author: DUFFY, District Judge.

text:
    PRIMAKOW v. RAILWAY EXPRESS AGENCY, Inc., et al.
    Civil Action No. 563.
    District Court, E. D. Wisconsin.
    April 27, 1945.
    H. A. Kovenock and Arthur K. Hellermann, both of Milwaukee, Wis., for plaintiff.
    Miller, Mack & Fairchild, of Milwaukee, Wis. (by Steven E. Keane, Marcus L. Plant, and Paul R. Newcomb, all of Milwaukee, Wis.), for defendant Railway Express Agency.
    Shea & Hoyt, of Milwaukee, Wis. (by Ralph M. Hoyt, of Milwaukee, Wis., and Leo J. Hassenauer, of Chicago, 111.), for defendant Gregg.
   DUFFY, District Judge.

Plaintiff, an employee of the defendant Railway Express Agency (hereinafter referred to as “company”), claims a seniority status superior to that of defendant Ella C. Gregg who, like the plaintiff, is employed as a stenographer in the office of the superintendent of the Wisconsin Division of the company.

Reference is made to Primakow v. Railway Express Agency, Inc., et al., D.C., 57 F.Supp. 933, for the opinion of this court on the motion to remand, and Id., D.C. 56 F.Supp. 413, for the opinion of this court that the plaintiff was not bound and concluded by the decision of Express Board of Adjustment No. 1 dated October 23, 1940.

Mrs. Gregg’s employment in the company commenced on February 1, 1919, in the Claim Department where she remained until transferred to the office of Superintendent W. C. Morgan on November 25, 1927. Plaintiff’s employment commenced July 13, 1925, and has been continuously in the superintendent’s office since that date.

Starting about 1930, Superintendent Morgan customarily gave his stenographic work to Mrs. Gregg. This work occupied the major part of her time, but when not so engaged she did perform work for others in the office. In the parlance of the office Mrs. Gregg was referred to as the superintendent’s stenographer.

The rights of the parties are to be determined by the collective bargaining agreement dated August 1, 1937, between the company and the Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Steamship Employees (hereinafter referred to as the “brotherhood”). A prior collective bargaining agreement dated February 1, 1931, providing among other things for seniority among the company’s employees, specifically provided that the office force in the superintendent’s office was excepted. The applicable provision of the August 1, 1937, agreement read: “These rules shall not apply to * * * (c) * * * One (1) Chief Clerk and one (1) personal stenographer of such officials as Superintendents or their equals in official rank. * * * ”

The 1931 agreement did not cover any of Superintendent Morgan’s office force, which included three stenographers, two of whom were plaintiff and Mrs. Gregg. Under the new agreement all of the stenographers in his office would have seniority rights except "one personal stenographer” of the superintendent. It was up to Superintendent Morgan either to designate one of the stenographers in his office as his personal stenographer or bring in a new one from the outside. He decided on the latter course, one of his reasons being that he preferred a male stenographer who could accompany him on trips outside the city.

Morgan was unable to inform Mrs. Gregg of his decision prior to August 1, the effective date of the agreement, as she was then absent on her vacation, but a few days thereafter Morgan called her to his private office and informed her of it and requested her to continue taking his personal dictation for a few weeks until such time as Milton Barndt, the man he had selected, who was at that time working in another department, was available. Mrs. Gregg not only did not protest, but stated she was glad someone else was to have the position as she would then be under the new agreement which, among other things, would protect her seniority. Morgan told her she would have to elect whether to return to the Claim Department or remain in the superintendent’s office. t

Barndt became available for his new duties on October 25 and shortly prior thereto Morgan gave notice to Mrs. Gregg of Barndt’s availability and assigned her to duty with the chief clerk. On October 20 he notified her by letter that she must make her election before November 1. She promptly filed an election to remain in the superintendent’s office and on October 25 began work for the chief clerk.

Under Rule 20 of the new agreement the company was required to post in January of each year a roster showing the seniority of all employees under the agreement. The rule also provided that employees had 60 days thereafter to protest any changes in their status. No roster having previously been necessary in the superintendent’s office because all of the employees therein had been exempt, the company posted its first roster as to the superintendent’s employees on October 23, 1937, which showed Mrs. Gregg in position 4 and plaintiff in position 5. The first three positions were assigned to employees other than stenographers. Six weeks later plaintiff forwarded a protest to Superintendent Morgan claiming she was entitled to seniority over Mrs. Gregg for the reason she entered the superintendent’s office in 1925 while Mrs. Gregg started work in that office in 1927. Her protest was unavailing and in the 1938 roster as well as the first roster in 1939 plaintiff’s name appeared below that of Mrs. Gregg. However, in March Morgan changed his position on the question of seniority, posting a roster on March 9, 1939, giving plaintiff priority over Mrs. Gregg; but upon receiving a protest from Mrs. Gregg he again reversed his position, and in a roster posted March 25 Mrs. Gregg’s name was again above that of plaintiff.

Plaintiff then filed a protest which finally reached the general manager of the company who sustained her position. A roster posted November 27, 1939, gave plaintiff seniority over Mrs. Gregg. The brotherhood, upon behalf of Mrs. Gregg, then took an appeal to Express Board of Adjustment No. 1. After the first hearing the board deadlocked and called in a referee to hear and decide the case. The referee was Honorable James H. Wolfe, Justice of the Supreme Court of Utah, and his decision was favorable to Mrs. Gregg. On November 7, 1940, the company posted a new roster giving Mrs. Gregg seniority over plaintiff. Thereafter plaintiff filed this suit and this court decided as a preliminary issue that because of lack of notice of the hearings plaintiff was not bound by the determination of Express Board of Adjustment No. 1.

I find myself in agreement with the decision of Judge Wolfe and the reasons he assigned for his conclusions. The difficulty and confusion has arisen from the fact that in office parlance Mrs. Gregg was often called the superintendent’s stenographer, while the new agreement of August 1, 1937, gave a status and meaning to the designation, “personal stenographer of the superintendent,” which had not theretofore existed. In the first protest filed by plaintiff she claimed seniority over Mrs. Gregg because she had entered the superintendent’s office in 1925 whereas Mrs. Gregg was not employed in that office until 1927. The basis of this protest was unsound because Rule 3 provides, in part, “Seniority shall consist of time in continuous service of the Railway Express Agency and American Railway Express Company * * Mrs. Gregg entered the company’s employ in 1919, six years prior to the entry date for the plaintiff. However, as I understand the plaintiff’s position in this suit, the contention now made for her seniority rests on the elimination of any seniority rights for Mrs. Gregg on the grounds that at the time the new agreement went into effect Mrs. Gregg was in fact the personal stenographer of the superintendent and therefore does not come under the agreement.

The new agreement created a new position with incidents different from those performed by anyone who formerly might have been designated as a preferred stenographer in the superintendent’s office. After August 1, 1937, all stenographers in that office except a personal stenographer for the superintendent were to be classified and have a fixed basic monthly service time and seniority rights, whereas under the 1931 agreement all of the stenographers in that office had been excepted employees.

Plaintiff argues that Mrs. Gregg automatically became the personal stenographer of the superintendent on August 1 because prior to that date she had been the preferred stenographer who took little or no other office dictation. This contention has no merit. I fully agree with what Judge Wolfe had to say about it, and quote with approval from his decision, as follows :

“* * * I think the position of personal stenographer was not filled until after August 1st, 1937, until Superintendent Morgan intended to fill it definitely and manifested such intent by outward acts or declarations brought home to Mrs. Gregg. Certainly the simple continuation of Mrs. Gregg as preferred stenographer over the deadline could not commit her to the excepted position of ‘Personal Stenographer’ against her will and desire. Such would work a gross injustice on her. The reward for being capable enough to be preferred by the Superintendent would result in fastening upon her a status by mere flow of time which she not only did not desire but later expressly decided against by definitely choosing to be classified within the ninety days permitted for that purpose. Certainly Note 2 of Rule 1 implies a time after August 1st in which such choice can be made. If by the mere accident of allowing herself to go across the deadline as the personal stenographer of W. C. Morgan as the term is used in office parlance she became his personal stenographer within the meaning of that term as used in the exceptions to Rule 1, and by such fact acquired a lower seniority rating than the other stenographers in the office, the intent and spirit of Note 2 would not be fulfilled. It seems unrealistic to assert that the only way Mrs. Gregg could avoid the unintended transmutation of herself from the mere position of preferred stenographer as used "in office parlance and established for the orderly running of the office to the position of ‘personal stenographer’ carrying exception from the Agreement, was to have the Superintendent renounce her as his preferred stenographer before August 1st, 1937, either by definite announcement or by displacing her with another stenographer. If such were the case what would be the situation of the one who took her place as preferred stenographer before August 1st, 1937? That person would be in the same unfortunate position if she went over the deadline as personal stenographer.

*****

“In order for Mrs. Gregg to become Mr. Morgan’s personal stenographer as intended by the exceptions to Rule 1, he must have intended her to be such and manifested such intention by declaration or acts which would have put her on notice that she was considered such. What are the facts? They are just to the contrary. She innocently went along after August 1st as she had before, taking Morgan’s dictation.”

Superintendent Morgan was undoubtedly aware of the reason for exempting one personal stenographer. His office was being unionized for the first time. The superintendent was the officer in Milwaukee who would be dealing with union representatives. His correspondence, activities, and work manifestly would be of such a confidential nature that both the company and the brotherhood recognized the propriety of permitting the superintendent to have a stenographer who was not a member of the union. It certainly was not contemplated or intended that the position would necessarily be filled by the one to whom, through mere chance or personal preference in the past, the superintendent had given most of his dictation in the office.

Plaintiff relies heavily upon certain office records used in making up payrolls when a changp in anyone’s salary occurred. A certain Form 945 is pointed to, with emphasis on the fact it was signed by Superintendent Morgan. It designated Mrs. Gregg’s assigned work days per year as 365, contrasted with a specification of 306 days for other stenographers. This probably proves that the clerk who made out the sheet or form considered Mrs. Gregg occupied the excepted position, but that is a long way from proving an intention oñ the part of Superintendent Morgan to designate Mrs. Gregg as his personal stenographer within the meaning of the new collective bargaining agreement.

The record is clear as to Mrs. Gregg. She did not want the excepted position. It was never offered to her, and in fact the superintendent told her in early August that it was to be filed by Milton Barndt. She did not sign Form 945 or any other paper showing she had any idea or knowledge that she held the excepted position.

I conclude that plaintiff has not established her seniority rights over defendant Gregg and that the action must be dismissed.


source: Caselaw Access Project

author: MILLER, District Judge.

license: Public Domain

text:
    HERREN v. FARM SECURITY ADMINISTRATION, DEPARTMENT OF AGRICULTURE.
    Civ. No. 263.
    District Court, W. D. Arkansas, El Dorado Division.
    May 12, 1945.
    Duval L. Purkins, of Warren, Ark., for plaintiff.
    Clinton R. Barry, U. S. Atty., and Hugh-M. Bland, Asst. U. S. Atty., both of Fort-Smith, Ark., for defendant.
   MILLER, District Judge.

On January 1, 1940, the plaintiff, GordieM. Fierren, and Southwest Joint Stock Land Bank, as lessors, entered into an-agreement with the Ashley Homestead Association, Inc., as lessee, and the United States of America, acting by and through the Secretary of Agriculture, and designated in the agreement as the Government, by the terms of which written agreement a certain farm owned by plaintiff was leased’ to the lessee for a period of five years, beginning January 1, 1940 and ending December 31, 1944. The United States of' America .was given an exclusive and irrevocable option to purchase the property at any time prior to December 31, 1941.

The lease agreement provided that the lessee would farm the property in accordance with requirements of good husbandry and at the termination of the lease would deliver the possession ef the property in. the same condition as it was -at the beginning of the period, except for customary use and wear.

In this action the plaintiff seeks to recover the sum of $10,000 and costs against the defendant, United States of America, upon the allegation that the lessee had violated and breached the terms of the lease and as a result of said breach and the negligence of the Farm Security Administration, its employees, servants and agents, the leased property had been damaged in the sum sought to be recovered.

It is also alleged in the complaint that the Ashley Homestead Association, Inc., is a mere device of the Farm Security Administration and that in truth and in fact the Farm Security Administration supervised, controlled and operated the farm, although the lessee named in the agreement was Ashley Homestead Association, Inc.

The defendant, United States of America, has filed a motion to dismiss the complaint and for summary judgment upon the ground that the complaint shows upon its face that the court lacks jurisdiction for the following reasons. (1) The United States of America is not suable, (2) plaintiff’s claim is an action sounding in tort and does not come within the provisions of the Tucker Act, subdivision 20 of Section 41 of Title 28 U.S.C.A.

The attorneys for plaintiff and defendant have filed most excellent briefs in support of their respective contentions, which briefs have been carefully considered by the court, and the questions raised by the motion will be considered in the order as therein set forth.

The plaintiff on her brief states: “This is a suit against the United States. The .action comes within the waiver of governmental immunity under the terms of the Tucker Act. The assertion of plaintiff’s claim is a privilege conferred by the Court of Claims Act, and, its amendment, the Tucker Act, creating concurrent jurisdiction in this court.”

In the case of United States v. Sherwood, 312 U.S. 584, 590, 61 S.Ct. 767, 771, 85 L.Ed. 1058, the court in discussing -the effect of the amendment of the Court of Claims Act by the Tucker Act, said: '“Construing the statutory language' with that conservatism which is appropriate in the case of a wavier of sovereign immunity .and in the light of the history of the Court •of Claims’ jurisdiction to which we have -.referred, we think that the Tucker Act did no more than authorize the District Court to sit as a court of claims and that the authority thus given to adjudicate claims against the United States does not extend to any suit which could not be maintained in the Court of Claims.”

In the same case at page 586 of 312 U.S., at page 769 of 61 S.Ct., 85 L.Ed, 1058, the court said: “The United States, as sovereign, is immune from suit save as it consents to be sued, United States v. Thompson, 98 U.S. 486, 25 L.Ed. 194; United States v. Lee, 106 U.S. 196, 1 S.Ct. 240, 27 L.Ed. 171; Kansas v. United States, 204 U.S. 331, 27 S.Ct. 388, 51 L.Ed. 510; Minnesota v. United States, 305 U.S. 382, 387, 59 S.Ct. 292, 294, 83 L.Ed. 235; Keifer & Keifer v. Reconstruction Finance Corporation, 306 U.S. 381, 388, 59 S.Ct. 516, 517, 83 L.Ed. 784; United States v. Shaw, 309 U.S. 495, 60 S.Ct. 659, 84 L.Ed. 888. See cases cited in The Pesaro, D.C., 277 F. 473, 474, et seq., and the terms of its consent to be sued in any court define that court’s jurisdiction to entertain the suit.”

In the case of United States v. United States Fidelity Co., 309 U.S. 506, 514, 60 S.Ct. 653, 84 L.Ed. 894, the court said: “Consent alone gives jurisdiction to adjudge against a sovereign. Absent that consent, the attempted exercise of judicial power is void. The failure of officials to seek review cannot give force to this exercise of judicial power. Public policy forbids the suit unless consent is given, as clearly as public policy makes jurisdiction exclusive by declaration of the legislative body.”

The court does not have the right nor the power to extend the waiver of sovereign immunity more broadly than has been directed by the Congress, the policy making branch of the Government. United States v. Shaw, 309 U.S. 495, 60 S.Ct. 659, 84 L.Ed. 888.

In Section 1853 of Volume 3, Hughes’ Federal Procedure, it is said: “The United States cannot be sued without its consent. Therefore the Government, through Congress, may prescribe the conditions on which it may be subjected to litigation. And a party who institutes such a suit must bring the same within the authority of some Act of Congress in order to come within the court’s jurisdiction.”

Under the statute, subdivision 20 of Section 41, Title 28 U.S.C.A., United States District Courts have the same jurisdiction as that of the Court of Claims, limited only in respect to the sum involved. The Court of Claims alone had jurisdiction to render money judgments against the sovereign until concurrent jurisdiction was given to the Circuit Courts of the United States in 1887 and subsequently to the District Courts by the statute above referred to. The purpose of this statute was to fix the venue and to permit citizens to prosecute their claims against the Government in the districts of their residence rather than compel them to prosecute their suits in the Court of Claims sitting in the National Capitol.

The plaintiff, in effect, contends that the statute (supra) by its terms grants consent for the prosecution of her suit, but as above shown, the statute only confers jurisdiction upon the court “of all claims not exceeding $10,000 founded upon the Constitution of the United States or any law of Congress, or upon any regulation of an executive department, or upon any contract, express or implied, with the Government of the United States, or for damages, liquidated or unliquidated, in cases not sounding in tort, in respect to which claims the party would be entitled to redress against the United States, either in a court of law, equity, or admiralty, if the United States were suable, * *

The plaintiff has not called the court’s attention to any statute in which the consent of the sovereign to be sued on a transaction such as is involved herein has been granted,- but very earnestly contends that under the holding in the case of Keifer & Keifer v. Reconstruction Finance Corporation, 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784, that the United States is suable because of the acts of the Farm Security Administration. At page 397 of 306 U.S., at page 522 of 59 S.Ct., 83 L.Ed. 784, the court said: “Congress has thus clearly manifested an attitude which serves as a guide to the scope of liability implicit in the general authority it has conferred on governmental corporations to sue and be sued. We should be denying the recent trend of Congressional policy to relieve Regional from liability. This compels us to reverse the judgment of the court below.”

The Regional Agricultural Credit Corporation involved in the Keifer case was chartered by the Reconstruction Finance Corporation, and the Congress gave the Reconstruction Finance Corporation' various general corporate powers, including authority “to sue and be sued, to complain and to defend, in any court of competent jurisdiction, State or Federal,” 47 Stat. 5, 6, 15 U.S.C.A. § 604, and since the parent corporation had the right to sue and be sued, it is reasonable to assume that the same rights and liabilities were extended to the Regional Agricultural Credit Corporation, and especially is this true when the purpose of the creation of the latter is considered. It was intended to carry on a part of the work of the Reconstruction Finance Corporation and other closely allied governmental corporations.

The Farm Security Administration is not a governmental corporation. 4 The plaintiff on her brief has designated it as “an administrative agency of the United States”, and it was created as a relief agency to aid in the rehabilitation of distressed farmers.

Section 4 of the Emergency Relief Appropriation Act of 1935, 49 Stat. 115, 15 U.S.C.A. §§ 721-728, gave the President of the United States authority to establish and prescribe the duties and functions of necessary agencies within the Government for the purpose of administering the various programs of relief. Prior to that time relief to distressed farmers was being administered by the Resettlement Administration. On December 31, 1936, the President issued an executive order (No. 7530, 40 U.S. C.A. §§ 431-434 notes) transferring all the powers, functions and duties vested in the Resettlement Administration by Executive Order No. 7027 of April 30, 1935, to the Secretary of Agriculture, “to be exercised and performed by him; and all funds, personnel, property, records, and equipment of the Resettlement Administration are hereby transferred to the Department of Agriculture, to be under the supervision, control, and direction of the Secretary of Agriculture.”

Effective September 1, 1937, the Resettlement Administration was changed to Farm Security Administration and the Administrator of Farm Security Administration was- directed to perform the functions of the Secretary of Agriculture under Titles 1 and 2 and the related sections of Title 4 of the Bankhead-Jones Farm Tenant Act, 7 U.S.C.A. §§ 1000-1009, 1014-1029. Title 6, Sections 301.1 to 301.6 of the Code of Federal Regulations.

An examination of the various appropriation acts of the Congress, appropriating money to be expended by the Farm Security Administration, fails to disclose consent on the part of the Government for the prosecution of any suit of any kind against the Government by reason of the actions of the officials of the Farm Security Administration, and since the Farm Security Administration is an executive agency and not a governmental corporation, consent to be sued cannot be implied.

Therefore, the court is without jurisdiction to entertain this suit.

This makes it unnecessary to consider the contention of the defendant, United States of America, that the plaintiff’s claim is an action sounding in tort, but it is apparent to the court that the alleged action of the plaintiff arises out of contract and is not an action sounding in tort.

For the reasons above stated the motion of the defendant, United States of America, to dismiss is sustained and a judgment is being entered today dismissing the complaint of the plaintiff.


author: BONDY, District Judge.

text:
    ADDRESSOGRAPH-MULTIGRAPH CORPORATION v. COOPER et al.
    District Court, S. D. New York.
    May 4, 1945.
    Ward, Crosby & Neal, of New York City, Wallace & Cannon, of Chicago, 111., Joshua Ward, of New York City, and George FI. Wallace and Charles B. Cannon, both of Chicago, 111., for plaintiff.
    Judah B. Felshin, and Jacques Buitenkant, both of New York City, for defendants.
   BONDY, District Judge.

This is an action for the infringement of Claims 7 and 8 of patent No. 1,967,221 granted July 24, 1934, in the names of William R. Allen and Emmett C. Hartley, of which the plaintiff is the owner.

The individual defendants deny validity and infringement of the patent. The corporate defendant concedes infringement if the claims are valid.

The individual defendants were parties to a consent decree entered in this court January 25, 1939, in a former action brought by this plaintiff against the individual defendants. It states that it is decreed that the patent is valid as to each of the claims thereof; that the plaintiff is possessed of all interests therein; that whereas defendants have represented that they have merely furnished to others printing plates employing the invention covered by the patent for use upon holding means as claimed in the patent but have not made or sold the printing plates and have no intention of doing so, plaintiff waived the issuance of an injunction against and an accounting by them, and that the defendants recover from the plaintiff, their costs to be taxed.

The plaintiff contends that because the individual defendants since the entry of the decree have used the defendant corporation as a guise in making and selling the accused device, the admission of the corporation in this action that it infringed the patent if valid and the provision of the consent decree that the patent is valid are binding upon all defendants, and that therefore none of the defendants may question the validity of the patent or its infringement.

The defendants contend that the consent decree is invalid, that the entry thereof was unauthorized, and that Claims 7 and 8 in suit are invalid.

Both individual defendants were incorporators, and are directors and officers of the defendant corporation. They subscribed for and own all but one share of stock of the corporation. The evidence does not disclose that anyone other than the individual defendants controlled or transacted any business of the corporation. The court finds that the individual defendants participated in the manufacture and sale of the plates which it was conceded by the corporation, over which the individual defendants have control, infringe plaintiff’s patent if valid. Claude Neon Lights, Inc. v. American Neon Light Corporation, 2 Cir., 39 F.2d 548.

Claims 7 and 8 in suit read as follows:

“7 A comparatively long and narrow flexible metallic printing plate having at the ends thereof a series of spaced integral projections, each being rounded at its ends and the spaces between the projections being reversely rounded.”

“8 A metallic printing plate having a series of ears on its ends integral with the plate and slots through the ears, the outermost portion of the slots being beyond the innermost portions of the spaces between the ears.”

It accordingly appears that these two claims relate only to the plate itself and its shape or form. They do not relate to the plate in combination with any holding means. This is confirmed by the fact that all the other twenty claims relate to the plate in combination with holding means, and by the fact that the patent states: “the invention being concerned with the mutual formation of the printing plate and the means for attaching it to the drum” and therefore not with the plate itself.

The accused plate is a flexible metallic plate with holes at the ends thereof spaced to engage pins in the means for holding the plate, the ends of the plate being scalloped or formed so as to straddle lugs or raised projections on cylinders made and sold by plaintiff. It is exactly like plates made by the plaintiff for use on cylinders made by it.

Flexible metallic printing plates with holes so proportioned and spaced as to engage pins on the means for holding the plates have been in use long before plaintiff’s patent issued.

Patent No. 1,651,924, dated December 6, 1927 to Lichtenstein, discloses a flexible metallic printing plate for use on a cylinder of a rotary printing machine with holes spaced to engage pins on holding means, and differing from the accused plate and the plate which plaintiff manufactures and which it claims is protected by the patent in that the ends of the plate are straight and not scalloped. Scalloping the ends of the plate so that it will not strike projections on a specific holding means and shaping and placing slots to engage pins in the holding means are a matter of form, and do not constitute invention. See Gillette Safety Razor Co. v. Standard Safety Razor Corporation, 2 Cir., 74 F.2d 691; Addressograph-Multigraph Corporation v. Staudt, 2 Cir., 124 F.2d 672. Neither the scalloped ends of plaintiff’s plate nor of the defendants’ plate contact the projections on its holding means. In fact the proj ections on the holding means of plaintiff’s plate at times have been ground away so plates with straight ends could be used in connection with plaintiff's holding means. It is therefore apparent that there is no co-action between the holding means and the plates shaped to straddle the lugs on the holding means.

Claims 7 and 8 are therefore unpatentable elements of a combination.

The defendants contend that they are not estopped from questioning the validity of the patent because the consent decree was not authorized and because it is invalid even if authorized.

The individual defendants knew that their attorney, Max Singer, was not authorized to practice in this court and that he employed Nathan Schiff, who signed the consent decree, to appear for them in the former suit. The answer therein was interposed on behalf of both individual defendants. It expressly stated that they are answering the complaint by their attorney Nathan Schiff. At the end ■of the answer again appears the name “Nathan Schiff, Attorney for defendants”, and his address followed by the verification by the defendant Eva Cooper, in whose employ her present husband, Milton Berg, then was. She was not called as a witness on the trial of this action to testify as to whether or not she and her husband knew that Schiff was representing them in the former action and whether or not they knew of the provisions of the decree. Milton Berg’s statements as to when he first learned that the consent decree was signed by Nathan Schiff were so inconsistent that they cast a doubt as to his credibility and as to the truth of the statement that he authorized only the discontinuance or dismissal of the action upon payment of costs to the defendants but not the admission that the patent was valid. In any case, the plaintiff was justified in relying on the presumption that Schiff was the attorney for these defendants and authorized to sign and consent to the decree. In re Level Club, D.C., 46 F.2d 1002.

The consent decree states that the defendants represented that they have not made or sold but merely furnished to others plates covered by the patent for use upon holding means covered by the patent and have not any intention of making or using such plates and that for that reason the plaintiff waived the issuance of an injunction and an accounting. No evidence has been submitted disclosing that such representations were not true at the time when made.

There was not any trial or any adjudication on the merits as to the validity of the patent. Though it does not grant defendants any relief it provides for the payment of costs by the plaintiff. It does not provide for any injunction or accounting. It does not disclose that there has been any infringement of plaintiff’s patent. On the contrary, the evidence discloses that the defendants rejected a proposed consent decree submitted by plaintiff to them because it contained an allegation that they infringed the patent. The consent decree thereafter submitted by the plaintiff to the defendants and signed by them does not contain any allegation of infringement.

The facts in this case are distinguishable from those cited in which there was not any consent decree and from those in which non-infringement was expressly found and from those in which a decree entered by consent was corrected so as to express the understanding of the parties thereto and from those in which continuing injunctions were modified to meet changed conditions.

A decree adjudging a patent to be valid in the absence of a finding of infringement if valid, will not be sustained. See Electrical Fittings Corporation v. Thomas & Betts Co., 307 U.S. 241, 59 S.Ct. 860, 83 L.Ed. 1263, reversing 2 Cir., 100 F.2d 403; Richard Irvin & Co. v. Westinghouse Air Brake Company, 2 Cir., 121 F.2d 429. In Nachman Spring-Filled Corporation v. Kay Mfg. Co., 2 Cir., 139 F.2d 781, 785, which, however, only involved the breach of an agreement to acknowledge the validity of a patent and not to infringe it but did not involve estoppel by consent decree, the court referring to Pope Mfg. Co. v. Gormully, 144 U.S. 224, 233, 12 S.Ct 632, 36 L.Ed. 414, said: “Stating that ‘the real question is whether the defendant can estop himself from disputing patents which may be wholly void, or to which the plaintiff may have no shadow of title,’ the court went on to hold that, on grounds of public. policy, equity must refuse to give specific enforcement (by way of injunction) of such a contract ■because ‘it is important to the public that competition should not be repressed by worthless patents.’ ”

The claims in suit are so manifestly void for lack of invention and by reason of anticipation that the court, though not without doubt, is of the opinion that it should not grant any equitable relief based on the validity of the patent notwithstanding that a consent decree admitting the validity was signed by defendants, who, if they did not infringe, were not seriously interested in any adjudication of its validity.

If the defendants are to be estopped from contesting the validity of the patent, they would be prevented from making and selling an article which should be open to competition. The consent decree would be given the effect of an agreement not to make the plates, an agreement which according to the Nachman case, supra, is clearly illegal unless the claims in suit be valid. In the opinion of the court the claims are clearly invalid, and restraints on competition should not be permitted whether brought about by agreement, consent decree or estoppel. See Sola Electric Co. v. Jefferson Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165.

The complaint accordingly is dismissed.


author: KIRKPATRICK, District Judge.

text:
    BURKHOLDER v. UNITED STATES et al.
    No. 75 of 1944.
    District Court, E. D. Pennsylvania.
    Dec. 29, 1944.
    On Reargument May 17,1945.

      Dorfman & Levitan, Gerald A. Gleeson, U. S. Atty., and J. Barton Rettew, Jr., Asst. U. S. Atty., all of Philadelphia, Pa., for libellant.
    Rawle & Henderson, of Philadelphia, Pa., for the United States et al.
    Krusen, Evans & Shaw, of Philadelphia, Pa., amicus curiae.
   KIRKPATRICK, District Judge.

This is the second libel filed by this libellant against the respondents. The first libel, filed October 13, 1943, alleged that the libellant was injured when a ladder, by which he was descending from the ship to the dock, fell, and that the accident was caused by the negligence of the respondents in that the ladder was not fastened or lashed in any way. That libel was dismissed upon exceptions (Burkholder v. United States of America, War Shipping Administration and Fall River Navigation Company, D.C., 56 F.Supp. 106), for the reason that it was clearly a suit under the Jones Act, 46 U.S.C.A. § 688, and that the respondents, being time charterers, were not suable under that Act for the negligence of the owner’s employees.

The present libel was filed after the entry of the opinion in the first case but before final decree of dismissal. In the statement of the first cause of action the allegations are substantially the same as in the first libel except that, instead of pleading negligence, the libellant avers that his injuries were caused by the unseaworthiness of the ship in “that the said ladder wás not fastened securely or lashed in any way to prevent it from falling, as such, constitutes an unsafe means of access to and from the said vessel.” There is also a second cause of action for maintenance and cure and wages. The respondents have again filed exceptions, which •must be sustained as to the first cause of action.

Section 33 of the Merchant Marine Act 1920 (Jones Act), 46 U.S.C.A. § 688, provides: “That any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right of trial by jury, and in such action all statutes of the United States modifying or extending the common-law right or remedy in cases of personal injury to railway employees shall apply.” The Supreme Court in discussing the election referred to in this section in the case of Pacific Steamship Co. v. Peterson, 278 U.S. 130, 138, 49 S.Ct. 75, 77, 73 L.Ed. 220, said: “The right to recover compensatory damages uilder, the new rule for injuries caused by negligence is, however, an alternative of the right to recover indemnity under the old rules on the ground that the injuries were occasioned by unseaworthiness; and it is between these two inconsistent remedies for an injury, both grounded on tort, that we think an election is to be made under the maritime law as modified by the statute.” See also Plamals v. Pinar Del Rio, 277 U.S. 151, 48 S.Ct. 457, 72 L.Ed. 827; Kuhlman v. W. & A. Fletcher Co., 3 Cir., 20 F.2d 465; Engel v. Davenport, 271 U.S. 33, 46 S.Ct. 410, 70 L.Ed. 813; Skolar v. Lehigh Valley Railroad Company, 2 Cir., 60 F.2d 893. This libel is obviously based upon exactly the same facts as those upon which the libellant first elected to bring suit under the Jones Act against these respondents.

That election was final. The Court in the Pinar Del Rio case, supra [277 U.S. 151, 48 S.Ct. 458], said: “Seamen may invoke, at their election, the relief afforded by the old rules against the ship, or that provided by the new against the employer. But they may not have the benefit of both.” Plainly that statement of the law is not susceptible of. the interpretation that a seaman may bring an action under the Jones Act and, if it is decided against him, follow up with a second one under the general law of maritime tort. If he .could do that he would unquestionably be having the benefit of both remedies. To so hold would amount to construing the “election” required by the statute as no more than a provision against double recovery for one injury, and there would be nothing to prevent his bringing the two actions at the same time and awaiting the result of the one first to come before the Court before proceeding to the final disposition of the other. Hence, the libellant may not now maintain this suit against the same respondents by merely rephrasing his libel to charge unseaworthiness in place of negligence.

There is also another reason for dismissing this libel. To recover indemnity for personal injuries under the general maritime law, independent of the statute, a seaman must show that either the ship or its appliances were unseaworthy. The defect may have existed at the commencement of the voyage or it may have arisen subsequently, but a defect of some kind in ship or appliances must be proved. Whether the germ of the doctrine of unseaworthiness is to be found in some conception of owner’s negligence, real or presumed, or in a breach of warranty of seaworthiness, or in a quasi-contractual obligation imposed by the relationship of the parties, in any case some breach of the duty or obligation is requisite in order to give rise to liability for injury. I know of no case based on the old rules of maritime tort, in which recovery has been allowed where the injury occurred on a ship, sound and perfect in all respects, with no fault directly attributable to the owner. In this case the injury arose from the negligent non-use of good equipment. If recovery were to be sustained there would be no reason why it would not be also allowed in a case of misuse or negligent use of sound equipment — exactly the situation in which recovery was denied in The Osceola, 189 U.S. 158, 23 S.Ct. 483, 47 L.Ed. 760.

In the present libel, there is no allegation of defect in the ladder or suggestion that it had been made fast by a defective rope. The reason it fell was that someone had failed to make it secure by any kind of rope. That was a negligent omission on the part of the person whose duty it was, but it did not render the ship unseaworthy.

. The second cause of action, for maintenance and cure, is maintainable. This right is a contractual right independent of the seaman’s right to recover indemnity under the general maritime law or indemnity under the Jones Act. Since he would have had a right in rem against the ship prior to the passage of the Jones Act for maintenance, cure and wages, this cause of action will be transferred by the Suits in Admiralty Act to the United States. See, Burkholder v. United States of America, War Shipping Administration and Fall River Navigation Company, D.C., 56 F.Supp. 106.

The exceptions are sustained as to the first cause of action and overruled as to the second cause of action.

On Reargument.

This reargument was granted upon the Government’s exception to the Court’s holding that a seaman’s remedy for maintenance and cure against a privately owned ship time chartered to the United States is converted by the Suits in Admiralty Act into a libel in personam against the Government.

The vessel, in common with most of the merchant ships of the United States, was requisitioned by the Government immediately after Pearl Harbor. Subsequently the owners executed a time charter to the War Shipping Administration, under which it was being operated at the time the cause of action arose.

The first and second sections of the Suits in Admiralty Act, 46 U.S.C.A. §§ 741, 742, are in pari materia (Blamberg Bros. v. United States, 260 U.S. 452, 458, 43 S.Ct. 179, 67 L.Ed. 346), and provide a consistent scheme of legislation by which in all cases in which Section 1 takes away an injured party’s remedy by arrest or seizure of the vessel, a remedy by libel in person-am against the United States is substituted. The vessels as to which the right to proceed in rem was abolished were (in addition to cases not here Relevant) vessels owned by or operated by or for the United States.

The question now for decision is whether this ship was operated “for the United States.”

In Byonnes, etc., v. United States, D. C., 298 F. 123, Judge Learned Hand pointed out that a ship under charter is not operated for the owner nor a ship under subcharter for the charterer. He said: “How can a charterer be said to be operating a ship for the owner? It is the charterer’s venture, not his. The charterer may lay her up, if he will, and the hire goes on as though he worked her. The profits from her operation are his profits, and the losses his. The owner is indifferent to her dispatch upon commercial ventures on the seas. He has parted with all right to her control, just to allow the charterer to use her for himself, to make out of her what he can. The owner looks for his return, not to what she earns, but to the charterer’s responsibility for the hire. The same relation holds between charterer and subcharterer.”

One would say that a time chartered ship "plying in commerce was necessarily being operated for some one and it would follow that if it is not being operated for the owner it must be for the charterer. However, the argument is now made that the word “for” in Section 1 of the Suits in Admiralty- Act has a special meaning. Based on a dictum of Judge Hand in the Byonnes case and also upon what is stated to be the view adopted by the Shipping Administration and its practice for the last few years, it is contended that, in the words of Judge Hand “ ‘operated for’ was meant to cover the agency or operating agreements, which were very common just after the war, in which the Shipping Board stood to gain or lose by the ship’s traffic.” As I understand these contracts however, the ships were generally owned by the United States or by the Emergency Fleet Corporation and would have been covered by “owned by” clauses of the first section of the act, without any necessity for the “operated for” clause. If the general purpose of the Suits in Admiralty Act be considered no reason is apparent to place ships time chartered by the United States outside its scope. The law was enacted “for the purpose of relieving the United States from obstruction of its commercial traffic by the seizure of merchant vessels owned by it or under its control * * Kunglig Jarnvagsstyrelsen v. United States, 2 Cir., 19 F.2d 761, 762. Vessels time chartered by the United States are instruments of the Government’s commercial traffic and, in respect of obstruction of such traffic, no distinction can be drawn between the inconvenience arising from the seizure of such vessels and the seizure of those owned by the United States or operated for it under agency agreements. The fact that the charter may and usually does require the owner to provide by insurance or otherwise for the prompt release of the ship by the giving of a bond does not seem to be a convincing reason for reading into the statute a limitation in no way called for by its purpose.

The Court’s decision is reaffirmed.


author: HULEN, District Judge.

text:
    In re STINE.
    No. 10979.
    District Court, E. D. Missouri, E. D.
    May 17, 1945.

      Tom R. R. Ely, Jr., of St. Louis, Mo., for bankrupt.
    Dunbar & Biggs, of St. Louis, Mo., for objector.
   HULEN, District Judge.

This case is now before the Court on petition of bankrupt for review of findings of fact and conclusions of law and order of the Referee, denying bankrupt’s discharge.

The discharge of the bankrupt was denied on petition of the Tower Grove Bank and Trust Company, a creditor, on the ground that on October 20, 1943, the bankrupt had obtained money on credit from the Trust Company “upon a materially false statement in writing,” made by the bankrupt for the purpose of obtaining credit. The objections of the petitioner were sustained by the Referee and discharge of the bankrupt was denied. 11 U.S.C.A. § 32.

On October 20, 1943, the bankrupt applied to the Trust Company for a loan in the sum of $375. He was given an application and financial statement to fill out on a blank furnished by the Trust Company. The bankrupt took the financial statement home, filled it out, returned it to the Trust Company, and upon the application and statement so made, the loan to the bankrupt was made.

In answer to the question on the financial statement as to real estate owned by the bankrupt, he listed property having a value of $7,500, subject to a mortgage of $3,000, the title to which was in the name of “A. M. Stine.” The bankrupt listed but one creditor, Bayne Construction Company, $475, for labor and material. The real estate listed in the financial statement was not in the name of “A. M. Stine,” but was in the joint names of bankrupt and his wife, Rose Stine.

Debtor’s voluntary petition in bankruptcy was filed April 12, 1944. It listed unsecured creditors in the total sum of $11,819. The Referee found that the failure of the bankrupt to include his wife’s name as owner of the real estate in filling in the financial statement was not done with intention to mislead the Trust Company, and that the Trust Company did not rely upon the statement in making the loan to the bankrupt, but that the bankrupt did omit from his financial statement certain indebtedness and that the financial statement so made by the bankrupt was knowingly false and did induce the Tower Grove Trust Company to extend credit.

We have read the record in this case, and we are unable to conclude that the findings of the Referee are erroneous and unless such be the case, findings should be sustained. In re Garmann et al., D.C., 18 F.2d 155. The record in this case not only sustains the findings of the Referee that the bankrupt omitted from the financial statement presented to the Trust Company a statement of the indebtedness owed by him to Wayne County, Michigan, but we think the record would sustain the finding that the bankrupt omitted to list certain other items of indebtedness owed by him on October 20, 1943.

The objector introduced the financial statement signed by the bankrupt and the schedules which were signed by the bankrupt and are admissible against him. In re Margolis, D.C., 23 F.Supp. 735. These schedules, filed April 12, 1944, list twenty-four creditors (Schedule A-3) as holding unsecured claims totaling “fifteen thousand nine hundred forty-three dollars.” None of these claims were listed in the financial statement given to the Trust Company by the bankrupt. Under the heading, "When and Where contracted,” appears either “October, 1943,” or “1943” or a date prior thereto, as to nineteen of the claims.

On this record made by the objector, reasonable grounds were shown for believing that the bankrupt had obtained the credit through materially false statements in writing respecting his financial condition, and the bankrupt, on the issue of good faith to secure his discharge, had the burden of explaining the false entries. In re Frumkin, 2 Cir., 82 F.2d 290, and Berley v. Fiol, 2 Cir., 124 F.2d 676. By the undisputed evidence that the credit was extended on the basis of the false statement made by the bankrupt, In re Graham, D.C., 22 F.Supp. 233, a prima facie case was made by the objector. In re Farrell, D.C., 30 F.Supp. 88.

The only explanation which the bankrupt had to offer why he had not included the claims of Wayne County, Michigan, in the financial statement was that he believed the claims barred by the Michigan six year statute of limitations. As the claims appear in the schedule, even the six year statute of limitations could not have been a bar to some of them. The bankrupt’s testimony in this respect was not corroborated. The Referee apparently did not believe him, and in view of the contradictory nature of his testimony, this conclusion on the part of the Referee is not surprising. The Referee need not accept the uncorroborated testimony of the bankrupt. Dixwell v. Scott & Co., 1 Cir., 115 F.2d 873.

•If the findings of the Referee confine the false representations on the financial statement solely to bankrupt’s obligations to Wayne County, Michigan, then we are not in accord with his conclusions. We are not prepared to accept the bankrupt’s explanation of failure to list other claims of creditors in the financial statement given to the Trust Company. Referring to the claim of “Famous-Barr” and “Union May Stern” appearing in the schedule, counsel for the bankrupt asked the bankrupt, “And you did have credit at Famous-Barr, did you?” Answer, “That is right.” “You had credit at Union May Stern, didn’t you?” “That is right.” We are unable to tell from this line of questioning if counsel and the bankrupt were taking the position that because the bankrupt “had credit” at the two stores named, he was not thereby obliged to list the amount of his obligation to them at the time he made the statement to the Trust Company. Referring to the claim of Stix, Baer & Fuller, the bankrupt was even more indefinite. He stated during his examination as to the time of contracting the obligation, with reference to the statement made to the Trust Company — “I believe that was afterwards.” Asked the question, “Well, the dates are reflected on your schedules, aren’t they ?” the bankrupt answered, “That is right.” Later in the testimony of the bankrupt this question was asked and the following answer given—

“So that the great bulk of these accounts were contracted after you made that state.ment with the exception of the ones in Michigan ?”

“That is right'’”

Just what is meant by “great bulk” does not appear. Most of the accounts representing claims listed in the schedule were from business institutions located in St. Louis, and the bankrupt could easily have verified the exact date on which the indebtedness was created and its status at the time he made the financial statement to the Trust Company. We conclude, therefore, that there was evidence justifying the finding that the bankrupt knowingly made material false statements to induce the Trust Company to extend credit to him, in addition to the matter of the obligation of the bankrupt to Wayne County, Michigan.

Neither are we in accord with the Referee in his conclusion that the statement of the bankrupt regarding ownership of the real estate listed by him was not done with intention on the part of the bankrupt to mislead the bank. Judging from the nature of the claims listed in the schedule, the bankrupt was not a novice in the field of credit and the basis upon which it is extended. The bankrupt had owned and been a party to the transfer of real estate. The financial statement was made out by the bankrupt in the seclusion of his own home. It contained the statement in bold type, “Unless stated above to the contrary, all real estate and stocks and bonds are carried in the name of the undersigned alone.” The bankrupt deliberately filled in his own name in answer to the question as to the name in which title to the real estate was carried. The bankrupt must be held to have intended the natural and necessary consequences of his act. In re Weisberger, D.C., 41 F.2d 275. One who lends money is presumed to be affected by the financial status of the borrower as revealed by his own statement. In re Gregor, D.C., 50 F.Supp. 918.

The Trust Company’s officer in charge of credits testified that on the strength of the financial statement, the money was loaned. True the officer said he expected to be paid by the bankrupt out of his salary, and did not expect to have to foreclose on real estate listed, nevertheless we fail to find any basis in the record for the conclusion that the money was not loaned to the bankrupt on the strength of his statement as a whole. The loaning officer was pressed on the attention given by him to the statement, particularly to the representation regarding ownership of the residence. He refused to say that he did not pay any attention to it. Question, “You mean you noticed particularly that he owned it?” Answer, “Yes.” Later, on the same subject, on the cross-examination, he. was asked, “As a matter of fact, you didn’t think about it a whole lot, did you?” Answer, “I don’t agree with you.” “You wouldn’t have loaned the money on just the house would you?” “Not on that alone, no. We took the other things in the statement into consideration.”

It is our opinion that the representation as to ownership of the real estate being false, and in our opinion intentionally so, and having contributed to the granting of the loan, such false representation was additional grounds for refusing discharge to the bankrupt, Berley v. Fiol, supra, along with the failure of the bankrupt to list the other claims on which he was obligated, even though he testified that the “great bulk of these accounts” were contracted after the financial statement was executed. In re Graham, supra; In re Gregor, supra.

We believe that the representations made by the bankrupt in the financial statement given to the Trust Company come within the ruling of the case of Third Nat. Bank v. Schatten, 6 Cir., 81 F.2d 538, 540:

“ ‘The false statement in writing which is enough to deny a discharge implies a statement knowingly false, or made recklessly, without an honest belief in its truth, and with a purpose to mislead or deceive.’

“In Franklin v. Monning Dry Goods Co., 5 Cir., 217 F. 929, 932, it was said that the word ‘false’ as used in section 14b (3) of the Bankruptcy Act means false in the sense of being ‘intentionally untrue.’

“In Aller-Wilmes Jewelry Co. v. Osborn, 8 Cir., 231 F. 907, it was held that a statement, to be materially false, so as to justify the denial of a discharge to a bankrupt under section 14b (3), must not only be false in fact, but must have been with the intention to deceive.”

Discharge in bankruptcy is a privilege which a bankrupt is not entitled to unless he deserves it. A discharge is intended to relieve misfortune, but it must be misfortune coupled with absolute honesty. In re Merritt, 9 Cir., 28 F.2d 679. The fact that this Court is in agreement with the Referee on the one ground on which the discharge was denied calls for affirmance of the order of the Referee, even though there were1 additional grounds upon which the discharge could properly have been denied. Dixwell v. Scott, supra.


author: CONGER, District Judge..

text:
    BEHLERT et al. v. JAMES FOUNDATION OF NEW YORK, Inc., et al.
    District Court, S. D. New York.
    May 19, 1945.

      A. S. Cutler, of New York City, for plaintiff.
    Whitman, Ransom, Coulson & Goetz, of New York City (William L. Ransom and Forbes D. Shaw, both of New York City, and Horace E. Whiteside, of Ithaca, N. Y., of counsel), for defendants James Foundation of New York, Inc., William W. Car-man and United States Trust Co. as executors of estate of Arthur Curtiss James.
   CONGER, District Judge..

Motion to dismiss the complaint because of lack of jurisdiction.

This is a stockholders’ derivative action.

In the complaint it is alleged that the matter in controversy exceeds $3,000. In the complaint there are allegations of fact which purport to show diversity of citizenship between plaintiffs and the defendants. The complaint alleges that the plaintiffs are citizens and residents of the District of Columbia and that the defendants respectively are citizens and residents of the States of New York, Delaware and New Jersey.

Defendants, James Foundation of New York, Inc., and William W. Carman and United States Trust Company as executors of the estate of Arthur Curtiss James move to dismiss the complaint under Rule 12(b) (1) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, on the ground that this Court lacks jurisdiction over the subject matter of this action for the reason that the action does not involve a case or controversy between citizens of different states within the meaning of Article III, Section 2, of the Constitution of the United States.

The basis of defendants’ contention is that plaintiffs, being citizens of the District of Columbia, are not citizens of a state for diversity of citizen purposes and that where (as here) jurisdiction depends on diversity of citizenship of the parties it is not present when the plaintiffs are citizens of the District of Columbia and the defendants are citizens of various states.

The pertinent part of the Constitution is as follows:

“Article III, Section 1. The judicial Power of the United States, shall be vested in one supreme Court and in such inferior Courts as the Congress may from time to time ordain and establish * * *.

“Section 2. The judicial Power shall extend * * * to Controversies * * * between citizens of different states.”

Down through the years it has been recognized and held that citizens of the District of Columbia are not citizens of a state and that the Courts of the United States had no jurisdiction of cases between citizens of the District of Columbia and citizens of a state. Hepburn v. Ellzey, 2 Cranch 445, 2 L.Ed. 332; Hooe v. Jamieson, 166 U.S. 395, 17 S.Ct. 596, 41 L.Ed. 1049.

This point -is well settled and plaintiffs do not dispute it. They rely upon an Act of Congress passed in 1940, 28 U.S.C.A. 41.

By that Act the Congress amended Section 24, Subd. 1, of the Judicial Code in an apparent attempt to give the District Courts jurisdiction where the matter in controversy is between citizens of different states or citizens of the District of Columbia. Section 24 of the Judicial Code now reads in part as follows:

“The district courts shall have original jurisdiction as follows: (1) Of all suits of a civil nature, * * * where the matter in controversy exceeds, exclusive of interest and costs, the sum or value of $3,000, and * * * (b) is between citizens of different States, or citizens of the District of Columbia, the Territory of Hawaii, or Alaska, and any State or Territory * * *.”

It was the evident intention of the Congress by this amendment to correct a situation which Chief Justice Marshall in 1805 in Hepburn v. Ellzey, supra, characterized as “extraordinary.”

Defendants urge that this amendment is unconstitutional in that it extends the powers of the Federal Courts beyond that given by the Constitution. That is the sole issue before me.

I think that defendants are right in their contention, that, while this Court was created by and its jurisdiction given by Acts of Congress, yet, being a Constitutional Court, such Acts of Congress may not go beyond the jurisdictional boundaries created by Article III of the Constitution.

Chief Justice Marshall in Hodgson v. Bowerbank, 5 Cranch 303, 304, 3 L.Ed. 108, passed on this proposition. In that case there was objection to jurisdiction on this question of diversity of citizenship.

The attorney for plaintiffs contended that jurisdiction was given the Court by the Judiciary Act. In answering this contention, Chief Justice Marshall said: “Turn to the article of the constitution of the United States, for the statute cannot extend the jurisdiction beyond the limits of the Constitution.”

In Sheldon et al. v. Sill, 8 How. 441, 449, 12 L.Ed. 1147, the Court in holding that the Congress having the power to establish the Courts must define their respective jurisdictions and that the Congress having a right to prescribe may withhold from any Court of its creation jurisdiction of any of the enumerated controversies and further:

“The Constitution has defined the limits of the judicial power of the United States, but has not prescribed how much of it shall be exercised by the Circuit Court; consequently, the statute which does prescribe the limits of their jurisdiction, cannot be in conflict with the Constitution, unless it confers powers not enumerated therein.”

See also Kline v. Burke Construction Co., 260 U.S. 226, 43 S.Ct. 79, 82, 67 L.Ed. 226, 24 A.L.R. 1077, where the Court held that the inferior Federal Courts derive their jurisdiction over designated cases from the Congress, and that the Congress might “give, withhold or restrict such jurisdiction at its discretion, provided it be not extended beyond the boundaries fixed by the Constitution.”

This Court is a constitutional court as distinguished from a legislative court. It was established under the specific power given in Section 2 of. Article III of the Constitution. It shares in the exercise of the judicial power defined in that section of the Constitution and can be invested with no other jurisdiction. Ex parte Bakelite Corporation, 279 U.S. 438, 49 S.Ct. 411, 73 L.Ed. 789.

I have come to the conclusion that the rule has been well established by the Supreme Court of the United States that the Congress may not enlarge the jurisdiction of this Court beyond that fixed by Article III, Section 2 of the Constitution, and that by the amendment of 1940 of Section 24(1) in so far as it extends the jurisdiction of this court to include controversies between “citizens of the District of Columbia * * * or any State or Territory” it does go beyond the jurisdiction boundaries fixed by the aforesaid section of the Constitution and is, therefore, unconstitutional.

I am not unmindful of the recent cases in District Courts which have held this 1940 amendment to be constitutional. Winkler v. Daniels, et al., D.C., 43 F.Supp. 265; Glaeser v. Acacia Mutual Life Association, D.C., 55 F.Supp. 925.

The decisions in both of these cases reflect the opinions of the proposers of the 1940 amendment (see House Report 1756). This Act of Congress was passed on the theory that there was authority for so doing under Article I, Section 8, Clause 17 of the Constitution. This provision of the Constitution gives the Congress the right and authority to legislate for all purposes for the District of Columbia, to establish Courts therein and to prescribe their jurisdiction. It is not pertinent here to discuss the extent of the power given Congress by this portion of the Constitution in so far as it relates to the Courts of the District of Columbia. This question has been dealt with by Mr. Justice Sutherland in O’Donoghue v. United States, 289 U.S. 516, 53 S.Ct. 740, 77 L.Ed. 1356. Justice Sutherland makes a distinction between Courts (and their various jurisdictions) created by Congress for the District, under Article I, Section 8, Clause 17 and the inferior Federal Courts established under Article III of the Constitution.

I am convinced that while Congress, under Article I, Section 8, Clause 17 of the Constitution, may provide jurisdiction to the Courts of the District of Columbia beyond that prescribed by Article III, Section 2 of the Constitution, it may not do so with this Court or any Federal Court established under Article III, Section 2 of the Constitution. O’Donoghue v. United States, supra; Postum Cereal Co. v. California Fig Nut Co., 272 U.S. 693, 47 S.Ct. 284, 71 L.Ed. 478; McGarry v. City of Bethlehem, D.C., 45 F.Supp. 385.

By reason of the above I sustain defendants’ motion to dismiss for want of jurisdiction.

Submit order on notice.


text:
    WERNHARDT et al. v. KOENIG et al.
    Civil Action No. 4073.
    District Court, E. D. Pennsylvania.
    May 10, 1945.
    Frank M. Lissy, of Philadelphia, Pa., for plaintiff.
    George E. Peterson, of Philadelphia, Pa., for defendant.
   KIRKPATRICK, District Judge.

This action was brought under the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., for overtime pay. The defendant has moved to dismiss the complaint on the ground that it fails to state a cause of action upon which relief can be granted.

It appears from the complaint that the plaintiffs are employees of the defendants and are engaged in interstate commerce. It further appears from a letter from the National War Labor Board, dated March 4, 1944, which by agreement of the parties was considered by the 'Court as though incorporated into the pleadings, that the hourly rates, upon the basis of which this claim for overtime is made, were the result of a wage adjustment made by the employers without securing the approval of the National War Labor Board, in violation of the Wage Stabilization Law and regulations promulgated thereunder. Therefore, this complaint shows on its face that the recovery sought is based on an illegal contract. The Wage Stabilization Law provides in 50 U.S.C.A.Appendix, § 965:

“No employer shall pay, and no employee shall receive, wages or salaries in contravention of the regulations promulgated by the President under this Act.” This section makes plain the intent of Congress that such contracts are illegal and the Court can not and will not lend itself to the enforcement of a contract made to perform an act which is expressly forbidden by a law of the United States and arises from an illegal contract. Such a contract is not only unenforcible but void. Fitzsimons v. Eagle Brewing Co., 3 Cir., 107 F.2d 712, 126 A.L.R. 681. The result is that these plaintiffs can not base any claims on such agreements.

The motion to dismiss the complaint is granted.


author: REEVES, District Judge.

text:
    PALMER v. MILLER.
    No. 1459.
    District Court, W. D. Missouri, W. D.
    May 12, 1945.

      Edwin S. McAnany, of Kansas City, Kan., and Omar E. Robinson and Charles M. Miller, both of Kansas City, Mo., for plaintiff.
    Cowgill & Popham, Arthur C. Popham; and Sam Mandell, all of Kansas City, Mo., for defendant.
   REEVES, District Judge.

The plaintiff’s motion for a new trial raises sundry questions as to- the effect and weight of the testimony as well as alleged errors in the instructions of the court and errors in refusing to give instructions requested by plaintiff, together with alleged misconduct on the part of counsel. All of these matters will be discussed in the course of this memorandum opinion.

At the outset, and in view of the averments of the motion, it seems proper to indicate what the issue or issues were in the case.

The plaintiff seeks damages because of alleged injury to his left ear. The defendant had contracted to supply the plaintiff with a hearing aid for his left ear. In order to make a device that would fit, he undertook to obtain an impression by the use of plaster of Paris. This impression was to be made by putting cotton or packing into the auditory canal so as to prevent the composition in its fluid state from passing into the inner ear or to the tympanic membrane. In the negotiations for the device the defendant made representations to the plaintiff as to the method of taking the impression. The method was acceptable to the plaintiff and accordingly the defendant prepared to take or make the impression by inserting cotton in plaintiffs left ear and thereafter pouring the plaster of Paris in its liquid state into the outer ear. It had been represented to plaintiff that, by use of cotton in the ear, the fluid would be barred or prevented from flowing through the auditory canal into the inner ear or on to the tympanum.

Defendant took the impression in accordance with the method agreed upon, but, plaintiff alleges,

“ * * * that in so doing he placed an inadequate amount of cotton or other substance in said auditory canal of plaintiff’s left ear, as aforesaid, and so negligently and carelessly packed said auditory canal that said auditory canal was not wholly closed.

“ * * * That as a result of said defendant’s carelessness and negligence said plaster of Paris so placed in plaintiff’s external ear by the defendant, flowed into and passed through said auditory canal into and upon the tympanic membrane and other internal organs of plaintiff’s said ear, and having reached same solidified, hardened and became firmly attached to the said membrane and internal organs of said ear.”

Concerning the defendant’s duty, plaintiff said:

* * * that it then and there became the duty of defendant to use ordinary care and to do whatever was usual and necessary to be done in closing said auditory canal so as to prevent any part of said plaster of Paris, to be used as aforesaid, from entering into and passing through said canal and thereby penetrate to the said internal organs of plaintiff’s said ear; * * ¡m>

There were other averments that the defendant knew, or should have known, the disastrous effect of the plaster of Paris in a liquid state if it became attached to the tympanic membrane and solidified while so attached. It is charged by the plaintiff that the defendant was careless in packing his ear for the impression and, that, because of such carelessness, the material spread not only into the ear but caused entire loss of his hearing in that ear and occasioned intense pain and suffering and prolonged disability.

While the defendant by his answer admitted that he was engaged in the sale to the public of hearing devices, he denied all of the other averments of the complaint.

The testimony on behalf of the plaintiff fully sustained his averments that the composition passed to the inner part of the auditory canal and caused permanent deafness with intense intermediate pain and suffering and lasting disability.

The defendant testifying in his own behalf said that the method employed by him had been uniformly followed in a large number of cases; that is to say, that it was proper, in taking impressions, to pack the auditory canal with cotton and then pour the liquid composition into the external ear, and he frankly admitted that, if the canal were properly packed, the fluid would not flow by or by-pass the cotton into the inner ear so as to cause damage. The defendant with commendable frankness admitted that, if the auditory canal of plaintiff’s left ear in this case had been properly packed, the liquid would not have escaped into the inner ear.

It was alleged in the petition that it was the defendant’s duty to pack the ear in such way as to prevent the composition from flowing by the cotton packing. The defendant undertook to perform that duty, but, in substance, said he had not put sufficient packing in the ear or that it was not properly packed.

The plaintiff, at the close of all of the evidence, asked for a directed verdict for plaintiff. The court refused that instruction, but in the charge to the jury said:

“The whole issue here before you men in this case, * * * is: — Did the defendant take that impression in a careless way? * * * did he use a proper method in a careless manner. Did he so carelessly pack the cotton * * * as to permit the liquid to escape beyond and by-pass the cotton and get into the inside of his ear? That is the whole issue in the case.”

The court further said to the jury:

“ * * *■ if you find that in taking the impression, and by placing cotton in the auditory canal for the purpose of holding back the liquid that he was about to pour into the ear for the purpose of the impression, if you believe and find from the evidence that in placing the cotton in his ear he did it negligently, and that the result of his negligence was that the plaintiff suffered the injuries he asserts here, that he lost his hearing in his ear, then the plaintiff is entitled to recover.”

In covering the converse of this instruction on behalf of the defendant, the court said:

“Now then, gentlemen, on the other hand, if you believe and find from the evidence in this case that the defendant not only used the standard method in making the impression, * * * but that in applying the method in the manner in which he inserted the cotton, unless he inserted an inadequate or insufficient quantity of cotton when in the exercise of ordinary care, as I have defined ordinary care to you, he could have put in an adequate quantity in order to prevent the escape or the by-passing the cotton and passing the fluid into the inner ear, or into the tympanum, causing the injury, then your verdict should be for the defendant. That is to say, if you find he exercised such care in placing the cotton as a reasonably careful and prudent person would have done under the same or similar circumstances.”

. In giving the above charge, the reporter understood the court to use the words “or if” instead of the word “unless.” If the words “or if” were in fact used, of course the charge was faulty in the extreme. The reporter has been interviewed and her notes were produced for the purpose of ascertaining whether or not the notes were wrongly transcribed. They were not. Her notes show that the words “or if” instead of the word “unless” were used. The use of such words would have been meaningless whereas the use of the word “unless” would make “sense” for the instruction, as was quite clearly the intention when the instruction was given. The jury was told in substance that if, in applying a standard method, the defendant used ordinary care, then the verdict should be for the defendant. But it was carefully pointed out that if there was inadequate or insufficient cotton placed or packed in the ear by the defendant, so as to permit the liquid plaster of Paris to flow by it, then such a situation was excepted from the instruction given on behalf of the defendant. The court is assured with respect to the use of the word “unless” instead of the words “or if” by the fact that at the end of the charge attention was not called by unusually alert and able counsel to an error which, if committed, was glaring. Clearly it would have been the duty of the court to have corrected the instruction if the words “or if” had been in fact used. The difference between the charge as recorded and as it is believed to have been actually given may be explained upon the theory that in the rapidity of the instruction and probable confusion in the courtroom, the reporter misunderstood the word “unless” and thought the words “or if” were in fact used.

In another part of the charge, in commenting on the testimony, the court said concerning the defendant’s testimony:

“He said frankly that if it did get through it was because of insufficient packing, that it had not been packed sufficiently and that by reason of that fact it had got through.”

In the light of the foregoing, a discussion of the grounds sef up for a new trial can be more intelligently understood.

1. It is the plaintiff’s contention that the court should have instructed the jury to find for the plaintiff on the question of liability. This contention is made for the reason that the defendant admitted the averments of the complaint to the effect that the ear was insufficiently packed.

In the case of Northwestern Fuel Co. v. Danielson, 57 F. 915, loc. cit. 920, the late Honorable Walter H. Sanborn of the 8th Circuit Court of Appeals said:

“ * * * but where there is no dispute about the facts, and they are such that but one conclusion can fairly be drawn from them by reasonable men, it is the duty of the court to declare that conclusion to the jury. If the evidence is of such a conclusive character that the court, in the exercise of a sound judicial discretion, would be bound to set aside a verdict returned in opposition to it, it is its duty to direct a verdict for the plaintiff or the defendant, as may be proper.”

Many cases were cited by Judge Sanborn in support of this proposition.

The late Judge Van Valkenburgh cited with approval this pronouncement of Judge Sanborn, in Andresen v. Kaercher, 8 Cir., 38 F.2d 462, loc. cit. 465. Judge Van Valkenburgh was content to quote the exact language of Judge Sanborn in disposing of a similar question.

In the case of Jones v. Smith, C.C., 158 F. 911, the district judge of the Eastern District of Pennsylvania expressed a regret that he had not directed a verdict for plaintiff where a jury had found adversely to the plaintiff. The district judge supposed (as in this case) that the jury would make a proper finding and, concerning its failure to do so, he said:

“As it has turned out, however, it would have been better if I had given the instruction in so many words that the plaintiff was entitled to a verdict, leaving the amount only to be determined by the jury.”

At the time the instruction here was presented by counsel to the court, the view of the Court of Appeals in a former trial (Palmer v. Miller, 8 Cir., 145 F.2d 926, loe. cit. 931) appeared to preclude such an instruction. The court there said:

“In a case such as this, where the uncertainty as to the existence of negligence does not arise from a conflict of evidence, but ‘because, the facts being undisputed, fair-minded men will honestly draw different conclusions from them’ * *

This court was of the opinion that this ruling by the Court of Appeals had become the law of the case and that the question of liability should be submitted to a jury. The Court of Appeals cited as authority the case of Gunning v. Cooley, 281 U.S. 90, loc. cit. 94, 50 S.Ct. 231, 233, 74 L.Ed. 720. The court did not refer to the stronger statement by the Supreme Court on the same page:

“Where the evidence upon any issue is all on one side or so overwhelmingly on one side as to leave no- room to doubt what the fact is, the court should give a peremptory instruction to the jury.”

In the light of the authorities it is obvious that the court should have pointed out to the jury that there was no controversy on the question of carelessness on the part of the defendant and that its verdict should be for the plaintiff in some amount. This was the duty, unless, as indicated, the opinion in the same case on appeal from a former verdict and judgment had determined the law differently.

As said by District Judge J. B. McPherson in the Pennsylvania case, Jones v. Smith, supra, the court was of the opinion under the instructions given that a verdict in some amount would be returned for the plaintiff and that it seemed unnecessary to direct the jury to do so.

The verdict in this case ought not to stand for the reason that the plaintiff has suffered serious injury, including the loss of his hearing, without any fault on his part, but, according to the admission of the defendant, his injury accrued to him solely because the defendant did not put an adequate quantity of cotton in his ear or did not properly pack such cotton when he took the impression. It is undeniable that it was the duty of the defendant to pack the ear so that the fluid would not flow by the packing. Reason and ordinary experience would say that that was not a difficult task and could have easily been done. The defendant had done it properly and successfully in a hundred cases. It was his duty to have done it properly and successfully in this case.

2. Under the law, the court is clothed with authority by Section 391, Title 28 U.S.C.A., to grant a new trial, as follows:

“All United States courts shall have power to grant new trials, in cases where there has been a trial by jury, for reasons for which new trials have usually been granted in the courts of law.”

In Garrison v. United States, 4 Cir., 62 F.2d 41, loc. cit. 42, the court said:

“Verdict may be set aside and new trial granted, when the verdict is contrary to the clear weight of the evidence, or whenever in the exercise of a sound discretion the trial judge thinks this action necessary to prevent a miscarriage of justice.”

In Duggan v. Fidelity & Casualty Co., Mo.App., 296 S.W. 822, loc. cit. 823, the St. Louis Court of Appeals, in upholding an order of court granting a new trial, said:

“There can be no question, on the record here, that plaintiff made out a strong case for the jury on this issue.”

That is to say, on the sole issue that was presented, as to whether or not an article had been stolen, and which article had been insured by the defendant.

In commenting on the justice and propriety of a new trial, the late Judge Graves of the Supreme Court of Missouri, in Keller v. St. Louis Butchers’ Supply Co., 229 S.W. 173, loc. cit. 175, said, where the trial judge was of the opinion that the verdict was contrary to the weight of the evidence:

“At common law the court, could for this cause set aside verdicts in such case as fast as they came to him, and as often as he saw fit to exercise the right.”

Then, in discussing a Missouri statute which forbids more than one new trial on the ground that the verdict was against the weight of the eyidence, Judge Graves said:

“The well-matured doctrine of the common law usually reached exact justice, and it is doubtful as to whether the real ends of justice have been subserved by our statutory modification of the common-law rule.”

The common law prevails in the federal court.

In the case of Littig v. Urbauer-Atwood Heating Co., 292 Mo. 226, loc. cit. 238-239, 237 S.W. 779, 782, the court said:

“It has been the settled doctrine of this court for more than 40 years that the trial court may grant one new trial to either party, where the verdict returned is deemed to' be contrary to the weight of the evidence.”

The author of that opinion then quoted from Judge Wagner, a former judge of the same court, in part as follows:

“¡ * * * and where the trial court is of the opinion that the verdict is not supported by the evidence, or is against the weight of evidence, it should never hesitate in exercising the power and giving the aggrieved party a new trial.’ ”

The writer sat in the above case and concurred in the opinion.

3. The third ground of the motion refers to claimed inadvertence in the charge. The statement of facts as hereinbefore made is probably sufficient discussion of that subject. If the court used the words “or if” in the charge, as above set out, then it was an erroneous charge. However, it is the court’s recollection that such words were not used, and most certainly it was never intended that they should have been used. They not only fail to make sense, but able counsel would have challenged their use at the time. The reporter, however, has produced her records showing that they were used. If the word “unless” was used in the charge, then the charge was favorable to plaintiff. However, in view of the ruling on other grounds, it is needless to discuss that question further.

4. The plaintiff further complains that the court erred in refusing requested Instructions 1 and 2. The first instruction was for a directed verdict in favor of plaintiff. It could hardly have been given as drawn for the reason that it directed a verdict generally for the plaintiff. The only peremptory instruction that could properly have been given was one telling the jury in substance that they must assume liability on the part of the defendant and that their function thereafter was to determine the amount of damages. The proposed instruction was not so drawn. The second instruction was an elaborate proposal with respect to the duty of the defendant to acquaint himself with the many modern means of taking impressions as in this case. That seemed wholly unnecessary. The pertinent and proper portions of the instruction were actually given by the court.

5. The last ground assigned was that counsel for the defendant was guilty of improper conduct toward the jury, which probably influenced the verdict. The alleged improper conduct was conversation with the jury during the intermissions of the court.

On that subject, the Supreme Court, in Kennedy v. Holladay, 105 Mo. 24, loc. cit. 35, 36, 16 S.W. 688, 691, said:

“It is the practice in this state, in civil cases, to’ permit the jury to separate at the usual recesses of the court, under a charge not to talk with any person in regard to the case, or permit others to talk with them, or in their presence, in regard to it.

“ * * * the courts look with suspicion upon any communications between parties to a suit and a juror impaneled to try it; and if such communication is had, and it appears that the parties talked about the suit or the communication is not explained satisfactorily, it will, in itself, be ground for new trial. If, when explained, however, it can be seen that in the communication nothing was said about the case, and nothing said or done for the purpose of influencing the mind of the juror, and the court cannot see from what was said or done, or from the verdict rendered by the jury that such communication had any influence in directing 'the verdict, it will not be set aside on account thereof.”

In this case counsel explained the conversation. Such conversation pertained to other matters than the case. However, the Kansas City Court of Appeals, in McGraw v. O’Neil, 123 Mo.App. 691, loc. cit. 708, 101 S.W. 132, 137, pointed out the proper conduct to litigants during the course of a trial:

“It is the duty of litigants and their attorneys to refrain, while the trial is in progress, from seeking the companionship of jurors during the necessary adjournments and recesses. They- should avoid even the appearance of evil, and, when it is brought to the attention of the trial judge that any person interested in the result of the cause on trial is attempting to court favor with jurors by any sort of attention, a prompt and sufficient rebuke should be administered, and should it appear that a party or his counsel with improper design has succeeded in bestowing favor on a juror, though it consists of nothing more than social attention, a verdict in favor of the offending party should be set aside.”

Attention is called to the above case, not with the ideá that the facts become so important in the present case, for the reason that on other grounds a new trial should be granted, but the admonitions of the opinion should be kept in mind generally by litigants and their attorneys in trying cases.

While the court is mindful that two juries have returned verdicts for defendant, yet that fact should not deter the court from granting a new trial when it is so obvious and clear that the verdicts were not only contrary to the evidence but an unmistakable miscarriage of justice. The issue of liability was a narrow and a simple one. A trial, too greatly prolonged, was conducted on both sides by very capable, alert and learned counsel. The attention of an honest and sincere jury was probably diverted from the issues to the more interesting and rather fascinating contest of wits between able counsel. The rapier-like verbal thrusts, brilliant retorts and repartee, flashes of challenging oratory combined to obscure the real issue in the case and left the jury under a spell from which it could not be aroused by the court’s prosy charge, even if correct.

In view of the foregoing, and in the interest of justice, a new trial should be granted and it will be so ordered.