author: CHESNUT, District Judge.

text:
    UNITED STATES v. MURRAY.
    District Court, D. Maryland.
    July 11, 1931.

      Milton H. Talkin, Asst. U. S. Atty., of Baltimore, Md.
    R. Palmer Ingram, of Baltimore, Md., for defendant.
   CHESNUT, District Judge.

The defendant is indicted for the illegal transportation and possession of intoxicating liquor. In accordance with the now well-established practice, a motion has been made by the defendant in advance of the trial, to suppress evidence proposed to be offered against him in the trial of the ease on the ground that it was obtained by an unreasonable and therefore allegedly illegal seizure, in contravention of the Fourth Amendment to the Constitution.

The facts are within a narrow compass. The evidence in support of the motion offered by the defendant consists of the testimony of certain Prohibition Agents who made the seizure and contemporaneous arrest of the defendant. The substance of this testimony is as follows: Agent Thomas F. Andrew, who had been a prohibition agent for about a year and was formerly an automobile salesman, while patrolling the Baltimore-Washington state highway, noticed an automobile of a particular license number (127371), described as a dark blue Chevrolet five-passenger two-door closed car, on April 15,1931. His attention was attracted to this car, because, as he described it, the body of the ear was “riding high” in the rear. The significance of this fact to him, based on his experience as Prohibition Agent in discovering and detecting illegal transportation of liquor, arose from the fact that it has become necessary in order to escape detection in the transportation of liquor, for ordinary passenger automobiles to have additional leaves added to the rear springs of the ear so that when heavily loaded with liquor the body of the ear will, by reason of the added resistance of the springs, give no indication of an unusual load by the body of the car being obviously depressed on the springs as would be the case if resistance of the springs were not increased by the addition of the extra leaves. The effect of thus equipping ordinary passenger cars is to make them noticeable or abnormal in appearance when the rear of the car is empty and also to make them entirely normal in appearance when heavily loaded.

The defendant also offered the testimony of a witness engaged in the business of making and supplying springs for automobiles, that it is not unusual to add leaves to the springs of passenger automobiles where, for' any reason, the springs of the particular car are not sufficiently stiff for comfortable use of the car and that the number of leaves added varies with the particular car and the condition of its particular springs. But from the testimony of the same witness it also appeared that the effect of so adding additional leaves to the ordinary passenger automobile was not ordinarily to make the appeai'anee of the automobile in the rear abnormal but only to make the rear set about one inch higher. That is to say, the rear of the ear would not seem to be “riding high,” as was the case with the Chevrolet ear mentioned in the evidence.

I, therefore, find as a fact under the evidence that the ordinary passenger automobile such as in this case, so equipped with extra leaves in the springs to the unusual and abnormal extent of making it “ride high in the rear ” so noticeably as in the particular case, is such an unusual condition of a passenger automobile and so identified in the experience of the Prohibition Agents with the purpose of illegal transportation of liquor, that a car of such an appearance is a very reasonable object of strong suspicion to Prohibition Agents who have specialized in detecting such offenses.

Agent Andrew, having noted the particular appearance of this automobile and having made a memorandum of the license number, again saw the same automobile on the Baltimore-Washington road on April 29, 1931, about 3 p. m., while he and other agents were in a government automobile patrolling the road to deteet violations of the law. On this latter occasion the blue Chevrolet was again being driven toward Baltimore and Agent Andrew again noticed that it was “riding high” in the rear. About two and one-half hours later on the same afternoon the Prohibition Agents, having reversed their direction, were proceeding toward Baltimore on what is known as the Crain highway when Agent Andrew again noticed the same blue Chevrolet automobile proceeding toward Washington from Baltimore, and this time he noted that the r*ear of the car was not “riding high,” but that the body appeared to be entirely normal in relation to the springs. He immediately exclaimed to his associate, “There goes a load.” At the first convenient turning point the government ear turned around and gave chase to the blue Chevrolet. On the prior occasions when Agent Andrew had noticed the car in passing he got the general impression from observation as it was receding from his vision that the springs were extra thick, but of course the rate of speed of the passing ears was such that he had no opportunity for detailed inspection. As, however, the government automobile was overhauling the blue Chevrolet on the last occasion mentioned the unusual thickness of the rear springs was clearly noticeable to him. Agent Andrew stepped out on the running board'of his car on the right side as the government car drew abreast of the blue Chevrolet on its left. At this time, Agent Andrew in lookng through the windows of the Chevrolet, saw that its only passenger was the driver and that the front seat by the driver had been removed and the space thus made in the ear, together with the rear portion of the car, carried large paper cartons of the kind frequently, if not customarily, used for holding liquor, although the contents of the cartons were not visible. There was a rug or some similar covering over a large part of the cartons, but it did not suffice to entirely conceal them. Agent Andrew requested the driver of the car to pull over to the side of the road, which he did. He then showed his badge and asked the driver what was in the ear. To this particular question he received no reply. The agents then searched the blue Chevrolet and found fifteen cases of whisky, each ease containing six gallons. The driver at first gave the name of Tom Davis and said, “Can’t we fix this up.” The driver’s license or permit showed that his name was Harry Murray, and he is the defendant in this ease. After the search he said that the liquor was “Bourbon, I guess” and that he paid $8 or $10 a case for it and had gotten it in Baltimore, from a man that he had met on the street (apparently by appointment), but whom he did not previously know. When asked “How did this man know you?” Murray replied, “Same as you did, I guess, by the springs.” Murray, however, stated that he did not know who put the heavy springs on the car. When the automobile was examined in detail it was found that it had the abnormally large number of 14 leaves in each rear spring thus making the thickness of the springs 3% inches as compared with 2 inches in the normally built ear of that type.

The search and arrest was made without a warrant. The crime, since the passage of the Jones Act (27 USCA §§ 91, 92), is of the grade of a felony. The question in the case is whether the seizure of the liquor found in the car, samples from which are proposed to be offered in evidence by the government at the trial of the case, constitutes an unreasonable search which is prohibited by the Fourth Amendment. The applicable law is fully and clearly stated in two recent decisions of the Supreme Court: Carroll v. United States, 267 U. S. 132, 45 S. Ct. 280, 69 L. Ed. 543, 39 A. L. R. 790; Husty v. United States, 282 U. S. 694, 51 S. Ct. 240, 241, 75 L. Ed. 629. The guiding principle in such eases is summarized in the Husty Case by Mr. Justice Stone as follows: “The Fourth Amendment does not prohibit the search without warrant, of an automobile, for liquor illegally transported or possessed, if the search is upon probable cause; and arrest for the transportation or possession need not precede the search. Carroll v. United States, 267 U. S. 132, 45 S. Ct. 280, 69 L. Ed. 543, 39 A. L. R. 790. * * * To show probable cause it is not necessary that the arresting officer should have had before him legal evidence of the suspeeted illegal act. Dumbra v. United States, 268 U. S. 435, 441, 45 S. Ct. 546, 69 L. Ed. 1032; Carroll v. United States, supra. It is enough if the apparent facts which have come to Ms attention are sufficient, in the circumstances, to lead a reasonably discreet and prudent man to believe that liquor is illegally possessed in the automobile to be searched.”

Applying this principle to the facts of this case I find that the prohibition agents believed in good faith and on reasonable grounds-that the suspeeted automobile was illegally transporting liquor and their action in making the arrest and seizure was, therefore, lawful. The basis on which thes acted, it seems to me, was as reasonably convincing to them as the information on which the agents properly acted in the Carroll and Husty Cases, above mentioned. And it seems to me my conclusion on the facts is consistent with the decisions of the Circuit Court of Appeals for the Fourth Circuit in the somewhat similar ease of Ash v. United States, 299 F. 277, and Milam v. United States, 296 F. 629. In the eases above cited the information possessed by the agents and on which they acted related largely to the known character and reputation of the persons arrested, while in this ease the basis on which the agents acted related largely to the character of the vehicle rather than to that of the driver. However, this seems to me to be an immaterial difference especially as the opinion of Chief Justice Taft in the Carroll Case lays emphasis, under section 26, title 2 of the National Prohibition Law (27 USCA § 40), upon the seizure of the contraband liquor and its destruction rather than on the incidental arrrest of the transporter. The illegal transportation in the Carroll Case, where the search and seizure of the automobile was upheld, was under the then existing acts of Congress, only a misdemeanor. The agents, therefore, who then made the arrest were justified in doing so only on the basis of observing a misdemeanor committed in their presence. Since then, the Jones Act has made the transportation of the quantity of liquor involved in the instant case, a felony. It is elementary law of criminal procedure that a peace officer may arrest without warrant on reasonable suspicion of felony without the necessity of personally observing the commission of the offense.

While the appearance of the blue Chevrolet car might have meant nothing to the ordinary observer, it had special significance to Mr. Andrew, who, by virtue of his experience as a prohibition agent, had had occasion to study various devices used by “bootleggers” to escape detection in the transportation of liquor. It seems to me that we should be practical in applying the principles of the law to new situations. If the “bootleggers” devise a system of camouflage to escape detection, it is reasonable for the prohibition agent to penetrate the disguise by using and applying his special experience in detecting crime. New methods of defense naturally lead to new methods of offense. The question of what constitutes probable cause seems to me must be determined from the standpoint of the agent with uis special skill and knowledge rather than from the standpoint of the average citizen under similar circumstances. Thus, symptoms of a new disease might be meaningless to the average practitioner of medicine, but clearly recognized by the modem specialist in that branch of the profession.

The conditions under which an. automobile may be stopped and searched while moving on the public highway are radically different from those justifying a search of a private dwelling. The latter may not be searched at all without a warrant except as incidental to a valid arrest of a person. Agnello v. U. S., 269 U. S. 20, 46 S. Ct. 4, 70 L. Ed. 145, 51 A. L. R. 409. Nor may prohibition agents stop and search any automobile at will. There must be some probable cause for the search of the particular automobile. I think there was such a probable cause in this case.

For these reasons I conclude that the motion should be overruled, and an order will be accordingly so entered.


source: Caselaw Access Project

author: KNOX, District Judge.

license: Public Domain

text:
    CLARENCE P. HOWLAND CO., Inc., v. COMPAGNIE HAVRAISE PENINSULAIRE DE NAVIGATION A VAPEUR et al., and three other actions.
    District Court, S. D. New York.
    Aug. 19, 1926.
    Mengel & Conroy, of New York City (Carl K. Mengel, of New York City, Advocate), for libelants.

      Joseph P„ Nolan, of New York City, for respondent.
   KNOX, District Judge.

William H. Rynders has filed a libel against Compagnie Havraise Peninsulaire de Navigation a Yapeur and Algerian American Line, Inc., for services rendered as watchman on the steamers Yille de Djibouti, Mal-gache, and Bourbonnais. The amount of the claim is $1,533. The Algerian American Line, Inc., is out of business and bankrupt, and libelant asks that the other respondent be held liable upon.the ground that it and Algerian American Line, Inc., entered into an agreement on February 4, 1922, under which they were to operate a line of steamers between Mediterranean, North African, and United States ports under the name of Algerian American Line, Inc., and to divide the profits and share the losses. Among the steamers so operated were the above-named vessels.

Howland Towing & Transportation Company has filed two libels, one against the Yille de Djibouti, and another against the above-named respondents in personam. Clarence P. Howland Company, Inc., has filed a libel in personam against respondents for supplies furnished the aforesaid vessels or some of them. The rem action is founded on a tow-age service rendered the Yille de Djibouti in the sum of $731.25, and the others are for towage, and dunnaging of other vessels operated by respondents. The amount claimed on the latter libels aggregates $3,171.16. For the reasons heretofore stated, the claims asserted in the libels are not pressed against the Algerian American Line, Inc. The other respondent does not deny the rendition of the towage and dunnage services. It does, however, deny its liability. The same is true of the Rynders’ claim.

The facts seem to be these: In the early part of February, 1922, a man named Stari-ta, who afterwards became the principal stockholder of Algerian American Line, Inc., went to France and carried on negotiations with A. Grossos, the managing director of Compagnie Havraise Peninsulaire de Navigation a Yapeur, with respect to the establishment of a steamship service between the ports previously mentioned. Due to agreements and Understandings theretofore had with the French and Fabre Lines of steamers, Com-pagnie Havraise did not wish openly to appear to be interested in the creation and operation of the new service. But it was quite desirous of entering the business if its connection therewith could be kept secret. . Believing that an American organization, to be formed by Starita, or at his instance, could serve the purpose Havraise wished to accomplish, Compagnie Havraise authorized, and had executed, an agreement dated February 4, 1922. It provided that Compagnie Hav-raise should charter steamers to Algerian American Line, Inc., then being organized, at rates, terms, and conditions named in the charters. The results of the trips of each steamer were to be divided in halves between the owner and charterer, the latter company taking charge of the accounting of each vessel. The steamers were to be consigned to Algerian American Line at New York, and in other ports to agents designated by E. Grossos Sons, acting for account of the owners and of the American corporation. Yarious other provisions, now not material, were included in the agreement.

By the time the Starita returned to New York, the Algerian American Line, Inc., had been incorporated, and it executed the agreement that had been negotiated and returned it to France.

Strangely enough, the charters, that seem to have been contemplated by the contract, were not offered in evidence by either party. Nevertheless, there is slight doubt that charters of the vessels actually existed. That the hire was. exceptionally small seems also to have been the fact. In the absence of the charters, the court has no means of ascertaining if they did, or did not, authorize the charterer-to bind the ship for necessary expenses and supplies.

There exists then this situation: The Compagnie Havraise and Algerian American Line, Inc., entered into an agreement of dormant partnership with respect to the operating profits and losses of the vessels that should be put into service. Contracts of this nature seem to be lawful under the French law, and I have no hesitation in saying that the agreement now before the court is to be regarded as a French contract, and to be construed in conformity with the law of that republic.

Testimony was taken at the trial bearing on the French law; and the parties, by stipulation, have admitted into the ease an opinion upon the same subject written by Leopold Dor, editor and director of Droit Maritime Compaie. He and Mr. Mancini, the expert called by the French company, agree that, ordinarily, a dormant or secret partnership, such as was here made, is one which exists only so far as the relationship between the partners is concerned, and has no existence as to third parties who may contract with one of the partners. Customarily, the partner who contracts with a third party binds only himself, and the third party has no recourse against the dormant partner if his interest in the matter later becomes known. But, according to Mr. Dor, whose testimony I shall accept, there are exceptions to this rule. One of them is that when a particular partner acts as agent for his copart-ners, the latter are jointly and severally liable for debts contracted by the former, who also incurs a like liability.

As hereinbefore stated, the original agreement provided that the steamers should be consigned at New York to the Algerian American Line, acting both for its own account, and for the account of the shipowners. It would appear, from the accountings had between the parties to the agreements, that each class of services rendered by the present libelants was for the account of both partners, and each of them is liable therefor.

So far as the making of inquiry as to the responsibility of the shipowners for services rendered to the vessels by the present libel-ants is concerned, the following is to be said:

Clarence P. Howland, president of the Howland Towing & Transportation Company, Inc., testified that within from two to four weeks after his companies started to serve the vessels, he had an interview with both Mr. Starita and Mr. Raynor, of the Algerian American Line, and was told that his money was perfectly safe, as the American company represented a good house. So far as appears, he was not shown any charters of the vessels. In this connection, it must be borne in mind that there is no evidence that such agreements, if they actually existed, placed any limitation upon the power of the Algerian American Line, Inc., to bind its principal or the ships. Howland, therefore, had knowledge that the American company was the agent for the French company, and he proceeded to permit the companies controlled by him to furnish services and supplies to the ships of Compagnie Havraise.

As for Rynders, it may be said that he made no effort to ascertain the owner of the vessels, and made no inquiry as to their agents. He did not know, and never heard of, the owners. On the contrary, he says that he relied solely on the credit of the Algerian American Line, Inc. This fact, it seems to me, is of no particular significance. The authorized contracts of an agent upon behalf ,of an undisclosed principal are, as I understand Mr. Dor’s statement of the French law as applied to the present facts, binding upon the principal. Furthermore, had an inquiry been made, it would have resulted in the knowledge that in handling these ships, the Algerian American Line was the agent of the vessels, even though it was also a partner of the French company.

The libelants may have decrees.


author: SANBORN, District Judge.

text:
    KARN v. ANDRESEN et al.
    District Court, D. Minnesota, Sixth Division.
    May 26, 1931.

      Daly & Barnard, of Renville, Minn., for plaintiff.
    Hall & Catlin, of Marshall, Minn., for defendants.
   SANBORN, District Judge.

The facts, so far as material, are as follows :

The Citizens’ National Bank of Orton-ville, a national bank doing business at Or-tonville, Minn., prior to December 23, 1926, was on that day closed and taken over by the Comptroller of the Currency. Mr. Ryder was its first receiver, and in April, 1929, was succeeded by Carl M. Andresen.

B. R. Kam, the plaintiff, was at all times. which are here material, a practicing physician of Ortonville, a stockholder of the bank, arid from 1920 to the date of its closing a director. Mr. Ryder, during the time he was' receiver, claimed that the directors of the bank were indebted to it for losses due to their negligence and mismanagement. Mr. Andresen also made that claim after he took over the management of the trust estate. In May, 1929, Mr. Andresen discussed the question of the plaintiff’s liability as a director with the plaintiff. At that time the plaintiff had claims against the trust estate aggregating more than $5,000, for which certificates had been issued by the receiver.' Dr. Kam offered to release his claims against the bank in full settlement of any liability on his part as a former director of the bank. He was advised that the proposed settlement must be authorized by the Comptroller and approved by the court in order to be effective. Mr. Andresen first advised the Comptroller, in his letter of May 20, 1929, that the amount of the claims against the estate to be released by the plaintiff was $6,352.93. The receiver was authorized by the Comptroller to settle with Dr. Kam on that basis. Thereafter, in his letter of September 12, 1929, the receiver advised the Comptroller that the offer of settlement made by the plaintiff was the assignment of certificates aggregating $5,-560.22, and he requested authority to complete the settlement on that basis. The Comptroller in a letter dated December 19, 1929, authorized such a settlement and directed the receiver, in consideration of the assignment of the plaintiff’s claims against the bank, to enter into a covenant not to sue him. Thereafter the receiver procured from the state district court its approval of the proposed settlement, and tendered to the plaintiff • a certified copy of the order of court and the covenant not to sue. The plaintiff directed that these papers be submitted to Mr. F. L. Cliff, his attorney. Mr. Cliff refused his approval.

On December 24,1929, the receiver wrote to the Comptroller in part as follows:

“Under date of September 19th, 1929 we were authorized to accept from former director, B. R. Kam his offer of settlement on director’s liability, being the assignment to this trust of his interest in receiver’s certificates originally reported to your office in the amount of $6,352.93, but later reduced to $5,560.22 as explained in our letter of September 12th. On the strength of Mr. Kara’s offer together with proper authority from your office, we petitioned the Court for an order authorizing us to complete settlement on this basis. A copy of the Petition, Certified Copy of Court Order, and a Covenant not to sue agreement was forwarded your office in our letter of Oct. 3rd.
“In completing this settlement objections were raised by Atty. F. L. Cliff, who is the father in law of Mr. Karn, as to the Covenant not to sue agreement. The form used was identical with that used in the settlement with the directors at the Beardsley trust which was approved by your office. Further objections were raised that this director did not want to go on record in the District Court as being liable, or admitting liability, as to the failure of this bank.
“As a result Atty. Cliff has advised Mr. Kam to withdraw his offer of settlement, which the latter has now done. The papers as forwarded you in our letter of October 3rd are therefore null and void as far as this settlement is concerned. Suit will have to be instituted against this director, as well as the other former directors of this bank, to determine the liability.”

On December 30, 1929, the Comptroller wrote the receiver as follows:

“Receipt is acknowledged of your letter of December 24th advising that Mr. B. R. Kam, a former director of your bank, has withdrawn his offer to surrender his Receiver’s Certificates totalling $5,560.22 in consideration of your executing a covenant not to sue him on a statutory and common law directors’ liability. This compromise had been approved by this office and by an order of the District Court, 16th Judicial District of Minnesota. Mr. Kam raised certain objections to the form of the covenant not to sue and his attorney advised him to withdraw his offer of settlement. You state that it will now be necessary to file suit against Mr. Kam and the other directors, and your general attorney, Mr. Chrisman, because of his friendship for the Kam family, has requested the designation of a special attorney to handle this suit. You request instructions as to the course to be pursued.
“It is our view that the rights of the parties to this compromise were' concluded when the Court ordered you to execute the covenant not to sue. Thereafter, Mr. Kam was powerless to withdraw his offer. Accordingly, you will advise Mr. Kam that you are willing to execute the covenant not to sue as directed by the Court and you will also advise him that your trust claims ownership of all dividends that may be declared on the Receiver’s Certificates totalling $5,-560.22, title to which passed to you as Receiver, when the Court’s order approving the compromise was signed. You will decline to recognize an assignment of any of these certificates that was not actually executed and recognized as an assignment by you prior to the date of the Court’s order and demand that Mr. Kam return the same to you for cancellation. On this theory, you will vigorously defend in the United States District Court any action that may be filed to test your trust’s ownership of the funds represented by these Receiver’s Certificates. As your attorney knows, such an action is cognizable in the United States District Court as a suit to wind up the affairs of a national bank, independent of the amount involved. See Studebaker Corporation of America v. First National Bank of Florence, 10 F.(2d) 590.
“If this view will eliminate Mr. Kam from any suit that is to be filed against the former directors of your bank, we assume that Mr. Chrisman will now be able to go forward with the preparation of the action contemplated against the other directors.”

The defendant receiver has at all times since the approval by the court of the settlement been ready, able, and willing to execute the covenant not to sue. In a suit commenced against the former directors of this bank, the plaintiff was not made a defendant.

It is the contention of the plaintiff that no settlement was actually agreed upon or executed. It is the contention of the defendant receiver that an agreement as to the settlement of the plaintiff’s liability as a director was made and completed.

The covenant not to sue was not actually executed by the parties, nor were the receiver’s certificates actually assigned in writing by the plaintiff. I find, however, from the evidence, that the offer made by the plaintiff to the receiver, in settlement of all claims made against him by the receiver growing out of his acts as a director of the bank, was accepted by the receiver, approved by the Comptroller of the Currency, approved by the state district court, and Dr. Kam notified of its acceptance, prior to any attempt on his part to withdraw the offer, and that all that remained to be done were the formal and ministerial acts of signing the covenant not to sue and transferring the receiver’s certificates. These acts would only be evidence of the agreement, and not the agreement itself.

Had Dr. Kam withdrawn his offer at any time prior to its approval by the court, the situation would have been different. It is trae that he testifies to a different state of facts than the receiver and his ^witnesses. The inference to be drawn from the plaintiff’s testimony is that he asked the receiver to find out from the Comptroller what settlement would be approved, and that the receiver, instead of doing that, reported to the Comptroller that he had actually received an offer from the plaintiff, and thereupon proceeded to procure its approval by the Comptroller and by the court, before the plaintiff was advised as to what was being done. It is, of course, possible that this was the situation, but there are two reasons why it is extremely improbable. The first is that the receiver had no adequate reason and no apparent motive for misrepresenting the facts to his superior officer, the Comptroller. The second is that the letter written by - the receiver on December 24, 1929, indicates that he supposed that the plaintiff could withdraw his offer even after it had been approved by the Comptroller and the court. To charge the receiver with attempting to fabricate a settlement which, in his opinion, would become null and vend, even though approved by the Comptroller and the court, in case’the papers were not approved by the plaintiff’s attorney, is not in accordance with reason.

The only real question in this ease is whether the minds of the parties actually met upon the settlement. If the plaintiff was bargaining for a release not only of his own liability, but of that of his codirectors as well, there was no agreement. If he was bargaining for his own release, there was an agreement. A release of a joint tort-feasor is a very different thing than a covenant not to sue, which reserves the right to proceed against other joint tort-feasors. Davis v. Moses, 172 Minn. 171, 215 N. W. 225; Musolf v. Duluth Edison Electric Co., 108 Minn. 369, 122 N. W. 499, 24 L. R. A. (N. S.) 451 and note. So far as I am aware, the only way that one joint tort-feasor can he released without releasing the others is by the method proposed. The evidence does not warrant a finding that the plaintiff was interested in anything except the release of his own several liability. He was bargaining for that. His offer was accepted. After having secured the approval of the settlement and having delivered the covenant, at. the plaintiff’s request, to his counsel, it is scarcely conceivable that the receiver could have successfully maintained a suit against the plaintiff on his liability as a director. If the receiver could not have maintained a suit against the plaintiff, the plaintiff could not have successfully sued the receiver upon the plaintiff’s claim against the bank. There is nothing to indicate that the plaintiff was bargaining for any particular form of release or that he made a condition of his offer that the written evidence of the agreement should be such as would be approved by his counsel.

Finding the facts and the law to be as hereinbefore stated, I reach the conclusion that the defendants are entitled to a decree dismissing the complaint of the plaintiff, and for costs.


author: ANDREW M. J. COCHRAN, District Judge.

text:
    GAMBLE v. CRAWFORD.
    District Court, E. D. Kentucky.
    Feb. 23, 1931.
   ANDREW M. J. COCHRAN, District Judge.

This suit is before me on defendant’s motion that he be permitted to file the amended and substituted answer tendered by him.

1. It must be accepted that the $100,-000 note executed by the Old Bank to the New Bank is the valid obligation of the former. No facts are alleged which, if true, show that it is not so. It is claimed that it is alleged that it was executed after the officers of the Old Bank had placed it in voluntary liquidation without the authority of the stockholders. Assuming that it is possible for a national bank to go into voluntary liquidation without the consent of the stockholders and that after so doing it cannot execute any obligations, notwithstanding this allegation, it must be taken that it was not so executed. There is no direct allegation that the bank ever went into voluntary liquidation. If there is any allegation to that effeet, it is merely by way of recital in alleging that the note was executed after the bank had so done. This being so, there is no allegation as to how the bank went into liquidation or what steps were taken to put it there or when it so went. Against the position ihat this is to be taken as an allegation that the note was executed after the Old Bank went into liquidation is the further allegation that it was executed whilst that bank was still in existence and doing business under its charter. What is meant is that the note was executed after the Old Bank had gone into liquidation is to be gathered from its further allegation that the note was executed after the Old Bank had sold and transferred all of its assets to the New Bank. Construing all these allegations together, the sum of them is that the note was executed whilst the Old Bank was in existence and doing business under its charter after it had sold and transferred all its assets to the New Bank and pursuant to the contract of sale and transfer, and hence that it was executed after the Old Bank had in this way gone into voluntary liquidation. If that was the way of the transaction — plaintiff's pleading can mean no more — then the note is the binding obligation of the Old Bank. Hightower v. American National Bank, 263 U. S. 351, 44 S. Ct. 123, 68 L. Ed. 334. Besides this in brief filed on behalf of the defendant it is stated that at the regular annual meeting on January 8,1929', of which meeting and its objects every stockholder had written notice sent by registered mail, and at which stockholders owning more than three-fourths of the capital stock, including plaintiff, were present, the action of the directors in entering into the contract with the New Bank and executing the $100,000 note was ratified and for the first time the affairs of the bank were placed in liquidation and trustees appointed to liquidate its affairs. These statements are not denied by defendant. I think on this motion to be permitted to file this amended and substituted pleading this circumstance may be considered.

2. No fact is alleged showing fraud in the transaction between the Old and the New Bank. In the absence of any allegation in the pleading tendered to the contrary, I have a right to take it for granted that the action was had in order to- head off a run on the Old Bank and the closing of its doors. It seems that I am mistaken in saying in former opinion that there had been previous bank failures in Hazard and that vicinity; but it is a matter of common knowledge that at that time and for some years previous financial conditions in that part of the state have been very bad on account of the great depression in the coal business on which it is dependent, and shortly thereafter there were three banks in Hazard and vicinity which failed.

The only complaint made of the transaction was that the New Bank did not give enough for the bank building and paid nothing for the good will. Though defendant may have known nothing of the transaction at the time it was had, according to his concession he became aware of it shortly thereafter and made no complaint of it. The un-denied statement referred to above is to the effect that he was present at the meeting on January 8, 1929, and ratified the transaction and the execution of the note.

The transaction no doubt was had under the supervision of the Comptroller and his examiner and met with their approval.

3. The defendant in the new pleading shifts the burden of his complaint. In the former pleading it was the failure to give enough for the bank building and anything for the good will. In order to appreciate this shift, it is important to call attention to certain allegations in the former pleading. It was there alleged that the sale by the- Old Bank to the New Bank was limited to such of the assets of the former as were acceptable to the latter and the other assets were pledged to secure the $100,000 note and transferred in trust to certain trustees to collect and realize such assets and apply same so far as necessary in satisfaction of the note and the balance, if any, to be distributed amongst the stockholders. This pleading was sworn to by the defendant. In the pleading tendered it is in effect alleged that the entire assets were transferred to the New Bank and that it has realized therefrom more than sufficient to pay off the $100,000 note and that it has concealed this fact from the Comptroller. Without some explanation of this radical change in position, it is not of itself sufficient to justify a permission to file this pleading. It ought to be accepted that the Comptroller would not have made the assessment if any such state of facts existed.

4. The defendant is seeking to overhaul the transaction between the two banks and all that has transpired since, which will hang up the winding up of the affairs of the Old Bank for a long time and offers no security for the payment of his assessment in ease it should finally be determined that he is liable therefor.

The motion for permission to file the amended and substituted answer is overruled, and the plaintiff is entitled to judgment.


author: WOOLSEY, District Judge.

text:
    UNITED STATES v. ONE BOOK, ENTITLED “CONTRACEPTION,” by MARIE C. STOPES.
    District Court, S. D. New York.
    July 16, 1931.

      George Z. Medalie, U. S. Atty., of New York City (Morton Baum, of New York City, of counsel; and Walter R. Eaton, of New York City, solicitor to the Collector of the Port of New York, as amicus curias), in support of the motion for a decree of forfeiture.
    Greenbaum, Wolff & Ernst, of New York City (Alexander Lindey, of New York City, of counsel), in support of motion for a decree dismissing the libel.'
   WOOLSEY, District Judge.

The motion to dismiss the libel herein is granted.

The motion for a decree of forfeiture is, consequently, denied.

I. This is a libel in rem brought under title 19, U. S. C., § 1305 (19 USCA § 1305), for the forfeiture of the book “Contraception,” written by Dr. Marie C. Stopes, on the ground that it falls within the exclusion of that statute.

II. At the time of the argument the counsel for the respective parties submitted to me a stipulation providing that the book “Contraception” should be deemed annexed as an exhibit to the libel, that the words “by United States mails” should be stricken from article 2 of the libel, that trial by jury, provided for in title 19, U. S. C., § 1305, on forfeiture proceedings thereunder be waived, and that the issues involved herein should be raised and presented before me on a motion by the claimant to dismiss the libel, and by the libelant for a decree of forfeiture thereon.

The provisions of the statute involved, title 19, U. S. C., § 1305, in so far as they are here relevant, are as follows:

“§ 1305. Immoral Articles — Importation Prohibited, (a) Prohibition of importation. All persons are prohibited from importing into the United States from any foreign country * * , * any) obscene book, pamphlet, paper, writing, advertisement, circular, print, picture, drawing, or other representation, figure, or image on or of paper or other material, or any east, instrument, or other article which is obscene or immoral, or any drug or medicine or any article whatever for the prevention of conception or for causing unlawful abortion. * * * No such articles, whether imported separately or contained in packages with other goods entitled to entry, shall be admitted to entry; and all such articles * * * shall be subject to seizure and forfeiture as hereinafter provided: * * * Provided further, That the Secretary of the Treasury may, in his discretion, admit the so-called classics or books of recognized and established literary or scientific merit, but may, in his discretion, admit such classics or books only when imported for non-commercial purposes.”

The act further provides for forfeiture proceedings as follows:

“Upon the appearance of any such book or matter at any customs office, the same shall be seized and held by the collector to await the judgment of the district court as hereinafter provided. * * * Upon the seizure of such book or matter the collector shall transmit information thereof to the district attorney of the district in which is situated the office at which such seizure has taken place, who shall institute proceedings in the district court for the forfeiture, confiscation, and destruction of the book or matter seized. Upon the adjudication that such book or matter thus seized is of the character the entry of which is by this section prohibited, it shall be ordered destroyed and shall be destroyed. Upon adjudication that such book or matter thus seized is not of the character the entry of which is by this section prohibited, it shall not be excluded from entry under the provisions of this section.
“In any such proceeding any party in interest may upon demand have the facts at issue determined by a jury and any party' may have an appeal or the right of review as in the case of ordinary actions or suits.” ■

III. The contention here made by the claimant that the act just quoted is unconstitutional on the ground that it interferes with the freedom of the press is sufficiently answered by my opinion in the case of United States v. One Obscene Book, entitled “Married Love,” 48 F.(2d) 821, 822.

IV. There is not involved here, however, as the claimant urges, and as there was in the case of the book “Married Love,” any possible question of res adjudieata, for the book “Contraception,” so far as I am aware, is now for the first time libeled in a federal court to test the question of its admissibility under the section of the statutes above quoted.

It is quite true that Judge Kirkpatrick, in the Eastern District of Pennsylvania, had before him on October 30, 1930, in a similar proceeding, three books by this same author, which contained contraceptive information, namely, “Wise Parenthood,” “The First Five Thousand,” and an edition of “Married Love” which had not been expurgated in that regard, as was the edition before me in the ease above mentioned, and that he directed the ■ jury to return a verdict for the defendant on the ground that the said three books' were not obscene and that they did not fall within the prohibition, as to contraceptives, contained in the section of the Tariff Act in question here.

But Judge Kirkpatrick’s decision involved merely a construction of the statute, not a ruling on the book “Contraception” now before me and, hence, is of nothing more than persuasive value in this case.

V. I find myself, however, entirely in accord with Judge Kirkpatrick’s views as to the construction of the section of the statutes under which this libel is brought.

He said in this connection: “I think that under the Tariff Act under which these books are libelled the only question is whether the books are obscene. I do not think the question of whether they contain birth control information is material under this act. It might be under a prosecution for using the mails, but this is a question of importing. So far as birth control matter goes the act prohibits only the importation of drugs, medieine, or other articles for the prevention of conception or causing unlawful abortions. These books, are, of course, not drugs, medicines, or other articles for that purpose, and therefore the only question remaining is whether the books are obscene.”

VI. In Murray’s Oxford English Dictionary the word “obscene” is defined as follows:

“Obscene — 1. Offensive to the senses, or to taste or refinement; disgusting, repulsive, filthy, foul, abominable, loathsome. Now somewhat arch.
“2. Offensive to modesty or decency; expressing or suggesting unchaste or lustful ideas; impure, indeeent, lewd.”

In the same dictionary the word “immoral” is defined as follows:

“Immoral — The opposite of moral; not moral.
“1. Not consistent with, or not conforming to, moral law or requirement; opposed to or violating morality; morally evil or impure; unprincipled, vicious, dissolute. (Of persons, things, actions, ete.)
“2. Not having a moral nature or character; non-moral.”

I have read “Contraception,” and I find that it does not fall, in any respect, within these definitions of the words “obscene” or “immoral.”

“Contraception” is written primarily for the medical profession. It is stated, in an introduction written by an eminent English doctor, to be the first book dealing fully with its subject-matter — the theory, history, and practice of birth control. It is a scientific book written with obvious seriousness and with great decency, and it gives information to the medical profession regarding the operation of birth control clinics and the instruction necessary to be given at such clinics to women who resort thereto. It tells of the devices used, now and in the past, to prevent conception, and expresses opinions as to those which are preferable from the point of view of efficiency and of the health of the user.

Such a book, although it may run counter to the views of many persons who disagree entirely with the theory underlying birth control, certainly does not fall within the test of obscenity or immorality laid down by me in the case of United States v. One Obscene Book, Entitled “Married Love,” 48 F.(2d) 821, at page 824, for the reading of it would not stir the sex impulses of any person with a normal mind.

Actually the emotions aroused by the book are merely feelings of sympathy and pity, evoked by the many cases, instanced in it of the sufferings of married women due to ignorance of its teachings. This, I believe, will be the inevitable effect of reading it on all persons of sensibility unless by their prejudices the information it contains is tabooed.

VI. It follows that as “Contraception” is not an obscene or immoral book, and, obviously, is not a drug, medicine, or an article for the prevention of conception within the meaning of title 19, U. S. C., § 1305, it may be imported into the United States and the libel brought in this ease to test that question must be dismissed.

Settle decree on two days’ notice.

       Remarks on direction oí verdict. No opinion filed.'


author: PER CURIAM.

text:
    SCHOOL DIST. NO. 7, MUSKOGEE COUNTY, OKL., et al. v. HUNNICUTT, County Superintendent.
    No. 4178.
    District Court, E. D. Oklahoma.
    Jan. 15, 1931.
    J. J. Bruce and J. Bernard Smith, both of Muskogee, Okl., for plaintiffs.
    B. B. Wheeler and John H. Dill, both of Muskogee, OH., and Thomas ‘H. Owen, of Oklahoma City, OH., for defendant.
    Before COTTERAL, Circuit Judge, and WILLIAMS and VAUGHT, District Judges.
   PER CURIAM.

This suit was brought by the school district No. 7, of Muskogee county, OH., and the trustees of that district, to obtain a decree enjoining the county superintendent of that county from changing the district school of the colored race to a separate school of that race and maintaining the same, in the said school district.

The faets disclose that previously the colored school was the district school and the white school the separate school, and the defendant has sought to reverse them, pursuant to his alleged power, under section 10569, Comp. Okl. Stat. 1921, which provides as follows: “The county separate school in each district is hereby declared to be that school in said school district of the race having the fewest number of children in said school district; provided that the county superintendent of public instruction of each county shall have authority to designate what school or schools in each school district shall be the separate school and which class of children, either white or colored, shall have the privilege- of attending such' separate school or schools in said school district. Members of the district school board shall be of the same -race as the children who are entitled to attend the school of the district, not the separate school.”

This section has been construed by the Oklahoma Supreme Court to mean that the' schools shall exist as defined in the first part of the sentence, unless the county superintendent shall designate them as provided in the second part of the sentence, as he is invested with the authority to effect the change of the schools. Jumper v. Lyles, 77 Okl. 57, 185 P. 1084; State ex rel. Gumm v. Albritton, 98 Okl. 158, 224 P. 511. It is not questioned that this court is bound by that construction as to tbe meaning of the statute, but is free to judge of its validity under the Federal Constitution as thus construed. Truax v. Corrigan, 257 U. S. 312, 42 S. Ct. 124, 66 L. Ed. 254, 27 A. L. R. 375.

The statute is assailed on the ground it vests in the county superintendent an absolute and arbitrary power, without any legislative guide or basis for his action. Without reviewing the numerous cases cited, we refer to section 3, article 13, of the Oklahoma State Constitution, which provides for separate schools for white and colored school children, with like accommodations to be impartially maintained, and section 10567, C. O. S. 1921, which provides that separate schools shall be maintained with impartial facilities for both races. Thus, a guide was imposed in his action in the control of the schools, to which he was required to conform, and it was his duty if he sought to change them to secure the objects of the state Constitution and statute. Beyond this, we are-of the opinion that section 10569 commits to him a permissible discretion in the administration of school affairs. 6 R. C. L. p. 179; 12 C. J. p. 844.

Another contention of the plaintiffs is that the action of the county superintendent should be enjoined because a discrimination is said to result from the disproportionate funds allowed for the colored school as compared with the white school, as the former could not then be maintained with equal facilities or advantages, on account of the needs of a greater number of pupils.

If we assume that there was the alleged disparity in the funds, it did not arise from the interchange of the schools, but from an insufficient levy by the county excise board, which is not a party to this suit. It is our opinion that the constitutional requirement of equal advantages or like accommodations to the schools does not mean that the colored race shall have the district school or vice versa. The question under the Federal Constitution (Amendment 14) is whether there is a denial of the equal protection of the laws, but it does not occur if equal advantages are granted. United States v. Buntin (C. C.) 10 F. 730, cited with approval in Gong Lum v. Rice, 275 U. S. 78, 48 S. Ct. 91, 72 L. Ed. 172. See Wong Him v. Callahan (C. C.) 119 F. 381.

A shortage of funds might exist for either school, due to an insufficient levy of taxes. But it works no denial of a constitutional right, because all the laws applicable should be considered, and among them there is the remedy to bring a mandamus action to compel an additional levy of taxes. Board of Education v. Excise Board, 86 Okl. 24, 206 P. 517. Even a suspension of a separate school, for economic reasons under some conditions, may be justified. Cumming v. County Board of Education, 175 U. S. 528, 20 S. Ct. 197, 44 L. Ed. 262; Gong Lum v. Rice, supra.

The plaintiffs did not pursue the remedy open to them, but chose to contest the statute and the enforcement of it and claim an infringement of their constitutional rights. But there was no invalidity of the statute or wrong committed by the defendant. They are not entitled to maintain this equity suit, because of an adequate and efficient remedy at law. Section 267, Jud. Code (28 USCA § 384).

The plaintiffs have no just ground to complain of the defendant’s action. The facts evidence his good faith, and our conclusion is his action was within the scope of his lawful powers. The injunction sought is not warranted. The bill of the plaintiffs as amended will therefore be dismissed and the costs of the suit will be taxed to the plaintiffs.