author: BAILEY, Associate Justice.

text:
    AIRCRAFT & DIESEL EQUIPMENT CORPORATION v. HIRSCH et al.
    Civil Action No. 28999.
    District Court of the United States for the District of Columbia.
    Sept. 28, 1945.

      Gallagher, Rinaker, Wilkinson & Hall, of Chicago, Ill., and Hill & Crenshaw, of Washington, D. C., for plaintiff.
    Rawlings Ragland, Acting Asst. Atty. Gen., Edward M. Curran, U. S. Atty., of Washington, D. C., Arnold Levy, Sp. Asst, to Atty. Gen., and Walker Lowry and A. Morris Kobrick, Attys., Dept, of Justice, both of Washington, D. G, for defendant.
    Before MILLER, Associate Justice, United States Court of Appeals, District of Columbia, and BAILEY and PROCTOR, Associate Justices, District Court of the United States for the District of Columbia, sitting as a statutory three-judge court.
   BAILEY, Associate Justice.

The plaintiff is a corporation under the laws of the State of Delaware. The defendant Henry L. Stimson was the Secretary of War and the defendant Robert P. Patterson was the Under Secretary of War at the time of the filing of the amended complaint. The remaining defendants are the members of The War Contracts Price' Adjustment Board.

This is a suit filed by the plaintiff, seeking a declaratory judgment to the effect that the original Renegotiation Act passed by Congress on April 28, 1942 and the later Act which became effective on February 25, 1944, being Title VII of the Revenue Act of 1943, 26 U.S.C.A. Int.Rev.Acts, which amended and reenacted the Act of April 28, 1942, is each unconstitutional as repugnant to Articles I and II and Amendments V, VII and X of the Constitution of the United States.

The plaintiff has filed an amended and supplemental complaint in which it also seeks injunctive relief restraining the defendants from further proceeding under the Renegotiation Act and particularly under Sections 403(c)(2) and 403(e)(1) in so far as said Act, 50 U.S.C.A.Appendix § 1191(c)(2), (e)(1), and said sections provide for the taking of plaintiff’s “property” without any form of judicial review, and, in addition, injunctive relief restraining the defendants from taking plaintiff’s “property” prior to a redetermination by The Tax Court of the United States of the determination of the War Contracts Price Adjustment Board, for the reason that said order was entered by the Board illegally, arbitrarily, capriciously and without regard to the evidence then before it, finally that the enforcement of said order of January 11, 1945 will cause plaintiff irreparable injury, and this latter relief is sought also under the general equity powers of the Court.

The amended complaint states that the plaintiff made a contract with the United States Navy on May 21, 1941, under which it agreed to furnish certain pumps to the United States Navy; that on March 17, 1942 it entered into an agreement supplemental to contract of May 21, 1941, by which plaintiff agreed to furnish certain pumps and other material to the United States Navy, and that during the fiscal year ended November 30, 1943, it furnished to the Navy Department pumps and other material as had not been previously furnished on the supplemental contract of March 17, 1942, and that all the equipment delivered by the plaintiff to the United States Navy in the fiscal year ended November 30, 1943, were all paid for by the United States on or 'before the 27th day of August 1943; that after certain proceedings and conferences the War Contracts Price Adjustment Board notified plaintiff that it had received excessive profits of $1,265,000 in the fiscal year ended November 30, 1943 and that on or about January 11, 1945 plaintiff was notified of the entrance and issuance of an order by the defendant, Robert P. Patterson, Under Secretary of War, acting as a delegate of the War Contracts Price Adjustment Board that plaintiff had realized the said excessive profits in the said fiscal year and plaintiff was directed to pay that sum, less applicable taxes previously paid, to the Treasury of the United States; that on February 28, 1945, plaintiff requested the said Board to initiate a review of the above determination but that on May 3, 1945, the Board refused to do so; that under the provisions of Section 403(c)(2) of the Renegotiation Act the Board may direct the defendant Henry L. Stimson, Secretary of War, to direct contractors or sub-contractors for whom the plaintiff had done work under contract or pursuant to sales orders, to withhold such sums of money due the plaintiff as will aggregate $1,265,000 less applicable tax adjustment; that on April 4, 1945 plaintiff, pursuant to right granted by Section 403(e)(1) of the Renegotiation Act, petitioned the Tax Court of the United States to redetermine the excessive profits, if any, realized during the fiscal year ended November 30, 1943; that the United States filed a motion to strike this petition on the ground that it was filed prematurely; that this motion was heard on May 16, 1945, but that in the event The Tax Court shall dismiss said petition, the plaintiff will file another petition in The Tax Court for the same purpose; that “notwithstanding the fact that the plaintiff has filed its petition for redetermination in The Tax Court of the United States whereby it seeks an orderly determination of the amount, if any, it may owe to the United States of America, as excessive profits for its fiscal year ending November 30, 1943,” the War Contracts Price Adjustment Board purposes to direct the Secretary of War to withhold moneys due to the plaintiff by said contracts for the account of the United States in the amounts determined by it to be due as excessive profits and the Secretary of War purposes to follow such directions; that in the event of such seizure of such amounts due to the plaintiff or the payment thereof by customers thereof to the Treasury, the amounts so seized or paid would be transferred to the Surplus Fund of the United States Treasury; that the Renegotiation Act in so far as it may authorize such seizure is in violation of rights guaranteed to the plaintiff by the Constitution of the United States; that there was, as of May 1, 1945, due plaintiff from its customers (they being firms, individuals and corporations, other than the United States of America, or any department, agency or instrumentality thereof) approximately $274,000, and on that date plaintiff had on its books unfilled orders from such customers and others (not the United States of America or any department, agency or instrumentality thereof), calling for the manufacture and sale of its products at prices approximately aggregating $890,000. The said sums now due, or such portion thereof as the War Contracts Price Adjustment Board has determined should be withheld and paid into the Treasury, and other sums which may become due in the future, Henry L. Stimson or his delegates will, as his delegate Robert P. Patterson did in a prior year, direct to be withheld from the plaintiff and paid into the Treasury of the United States. Plaintiff avers that, after adjustment for Federal income and excess profits taxes, the amount involved in the order and decision of War Contracts Price Adjustment Board does not and can not exceed $275,000, but defendant Henry L. Stimson, acting at the threatened direction of the War Contracts Price Adjustment Board nevertheless threatens to, and will, unless enjoined and restrained, order the withholding from the plaintiff and the payment by plaintiff’s customers of said sums of money into the Treasury of the United States; that the action of the War Contracts Price Adjustment Board was arbitrary; it refused to state the ground upon which it acted and this was in violation of the provisions of the Constitution in that it acted without due process of law.

The amended complaint further sets out certain transactions which it claims were contracts entered into before the passage of the original Renegotiation Act under which various articles were sold, some of which were sold and delivered after the passage of that Act and some before, and that the action of the defendants in making any redetermination of all profits arising under these contracts was unconstitutional and void; that as to contracts entered into after the passage of the Renegotiation Act, in so far as they might be controlled by the Act, the Act was so indefinite and uncertain and was unconstitutional in investing administrative bodies with the legislative powers without sufficiently defining the terms and conditions under which these powers were to be exercised.

The amended complaint seeks an injunction enjoining the defendants from eliminating any excessive profits of the plaintiff determined by the War Contracts Price Adjustment Board by directing any customers of the plaintiff to withhold for the account of the United States, or otherwise, any moneys due to the plaintiff or directing any such customers to pay any money due to the plaintiff into the Treasury of the United States.

The preliminary question to be determined is the jurisdiction of equity. In the first place the plaintiff has filed its petition in The Tax Court of the United States, seeking a determination of the amount of excess profits, if any, which it has earned if the Renegotiation Act be constitutional. It is enough to say that if The Tax Court of the United States should hold that the plaintiff received no excess profits, then the constitutionality of the Act of Congress is immaterial so far as the rights of the plaintiff are concerned and for that reason the suit is premature.

In addition to this, equity has no jurisdiction for the reason that the plaintiff has complete remedies by actions at law. It claims that certain parties are indebted to it by reason of certain contracts; the payment of these claims under a judgment at law would give a full, adequate and complete remedy. These debtors are not numerous, and so far as the plaintiff’s being entitled to relief to avoid a multiplicity of suits, it has a complete remedy in the Court of Claims for all sums of which it may be deprived, if the Renegotiation Act be unconstitutional.

In the case of Coffman v. Breeze Corporations, Inc., et ah, 323 U.S. 316, 65 S.Ct. 298, 301, which was a suit by a patent owner against his licensees, seeking an adjudication of unconstitutionality of the Royalty Adjustment Act and seeking an injunction against the licensees from complying with the Act by paying the balance in excess of royalty payments and in excess of the amount declared by the War and Navy Departments to be fair and just into the Treasury of the United States, the Court held that equity was without jurisdiction. The Act in question in that case deprived the licensor of any remedy. The Court said:

“The only rights asserted as the basis for the relief sought by appellant are derived from the license agreements. Those agreements, so far as now appears and as we assume for present purposes, are contractual obligations to pay the stipulated royalties. As they accrue, the royalties become simple debts recoverable in an action at law, or possibly, where the accounts are complicated, in a proceeding for an accounting such as appellant has already begun in its separate suit pending in the District Court of New Jersey. Kirby v. Lake Shore & M. S. R. Co., 120 U.S. 130, 7 S. Ct. 430, 30 L.Ed. 569; United States v. Old Settlers, 148 U.S. 427, 465, 13 S.Ct. 650, 655, 37 L.Ed. 509.
“Appellant does not in the present suit bring to our attention any facts showing or tending to show that a suit to recover a money judgment for the royalties would not afford complete and adequate relief without resort to an equitable remedy. In such a suit if appellee Breeze is obligated by the contracts in question to pay the royalties to appellant, it can discharge that obligation only by payment of the amount due, or by setting up the Royalty Adjustment Act as a defense. Compliance with the duty under the Act to pay into the Treasury the royalties withheld from appellant would operate by the terms of the Act as a discharge of the obligation to pay appellant. If that defense were offered, the constitutional validity of these provisions of the Act would be a justiciable issue in the case, since upon its adjudication would depend appellant’s right to recovery.
“But whether the provisions of the Act be valid or invalid appellant shows no ground for equitable relief. If valid they would be a defense, and appellant would be entitled to no relief other than that afforded by the suit against the Government authorized by § 2 of the Act. If invalid, appellant’s right to recover remains unimpaired. The sufficiency of the defense may be as readily tested in a suit at law to recover the royalties as by the present suit in equity to enjoin payment of the royalties into the Treasury. In either case appellant would receive all the relief to which it shows itself entitled.”

The Act of Congress involved in the Coffman case is very similar to the Act in this case and there is no reason why the plaintiff has not a complete and adequate remedy by suit against its customers for any sums that may be due from them, if the Act be unconstitutional; and, as to any liability on the part of the United States, its remedy is in the Court of Claims.

The plaintiff contends that the Coffman case was decided simply upon the ground that the complaint did not allege that the plaintiff in that case would be irreparably injured. It is not sufficient, however, to allege irreparable injury without showing the facts upon which that injury follows. In this case, mere delay in the collection of sums due to the plaintiff, the complaint not stating that the debtors are or are likely to become insolvent, does not constitute irreparable injury.

So far as the administrative procedure is concerned, any defects in the hearing before the War Contracts Price Adjustment Board are immaterial so long as the plaintiff obtains a full hearing before The Tax Court of the United States. National Labor Relations Board v. Mackay Radio & Telegraph Co., 304 U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381.

In the case of Arrow Distilleries, Inc., v. Alexander, D.C., 24 F.Supp. 880, which was affirmed by the Supreme Court of the United States in 306 U.S. 615, 59 S.Ct. 489, 83 L.Ed. 1023, it was held that one is not entitled to judicial relief for a ■supposed or threatened injury until the prescribed administrative remedy has been exhausted, even though the question of the ■constitutionality of the statute prescribing the administrative remedy is undecided.

We conclude, therefore, that the suit is ■premature and, in addition, that equity has no jurisdiction.

The motions of the defendants to dismiss the amended complaint and for a summary judgment will each be sustained without prejudice, however, to the right of the •plaintiff to maintain actions at law against its debtors and to bring suit as it may be advised in the Court of Qaims.


source: Caselaw Access Project

author: LEAVY, District Judge.

license: Public Domain

text:
    CARSTENS PACKING CO. v. UNITED STATES.
    No. 674.
    District Court, W. D. Washington, S. D.
    Sept. 22, 1945.
    Kerr, McCord & Carey, of Seattle, Wash, (by R. A. Moen, of Seattle, Wash.), for petitioner.

      J. Charles Dennis, U. S. Atty., and Guy A. B. Dovell, Asst. U. S. Atty., both of Tacoma, Wash., for defendant.
   LEAVY, District Judge.

Briefly and concisely stated, the fact that is not in dispute at all, is that one of the agencies of the federal government, the W.P.A., leased from the plaintiff the third floor of a building in Seattle, known as the Carstens Building. The lease covered approximately 8,775 square feet. A standard form lease was provided for by the government itself, and approved by the Secretary of the Treasury in the Procurement Division. The rental was to be at $140 a month, and the lease was for a period running from October 28, 1940, to June 30, 1941, with the right of renewal, and the same was renewed by a notice of election to renew on the part of the United States —the first renewal took up immediately at the conclusion of the original lease, which would be June, ’41 and then again in ’42, then again in ’43, but the third year of the life of the lease was not carried through, because an election to surrender was made.

The lease further provided that it could be cancelled by either party upon 30 days’ notice in writing. In that manner it was terminated during the life of this lease upon the third renewal of it.

November 12, 1942, the accident in question occurred while the elevator was being used by agents and employees of the United States Government, and while so used was badly damaged by reason of the manner in which it was loaded, by placing thereon a small hand truck, so that it came in contact with the side-wall of the elevator shaft. The lease provided among other things that the lessor would furnish to the government during the occupancy of said premises as a part of the premises, the following: heat, light, water, elevator services, toilet facilities for men and women.

The question that we have to determine here in the first instance, it seems to me, is a question as to whether this obligation on the part of the lessor to furnish elevator service, carried an implication that it would be elevator service that included an elevator operator. There does not seem to be any serious contention on the part of the government that such was intended, so if it were not, why of course the elevator was there and it was available for a common use, both to the government as a lessee and the other occupants on the floors below, and the Court so finds. The evidence is undisputed that the elevator was supplied, but without an operator, and the use was a common use, as it had been used by the government in its occupancv of the third floor for a period beginning with the lease, when this accident occurred.

There isn’t any question but that the accident was brought about at least in part, and I have no hesitancy in finding that it was brought about as a proximate result, of carelessness on the part of the operators of the elevator, who were the employees of the federal government. Whether the elevator was so constructed or so maintained as to create a situation that resulted in contributory negligence as was found by the Army when the claim was presented to them, presents another question, and in that regard I find that such situation did not prevail. The damage to the elevator, then, was the result of its improper use by employees of the federal government.

It is contended that this resulted in an action ex delicto, and therefore could not be maintained against the government. The plaintiff contends that it is an injury to its property, and it is entitled to be reimbursed because it is an action growing out of a contract, either expressed or implied.

Counsel for the government has argued with a great deal of force and ability that this should be treated as an action in tort. The lease, however, has this provision in it, — we must remember the lease is one drawn by the government and therefore is not to be construed with any degree of liberality toward the government because they drafted it, and they provided at the end of the lease that they would restore the premises to the same condition as that existing at the time of entering into the same under this lease which reads: * * * reasonable and ordinary wear and tear and damages by the elements or by circumstances over which the Government has no control, excepted : ”

That covenant in this lease made it necessary, I take it, that if no steps had been taken by the lessor when the government sought to terminate the lease, it make amends for the damage or injury, irrespective of whether it arose out of the careless and negligent conduct of some government employee, or whether it was a direct breach of some specific covenant in the lease agreement, and I rest my conclusion as to the law on these cases to which I shall refer. I have checked them rather hastily. There has been reference to some of them by counsel for the government. However, the case not cited, which I take to be the leading case on this subject, decided long before the enactment of the Tucker Act, 24 Stat. 50S, is a case dating back to 1876. Justice Waite delivered the opinion of the Court and the case (United States v. Bostwick) is found in 94 U.S. 53, 24 L.Ed. 65, and I am reading particularly from page 66, of 94 U.S., because this establishes the law in a situation such as we have here. This was a case where property had been leased by the federal government, such as we have here, and the Court there said:

“There are in this contract no stipulations to take the place of or in any manner restrict this implied obligation on the part of the United States growing out of their relation to the petitioner as his lessees. They had the free and unrestricted right to use the property for any and all purposes, but were bound to so conduct themselves in such use as not to cause unnecessary injury. Whatever damages would necessarily result from a use for the same purpose by a good tenant must fall upon the lessor. All that the relation of landlord and tenant implies in this particular is, that the tenant, while using the property, will exercise reasonable care to prevent damage to the inheritance. * * * If he fails in this, he violates his contract, and must respond accordingly.”

The following language I want to call to your particular attention, because it is quoted again and again in subsequent opinions:

“The United States, when they contract with their citizens, are controlled by the same laws that govern the citizen in that behalf. All obligations which would be implied against citizens under the same circumstances will be implied against them. No lease in form was ever executed in this case; but the contract, followed by the delivery of possession and occupation under it, is equivalent for the purposes of this action to a lease duly executed, containing all the stipulations agreed upon.”

Passing from that case to a later one that cites it, found in, D.C., 31 F.2d at page 211, 212, being Crouch v. United States, and being a case in its facts somewhat similar to what we have in this case, the government leased a pile driver, and through the actions of some of the government employees, the pile driver was damaged far beyond ordinary wear and tear for such uses. The Court held there that the action could not be held to be an action in tort, stating: “The fact that the obligation to use due care arises as an implied obligation from the contract cannot change the situation. The suit, therefore, can be maintained under the Tucker Act” — and then they quote the Bostwick case from which I just quoted.

Another case, somewhat later, that it seems to me, throws light upon this, is found in, 2 Cir., SI F.2d at pages 1010, 1012, Cory Bros. & Co. Ltd. v. United States, and while this is an admiralty case, yet it involves the issue of the government’s liability in the lease of property, and the Court there quotes again the Bostwick case and numerous other later cases, with approval, and then it says: “It is apparent that the present action is ‘founded upon’ a contract, partly written and partly implied from prior dealings entered into with duly authorized representatives of the United States, and brought to enforce alleged obligations of that contract. Such a claim is clearly included within the spirit and language of the Tucker Act.”

The use to which the government put the property here in question creates a situation where I could not do other than find that the plaintiff is entitled to recover, this being an action ex contractu. There is no showing that the facilities were of such a deficient nature as to be totally unfitted for the purpose for which the lease had been taken. There was some testimony of one witness called by the defendant, who testified there was some movement or swaying of the elevator back and forth, but it had been used daily by the government’s agents for a period of more than a year, and continued to be used after the accident. Against that testimony we have that of the inspector, a man skilled in mechanics, and whose duty it is to inspect this elevator, and he said it met the standard required of an elevator to serve the purposes for which it was constructed and for which it was placed in this building, and the government continued to operate the elevator for more than a year after the accident and also renewed the lease, providing for such use.

Under all of the facts, I find that the action is one that rests upon contract, and can be maintained as against the government, and the amount of loss not being in dispute there — no issue has been made of this, I shall find that it is in that sum prayed for in the complaint, and the plaintiff is entitled to a judgment in such amount.


author: LEAMY, District Judge.

text:
    In re HOAG et al.
    No. 7071.
    District Court, D. Vermont.
    Sept. 26, 1945.

      Bernard J. Leddy, of Burlington, Vt., for debtor.
    J. H. Macomber, Jr., of Burlington, Vt., for creditor.
   LEAMY, District Judge.

This is a petition filed by Edith C. Hoag, surviving debtor in the above entitled proceedings, wherein she prays the Court to order J. H. Macomber, a secured creditor, to refund to her certain moneys which she allegedly paid to him under protest and duress. There is very little conflict on the facts, and from the files, the testimony and exhibits, and the briefs, I malee the following

Findings of Fact.

1. On May 12, 1941, the debtors filed their petition alleging that they were engaged primarily in farming; that they were unable to meet their debts as they matured and representing to the court that they desired to effect a composition or an extension of time to pay their debts under Section 75 of the Bankruptcy Act, 11 U.S.C.A. § 203. The petition was accompanied by a schedule of creditors, wherein Laura M. Jones appeared listed as a secured creditor. The petition was approved and referred to the court’s Conciliation Commissioner for further proceedings as required by law.

2. On May 22, 1941, ten days after the approval of the debtors’ petition, J. H. Macomber purchased the secured claim of Laura M. Jones, and at the first meeting of creditors on July 21, 1941, his secured claim was allowed in the sum of $4,929.36. The claim is represented by a promissory note executed by the debtors on February 7, 1936, in the face amount of $5,000 payable to the said Laura M. Jones three years after date, “with interest at five per cent (5%) per annum, payable in equal monthly installments on or before the seventh day of each and every month.” The note is duly endorsed by the said Laura M. Jones to J. H. Macomber. The note is secured by a first mortgage on the debtors’ real estate, being a farm of about 146 acres. This mortgage was duly assigned by Laura M. Jones to J. H. Macomber on May 22, 1941.

3. The following claims were filed with and allowed by the Conciliation Commissioner.

J. H. Macomber, Burlington, Vt. Secured 4929.36

Arthur Walker, Burlington, Vt. Secured 9504.00

Personal Finance Co., Burlington, Vt. Secured 132.88

International Harvester Co., Albany, N. Y. Secured 95.00

Mrs. W. W. Aldrich, Burlington, Vt. Unsecured 10.00

Burlington Trust Co., Burlington, Vt. Unsecured 106.05

Strong Hardware Co., Burlington, Vt. Unsecured 152.47

Carleton Allis, Charlotte, Vt. Unsecured 107.90

J. H. Middlebrook & Sons, Burlington, Vt. Unsecured 81.60

Farm. Credit Administration, Claremont, N. H. (originally secured but security entirely dissipated) 295.00

4. On or about October 15, 1941, and within the time set by the Conciliation Commissioner, the debtors submitted to the creditors a “proposal of composition and extension,” which for convenience will be hereinafter referred to as the proposal. The proposal differed as to the various creditors and apparently was accepted by all of the creditors except J. H. Macomber. This constituted a majority both in number and amount. The proposal as to the Ma-comber claim was as follows:

“J. H. Macomber, Sr. assignee of a first real estate mortgage on said debtors’ premises in Burlington and South Burlington, Vermont, given by said debtors to Laura M. Jones of Burlington, Vermont, upon which there is an unpaid balance of $4986.86 as of October 15, 1941.
“Said debtors propose to pay interest on the above mentioned unpaid balance from the 15th day of October 1941 to the 15th day of October 1944 at the rate of 3% per aiinum, payable in monthly installments of $12.46 each month, the first payment being due and payable on or before the 15th day of November 1941 and a like payment of $12.46 due and payable on or before the 15th of each month thereafter to and including the 15th day of October 1944, after which date principal and interest on said mortgage to be paid in accordance with the terms and conditions contained in said mortgage.”

5. On October 20, 1941, the debtors petitioned for confirmation of the proposal as to all creditors. At the hearing thereon on November 26, 1941, at which time opposition was presented by creditor Macomber, it was ordered that the proposal be confirmed.

6. The debtors retained possession of and operated their farm property in accordance with the terms of the proposal for the period of three years.

7. On October 16, 1944, the debtors gave to the University of Vermont and State Agricultural College an option in writing to buy their farm, with the stock and tools thereon, for the sum of $24,000. The option is petitioner’s Exhibit No. 1. Four days thereafter, the debtor Ezra M. Hoag died.

8. On October 21, 1944, the University accepted the option and shortly thereafter demanded from the surviving debtor a warranty deed of the real estate and a bill of sale of the personal property, free and clear of encumbrance, in accordance with the terms of the option. The University advised the surviving debtor that it desired to sell off the personal property on November 18, 1944. Thereupon the debtor, through her attorney, advised creditor Macomber of the proposed sale and the terms thereof, and requested of him a statement of the amount due on the mortgage indebtedness under the terms of the composition and extension order. The creditor’s note and mortgage called for interest on the debt at the rate of five percent per annum. During the three year period, the debtors had paid interest at the rate of three per cent per an-num in accordance with the order of confirmation. Macomber demanded interest on the indebtedness at the rate of 5% for the three year period instead of at the rate of 3% as provided in the order of confirmation, under the claim that the interest, continued to accrue at the five per cent rate and that he was entitled to the additional two percent, since the three year period had expired, and he refused to discharge his mortgage unless this disputed interest item was paid.

9. On November 15, 1944, by verbal agreement between the debtor and the University, the latter entered into possession of the real estate and personal property, 'and two days thereafter, in writing, demanded of the debtor a warranty deed and bill of sale, of all of which facts creditor Ma-comber was apparently aware. The surviving debtor was unable to carry on the farm, because of the recent death of her husband and because of the death of her son in military service.

10. On December 8, 1944, pursuant to th'e demands of the University and the terms of the option agreement, the surviving debtor executed and delivered to the University a warranty deed of the real estate and bill of sale of the personalty all free and clear of encumbrance. The transaction took place at the office of creditor Macomber, at which time the debtor, through her attorney, again inquired of Macomber the amount due on his mortgage and Macomber replied that the amount then due was $5344.60, which sum included interest at 5% per annum for the three year period instead of 3%, and that he would not discharge his mortgage unless the sum of $5,344.60 was paid to him.

11. Thereupon the debtor paid Ma-comber the sum of $5,344.60 under protest, claiming duress, and the payment was accompanied by a letter (Petitioner’s Exhibit No. 5) in which, for the reasons therein stated, she protested the payment and claimed that it was made under duress. She now asks the Court to order creditor Macomber to refund to her the amount involved, $320.86, with interest from the date of the alleged overpayment.

12. All of the exhibits are hereby referred to and made a part hereof.

Discussion.

The creditor resists the petition on the following grounds:

(1) The Court has no jurisdiction to order the repayment; (2) there was no overpayment under the provisions of the proposal; (3) there was no duress which would entitle the petitioner to recover the alleged overpayment; (4) the provision of section 75, subsection k, permitting a reduction in the interest rate on a secured debt, is unconstitutional in the circumstances of this case as violating the due process clause; (5) the agreement was not accepted by the requisite number of creditors because (a) these creditors did not vote by classes, and (b) if section 75, subsection g, does not require a vote by classes, it is unconstitutional in the circumstances of this case as violating the due process clause; (6) the provisions of section 75, subsections g and k, if it be construed as permitting a reduction in the interest rate on a secured debt without requiring acceptance by a majority of each class of creditors, are unconstitutional in the circumstances of this case as not being bankruptcy legislation and hence in violation of the tenth Amendment.

Of course the first question for determination is whether or not the Court has jurisdiction to entertain the petition and issue an order thereon. The creditor, in his brief, contends that the Court has no jurisdiction over his person such as would support an order for repayment, and that since the debt has been paid and the mortgage discharged, that the jurisdiction of the Bankruptcy Court has terminated, since the jurisdiction of the Court is limited to “the period of the extension” and that all of the events out of which the controversy arises occurred after the expiration of the extension period.

But the Act clearly provides that for the purpose of enforcing the terms of the confirmed proposal, that the Court has jurisdiction over the person of a creditor and that its jurisdiction does not terminate with the so-called extension period. Subsection k provides that “upon its confirmation, a composition or extension proposal shall be binding upon the farmer and 'his secured and unsecured creditors affected thereby * * Subsection l provides that if the confirmed proposal is one of composition, that the consideration is to be distributed under the supervision of the conciliation commissioner as directed by the Court and the case then dismissed. But if the proposal is one of extension the Court may “retain jurisdiction of the farmer and his property during the period of the extension in order to protect and preserve the estate and enforce through the conciliation commissioner the terms of the extension proposed" (Italics supplied.) Although this subdivision uses the expression “during the period of the extension” it cannot be construed to mean that the Court cannot enforce its confirmation order thereafter; or that the creditor is not subject to the Court’s jurisdiction thereafter, because subdivision o has operated as an automatic stay of his original claim, which he cannot enforce without the Court’s permission, thus holding him within the latter’s jurisdiction. This subsection provides that: "Except upon petition made to and granted. by the judge * * * the following proceedings shall not be instituted * * * in any court or otherwise, against the farmer or his property, at any time after the filing of the petition under this section, and prior to the confirmation or other disposition of the composition or extension proposal by the court: (1) Proceedings for any demand, debt, or account, including any money demand; * * (Italics supplied). And subsection o is supplemented by subsection p which provides that the prohibitions of subsection o “shall apply to all creditors, public or private.”

Thus it seems apparent that so far as the enforcing of its confirmation order is concerned, the Court retains jurisdiction of the creditor and the debtor until the case is terminated.

As’ the basis for the creditor’s claim that there was no overpayment to him, he contends that the limitation of interest to 3% during the three-year period was a suspension of payment only, and not a reduction in the interest rate from 5% to 3%.

The Act requires a debtor to submit a proposal for a composition or extension. Although neither of these terms are defined in the Act, it seems to be generally assumed in the decisions that a composition is an agreement for the payment of a certain percentage of a creditor’s claim in full satisfaction, while an extension contemplates an agreement extending the time within which a claim is to be paid. Before its amendment by the Act of August 28, 1935, subsection k provided that a “composition or extension shall not reduce the amount of nor impair the lien of any secured creditor, but shall affect only the time and method of its liquidation,” 47 Stat. 1472, and there were decisions thereunder which held that under that subsection a proposal which reduced the interest rate of secured creditors could not be confirmed. But the subsection, as now amended, clearly allows the reduction of a secured creditor’s claim provided the lien is preserved at the fair and reasonable market value of the security, and it also allows the reduction of the future interest rate on all debts, secured or unsecured, regardless of the market value of the property.

The debtors’ proposal as to creditor Macomber is set forth verbatim in paragraph 4 of the Findings of Fact. It was a proposal both of composition and extension and was apparently so understood by all concerned. It was a proposal of composition, in that it reduced the amount of interest payable for the three year period, as permitted by the Act, and it was a proposal for extension in that it postponed the payment of the principal. No other construction can reasonably be given to it.

With the debtor’s claim that the payment was made under duress and the creditor’s reply that it was voluntary and that there was no duress in the strict legal sense it seems to me, we are not concerned. Certainly, if it were necessary to do so, I would hold that the payment was made under duress. The debtor was under contract to sell her farm at a figure which would permit her to pay her creditors in full. She could not convey a clear title without a discharge of the Macomber mortgage and Macomber refused to discharge the mortgage unless she paid interest at a rate which was above the rate to which it had been reduced by the Court. But whether there was duress or whether there was no duress is beside the point. The simple question is whether or not this creditor, who in his demands upon the debtor is subject to the jurisdiction of this Court, has demanded and collected of the debtor more than he was authorized to collect under the provisions of the court order. And the short answer to the question is that he has. The order of confirmation reduced the interest on the Macomber mortgage from 5% to 3% for the three-year period, and when he demanded and collected interest of more than 3% for that period of time it was in violation of the order.

Nor can the creditor’s grounds 4, 5b and'6, wherein he attacks the constitutionality of subsections g and k be sustained, since the decisions uniformly hold that section 75 is well within the bankruptcy power, and its validity seems now. to be solidly established. Wright v. Vinton Branch Mountain Trust Bank, 300 U.S. 440, 57 S. Ct. 312, 81 L.Ed. 395, held valid subsection s, and Wright v. Union Central Life Insurance Co. 304 U.S. 502, 58 S.Ct. 1025, 82 L.Ed. 1490, while sustaining the validity of subsection n, defined the bankruptcy power in the broadest of terms. The validity of the Act was also upheld in State of North Dakota v. Hegstad, 8 Cir., 134 F.2d 598; Nalder v. Federal Land Bank, 10 Cir., 131 F.2d 74; Dombrowski v. Beu, 9 Cir., 114 F.2d 91; Cohan v. Elder, 9 Cir., 112 F.2d 967.

The only remaining ground of the creditor’s objections to the petition is No. 5 in which he claims that the order of the Court confirming the proposal is void so far as it purports to bind him, since a majority in number and amount of creditors of the class to which he belonged did not accept the debtor’s proposal; it being his contention that subsection g should be construed as requiring a classification of creditors according to the type of security held by them, if any, and an acceptance by a majority in number and amount of each class.

But the plain words o,f the statute reveal that this was not the intent of Congress. Subsection g provides that “an application for the confirmation of a composition or extension proposal may be filed in the court of bankruptcy after, but not before, it has been accepted in writing, by a majority in number of all creditors whose claims have been allowed, including secured creditors whose claims are affected, which number shall represent a majority in amount of such claims.”

To hold that this clear and unambiguous language requires a classification of creditors would be nothing short of judicial legislation. The statute requires only a majority in number and amount of all creditors. In re Lowman, 7 Cir., 107 F.2d 540, certiorari denied 309 U.S. 680, 60 S.Ct. 724, 84 L.Ed. 1024, rehearing denied 310 U.S. 656, 60 S.Ct. 896, 84 L.Ed. 1420, rehearing denied 311 U.S. 724, 61 S.Ct. 54, 85 L.Ed. 472.

I hold therefore that creditor Macomber has demanded and collected from the debtor the sum of $320.86 in violation of the order of this Court. Let it be repaid, with interest thereon at 6% .from December 8, 1944 to the date of payment; payment to be made on or before the date when the time for appeal expires, unless within said time an appeal is taken. As to the prayer in the petition that the proceedings be dismissed for the reason that the order has been fully complied with, the order is as follows: If repayment is made, the entry will be “petition granted.” If repayment is not made, the entry will be “decision reserved.”


author: PORTERIE, District Judge.

text:
    SHANNON (SEISMIC EXPLORATIONS, Inc., Third-Party Plaintiff) v. MASSACHUSETTS BONDING & INS. CO. et al. (WILLIAMS, Third-Party Defendant).
    Civil Action No. 1014.
    District Court, W. D. Louisiana, Opelousas Division.
    Sept. 20, 1945.

      Voorhies & Labbe, of Lafayette, for Seismic Explorations, Inc., and Union Oil Co. of California.
    St. Clair Adams, Jr., of New Orleans, for George Williams and Massachusetts Bonding & Ins. Co.
    Edward F. LeBlanc, of Abbeville, for Hugh L. Shannon.
   PORTERIE, District Judge.

Shannon, the plaintiff, seeks, first, a judgment in solido against the Massachusetts Bonding and Insurance Company, the Seismic Explorations, Inc., of Delaware, and the Union Oil Company of California, or, alternatively, seeks a judgment against any one of the three.

We quote the following from the petition, Article Three:

“That the cause of action and injuries herein complained of occurred in the Western District of the state of Louisiana, on the boat ‘Barbette’, a vessel engaged in interstate commerce and navigation over its navigable waters; that said defendant corporations named are respectively corporations of the states of Massachusetts, Delaware and California and that plaintiff is a citizen of the state of Louisiana and resides in the Eastern District of the state of Louisiana; that the matter in controversy exceeds, exclusive of interest and costs, the sum of Three Thousand & 00/100 ($3,-000.00) Dollars”.

George Williams was included in the original suit by the plaintiff, -but, by amendment (hearing had thereon and the Court permitting same), making use of Act 55 of 1930 (direct-action statute), George Williams was eliminated, and his insurer, Massachusetts Bonding and Insurance Company, was retained. Then, a previous motion to dismiss, filed by the defendants, based on the want of jurisdiction, because Shannon and Williams, plaintiff and defendant, respectively, were residents of the same district, was overruled and denied.

This established the necessary diversity of citizenship, and there has been tacit admission that the amount involved is over $3,000 exclusive of interest and costs.

Next we quote all of Articles Five, Six, and Seven of the petition:

“Five. That said accident was caused by the negligence and negligent operations of the operator and/or captain of said vessel, one Robert Lemaire, who was then and there the agent, acting under the instructions, supervision and control of all of said defendants; plaintiff alleges, alternatively, that said Robert Lemaire was the employee and agent of and/or acting as such under the instructions, supervision and control of defendant Seismic Explorations, Inc., of Delaware, or, alternatively, of defendant Union Oil Company of California, or, alternatively, of defendant George Williams.
“Six. Plaintiff alleges negligence causing said accident upon the part of all of said defendants, its said operator and/or captain, agent and employee, and, alternatively, negligence upon the part and as such of said Seismic Explorations, Inc., of Delaware, or, Union Oil Company of California, or, George Williams; that as a result of said negligence he sustained the injuries and damages herein complained of.
“Seven. Plaintiff alleges further the unseaworthiness of said vessel at said time in addition to the negligence herein complained of as causing said accident and injuries.”

In order to have all the facts of the case, as they are controlling, we must quote Articles Nine, Ten, Eleven, and Twelve of the petition:

“Nine. Plaintiff alleges that the motor vessel ‘Barbette’ was owned by defendant George Williams, who in turn had leased same to defendant Seismic Explorations, Inc., of Delaware and/or defendant Union Oil Company of California; that defendant Seismic Explorations, Inc., of Delaware was at the time doing certain seismograph and other exploratory work for defendant Union Oil Company of California, and/or, alternatively was the agent acting as such for said last named defendant who was in turn engaged in the exploration, discovery and production of oil and gas in competition with producers of other states and for the intended as well as actual sale and transportation of said oil and gas in interstate commerce.
“Ten. Plaintiff alleges that at the time of as well as before said accident he was employed by the United States Government as an ‘Inspector of Permit Work’, War Department, Engineers, New Orleans District, Inspection Division, Permit Section, and was assigned for such purposes to the operations for said defendant companies, or either of them, which operations were then being conducted on White Lake, the point which the said vessel ‘Barbette’ was about to depart for when the accident herein alleged occurred; plaintiff further alleges that he was properly aboard said vessel, had a legal right to be on the same and/or was a licensee thereon and was assigned to said operations for said purposes with the full knowledge, consent and agreement therefor by said defendant corporations, or either of them.
“Eleven. Plaintiff alleges further that the said accident occurred in the following manner: That on the morning of June 21st, 1943, plaintiff together with the members of the crews of said defendant corporations, all assigned to operations on White Lake in Vermilion Parish, Louisiana, for the aforesaid purposes, were aboard the vessel ‘Barbette’ preparatory to travel there from a point known as ‘Forked Island Ferry’ thence via Intra-Coastal Canal waterway to operations on said White Lake, when the hereinbefore mentioned captain and/or operator of said vessel, Robert Lemaire, negligently started the engine without first removing from the bilge the gasoline leakage which he had negligently allowed to accumulate there and without first allowing to escape the negligently accumulated gasoline vapours beneath the deck and in the cabins; that upon so doing, either a spark from a defective switch or starter wires or motor and/or by reason of the engine defectively backfiring, caused these accumulated gases and gasoline instantly to ignite causing explosion and fire which immediately enveloped the vessel, consuming it with fire and totally destroying same in a short time; that plaintiff was aboard and inside the cabin of said vessel housing the motor and was likewise surrounded and enveloped by flame, as were the others in said boat at that time.
“Twelve. Plaintiff alleges that said Robert Lemaire negligently started the engine of said vessel ‘Barbette’ and that said vessel, further, was unseaworthy and unsafe.”

The Seismic Explorations, Inc., then filed a third-party complaint, seeking to make George Williams, and, in turn, the Massachusetts Bonding and Insurance Company, third-party defendants. Service by regular summons has been made on Williams; a copy of the complaint has been mailed to the attorney of record for Massachusetts Bonding and Insurance Company.

The content of the third-party complaint is that George Williams, a resident of the state of Louisiana, was the owner of the Barbette and was the partner or the employer of Robert Lemaire; that the Seismic Explorations, Inc., had, by verbal contract with Williams, rented or hired the Barbette, which was to be kept in a good, safe, and running condition, and also was to be furnished with a boat operator at Williams’ expense (hence, Lemaire). The third-party complaint also states what was the monthly payment to be made to Williams; who was to furnish the necessary fuel to operate the boat; where the boat was to be kept; that the boat was to be at the disposal of third-party plaintiff for the transportation of its employees, and working instruments, and for the carrying of the messages of the company to and from the work location at which third-party plaintiff’s crew was operating, at such time as third-party plaintiff might direct; that Williams had hired and employed Lemaire personally and paid him an amount unknown to third-party plaintiff; and other added items of relative unimportance. And paragraph 6 is:

“That the only control which third-party plaintiff had over the boat and its operator was to indicate the time when the boat should travel and the destination of such travel.”

The third-party complaint further develops the relations between the parties involved in the original complaint. It tends to expand and develop the facts of the case. It does bring George Williams back into the case as a party, left out under Act 55 of 1930.

George Williams, and the Massachusetts Bonding and Insurance Company, moved to dismiss the third-party complaint, because: (a) It fails to state a claim against third-party defendants upon which relief can be granted; because (b) it attempts to make of the Massachusetts Bonding and Insurance Company, already a defendant, a third-party defendant; and because (c) Shannon and Williams are both residents of the state of Louisiana, the diversity of citizenship is wanting.

On this last point (c), the law is that such may exist under the theory of ancillary jurisdiction. Cases previous to the Rules: Phelps v. Oaks, 117 U.S. 236, 6 S.Ct. 714, 29 L.Ed. 888; Hardenbergh v. Ray, 151 U.S. 112, 14 S.Ct. 305, 38 L.Ed. 93; Moore v. New York Cotton Exchange, 2 Cir., 296 F. 61, affirmed 270 U.S. 593, 46 S.Ct. 367, 70 L.Ed. 750, 45 A.L.R. 1370; Alexander v. Hillman, 296 U.S. 222, 56 S. Ct. 204, 80 L.Ed. 192. Cases subsequent to the Rules: Crim v. Lumbermen’s Mut. Casualty Co., D.C., 26 F.Supp. 715, 718; Bossard v. McGwinn, D.C., 27 F.Supp. 412; Kravas et al. v. Great Atlantic & Pacific Tea Co. [Peoples-Pittsburgh Trust Co. v. Davis], D.C., 28 F.Supp. 66; Satink v. Township of Holland, D.C., 28 F.Supp. 67; Crum v. Appalachian Electric Power Co., D.C., 29 F.Supp. 90; Lewis v. United Air Lines Transport Corporation, D.C., 29 F. Supp. 112; Morrell v. United States Air Lines Transport Corporation, 29 F.Supp. 757; Schram v. Roney, 30 F.Supp. 458; Barkeij v. Don Lee, Inc., D.C., 34 F. Supp. 874; Malkin v. Arundel Corporation, D.C., 36 F.Supp. 948; Adam et al. v. Vacquier, D.C., 48 F.Supp. 275, affirmed 3 Cir., 139 F.2d 347; Saba et al. v. Emil Katz & Co., Inc. et al., D.C., 55 F.Supp. 1000; Davis v. Associated Indemnity Corporation, (Daniels), D.C., 56 F.Supp. 541; Williams v. Keyes, 5 Cir., 125 F.2d 208, certiorari denied 316 U.S. 699, 62 S.Ct. 1297, 86 L.Ed. 1768; Lesnik v. Public Industrial Corporation, 2 Cir., 144 F.2d 968, 973, 974; Sklar v. Hayes, D.C., 1 F.R.D. 415; Johnson v. G. J. Sherrard Co., D.C., 2 F.R.D. 164, 165; People of State of Illinois v. Maryland Casualty Co. (Bowen), D.C., 2 F.R.D. 241, affirmed, 7 Cir., 132 F. 2d 850; United States v. Pryor, D.C., 2 F.R.D. 382; Myer v. Lyford, D.C., 2 F.R. D. 507.

The fact that the third-party defendant, Williams, brought back into the case, was the leading and original defendant, and was taken out of the case by amendment when the plaintiff decided to sue under the direct-action statute of the state of Louisiana, does not alter the situation more than if he were an entirely new party. The philosophy of ancillary jurisdiction in our federal courts permits the bringing into the case of Williams because, in truth, Williams is directly connected, by operation of law, with the accident, and, therefore, with the case. It is not a separate and independent new suit.

There is no merit in saying that the plaintiff does not want Williams in the case, for the plaintiff has declared in a motion that, retaining his original petition as plaintiff inviolate, under the ancillary jurisdiction created, he would accept judgment against Williams under the third-party complaint of the Seismic, without, however, releasing the Seismic if held to be jointly or solidarily bound. Accordingly, Whitmire v. Partin et al., 2 Cir., 2 F.R.D. 83 is not applicable — if it be the law. See, contra, Atlantic Coast Line R. Co. v. United States Fidelity & Guaranty Co., D.C., 52 F.Supp. 177, 186; Lommer et al. v. Scranton-Spring Brook Water Service Co., 4 F.R.D. 104, D.C., overruling, Id., D.C., 3 F.R.D. 27.

So, we overrule the motion to dismiss on this phase.

The motion to dismiss contains the additional contention that the Massachusetts Bonding and Insurance Company is a party defendant in the original complaint and cannot be named in a third-party complaint. • We think there is very little logic in this point, which we dispose of instanter because the Massachusetts Bonding and Insurance Company being already a party defendant and, consequently, answerable to the plaintiff does not prevent it from becoming a third-party defendant through the complaint of the Seismic Explorations, Inc., and again made answerable to the original plaintiff. Third-party plaintiff, for its benefit, seeks to doubly establish the liability of the Massachusetts Bonding and Insurance Company — on the same legal relation. There is no inconsistency. Dran-off v. Railway Express Agency, Inc., D.C. E.D.Pa.1939, 28 F.Supp. 325; United States to Use of Foster Wheeler Corporation v. American Surety Co., D.C.E.D.N.Y.1938, 25 F.Supp. 700; Dewey & Almy Chemical Co. v. Johnson, Drake & Piper, Inc., D.C. E.D.N.Y.1939, 25 F.Supp. 1021, latter two —persuasive.

The first ground of the motion to dismiss (no claim against third-party defendants upon which relief can be granted) is developed in brief by movant, George Williams.

First, assuming that there is joint tort-feasorship in the case, he asserts that no joint tort-feasor (the Seismic Explorations, Inc.) may bring another joint tortfeasor (presumably Williams, or Lemaire, or both) into court, except and until there would be a judgment in solido against the joint tort-feasors, and one had paid more than his share, in which case contribution would follow under the laws of Louisiana.

Even if the above legal relation were to exist (but we shall show hereinafter that it does not), we still say it is not the law of Louisiana, it is not applicable under Article 14 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, as we have fully and definitely shown, to the best of our limited capacity, in the cases of Gray v. Hartford Indemnity Co., D.C., 31 F. Supp, 299; Id., D.C., 32 F.Supp. 335; Id., D.C., 36 F.Supp. 780. The three opinions should be read in order to show the practical operation of our rule. It covered all business contingencies and, in truth, brought about a settlement of the case without a trial on the merits.

But what are the legal relations between the parties in this suit? There is only one active, physical tort-feasor, and that is Lemaire. The accountability of Williams through Lemaire is based upon the principle that a principal is liable for his agent or that an employer is liable for the torts of his employee, within the scope of his authority. Furthermore, Williams is contractually obligated to the Seismic in the furnishing of a good, safe boat and its proper operation by Lemaire. The Massachusetts Bonding and Insurance Company comes into the case under its contract of suretyship to Williams in that it will answer for any and all claims against him in the operation of the Barbette. The tor-tious act of Lemaire is the sole and proximate cause of the accident. Seismic denies being the employer of Lemaire, and, consequently, denies the liability to Shannon, but it admits having entered into a contract with Williams, whereby Williams agreed to furnish service of transportation at points designated by Seismic for a fixed monthly consideration and that Williams agreed to furnish an operator for the boat at his expense and to maintain the boat. Seismic further alleges (and all the facts in these petitions must be taken as true) that Williams hired and paid Lemaire, who actually had the boat under his control and operation. It further shows, rather alternatively, that Williams breached his express or implied warranty to maintain the boat in a safe operating condition. Seismic then prays, in the event that judgment is rendered against it, that it should thereupon have judgment against Williams and the Bonding Company for such amount as it is compelled to pay. These, again, are all relations established by contract and by statutes, the Articles of the Louisiana Civil Code. There is but one wilful and intentional tort-feasor — Lemaire. Then the relation between Seismic and the Union Oil Company of California is that the explorations of Seismic by the use of the boat, crew, etc., were to discover oil and minerals for its employer, the Union Oil Company of California. Here again appears the relation of principal and agent, or employer and employee.

It is definitely clear, therefore, that there is but one tort-feasor in the case, and there is no joint tort-feasorship in the purely wilful and intentional manner.

There are no facts in this case, therefore, for the court to predicate the legal conclusions it made in the Gray Hartford case. If, however, any appellate court should think that any phase of joint tort-feasorship appears from the facts of the instant case that could give merit at all to that part of the motion to dismiss, then we still overrule the motion to dismiss for the reasons given in the three Gray-Hartford cases.

We feel that the present legal situation created by the facts of the petition is covered by the following language taken from George’s Radio v. Capital Transit Co., 75 U.S.App.D.C. 187, 126 F.2d 219, 222, as follows:

“The difference between indemnity and contribution — in cases between persons liable for a wrong — is that in the former the law implies an agreement or obligation and enforces a duty on the primary or principal wrongdoer to respond for all the damages, whereas in the latter, there is no agreement, express or implied, but a common burden in which the parties stand in equali juri and which in equity and good conscience should be equally borne.”

Seismic has a right of action against Williams under the substantive law of the state of Louisiana. In a suit in the state court, Seismic could call Williams into the court by warranty. Code of Practice, Article 379.

But even if this were not so as a matter of procedure, what is the substantive law of the state? The Louisiana cases which absolutely direct us to overrule the motion to dismiss are:

(a) Muntz v. Algiers & G. R. Co., 114 La. 437, 38 So. 410, 412. In that case the Louisiana Supreme Court said:

“The exception of no cause of action is based upon the propositions (1) that this is an action sounding in tort, and that tort feasors are not the warrantors of each other; and (2) that there is no privity between the plaintiff or the defendant in the main cause and the alleged warrantor.
“For the purposes of the exception, it must be assumed that the facts are as stated in the pleadings of the defendant (plaintiff in warranty), rather than as alleged in the petition of the plaintiff in the main cause, and the defendant has not alleged or admitted any tort on its part. It is true that the call in warranty presupposes a possibility that it may be proved on the trial that the injury complained of was the result of negligence, and that this court has already held that, if that be so, the defendant may be compelled to respond in damages to the person injured, but it does not follow that such negligence will be brought home to the defendant; nor has it been held that the defendant, if condemned for the negligence of another, may not obtain from the person through whose fault it happens indemnity for the damages it may be compelled to pay, and this though there be no special contract to that effect.”

We quote further:

“There is no doubt that some confusion and apparent conflict of authority exist upon the question at issue, but, whether dealing with the text of the law alone, or as interpreted by what we conceive to be the best-considered opinion, we find it impossible to sustain the proposition that the right of a defendant to call in a warrantor depends upon the question of privity vel non between such warrantor and the plaintiff in the main action, and equally impossible to deny that, as the basis for the exercise of such right, there must be a contract of warranty between such defendant and the person so called in. The remaining question therefore is whether such contract exists between the defendant now before the court and the exceptor.”

(b) Sutton v. Champagne, 141 La. 469, 7 5 So. 209, 211. From this .case we quote again the Louisiana Supreme Court:

“The solution of the problem must be that, while she is liable to the plaintiff, she has her recourse over against the person who by his act brought the responsibility upon her; and we shall so decide. ?}c 5jí s)e
“That the plaintiffs * * * have judgment against the defendants, Louis J. Champagne and Mrs. Maggie Sill, in solido, for the sum of $5,000,” etc., “and that, upon payment of this judgment, or of any part thereof, the said Mrs. Maggie Sill have judgment over against the said Louis J. Champagne for whatever amount is thus paid by her.”

This is enough to overrule this phase (a) of the motion to dismiss.

Moreover, specifically and additionally, the Louisiana jurisprudence goes further and says that, if it be inferred that Williams was in a remote and technical sense guilty of negligence to Shannon, thus making Williams and Lemaire joint tortfeasors, or joint tort-feasors in conjunction with Seismic or the Union Oil Company, all the parties may be brought into this suit. We mean that in this very case such a hearing and adjudication may be had in court, through trial.

The leading and important cases that support the above doctrine are:

A. There is a well-considered and oft-cited opinion by Judge Thompson of our Supreme Court in the case of Appalachian Corporation, Inc., v. Brooklyn Cooperage Co., Inc., 151 La. 41, 91 So. 539, 541, where, after recognizing “the general rule of law and jurisprudence that where two or more parties, acting in concert, or are legally held to have acted in concert, commit a wrongful act from which damages result to a third party, the party who is compelled to respond and to pay for the injury can have no action for indemnity against the other party or parties to the wrongful act,” the court went further and said:

“Every rule, however, has its exception, and where, as in this case, the actual fault of the proximate cause of injury is attributable to one of the parties and the other is only technically or constructively at fault, from failure or omission to perform some legal duty, the general rule will not apply, and indemnity may be had against the one primarily responsible for the act which caused the damage.”
The general facts in this case are that the Appalachian Corporation as owner of the premises on which the plaintiff was injured when he fell through a door which had negligently been left open by the Brooklyn Cooperage Company, was allowed to recover the damages which had been allowed to the plaintiff. It had been sued alone theretofore, and there was no judgment holding it and the defendant soKdarily liable. The court went on further and said:
“Whatever act of man, declares the Code (article 2315) that causes damage to another obliges him by whose fault it happened to repair the damage. If the facts alleged in the petition are true, and they are so accepted for the purpose of this discussion, the defendant company was at fault, and through its employees created the situation which brought about the injury to Lincoln. The plaintiff, not being in possession of the property, and having no knowledge of the defective condition of the door and no opportunity to prevent the accident which befell Lincoln, could not in law or morals be said to be a culpable participant in the act of negligence.”

The court, after referring to an old case, Meunier v. Duperron, 3 Mart.O.S., La., 285, 286, which held that there could be “no reparation allowed to a wrongdoer,” went on to show what had been held in the case of Sutton v. Champagne, supra. It showed further that the Sincer v. Heirs of Bell, 47 La.Ann. 1548, 18 So. 755, was not applicable, and in support of its instant doctrine makes the following quotation from the case of Pennsylvania Steel Co. v. Washington & Berkeley Bridge Co., D.C., 194 F. 1011, 1014:

“Careful consideration of these and other similar authorities must inevitably lead to the conclusion that in negligence cases based not upon willful wrongdoing, but growing out of legal duties and obligations —acts not malum in se but malum pro-hibitum — a clear distinction must be drawn between the liability of the party primarily negligent and that of one secondarily so to the extent of being liable to a third party injured. In such case, it is well settled that the second party, while he may not escape liability to the third party injured, may hold the first party, primarily negligent, for indemnity. Such ruling is sound in both law and goods morals, in that it secures greater care on the part of all engaged in the work, and lessens the danger of accidents.”

B. This Appalachian doctrine was re-uttered by the appellate courts of Louisiana in the cases of St. Paul Fire & Marine Ins. Co. v. Standard Casualty & Surety Co., La. App., 3 So.2d 463, and American Employers’ Insurance Co. v. Gulf States Utilities Co., La.App., 4 So.2d 628, 630. The following, taken from the latter case, is quite pertinent in the instant case:

“The first part of the above rule, to the effect that joint tort-feasors whose negligence combines in causing damage to a third person cannot enforce contribution between or among themselves, does not prevail in Louisiana, at least since the decision of the Supreme Court in the case of Quatray v. Wicker et al., 178 La. 289, 151 So. 208, where the court held that one of the joint tort-feasors who had been condemned in solido by a judgment of court for damages caused by their concurrent negligence had the right to force contribution against the other for his half of the judgment; that the rule under Article 2103 of the Civil Code providing for the contribution by solidary obligors between or among themselves for each to share his portion of the debt applies to obligations arising ex delicto as well as those arising ex contractu.”

This case provoked a note at page 451, V. 4, Louisiana Law Review, March, 1942, entitled “Torts — Indemnification of Joint Tortfeasor Constructively Liable — Contribution and Indemnity Between Joint Tort-feasors.”

We quote the last two paragraphs of this note:

“Greater relief may be obtained in the federal courts. A joint tortfeasor may be brought in as a party by the defendant, thus assuring the defendant’s right to contribution or indemnity, regardless of the party chosen for liability by the plaintiff. (Gray-Hartford case.) A recent English statute, enacting in effect a rule of comparative negligence as between joint tort-'feasors, has met the problem by allowing contribution without requiring any prior adjudication of the liability of the party from whom contribution is sought. In France the liability of joint tortfeasors is held solidary by the jurisprudence independent of any code provision on the subject. The commentators agree that the right to contribution is a necessary consequence of this doctrine and should be allowed even where there has been no previous adjudication of solidary liability. Under the doctrine of comparative negligence, this reparation may extend to full indemnity.
“The conclusion reached by the instant case (American Employers’ Insurance Company v. Gulf States Utilities Company, supra) properly throws the burden of making reparation for misconduct on the party actually guilty, without danger of loss to the injured plaintiff. The case may be held out as an example of the equitable conclusions that can be reached by means of careful interpretation of the articles of the Civil Code without the necessity of special legislation.”

So, we have Louisiana’s academic approbation.

C. Judge Ott of the Court of Appeal of Louisiana, First Circuit, in the case of Ætna Life Ins. Co. v. Dejean, La.App., 167 So. 864, at page 867, decision affirmed by the Supreme Court of Louisiana, 185 La. 1074, 171 So. 450, says:

“One of the exceptions to the rule that a joint tort-feasor who has paid the damage cannot sue the other tort-feasors for contribution is the case where one of the persons is only technically or constructively liable, or, as it is sometimes rather inappropriately expressed, only vicariously liable. The exception to the rule was recognized by the Supreme Court of this state in the well-reasoned case of Appalachian Corporation v. Brooklyn Cooperage Co., 151 La. 41, 91 So. 539, 541.”

D. As a further development and approval of this legal differentiation, we again quote from the George’s Radio case, 126 F.2d, at page 221 (and note that Judge Groner has cited the Louisiana case of Quatray v. Wicker in approval) :

“Some recent cases applying this principle are: Hobbs v. Hurley, 117 Me. 449, 104 A. 815; Ellis v. Chicago & N. W. Ry. Co., 167 Wis. 392, 167 N.W. 1048, 1049; Horrabin v. City of Des Moines, 198 Iowa 549, 199 N.W. 988, 38 A.L.R. 554; Underwriters at Lloyds of Minneapolis v. Smith, 166 Minn. 388, 208 N.W. 13; Goldman v. Mitchell-Fletcher Co., 292 Pa. 354, 141 A. 231; Eureka Coal Co. v. Louisville & N. R. Co., 219 Ala. 286, 122 So. 169; Quatray v. Wicker, 378 La. 289, 151 So. 208. The sum and substance of the ruling in all is that, where the parties are not intentional and wilful wrongdoers, but are made such by legal inference o>r intendment, contribution may be enforced. Since in the case we are considering it is admitted that the acts, out of which the judgment was had, resulted from mere negligence and were involuntary and unintentional, we are of opinion that the correct rule to apply is that just above stated. Here, as we have seen, there was no personal participation in the wrong, and the liability of both parties in the original damage suit existed only as the result of the relationship of principal and agent under the doctrine of respondeat superior or, in other words, by implication of law. In the circumstances, it would, we think, be contrary to the principles of natural justice, of reason, and of common sense, to impose unconditionally the whole loss on one of them.”

E. In truth, not to make this differentiation between the wrongdoer in the physically participative sense and the wrongdoer in the legally relative sense would be a violation of the real test of the propriety of third-party impleader. This test has been said to be, in the case of United States v. Jollimore (Holland Furnace Co.), D.C. Mass., 1941, 2 F.R.D. 148, whether the third ■ party could have been joined originally as a defendant by plaintiff, or whether the third party is liable as guarantor, surety, insurer, or indemnifier, to the principal defendant.

F. In the case of Jeub v. B/G Foods, Inc., D.C., 2 F.R.D. 238, where the consumer of canned ham, eaten at a Minneapolis restaurant, sued the restaurateur for the injury sustained from eating the unwholesome ham, the restaurateur converted himself into a third-party plaintiff and made Swift & Company, the canners of the ham, a third-party defendant, and the motion to vacate the third-party complaint because, under the Minnesota rule, no contribution was allowed between persons guilty of an intention to wrong, was overruled because the act of negligence would only be a technical violation of the state statutes. The restaurateur relied upon the wholesomeness of the canned food produced by the manufacturer.

Counsel for movant deprecates the case of Sutton v. Champagne, supra. The organ of the court, Justice Provosty, is generally admitted to have been one of the most distinguished civilians in our court of civil law — the only one in the forty-eight states. All of the advocates in the case are of accepted repute and of wide experience, and particularly in the number we note the distinguished father and partner of counsel for movant — an acknowledged specialist in the insurance law. The opinion is short, closely knit, very clear, and resembles in general character those of the French courts, a model, unfortunately, particularly as to brevity, we have not been able even to approach.

And so, again, we come to the conclusion that the motion to dismiss should be overruled.

Counsel for movant brings the Gray-Hartford case into the case. It is clear that since in the instant case there is only one wilful tort-feasor, the principle of the Gray-Hartford cases is not pertinent, since it relates to joint tort-feasors, physically wilful and intentional. This continued discussion by us, therefore, is purely dictum.

We respect counsel for saying the case is wrongly decided, when he cites, particularly, Brown v. Cranston, 2 Cir., 132 F.2d 631, 148 A.L.R. 1178, certiorari denied, 319 U.S. 741, 63 S.Ct. 1028, 87 L.Ed. 1698. This latter case has superior talent, we admit, in its authorship, but it has nothing to say about, do with, the Gray-Hartford principle, as we shall show.

Some have accepted — none has censured — the Gray-Hartford doctrine. See what Judge Deaver approvingly says in Atlantic Coast Line R. Co. v. United States Fidelity & Guaranty Co., D.C., 52 F.Supp. 177, at page 184:

“In Malkin v. Arundel Corporation, D.C., 36 F.Supp. 948, it was held that by state statute contribution between joint tort-feasors was allowed only when a joint judgment was rendered against them and that where one was sued and brought in the other as third party, the order allowing the third party should be vacated, if plaintiff refused to amend so as to assert claim against third party. Order bringing in joint tort feasor vacated if original defendant had no right of contribution. Thompson (Brown) v. Cranston et al., D. C., 2 F.R.D. 270. That case, however, does not hold that joint tort-feasor could not be brought in as liable directly to plaintiff. It was held, in Gray v. Hartford Accident & Indemnity Co., D.C., 31 F.Supp. 299, that Rule 14 precludes a right of election of defendants in plaintiff and that defendant may bring in parties liable to plaintiff irrespective of plaintiff’s election.”

Again, at page 186 of 52 F.Supp.:

“Rule 14 permits a third party, alleged to be solely or jointly liable, to be brought in without regard to any question of contribution. If a joint judgment is rendered, then, in a state where contribution is allowed, the judgment would bind third party in any proceeding for contribution, and in a state where contribution is not allowed, defendant could not enforce contribution. Thus, the purpose of the rule would have been served by adjudicating plaintiff’s claim and barring him from filing another suit against third party on the same claim, and would have done no violence to any state law, because contribution could be enforced or not accordingly as the state law so permitted or not. See Gray v. Hartford Accident & Indemnity Co., D.C., 31 F.Supp. 299.”

And again, 52 F.Supp. at page 187:

“If it be said that, in a state where no contribution is allowed between joint tort-feasors, defendant has no interest which would permit him to bring in his joint tort-feasor, not as solely liable but as jointly liable, the reply is that the rule authorizes it in the interest of settling the whole controversy in one suit. Besides, a joint tort-feasor, when sued, generally denies his own liability and brings in third party as solely liable, in which event, if the evidence so demands, a joint judgment may be rendered. Abraham v. National Biscuit Co., 3 Cir., 89 F.2d 266, 111 A.L.R. 1313. In that way the same result is reached as if third party had been brought in as jointly liable. Such procedure could do plaintiff no harm. As said in the Gray case, supra, plaintiff would still have his judgment against defendant ’ and if he failed to collect it from defendant, he could collect it from the third party. Moreover, if plaintiff elected to forgive 'third party, he could still do so by not collecting the judgment against him. Yet, the possibility of litigating the same claim in another suit against third party would be prevented. But it is sufficient to say that the rule permits defendant to bring in a third party who is solely or jointly liable to plaintiff.”

In Sklar et ux. v. Hayes, D.C., 1 F.R.D. 415, 416, we find:

“Finally, there is no force to the third-party defendant’s argument that he cannot be impleaded because the plaintiffs have neither sought nor as yet indicated any intention to seek relief against him. Whether or not the plaintiffs have elected to bring him in is now of no concern. Gray v. Hartford Accident & Indemnity Co., D.C., 31 F.Supp. 299 and Id., D.C., 32 F.Supp. 335.”

In Adam et al. v. Vacquier, D.C., 48 F. Supp. 275, at page 276, affirmed 3 Cir., 139 F.2d 347, we have:

“Surely no plaintiff has the right of election of a defendant in an automobile-accident case, where there are, or may be, several parties at fault. The rights and liabilities of the parties are fixed at the moment of the accident. Surely those ngnts and liabilities may not be altered by a party who merely brings on the record in the first instance only one of the parties who may be liable. That doctrine was announced in the case of Gray v. Hartford Accident & Indemnity Co., D.C., 36 F.Supp. 780.”

In the case of Brown v. Cranston, supra, a most eminent Circuit Judge, Mr. Augustus N. Hand, said that because of the provisions of the New York Civil Practice Act that no right to contribution exists between joint tort-feasors until a joint money judgment has been recovered against two or more defendants and one of the judgment debtors claiming contribution has paid more than his share of the judgment, the provisions of Rule 14, 28 U.S.C.A. following section 723c, giving the defendant the right to bring in a third-party “who is or may be liable * * * to the plaintiff” would not be permitted.

The premises for the doctrine of the Louisiana Quatray-Wicker case are different from those of the New York Brown-Cran-ston doctrine.

The case of Quatray v. Wicker, supra, represents the law of the state. The question in that case is posed by the Court at page 210 of 151 So., in the following language:

“The only question therefore is whether, if one of two joint tort-feasors pays the whole amount of a judgment rendered against both of them, in solido, for the damages done by them jointly, the one who pays may compel the other to contribute half of the amount paid.”

Wicker and Marchesseau were finally declared, after trial by the appellate court, to be joint tort-feasors, and liable solidarily to Quatray, the plaintiff. Hartford Accident and Indemnity Company, the insurer of Wicker, paid the whole judgment, was transferred to Wicker’s rights, and then sued Marchesseau co-joint-tort-feasor, for half of the amount. The court, in a well-reasoned opinion made its conclusion in the following language:

“Our conclusion is that the Hartford Accident & Indemnity Company has the right to require Harry F. Marchesseau to contribute half of the amount of the judgment paid by the company.”

It follows quite simply, as we have said in the Gray-Hartford case, that under Rule 14 all the parties involved, even those who are tort-feasors in the wilful manner (such as were Wicker and Marchesseau), are brought into the case, and, after judgment, if there be one, the Louisiana rule of contribution between joint tort-feasors is followed. The judgment may be sought by any third party who may be, or become, subrogated, directly or impliedly, to the rights or interest of one of the joint tortfeasors.

Chief Justice O’Niell (and there is no dissent in the case) says, in the case, 151 So. at page 211:

“In Louisiana the liability of joint tort-feasors is made a solidary liability by article 2324 of the Civil Code, which was article 2304 of the Code of 1825. The French text was translated originally so as to make cotrespassers, or joint tort-feasors, liable jointly, but not in solido; but by Act 20 of (the 19th of February) 1844, p. 14, the article was declared ‘so amended as to make the English of said article correspond with the French, and so as to make cotrespassers liable in solido.’ See Joseph Rathbome Lumber Co. v. Cooper et al., 164 La. 502, 114 So. 112; Gardiner v. Erskine, 170 La. 212, 127 So. 604.”

Then in the following paragraph, he says:

“ * * * but the rules relating to obligations in solido, or joint obligations, are the same with regard to obligations arising ex delicta as with regard to obligations arising ex contractu, especially when they are fixed by a judicial decree.”

We now quote Articles 2324, 2103, and 2161 of the Civil Code of Louisiana, in full:

“2324. He zvho causes another person to do an unlawful act, or assists or encourages in the commission of it, is answerable, in solido, with that person, for the damage caused by such act.” (Italics ours.)
“2103. The obligation contracted in soli-do towards the creditor, is of right divided amongst the debtors, who, amongst themselves, are liable each only for his part and portion.”
“2161. Subrogation takes place of right:
“1. For the benefit of him who, being himself a creditor, pays another creditor, whose claim is preferable to his by reason of his privileges or mortgages.
“2. For the benefit of the purchaser of any immovable property, who employs the price of his purchase in paying the creditors, to whom this property was mortgaged.
“3. For the benefit of him who, being bound with others, or for others, for the payment of the debt, Imd an interest in discharging it.
“4. For the benefit of the beneficiary heir, who has paid with his own funds the debts of the succession.”

We first note from the language of Judge O’Niell, that our Civil Code applies the law as to solidary obligations arising ex contractu to those arising ex delicto.

Next (and we believe this to be important and controlling) Article 2324 embraces the theory that joint tort-feasorship is unconditional; it says “is answerable, in solido, with that person, for the damage caused by such act.” Answerable to whom? To the plaintiff who is suing for the injury suffered; and answerable to a third-party defendant who has been sued, though a tort-feasor himself, since the obligation is a solidary one.

There is no Code Article, or any form of statute in Louisiana which is the equivalent of, and has the import of, § 211-a of the New York Civil Practice Act, so specifically and by definite provision restrictive in character:

“Action by one joint tort-feasor against another.
“Where a money judgment has been recovered jointly agamsi two or more defendants in an action for a personal injury or for property damage, and such judgment has been paid in part or in full by one or more of such defendants, each defendant who has paid more than his own pro rata share shall be entitled to contribution from the other defendants with respect to the excess so paid over and above the pro rata share of the defendant or defendants making such payment * * (Emphasis ours.)

Circuit Judge Clark, in Bates v. Miller, 2 Cir., 133 F.2d 645, at page 647, characterizes the above “the rather illusory New York law of contribution among joint tort-feasors.”

A comparison of the three statements in italics shows the main distinction between the two state provisions.

We must not forget, also, that the New York case, to us, is merely persuasive. We should remember, too, that Judge Sears (approved also by Judge Crouch), when the case of Fox v. Western N. Y. Motor Lines, Inc., 257 N.Y. 305, 178 N.E. 289, 78 A.L.R. 578, was before the Appellate Division of the Fourth Department, 232 App.Div. 308, 249 N.Y.S. 623, at page 628, said:

“When a joint tort occurs, a right of contribution among the joint tort-feasors arises forthwith under the provisions of section 211-a, Civil Practice Act, * * * despite its procedural language, but the right * * * is inchoate. It is none the less real and subsisting.”

The Louisiana Code Articles, supra, declare the Sears concept to be the substantive law. And, to spare in the argument, in Louisiana we have no equivalent of Sect. 211-a of New York State.

In the light of the Louisiana cases, Quat-ray v. Wicker, supra; Appalachian Corporation v. Brooklyn Cooperage Co., supra; Sutton v. Champagne, supra; Employers’ Insurance Co. v. Gulf States Utilities Co., supra; and the Gray-Hartford cases, supra, the persuasive force, if any, of the Brown-Cranston case is totally overcome. In truth, the case is inapplicable, for the courts of the two states have held differently.

Louisiana is one of the few states in the Union that has a direct-action statute. New York has not. Louisiana should not be reactionary and stifle the provisions of the direct-action statute, should not lose the benefits of the third-party practice rule of the Federal Courts. Our courts have not remained adamant, as we have shown by the cases, and quite properly have not adhered inflexibly to the maxim ex turpi causa non oritur actio.

In Brown v. Cranston, supra [132 F.2d 634], Judge Hand said:

“In spite of the great convenience and advantage of applying Rule 14 in the present case we feel impelled to hold that we are precluded from doing this by the interpretation of the New York statutes by its highest court.”

But the academic comment on American Employers’ Insurance Co. v. Gulf States Utilities Co., supra, previously quoted, is:

“The case may be held out as an example of the equitable conclusions that can be reached by means of careful interpretation of the articles of the Civil Code without the necessity of special legislation.”

In support from other courts, other cases of the same tenor: Tullgran v. Jasper, D.C.Md.1939, 27 F.Supp. 413; Crum v. Appalachian Elec. Power Co., D.C.S.D.W.Va.1939, 29 F.Supp. 90; Watkins v. Baltimore & O. R. R. Co., D.C.W.D.Pa.1939, 29 F. Supp. 700; Burris v. American Chicle Co., D.C.E.D.N.Y.1939, 29 F.Supp. 773; Saunders v. Goldstein, D.C.D.C.D.C.1939, 30 F. Supp. 150; United States v. R. L. Dixon & Bro., Inc., D.C.N.D.Tex.1940, 36 F.Supp. 147; Metzger v. Breeze Corporation (John J. Bergen & Co., Ltd.), D.C.N.J.1941, 37 F.Supp. 693; Kravas v. Great Atlantic & Pacific Tea Co., supra; Satink v. Township of Holland, supra; Jeub v. B/G Goods, Inc., supra; United States v. United States Fidelity & Guaranty Co., D.C., 1 F.R.D. 112; Lensch v. Boushell Carrier Co., Inc., 1 F.R.D. 200; Sklar v. Hayes, D.C., 1 F.R.D. 415; Falcone v. City of New York (Williams-Bauer Corporation), D.C., 2 F.R.D. 87; Greenleaf v. Hunting-don & Broad Top Mountain Railroad & Coal Co., D.C., 3 F.R.D. 24; Lommer v. Scranton-Spring Brook Water Service Co. v. American Oil Co., D.C., 4 F.R.D. 104; Kerna v. Trucking, Inc., 3 F.R.D. 195; Carbola Chemical Co. v. Trundle Engineering Co., 3 F.R.D. 500.

In conclusion, for they are inherited by the instant case, we must repeat the general principles of the first Gray-Hartford case, 31 F.Supp. at page 304:

“Also, all related matters growing out of one occurrence, this highway accident, will be settled, definitely and clearly, in one ac-lion. Joint tort-feasors, if there be any, will be enabled to exercise their legal right to demand contribution among themselves. This is the law of Louisiana and it is fulfilled thus in one suit.
“Whether a case at law be civil or criminal, it is well known that more truth reaches the surface and better justice is attained, if all related matters be considered and all involved persons be heard at one and the same trial.”

And from page 305, of 31 F.Supp.:

“Rule 14, by its very raison d’etre, precludes a vested right of election of defendants in the original plaintiffs; the rule permits the defendant, when he converts himself into a third-party plaintiff, to bring third-party defendants into the case whether or not the original plaintiff elected to put them into the case.
“The court is of the view that privity between the Hartford Company and the Aetna Company is born from the legal relations established by the Louisiana Code, arising spontaneously from the accident and its content of negligence. See Articles 2315, 2316, 2324, and 2104. of the Civil Code of Louisiana.”

And from the second case, 32 F.Supp. 335, at page 337:

“Summarizing, we believe this second motion to dismiss has shown our former opinion under test to be practical. By overruling the motion, the procedural law of the Federal courts and the substantive law of the state of Louisiana dovetail perfectly, as a whole and in smallest detail, to bring about prompt justice, freed of all technicalities of form and procedure, so often used in the past to seriously delay if not effectually defeat justice.
“ * * * The dominant logic of the case after all is that no plaintiff has the right of election of a defendant to the exclusion of other defendants in an accident case, where there are, or may be, several parties at fault. The legal relation is established in its substance at the moment of the accident; parties thereafter, by technical pleading, may not alter the substantive law.”

So, if there be the slightest (or, possibly, to some minds strong) indication, from the facts, that there is joint tort-feasorship of the wilful, intentional kind in the instant case (which we do not admit), the motion to dismiss by third-party plaintiff is still overruled.

In not one of the conclusions we have reached in the three phases of the motion to dismiss is there offense to the provision that the Rules (82) “shall not be construed to extend or limit the jurisdiction of the district courts of the United States or the venue of actions therein.” Of course, Neirbo Co. et al. v. Bethlehem Shipbuilding Corporation, 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437, applies.

A further motion to dismiss, received by us since the draft of this opinion, directed against the declaration, dated September 3, 1945, of the plaintiff, for failure to state claim, etc., for lack of service of process, and for lack of jurisdiction, presents nothing but what is already covered by our reasoning above, except the want of service of the declaration upon mover.

On this latter point, since the Seismic, third-party plaintiff, has served personal process on Williams, one of the movers (Rule 4), the subsequent mailing by plaintiff of his declaration to Williams’ attorney is sufficient. Also, Williams was served personally with the original complaint. As to the Massachusetts Bonding and Insurance Company, it has been a defendant from the very beginning through regular process by and through the Secretary of State and, consequently, the mailing to it is sufficient process. Rule 5(b).

Judgment dismissing the motions to dismiss will be signed upon presentation.


author: WILKIN, District Judge.

text:
    KINNINGER et al. v. SAM W. EMERSON CO.
    Civil Action No. 21050.
    District Court, N. D. Ohio, E. D.
    July 3, 1945.
    Allen & Allen, of Cincinnati, Ohio (John W. Meyer, of Hyde & Meyer, all of Cleveland, Ohio, of counsel), for plaintiffs.
    B. M. Kent and A. J. Hudson (of Kwis, Hudson, Boughton & Williams), all of Cleveland, Ohio, for defendant.
   WILKIN, District Judge.

This is a patent infringement suit based on claims 8, 20, 21, and 22 of Kinninger patent 2,245,559. It was admitted at time of trial that the defense was being conducted by J. Edward Ogden Co. of New York, manufacturer of the accused tie rods. The usual defenses of invalidity and non-infringement are relied on. The defendants base their defense of invalidity upon (a) no invention, and anticipation; (b) failure to define, as required by Section 33 of Title 35 U.S.C.A.; and (c) no basis in the specification for the claims in suit.

The patent relates to a form of tie used for holding form boards for concrete molds. The plaintiffs claim that the distinguishing features of the tie are “that it is breakable a considerable distance within the outer surface of a wall built up between opposing form walls” and “that it will not rotate in the intermediately fabricated wall but may be rotated near the outer surface of the intermediate wall so as to cause the wall tie to fail intermediate the center of the intermediately fabricated wall and the outside surface thereof”. Plaintiffs state the purpose of the invention was “to weaken the form wall tie so as to cause it to fail in torsion without materially weakening the tensile strength thereof.”

The court finds in favor of the defendants on the defense of invalidity. The patent was anticipated by the Schenk, Ewing, Podd, and Howes patents, and also by the Smith patents. While the plaintiffs’ construction was in some details different from the devices shown in the previous patents, the ideas were all clearly revealed in the prior art. The differences employed by the plaintiffs were only mechanical variations.

It is unnecessary to pass upon the other defenses. But in passing, the court feels that the claimed invention is sufficiently defined and portrayed to meet the requirements of the statute, that the specifications support the claims; and the court feels that there would be infringement by the defendants if the broad claims of the plaintiffs’ patent were upheld.

Judgment will be entered for defendants upon the ground of invalidity. Findings of fact and conclusions of law may be prepared by the defendants in accordance with the rule.