corporation has on hand earnings and profits accumulated since 1913, any distribution to its stockholders should be conclusively presumed to be a dividend out of such earnings or profits. It is evident that Congress intended that a stockholder, to whom distributions were made while a corporation had earnings or profits on hand, should not escape the burdens of the income tax law through the directors of the corporation undertaking to make distributions from some other source. The statute does not convert what is not income into income. It simply requires that, while there are earnings or profits, the distributions to the stockholders shall be made from such earnings or profits, and any distributions made while such earnings or profits exist shall be deemed to have been so made.

The Board of Tax Appeals found that the paid-in surplus was not a loan to the corporation. The evidence warranted such finding. The distributions, therefore, were not payments upon a loan.

The decisions or orders of the Board of Tax Appeals are affirmed.


author: MUNGER, District Judge.

text:
    STASSI v. UNITED STATES.
    No. 9086.
    Circuit Court of Appeals, Eighth Circuit.
    May 6, 1931.
    Rehearing Denied June 8, 1931.
    Sloane Turgeon, of Kansas City, Mo. (T. C. Swanson, of Kansas City, Mo., on the brief), for appellant.
    Harry L. Thomas, Asst. U. S. Atty., of Kansas City, Mo. (William L. Vandeventer, U. S. Atty., of Kansas City, Mo., on the brief), for the United States.
    . Before VAN VALKENBURGH and BOOTH, Circuit Judges, and MUNGER, District Judge.
   MUNGER, District Judge.

The defendant was found guilty of the offenses of unlawful possession' and transportation of intoxicating liquor, in violation of the National Prohibition Act (27 USCA). It appears that the charge of possession had been dismissed before the trial, and the sentence under that eount, therefore, cannot be upheld. While the evidence was conflicting it was sufficient to show that the defendant transported a quantity of intoxicating liquor in an automobile for a distance of five blocks. The defendant admitted the possession of the liquor, that he intended to sell it, that he had placed the liquor in his automobile for transportation, but claimed that he had not started to transport it when he was arrested. He testified that he had offered to pay the officer who arrested him $200 if he would release him. At the trial the defendant was represented by an experienced attorney. The assignments of error relate to alleged errors during the reception of evidence, in the arguments made to the jury by the prosecuting attorney, in a portion of the instructions given to the jury by the court, and in the court’s failure to instruct the jury on features of the case. It is conceded that no objections or exceptions were taken to the matters now complained of, except that objection was taken to portions of the argument made to the jury by the prosecuting attorney. Appellant contends that it was the duty of the eourt to instruct the jury on every essential question of law involved in the case, whether requested to do so or not, and that the judgment should be reversed because of omissions to instruct, and because of an alleged error in the instructions given.

The rule as to the right of review of a failure to give instructions to a jury, where no request was made, was stated in an early case by Justice Story in Pennock v. Dialogue, 2 Pet. 1, 15, 7 L. Ed. 327, as follows: “It has been said, on behalf of the defendants in error, that it called for other and explanatory directions from the eourt, and that the omission of the eourt to give them in the charge, furnishes a good ground for a reversal, as it would have furnished in the court below for a new trial. But it is no ground of reversal, that the court below omitted to give directions to the jury upon any points of law which might arise in the cause, where- it was not requested by either party, at the trial. It is sufficient for us, that the court has given no erroneous directions. If either party deems any point presented by the evidence to be omitted in the charge, it is competent for such party to require an opinion from the court upon that point; if he do not, it is a waiver of it. The court cannot be presumed •to do more, in ordinary eases, than to express its opinion upon the questions which the parties themselves have raised at the trial.”

This rule has been followed by that court ever since that decision. United States Express Company v. Kountze Brothers, 8 Wall. 342, 353, 354, 19 L. Ed. 457; Shutte v. Thompson, 15 Wall. 151, 164, 21 L. Ed. 123; Mutual Life Ins. Co. v. Snyder, 93 U. S. 393, 394, 23 L. Ed. 887; Texas & Pacific Railway v. Volk, 151 U. S. 73, 78, 14 S. Ct. 239, 240, 38 L. Ed. 78; Myers v. Pittsburgh Coal Company, 233 U. S. 184, 195, 34 S. Ct. 559, 58 L. Ed. 906. In Mutual Life Ins. Co. v. Snyder, supra, the eourt said: “But the omission of the learned judge to instruct the jury on a particular aspect of the case, however material, cannot be assigned for error, unless his attention was called to it with a request to instruct upon it.”

In Texas & Pacific Railway v. Volk, supra, the subject was considered more at length, and the rule was restated: “The omission of the eourt to instruct the jury upon the subject of the plaintiff’s contributory negligence is not open to exception, because the bill of exceptions does not show that the defendant requested any instruction upon that subject. In England, it is misdirection, and not nondireetion, which is the subject of a bill of exceptions. Anderson v. Fitzgerald, 4 H. L. Cas. 484, 499. In this country, the rule is somewhat more liberal; and the not giving an instruction upon a point in issue may be excepted to, if one was requested, but not otherwise. In a very early ease, Chief Justice Marshall said: ‘There can be no doubt of the right of a party to require the opinion of the eourt on any point of law which is pertinent to the issue, nor that the refusal of the eourt to give such opinion furnishes cause for an exception.’ Smith v. Carrington, 4 Cranch, 62, 71 [2 L. Ed. 550]. As afterwards more fully stated by Mr. Justice Story, ‘it is no ground of reversal that the court below omitted to give directions to the jury upon any points of law which might arise in the cause, when it was not requested by either party at the trial. It is sufficient for us that the eourt has given no erroneous directions. If either party deems any point presented by the evidence to be omitted in the charge, it is competent for said party to require an opinion from the court upon that point. If he does not, it is a waiver of it.’ Pennock v. Dialogue, 2 Pet. 1, 15 [7 L. Ed. 327]. See, also, Express Co. v. Kountze, 8 Wall. 342, 353, 354 [19 L. Ed. 457]; Shutte v. Thompson, 15 Wall. 151, 164 [21 L. Ed. 123]. A request for instructions, being necessary to entitle the excepting party to avail himself of an omission to instruct, cannot be presumed, but must affirmatively appear in the bill of exceptions.”

The same question has arisen in criminal cases decided by that eourt.

In Hickory v. United States, 151 U. S. 303, 316, 14 S. Ct. 334, 339, 38 L. Ed. 170, in holding that exceptions to instructions were properly taken the eourt said: “Again, the exception was not to the omission of the court to charge upon a particular point, in which case, in the absence of request that that should be done, it would not have been well taken. Texas & Pacific Railway Co. v. Volk, 151 U. S. 73, 14 S. Ct. 239, 38 L. Ed. 78.”

In Isaacs v. United States, 159 U. S. 487, 490, 16 S. Ct. 51, 53, 40 L. Ed. 229, the rule, was stated: “The next assignment is to the charge ‘that the corpus delicti could be established by circumstantial testimony, without saying that this circumstantial evidence should be such as creates cogent, irresistible grounds of presumption.’ Without any request on the part of the defendant to add the qualification suggested, there was no error in the charge actually given. It is no ground for reversal that the court omitted to give instructions, where they were not requested by the defendant. It is sufficient that the court give no erroneous instructions. Pennock v. Dialogue, 2 Pet. 1, 15 [7 L. Ed. 327], Texas & Pacific Railway v. Volk, 151 U. S. 73, 78, 14 S. Ct. 239 [38 L. Ed. 78].”

The question arose again in Goldsby v. United States, 160 U. S. 70, 77, 16 S. Ct. 216, 219, 40 L. Ed. 343, and it was said: “The four errors assigned as to the charge of the court do not complain of the charge intrinsically, but are based upon the assumption that, although correct, it was misleading, and tended to cause the jury to disregard the testimony offered by the defendant to establish an alibi. But the charge, in substance, instructed the jury to consider all the evidence and all the circumstances of the case, and, if a reasonable doubt existed, to acquit. If the accused wished specific charges as to the weight in law to be attached to testimony introduced to establish an alibi, it was his privilege to request the court to give them. No sueh request was made, and therefore the assignments of error are without merit. Texas & Pacific Railway v. Volk, 151 U. S. 73, 78, 14 S. Ct. 239 [38 L. Ed. 78].”

In Humes v. United States, 170 U. S. 210, 211, 18 S. Ct. 602, 42 L. Ed. 1011, the court stated that a part of the assignments of error related to the failure of the court to give certain instructions, and that the record failed to show that there was a request for such instructions, and the opinion then says: “We cannot regard as error the omission of the court to give instructions which were not asked. In Isaacs v. United States, 159 U. S. 487, 491, 16 S. Ct. 51 [40 L. Ed. 229], Mr. Justice Brown said: ‘It is no ground for reversal that the court omitted to give instructions, where they were not requested by the defendant. It is sufficient that the court gave no erroneous instructions. Pennock v. Dialogue, 2 Pet. 1, 15 [7 L. Ed. 327]; Texas & Pacific Ry. Co. v. Volk, 151 U. S. 73, 78, 14 S. Ct. 239 [38 L. Ed. 78].’ Nor are instructions which were given, but not excepted to, subject to review. Tucker v. United States, 151 U. S. 164, 14 S. Ct. 299 [38 L. Ed. 112]; St. Clair v. United States, 154 U. S. 134, 153, 14 S. Ct. 1002 [38 L. Ed. 936].

In these decisions there is no suggestion that a different rule applies in criminal eases from the rule in civil cases, and in the criminal cases the court cites its prior decisions in civil cases as determinative.

The same question has frequently arisen in eases in the United States Courts of Appeal. It has sometimes been said that it is the duty of the trial judge to instruct the jury on all essential questions in a criminal case, whether requests for sueh instructions are or are not made. What are essential questions has not been defined. It is obvious that any question involved in a case, whether relating to the principles of law, the nature of the issues, or the estimation of the evidence, may be regarded as an essential quession in the jury’s deliberation and conclusion. The federal courts, with practical unanimity, have followed the rule announced in the decisions of the Supreme Court in sueh cases, and have denied a right to review because of a failure to instruct the jury on some features in a case, unless some proper request or exception has been noted in the trial court. Failure to instruct on the presumption of innocence, Dinger v. United States, 28 F.(2d) 548, 550 (8 C. C. A.); Sylvia v. United States, 264 F. 593, 595 (6 C. C. A.); Silverberg v. United States, 4 F.(2d) 908, 909 (5 ' C. C. A.). Failure to define reasonable doubt, Raffour v. United States, 284 F. 720 (9 C. C. A.). Failure to charge that proof must show that the crime was willful, when statute denounced only willful acts, Ripper v. United States, 179 F. 497 (8 C. C. A.). Failure to charge that defendant must have known the officer he assaulted was an officer, Gay v. United States, 12 F.(2d) 433, 435 (5 C. C. A.) Failure to charge as to right of acquittal or conviction on each count, Alexis v. United States, 129 F. 60, 64 (5 C. C. A.); Tucker v. United States, 224 F. 833, 834 (6 C. C. A.). Limiting the application of evidence, as to one defendant, or to a particular purpose, Schultz v. United States, 200 F. 234, 239 (8 C. C. A.); Moffatt v. United States, 232 F. 522, 534 (8 C. C. A.); Schonfeld v. United States, 277 F. 934, 937 (2 C. C. A.); Silkworth v. United States, 10 F.(2d) 711, 720 (2 C. C. A.); Pappas v. United States, 292 F. 982, 983 (9 C. C. A.); Gordon v. United States, 53 App. D. C. 154, 289 F. 552, 556; Vachuda v. United States, 21 F.(2d) 409, 412 (2 C. C. A.); Ball v. United States, 147 F. 32, 40 (9 C. C. A.); Hallowell v. United States, 253 F. 865, 867 (9 C. C. A.). As to circumstantial evidence, Carroll v. United States, 39 F.(2d) 414, 416 (8 C. C. A.); Bloch v. United States, 261 F. 321, 325 (5 C. C. A.); Hughes v. United States, 231 F. 50, 53 (5 C. C. A.); Winslett v. United States, 43 F.(2d) 358, 359 (10 C. C. A.). As to defense of alibi, Dampier v. United States, 2 F.(2d) 329, 330 (9 C. C. A.). Accomplice testimony, Perez v. United States, 10 F.(2d) 352, 353 (9 C. C. A.). Defendant’s failure to testify, Harris v. United States, 59 App. D. C. 353, 41 F.(2d) 976, 978. Effect of defendant’s silence when accused, Price v. United States, 5 F.(2d) 650, 651 (6 C. C. A.). Disregarding involuntary confessions, Mamaux v. United States, 264 F. 816, 821 (6 C. C. A.); Mangum v. United States, 289 F. 213, 216 (9 C. C. A.); Gray v. United States, 9 F.(2d) 337, 340 (9 C. C. A.). As to entrapment, Boehm v. United States, 21 F.(2d) 283, 285 (8 C. C. A.). Effect of evidence of prior good character, Hermansky v. United States, 7 F.(2d) 458, 460 (8 C. C. A.); Boehm v. United States, 21 F.(2d) 283, 285 (8 C. C. A.); Estabrook v. United States, 28 F.(2d) 150, 154 (8 C. C. A.); Roth v. United States, 294 F. 475, 482 (6 C. C. A.). Other eases have stated the same principle. Horn v. United States, 182 F. 721, 740 (8 C. C. A.); Roberts v. United States, 283 F. 960, 962 (8 C. C. A.); Green v. United States, 28 F.(2d) 965, 968 (8 C. C. A.); Feigin v. United States, 279 F. 107, 108 (9 C. C. A.); Frisch v. United States, 17 F.(2d) 81 (3 C. C. A.).

In discussing the subject, other eases have not stated the rule as directly as the cases which have been cited. In Kreiner v. United States, 11 F.(2d) 722, 731 (2 C. C. A.), in a majority opinion, it was held: “In a criminal ease a court should instruct on all essential questions of law involved in the ease, whether requested or not. People v. Odell, 130 N. E. 619, 230 N. Y. 481; Commonwealth v. Ferko, 112 A. 38, 269 Pa. 39; Pearson v. State, 226 S. W. 538, 143 Tenn. 385; Duroff v. Commonwealth, 232 S. W. 47, 192 Ky. 31; State v. Lackey, 132 S. W. 602, 230 Mo. 707. Counsel had no right, however, to assume that the court, in the absence of a request, would instruct upon the evidence concerning the character of the defendant; for, while there are some subjects upon which counsel may assume that the court will instruct without request, character evidence is not one of them. People v. Luce, 178 N. W. 54, 210 Mich. 621; State v. Poder, 135 N. W. 421, 154 Iowa, 686; Brantley v. State, 113 S. E. 200, 154 Ga. 80; State v. Peterson, 16 P. 263, 38 Kan. 204; State v. McNamara, 13 S. W. 938, 100 Mo. 100; Branson’s Instructions to Juries (2d Ed.) § 126, p. 205.”

The court based its general statement of the-duty to give instructions, without request, solely upon decisions of state courts. In Steers v. United States, 192 F. 1, 10 (6 C. C. A.), the court notes the absence of request for specific instructions, and then said:

“Respondents’ counsel urge in this court that under the Kentucky procedure it is the duty of the trial judge to give to the jury ‘the whole law,’ and that respondents, in a criminal case, carry no such burden as we, by these conclusions, put upon them. This is a matter pertaining to the conducting of the trial itself by the trial judge, and it is-not governed by the conformity act. R. S. § 914 (U. S. Comp. St. 1901, p. 684 [28 USCA § 724]); Knight v. Ill. Centr. R. Co. (C. C. A. 6th Circuit) 180 F. 368, 372, 103 C. C. A. 514.
“FTo such rule, to the broad extent to which counsel now claim for it, exists in the federal courts. True, the trial judge should instruct the jury as to the whole law in one sense of that phrase, but if there are particular theories of fact or constructions of evidence which, if adopted, would take the respondents out of otherwise proper, general inferences, or if the counsel thought that the jury should have particular instructions as to the effect of certain evidence upon an individual defendant, or with reference to other matters of like character, respondents canrTot complain of an omission of such instruction by the court, if they did not bring such matters to his specific attention by appropriate request. The trial judge, in the trial of an indictment for conspiracy against several respondents and where the evidence is circumstantial, has burden enough in properly conducting the trial, if he receives from counsel on both sides all the aid which they can give to prevent the overlooking of details.”

In Gilmore v. United States, 39 F.(2d) 897, 898 (5 C. C. A.), the subject was disposed of in this way:

“The trial court in its charge to the jury did not comment upon the law of circumstantial evidence. At the conclusion of that charge, for the first time the court was orally requested by counsel, but refused, ‘to charge the jury the law of circumstantial evidence.’ Error is assigned upon the refusal of that request; but we do not think it is well assigned. In the first place, the request ■ came too late. It is the duty of counsel in fairness to the court to submit requests for instructions to the jury before the court begins its charge; but the court should not arbitrarily refuse, especially in criminal eases, to give instructions requested at the conclusion of its charge which it was its plain duty in the interests of justice to give without being requested to do so.
“Besides, the orderly way is to prefer such a request in writing so that the trial court may know definitely what it is, and the appellate court may be able to inspect it with the view of ascertaining' whether in its opinion the proposition of law asserted is correct and is applicable" to the facts of the case.
“The refusal of a mere oral- request to charge generally upon some question of law presents nothing to an appellate court for review. Holmgren v. United States, 217 U. S. 509, 524, 30 S. Ct. 588, 54 L. Ed. 861, 19 Ann. Cas. 778; Greenberg v. United States (C. C. A.) 297 F. 45; 14 R. C. L. 804.”

In this circuit, this court in Hermansky v. United States, 7 F.(2d) 458, 460, said: “It is insisted under assignments of error 25 and 26 that the court erred in not instruct ing the jury with reference to the testimony of the character witnesses produced by the defendant. Good character is not a defense, but evidence of good character may raise a reasonable doubt in the minds of the jury as to a defendant’s guilt. The court should have instructed on this question, and doubtless, if defendant had asked for such instruction, the court would have given the same. Defendant, however, did not ask such instruction, nor did he except to the failure of the court to instruct thereon. Not having done so, he is not in a position now to raise the question.”

• In Sunderland v. United States, 19 F.(2d) 202, 216, this court concluded that the various proceedings mentioned and commented upon indicated that the appellant had not had a fair trial and in defining certain essential elements of a fair trial in a criminal ease, the court said: “It means that, if evidence of good character of the defendant is introduced, an adequate instruction to the jury shall be given touching the probative value of such evidence.”

In that case the court had given an incomplete instruction on the effect of good character as evidence, and a request had been made to the court “to amplify” this statement by telling the jury the probative effect which evidence of good character might have and it appears that the request was also for an instruction recognizing the rule approved by' this court in repeated decisions. In Salinger v. United States (C. C. A.) 23 F.(2d) 48, 52, 53, there was a request by the defendant for an instruction on the weight to be given to evidence of good character and reputation, and the- defendant excepted to the instruction then given as not fully stating the law upon that subject. This court held that the refusal to give an instruction fully covering the subject was error. It was also stated that when evidence of his good character is given, the defendant is entitled, and especially when a request is made, to an instruction as to the purpose and effect of such evidence) and that it is the duty of the court to give such an instruction although not requested. There can be no doubt of the general principle that it is the duty of the court, whether a request is or is not made, to instruct the jury upon the essential issues in any case. It is likewise the duty of the court to see that the instructions which are given are correct and the giving of an erroneous instruction, although no proper exception is taken, may be as prejudicial as a mere failure to instruct on some feature of the case. There is no right to a review of an erroneous instruction given unless an exception, proper in form, is taken to such instruction. Holder v. United States, 150 U. S. 91, 92, 14 S. Ct. 10, 37 L. Ed. 1010; Allis v. United States, 155 U. S. 117, 122, 15 S. Ct. 36, 38, 39 L. Ed. 91; Lewis v. United States, 146 U. S. 370, 379, 13 S. Ct. 136, 36 L. Ed. 1011; Burns v. United States, 274 U. S. 328, 336, 47 S. Ct. 650, 71 L. Ed. 1077; Tucker v. United States, 151 U. S. 164, 170, 14 S. Ct. 299, 38 L. Ed. 112; St. Clair v. United States, 154 U. S. 134, 153, 14 S. Ct. 1002, 38 L. Ed. 936. In Allis v. United States, supra, the court said: “Evidently the claim of coercion is an afterthought from subsequent study of the record. But it is settled that no such afterthought justifies a reviewing court in reversing the judgment. A party must make every reasonable effort to secure from the trial court correct rulings, or such at least as are satisfactory to him, before he will be permitted to ask any review by the appellate tribunal ;• and to that end he must be distinct and specific in his objections and exceptions. Eule 4 of this court provides: ‘The party excepting shall be required te state distinctly the several matters of law in such charge to which he excepts; and those matters of law, and those only, shall be inserted in the bill of exceptions and allowed by the court.’ Bepeated decisions have emphasized the necessity of a strict adherence to this rule. ‘However it might pain us to see injustice perpetuated by a judgment which we are precluded from reviewing by the absence of proper exceptions to the action of the eourt below, justice itself, and fairness to the court which makes the rulings complained of, require that the attention of that court shall be specifically called to the precise point to which exception is taken, that it may have an opportunity to reconsider the matter and remove the ground of exception.’ Harvey v. Tyler, 2 Wall. 328, 339 [17 L. Ed. 871]. ‘If it was intended to save an exception as to distinct propositions embodied in the instructions, the attention of the court should have been directed to the specific points concerning which it was supposed error had been committed.’ Moulor v. Am. Life Ins. Co., 111 U. S. 335, 337 [4 S. Ct. 466, 28 L. Ed. 447]. ‘An exception "to all and each part” of the charge gave no information whatever as to what was in the mind of the excepting party, and therefore gave no opportunity to the trial court to correct any error committed by it.’ Block v. Darling, 140 U. S. 234, 238, 11 S. Ct. 832 [35 L. Ed. 476]. See, also, Phoenix Life Ins. Co. v. Raddin, 120 U. S. 183, 7 S. Ct. 500 [30 L. Ed. 644], and cases cited in the opinion; N. Y. & Colorado Mining Syndicate & Co. v. Fraser, 130 U. S. 611, 9 S. Ct. 665 [32 L. Ed. 1031]; Anthony v. Louisville & Nashville Railroad, 132 U. S. 172, 10 S. Ct. 53 [33 L. Ed. 301].”

The rule derivable from these cases and which was stated and applied by this court in Hermansky v. United States, supra, is that no reversal may be had, as a matter of right, because of the giving of erroneous instructions, where no proper exception has been saved, or because of error in the failure to give instructions, where no proper request or exception has been made. The reversals reached in some of the cases cited are well justified by the principle that an error may be of such a nature, and in a matter so absolutely vital to a party’s rights, and especially in a criminal ease, as to justify an appellate court in noticing and correcting it, although the appellant has no right of review. Wiborg v. United States, 163 U. S. 632, 658, 16 S. Ct. 1127, 1197, 41 L. Ed. 289 ; Clyatt v. United States, 197 U. S. 207, 221, 25 S. Ct. 429, 49 L. Ed. 726; Crawford v. United States, 212 U. S. 183, 194, 29 S. Ct. 260, 53 L. Ed. 465, 15 Ann. Cas. 392; Weems v. United States, 217 U. S. 349, 362, 30 S. Ct. 544, 54 L. Ed. 793, 19 Ann. Cas. 705; Brasfield v. United States, 272 U. S. 448, 450, 47 S. Ct. 135, 71 L. Ed. 345; Van Gorder v. United States, 21 F.(2d) 939, 942 (8 C. C. A.).

The trial court told the jury that the defendant was to be presumed innocent until his guilt was proved beyond a reasonable doubt, and instructed the jury as' to what must be proved before guilt could be established. The appellant.assigns that it was erroneous to fail to add that every material allegation must be proved beyond a reasonable doubt, that the indictment should not be considered as evidence, that any presumption that the police officer who testified for the government, was doing his duty, was not conclusive if the proofs showed the contrary, and that the court erred in telling the jury to consider the motives of the police officer, in weighing his testimony. Not only was there no request or exceptions relating to these matters, but after the charge was completed the court asked if there were any exceptions and defendant’s counsel said that they had none. In this situation the language of the Supreme Court in Boyd v. United States, 271 U. S. 104, 108, 46 S. Ct. 442, 443, 70 L. Ed. 857, is applicable: “With that addition the charge elicited no criticism or objection from the defendant, although there was full opportunity therefor. It evidently was regarded as consistent and satisfactory. Besides, in view of what was said in other parts of the charge, we are justified in assuming that, had the court’s attention been particularly drawn at the time to the part complained of now, it would have been put in better form. Certainly, after permitting it to pass as satisfactory then, the defendant is not now in a position to object to it. McDermott v. Severe, 202 U. S. 600, 610, 26 S. Ct. 709, 50 L. Ed. 1162; United States v. U. S. Fidelity Co., 236 U. S. 512, 529, 35 S. Ct. 298, 59 L. Ed. 696; Norfolk & Western Ry. Co. v. Earnest, 229 U. S. 114, 119, 120, 33 S. Ct. 654, 57 L. Ed. 1096, Ann. Cas. 1914C, 172.” See Wong Tai v. United States, 273 U. S. 77, 83, 47 S. Ct. 300, 71 L. Ed. 545.

The alleged errors, if any, have been considered under the discretionary powers of the court, and the conclusion has been reached that they were not of such a vital nature as to call for a reversal. Boehm v. United States, 21 F.(2d) 283, 284 (8 C. C. A.); Hammert v. United States, 14 F.(2d) 827, 828 (8 C. C. A.); Davis v. United States, 9 F.(2d) 826, 830 (8 C. C. A.); McCormick v. United States, 9 F.(2d) 237, 240 (8 C. C. A.); Feinberg v. United States, 2 F.(2d) 955, 956 (8 C. C. A.).

To prove the facts charged in the indictment, the government relied chiefly upon the testimony of a police officer of Kansas City, Missouri. .After this witness had testified to the principal facts, the prosecuting attorney asked the witness if he had ever received any money from the defendant for bootleg protection or for any other purpose. He answered that he had never received any money from the defendant or from any one else.

On cross-examination, the defendant’s counsel went into that subject of inquiry at great length. The defendant, as a witness, testified that he had paid this officer $50 per month for protection for a period of three years, ending five years before the date of the alleged offense for which the defendant was on trial. There was no objection to any of this evidence, although it was obviously foreign to any issue in the case.' In the opening argument to the jury the prosecuting attorney, with needless emphasis, referred to the testimony as an outrageous attack upon the police officer. The defendant objected to this statement, but his objection was overruled. ■Another objection was made and overruled to an uncompleted statement made by the prosecuting attorney in the closing argument to the jury in which he said, in substance, that he felt that the jury system was on trial, if a defendant could hope for an acquittal' on such testimony as he had produced. This court has frequently condemned unfair and intemperate statements made by prosecuting attorneys in the course of criminal trials, and has no disposition to recede from that condemnation, but it.is recognized that there must be a reasonable latitude for the arguments of an advocate. Green v. United States, 266 F. 779, 784 (8 C. C. A.); Chadwick v. United States, 141 F. 225, 245 (6 C. C. A.); Diggs v. United States, 220 F. 545, 555, 556 (9 C. C. A.); Remus v. United States, 291 F. 501, 511 (6 C. C. A.); Di Carlo v. United States, 6 F. (2d) 364, 368 (2 C. C. A.).

It is not believed that the characterization of a portion of the evidence,’ or the expression of the opinion of the prosecuting attorney is so far beyond the bounds of permissible argument, as to require a new trial of the defendant.

That portion of the judgment founded upon the first count of the indictment will be affirmed, and the portion of the judgment founded upon the second count will be reversed.