author: KENNEDY, District Judge.

text:
    UNITED STATES v. 165.1978 ACRES OF LAND, MORE OR LESS, IN EAST HAMPTON TP., SUFFOLK COUNTY, N. Y., et al.
    No. 25.
    District Court, E. D. New York.
    Dec. 26, 1944.

      Milbank, Tweed & Hope, of New York City, for the motion.
    Harry T. Dolan, Sp. Asst. to Atty. Gen. (John A. Jordan, of Brooklyn, N. Y., of counsel), opposed.
   KENNEDY, District Judge.

On March 29, 1943, the Secretary of the Navy requested that steps be taken to acquire the exclusive use and possession of the premises herein involved. A petition in condemnation was filed on April 3, 1943, and an order for possession signed on April 6, 1943.

After some intermediate steps, which are not important here, the Secretary of the Navy in a communication to the Attorney General on September 19, 1944, said that it had now been found necessary to acquire a fee simple title to parcel A in this proceeding and by his letter requested that the proceedings be amended to this end.

Accordingly, on October 7, 1944, the second amended petition was again amended to show that so far as parcel A is concerned the judgment sought was to acquire a fee simple title rather than for use and possession for a term of years.

Prior to that date, and on September 26, 1944, a declaration of taking covering the acquisition of the fee simple title was filed and the estimated compensation deposited. This is called in the papers “Declaration of Taking No. 3”. The judgment on this declaration was entered on October 14, 1944.

It is the order of October 7, 1944, and the judgment on the declaration dated October 14, 1944, which are now attacked.

Mr. Perkins, an attorney associated with Milbank, Tweed & Hope, attorneys for the defendants, makes an affidavit complaining that the amending order and the judgment on the declaration were both entered ex parte. He says that they produced a “metamorphosis” in the pending proceedings and should be vacated because no notice was given to the defendants of the Government’s intention to make this change. The affiant states this is not orderly procedure but cites neither statute nor precedent in support of his criticism.

In papers submitted in support of the motion it is urged on behalf of the defendants that while their counsel could not show that the taking in fee might not be for public use, the declaration and order should be vacated, so that the defendants may have an opportunity to raise the issue (so far nonexistent) if so advised.

If the Government failed to comply with a statute requiring the giving of notice to the defendants, then obviously both the amended order and the judgment entered on the declaration must fall. But defendants do not even claim there is any such procedural requirement, and the Government demonstrates that it has taken all the steps that the statute (40 U.S.C.A. § 258a) requires. But this would not necessarily halt the inquiry. If any good reason could be implied in law why notice should have been given, then certainly an appeal might be made to the discretion of the Court, even if the statute is silent on the subject. But even if notice were given to the defendants, so long as there was a decision on the part of the Secretary of the Navy to take a title in fee rather than a temporary use, they could do nothing about it. It is beyond dispute now that in condemnation proceedings under this Act the Court cannot consider the desirability of taking private property for a public use. The Second War Powers Act, 50 U.S.C.A. Appendix § 632, 56 Stat. 177, ch. 199, Title II, § 201, was designed to facilitate the acquisition of property necessary for military, naval and other war purposes. It authorized such acquisition for temporary or any other use or interest. Judge Moscowitz construes a similar statute in United States v. 243.22 Acres of Land, Situate in the Village of Farmingdale, D.C., 43 F.Supp. 561, affirmed, 2 Cir., 1942, 129 F.2d 678, certiorari denied 317 U.S. 698, 63 S.Ct. 441, 87 L.Ed. 558. He says, and I agree, that it is almost unthinkable that such a power vested in the Executive could be properly exercised if the Courts could substitute their judgment for that of the cabinet officer charged with the duty to make the decision. Refusal of the Court to assume such power is not anything recent. Shoemaker v. United States, 147 U.S. 282, 13 S.Ct. 361, 37 L.Ed. 170; United States v. Threlkeld, 10 Cir., 72 F.2d 464, certiorari denied 293 U.S. 620, 55 S.Ct. 215, 79 L.Ed. 708; United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 33 S.Ct. 667, 57 L.Ed. 1063. The principle holds both in time of peace and war, and under all sorts of administrations.

And so, far from suggesting that the right to notice ought to be interpolated in the statute (40 U.S.C.A. § 258a), the rationale of these cases leads to the conclusion that no such requirement ought to be in it, because there would be no benefit to anyone and it might be a source of considerable delay and detriment to the Government in the acquisition of sites necessary for the successful conduct of the war.

The attorneys for the moving parties seem to recognize the weakness in their own position. They disclaim any intent to interfere with the Navy’s use of the premises and ask only that “these lawyers in Brooklyn” be required to proceed in what they call an orderly manner. They indicate very clearly that they “cannot say at this time that the taking in fee might be for a private use.” They merely want undone that which has already been completed in order that they may have an opportunity to produce proof which they say they do not now have and which they intimate they may never have. Certainly their position finds no support in the statute, the decided cases or in common sense.

The motion is denied.


source: Caselaw Access Project

author: VAUGHT, District Judge.

license: Public Domain

text:
    FIRST NAT. BANK & TRUST CO. OF TULSA v. JONES, Collector of Internal Revenue.
    No. 1234.
    District Court, W. D. Oklahoma.
    May 7, 1945.
    Conner & Winters, of Tulsa, Okl., for plaintiff.
    Charles E. Dierker, U. S. Atty., of Oklahoma City, Okl. (Samuel O. Clark, Jr., Asst. to Atty. Gen., and Andrew D. Sharpe and Lester L. Gibson, Sp. Assts. to Atty. Gen., on the brief), for defendant.
   VAUGHT, District Judge.

The plaintiff filed its income and excess profits tax return for the year 1937, showing an income tax due of $41,238.50, which was paid in five payments, the last payment having been made about December 14, 1938. After an examination of the return, there was issued by the Commissioner of Internal Revenue a certificate of overassessment and a refund of taxes, including interest, was made in the amount of $1,148.61, which overassessment and refund resulted from an adjustment solely on the basis of bonds sold during the year 1937. On or about the 7th of March, 1940, the plaintiff filed with the Collector of Internal Revenue a claim for refund of income taxes in the amount of $5,185.17, alleging under oath that in its income tax return for the year 1937 the plaintiff had included bad debt recoveries made in that year on debts that had been charged off in the years 1931 to 1935, inclusive, amounting to $34,567.79, which did not result in a reduction of the plaintiff’s income tax for the years in which said debts were charged off. There was attached to the complaint a detailed statement of the bad debt recoveries made in the year 1937 and erroneously included as income in the year 1937, showing the names of the debtors, the years in which said items were charged off, the total amount charged off in said years, the total recoveries made prior to 1937, and the recoveries made during the year 1937 on said charged-off items.

The total recoveries in the year 1937 of bad debts charged off in the years 1931 to 1935, inclusive, shown by the plaintiff’s 1937 income tax return to be taxable, amounted to $36,654.98,' none of which effected a tax benefit either in the year in which said debt was charged off or in subsequent years, except the amount of $2,-087.19, which represents the excess of recoveries of debts charged off in 1935 over and above the charge-offs for that year which did not effect a tax saving to the plaintiff or had not previously been recovered by the plaintiff.

By letter dated December 13, 1940, the Acting Internal Revenue Agent in Charge at Oklahoma City, Oklahoma, notified the plaintiff that instead of the plaintiff being entitled to a refund of $5,185.17, with interest, it was liable for additional taxes in the sum of $14,454.34. The ruling of said agent was based on the then ruling of the Treasury Department that bad debt recoveries shown in the plaintiff’s 1937 income tax return, but excluded from income because they did not represent a tax benefit in the years in which they were charged off, were in fact income.

The plaintiff has paid the additional taxes based on said ruling and has filed with the Commissioner of Internal Revenue a separate claim for refund of the amount so paid which at the time of the filing of the complaint had not been acted upon by the Commissioner, but since this action was commenced, the plaintiff’s contention with respect to said additional income tax has been sustained by the Commissioner.

On .May 16, 1941, the Commissioner notified the plaintiff by registered mail that its claim first above referred to had been disallowed and this action was instituted to recover the sum of $5,185.17, excess taxes paid, together with interest thereon.

Thereafter, the plaintiff filed its supplemental complaint in which it reasserted its claim to the $5,185.17 and the additional sum of $14,454.34, the amount alleged to be due on its claim resulting from the erroneous reassessment, or a total of $19,-639.51, with interest thereon.

The defendant has filed his answer admitting certain facts but denying the right of the plaintiff to recover either of the sums alleged due it.

The case was submitted on the stipulation of facts, and certain additional oral testimony.

It was stipulated that the original income tax return of the plaintiff for the year 1937 shows the net loss, after deducting nontaxable recoveries, was in the amount of $1,617.42. In the trial of the case the plaintiff introduced in evidence a statement showing the recoveries of bad debts in 1937 and also the plaintiff’s loss during that year, and claimed that the loss was $30,-235.87 instead of $1,617.42. The government objected'to this evidence on the theory that it contradicted the facts as disclosed in the plaintiff’s original return. The case was continued for final hearing and time was given the government to check the figures that the plaintiff had submitted. The matter was referred by the Internal Revenue Agent in Charge in Oklahoma City to one of its agents, W. H. DeBolt, and in a letter to said Agent in Charge, dated December 14, 1944, with reference to this statement of the plaintiff, Mr. De-Bolt stated:

“The writer understands that it is the plaintiff’s contention that the recoveries shown on the above-mentioned list are nontaxable and should be excluded from income for the year 1935, thereby increasing its net loss for that year. The writer concurs in the plaintiff’s view, and determines the net loss for the year 1935 to have been $30,235.87 computed as follows:
Loss as determined per RAR
dated 3/14/38 1,617.42
Adjustment, as explained below 28,618.45
Corrected net loss 30,235.87”

The letter then explained the adjustment and the manner in which the agent arrived at his conclusion. The government objects to the introduction of this- evidence on the ground that it violates the provisions of the stipulation.

The real issue in this case is whether or not DeBolt’s letter of December 14, 1944, should be admitted in evidence. It is not seriously contended by the government that the DeBolt letter does not state the real facts, but that it could not be admitted in the face of the stipulation.

The evidence is competent, and while a stipulation generally is binding, yet if there is an error in the stipulation based upon misinformation at the time of the making of the stipulation, the court not only has the power to correct, but should correct the mistake. The government’s own agent now states that the net loss of the plaintiff for the year 1935 was $30,-235.87, which is the contention of the plaintiff.

As to whether or not the stipulation is binding in the face of admitted error, our courts have expressed definite opinions.

“It is settled that a court cannot be deprived by stipulation of its power to give equitable relief. Hence, wherever justice requires a court may set aside a stipulation. ‘Such agreements may go far towards informing the court’s discretion; but it has inherent power, in the control of its own action, to relieve against them when made improvidently or when for any cause their enforcement would work injustice.’ Pal-liser v. Home Telephone Co., 1911, 170 Ala. 341, 54 So. 499, 500. The power to set aside extends to time stipulations. Palliser v. Home Telephone Co., supra; Borgman v. Bultema, 1920, 212 Mich. 70, 179 N.W. 347. It follows that the trial court had power to grant a further extension of time for making the payments despite the stipulation entered into by the parties. This required that it exercise its discretion judicially, not for reasons' clearly personal or otherwise legally insufficient.” Laughlin et al. v. Berens, 73 App.D.C. 136, 118 F.2d 193, 196.

“The plaintiff contends that the stipulation was entered into through a mistake of law; that it was in no sense a compromise, for the reason that the taxpayer received no consideration; and that the court below in the exercise of a sound discretion had a right to relieve the plaintiff from the stipulation.

“The trial judge sustained the contention of the plaintiff, and we think properly did so. After the plaintiff had filed its petition before the Board of Tax Appeals for a redetermination of the Commissioner’s findings of deficiencies, the Board decided the precise point raised contrary to the contention of the taxpayer, and it is apparent from the correspondence and the evidence given below that it was the intention of the taxpayer to submit to the finding of the Board. Afterwards, this court in the case of Marsh Fork Coal Co. v. Lucas, 4 Cir., 42 F.2d 83, .decided the same questions against the contention of the Commissioner, reversing the Board of Tax Appeals in its decisions under which the stipulation here was made. The decision in the Marsh Fork case has been accepted as the established law. Under these circumstances, the stipulation entered into was evidently an agreement made under a mistake of law and did not partake of the nature of a compromise. The plaintiff by the stipulation merely agreed to pay what it was not, under the law as finally determined, required to pay, and, when it discovered its mistake, had the unquestioned right to ask that it be relieved.” Brast v. Winding Gulf Colliery Co., 4 Cir., 94 F.2d 179, 181.

“One other matter with reference to the findings should be mentioned. Finding 4 recites that ‘plaintiff filed a consolidated income and profits tax return for 1918 for itself and the subsidiary corporations.’ This does not follow the wording of the stipulation of the parties which recites that ‘Wilson & Co., Inc. * * * and its affiliated companies filed a consolidated income, excess-profits, and war-profits tax return for the calendar year 1918,’ but we have many times held that we are not bound by the stipulation when it is contrary to a fact which appears in evidence. The finding recites the fact correctly.” Wilson & Co., Inc. v. United States, 15 F.Supp. 332, 348, 82 Ct. Cl. 261.

Judgment will be rendered for the plaintiff on its original complaint for $5,-185.17, together with interest, and on the supplemental complaint for $14,489.98, with interest as provided by law, as stipulated. Findings of fact, conclusions of law and a form of judgment may be submitted within ten days from this date. •


author: PICARD, District Judge.

text:
    GRAY v. GRAY et al.
    No. 4819.
    District Court, E. D. Michigan, S. D.
    May 29, 1945.
    Davidow & Davidow, of Detroit, Mich., for plaintiff.
    August F. Brandt, of Grosse Pointe, Mich., for defendant.
    Edward Pokorny, of Detroit, Mich., for himself as friend of Court.
   PICARD, District Judge.

This is an action to prevent enforcement of a contempt order in the state court, plaintiff having been cited for failure to pay alimony and basing his claim chiefly upon a divorce which he obtained in Nevada. The action is aimed against defendant wife and the friend of the Court, the wife having commenced separate maintenance proceedings against plaintiff before he moved to Reno. Learning of his wife’s action, plaintiff avoided service of process and established his residence in Nevada. Service was made upon the wife in Michigan according to provisions of the Nevada law. She did not enter an appearance and default was taken, the decree making no provision whatsoever for her future maintenance and no determination of her interests and rights in property held jointly or by plaintiff alone. Upon the husband’s return to Michigan, defendant Gray continued with her separate maintenance suit, getting personal service upon plaintiff herein.

Plaintiff claims he has a right to come into this court for two reasons— ■

First, the full faith and credit clause of the constitution (Article IV, Section 1) to-wit, that a divorce in Nevada is equally binding upon the State of Michigan and the due process and equal protection of law provisions of Amendment Article 14.

Second, that action in the contempt proceedings was initiated by the “Friend of the Court” and not by defendant wife.

Plaintiff asks a permanent injunction and defendants ask that plaintiff’s bill be dismissed.

Conclusions of Law

There is no doubt but that this divorce at the present writing, granted according to the laws of the State of Nevada, should be given full force and credit by the courts of the State of Michigan, although now it is recognized that the bona fides of the domicile can be questioned by other states. See Williams v. State of North Carolina, 317 U.S. 287, 63 S.Ct. 207, 87 L.Ed. 279, 143 A.L.R. 1273, and the same case under a different record and presenting a different issue decided by the Supreme Court May 21, 1945, 65 S.Ct. 1092. See also Esenwein v. Commonwealth, 65 S.Ct. 1118. The above case when first before the court in establishing the law overruling Haddock v. Haddock, 201 U.S. 562, 26 S.Ct. 525, 50 L.Ed. 867, 5 Ann.Cas. 1, specifically distinguishes between the legality of the divorce and the property rights of the parties. On this point Justice Douglas in his opinion said [317 U.S. 287, 63 S.Ct. 210] “Thus we have here no question as to extraterritorial effect of a divorce decree in so far as it affects property in another state. * * * Fall v. Eastin, 215 U.S. 1, 30 S.Ct. 3, 54 L.Ed. 65, 23 L.R.A.,N.S., 924, 17 Ann.Cas. 853; Olmsted v. Olmsted, 216 U.S. 386, 30 S.Ct. 292, 54 L.Ed. 530, 25 L.R.A.,N.S., 1292; Hood v. McGehee, 237 U.S. 611, 35 S.Ct. 718, 59 L.Ed. 1144. These decisions refuse to require courts of one state to allow acts or judgments of another to control the disposition or devolution of realty in the former. They seem to rest on the doctrine that the state where the land is located is ‘sole mistress’ of its rules of real property.”

A like position is expressed in Price v. Ruggles, 244 Wis. 187, 11 N.W.2d 513, 517, a Wisconsin decision, where it is stated, “Williams v. North Carolina, supra, expressly disavows considering the effect of the divorce judgment upon the property rights of the parties. * * * This case is to the point that a divorce granted in a state other than that of the wife’s residence upon service by publication only is not a bar to a subsequent suit by the wife in this state based on personal service upon the husband for a divorce and alimony and a division of the property situated within this state. The decision goes on the proposition that the granting of the divorce in the other state did not destroy the marriage status of the wife which is contrary to the decision in the North Carolina case, supra, which is conclusive on that question as it is based on the ‘full faith and credit’ clause of the United States Constitution, sec. 1, Art. IV. There is a concurring opinion in.the case by Mr. Justice Taylor in which he expressed the view that under the circumstances involved if the divorce destroyed the wife’s marriage status, she might, upon personal service upon the former husband, no alimony or dower having been awarded her by the divorce judgment, prosecute a suit in equity for alimony out of his property. It would seem that in this state a wife situated as was the first wife might bring an action for alimony even though the husband had no real estate or other property within it. Else a man worth a million dollars in personal property might leave the state, take all his property with him, go to Nevada and get a judgment of divorce after staying there sixty days and thus throw his wife and the burden of her support upon the public.”

Not only is this the view of the Supreme Court of the United States, the Supreme Court of Wisconsin but the long standing decision governing the position of Michigan Courts was laid down in Van Inwagen v. Van Inwagen, 86 Mich. 333, 49 N.W. 154, 156, which states as follows, “The facts set up in the cross-bill relative to the defendant procuring a divorce in the state of Indiana would not, if true, oust the circuit court in chancery for Hillsdale county of jurisdiction.”

Thus, we answer plaintiff’s firrt reason in the negative.

On the second point we again disagree with plaintiff. The rule permitting the friend of the Court to proceed in these actions is not contrary to the state law but the sections quoted by plaintiff in his brief are directly applicable against him. “8. Said circuit courts may from time to time make rules for regulating the practice of the said courts in matters not covered by rule of the supreme court or by statute.” Comp.Laws 1929, § 13941, subd. 8; Mich. Stat.Ann. § 27.542, subd. 8. See also Comp. Laws Supp.1940 Mich. § 12783, Michigan Annotated Statutes, § 25.171 declared constitutional in Metzinger v. Metzinger, 310 Mich. 335, 17 N.W.2d 203.

Yet granting that plaintiff’s contention on this point is correct, any relief given plaintiff on his bill of complaint here would be only temporary. The wife would immediately begin action in her own name.

Therefore, we believe that the bill of complaint should be dismissed and the plaintiff returned to jurisdiction of the state courts to resume his battle, however meritoriously, to retain the property which he has been able to amass during his long years of married life, having temporarily divested himself of at least part of his irksome bondage but in a manner that leaves much to be desired.


author: SWINFORD, District Judge.

text:
    TROY REFINING CORPORATION v. SLAGTER OIL & GREASE CO.
    No. 99.
    District Court, W. D. Kentucky, Owensboro.
    July 21, 1945.
    R. Miller Holland, of Owensboro, Ky., for plaintiff.
    Edward B. Hayes and Lord, Bissel & Kadyk, all of Chicago, Ill., and Wilbur K. Miller and Cary, Miller & Kirk, all of Owensboro, Ky., for defendant.
   SWINFORD, District Judge.

This is an action to recover the purchase price of a quantity of heavy fuel oil which the plaintiff alleges it sold and delivered to the defendant.

By an oral contract the plaintiff sold to-the defendant a quantity of heavy fuel oil to be delivered to the defendant at the-plaintiff’s dock, by being loaded into a barge-spotted at the plaintiff’s dock by the defendant, or a common carrier employed by the defendant. The plaintiff’s dock was on the Indiana side of the Ohio River at the-mouth of Anderson Creek. On April 28, 1942,- the barge in question, which is identified in the record as A.B.L. No. 23, was-spotted at the plaintiff’s dock by the American Barge Line Company, a common carrier employed by the defendant to receive-the oil from the plaintiff’s tanks. The oil •was to be carried in this barge to a destination fixed by the defendant and was sold for delivery to the barge and f.o.b the plaintiff’s dock.

Before loading the barge the plaintiff notified the defendant that the barge was spotted at the dock. The defendant sent its agent, John Benton, who went upon the barge and took a gauge of the various tanks to determine what oil, if any, they contained. This inspection was made on the afternoon of April 28th. Mr. Benton then returned to his office some 65 miles away at Spotsville, with instructions that he should be notified when the barge was filled to within 8 or 10 inches of the top. Shortly thereafter the loading began and the oil was run into the barge through a 4-inch pipe extending from the plaintiff’s shore tanks, which were a distance of approximately 2000 feet from the dock. Oil ran into the barge all night and when the barge was within about 18 inches of being filled, it stranded or grounded on its forward port corner. The loading was immediately stopped and by means of a winch truck, the barge was pulled or winched off of the ground and again floated free. No more oil was loaded into the barge.

The next step in the chronology of events is disputed and the plaintiff’s proof is to the effect that after the barge was winched off the ground, and shortly before noon, it called the defendant and advised it that the barge was ready to be topped out. The defendant denies that it ever received this call. According to the proof, however, which is not contradicted, shortly after noon, the barge began to list to the stern and the plaintiff called the United States Engineers’ office and advised them of this fact and asked what, if anything, could be done to prevent a possible sinking of the barge. It is not clear just what the advice was but nothing was done and the barge sank on the afternoon of the 29th, at sometime after 2:30 o’clock. No second gauge or inspection was ever made by the defendant.

The record presents two questions. The first question is whether or not there was a delivery of the oil. The second question is, if there had been a delivery within the meaning of the law, was the sinking of the barge caused by the negligence of the plaintiff ? I will discuss these questions in the inverse order of their statement.

The barge was under the control of the defendant, or its carrier, the American Barge Line Company, at all times. The plaintiff owed no duty other than to use ordinary care in loading the barge and handling it while it was receiving the oil.

The only bit of proof on this question is that the barge was only slightly grounded, that it was not caused to list while it was thus grounded, but remained at an even keel. Whatever may be the real facts as to whether the grounding caused a listing of the barge, the court has nothing before it from which to reach a conclusion other than the evidence of the witnesses, and they all agree that while this barge was grounded it maintained an even keel. While it may be well reasoned that the grounding at the forward port side of the barge, with the continued loading of the barge, caused the stern to list to such an extent that it received water in the vents and openings, I do not believe that the proof would justify the court in reaching this inference. As a matter of fact, there is positive proof that this barge did not begin to list for some two or three hours after it was winched off the ground. When it was observed that the barge was grounded, three or four men endeavored to push it off the ground by means of hand tools but were unable to do so. A winch truck was taken to the opposite side of Anderson’s Creek and, with a cable or manilla rope attached to a stanchion on the deck of the barge, the barge was ungrounded with what is represented as a single and slight pull by the winch truck. It then floated free at an even keel and remained at an even keel, as I have heretofore said according to the only proof on the question, for two or three hours, or until shortly after noon.

I cannot speculate on what caused the barge to sink and presume the negligence of the plaintiff. Negligence must be proved. Kentucky Glycerine Co. v. Woodruff Development Co., 233 Ky. 325, 25 S.W.2d 736. While negligence can be inferred from facts proven, the facts on which the inference or presumption rests must be proved. Stull’s Adm’x v. Kentucky Traction & Terminal Co., 172 Ky. 650, 189 S.W. 721. The defendant here seems to take the position that the plaintiff must prove that it was not negligent. I do not have before me Shearman & Redfield on Negligence, 6th Ed., Section 58(b), in which a quotation from Scott v. London, etc. Dock Co., 159 Eng.Repr. 665, as given in defendant’s brief, is quoted, but from the authorities cited in the brief which I do have available I cannot find any reason to place this burden of proof of no negligence upon the plaintiff.

Consequently I must necessarily conclude from this evidence and from any reasonable inference which may be drawn from the evidence, that the sinking of the barge was not caused through any negligence on the part of the plaintiff. That the only thing that was done was the ungrounding of the barge, which seemed to be a relatively minor undertaking, which was successfully carried out by conventional methods. There is no showing that the plaintiff at any time while the barge was being loaded failed to exercise ordinary care to prevent damage.

The next question in this case, and the one first above stated, is whether or not there was a delivery of the oil to the defendant within the meaning of the law.

One circumstance to be considered in the determination of this question is the fact that this oil was a by-product of the refinery and the plaintiff had been selling all of this by-product to or through the defendant for eight months prior to the happening involved here. Seven or eight barge loads of oil had been delivered to the defendant in this same way and under the same circumstances. It is not clear and I cannot ascertain from the record the amount of oil that was contained in these other barges. That is, whether or not they were filled to capacity at the time they left the plaintiff’s dock on. the previous occasions. The plaintiff states that it had an arrangement or tentative understanding with the defendant to receive all of its heavy fuel oil. The defendant contends that it purchased a barge load of oil and that since a barge load of oil had not been delivered, there was no delivery of oil at the time of the loss; that no title passed and it was under no obligation to pay for the oil until the barge had been filled to within 8 or 10 inches of the top and an opportuuity for inspection had been given. There is a general statement of the issue involved here contained in 46 American Jurisprudence p. 605, § 440, which I quote: “The question as to when the title passes in case of a delivery to a carrier for transportation to the buyer primarily depends on whether such delivery is a full compliance with the duty of the Seller with respect to delivery, and on the intention of the parties as to whether the title shall pass at the time of such delivery or not. It is the general rule, where the goods sold are to be shipped by carrier and the place of delivery is the point of shipment, that a delivery of the goods to a carrier, consigned and properly directed to the buyer, whether the carrier is one designated by the buyer or by the seller with the consent of the buyer, passes the title to the buyer if there is nothing else to show a contrary intention. In such case, the time and place of delivery are regarded as the time and place of sale, the carrier is deemed the bailee of the buyer for the purpose of transportation, and the seller is deemed the agent of the buyer in employing the carrier.”

The defendant has filed herein a very excellent and exhaustive brief. Most of the cases cited in the brief, however, are from state courts of last resort or English authorities which I do not have available. I believe, however, that the quotations from these authorities are not at variance with the general understanding of the rule on the question of the passing of title and it only remains to determine whether or not the facts in this case bring it within the rule that title passes to the buyer upon delivery of the goods unless there is something expressly to the contrary in the contract or arrangement between the parties.

Here 90 percent of the oil had been delivered and the barge was practically filled. According to the plaintiff’s theory the defendant had been notified and had had ample time to make any further inspection which it might desire and it had not concluded topping out the barge, since it was awaiting inspection by the defendant. It is true that the barge had not been filled to within “8 or 10 inches” of the top but it had been filled to within about 15 or 18 inches of the top. All of this is an approximation and it would be straining a point to say that this barge had not been filled to approximately the amount directed by the agent of the defendant and was ready for inspection and to be topped out. There can be no question but that the oil was the product and of the quality ordered by the buyer. According to the testimony it was a well identified by-product which the plaintiff had been selling to the defendant for the past several months and there is nothing to indicate that either party expected or required an inspection as to quality. Had there been no loss there would undoubtedly have been a delivery as on previous occasions without any thought of looking into the quality or inspecting the quality of the product.

John Benton, the agent of the defendant, had been at the plaintiff’s plant within a few hundred feet of its tanks, from which the oil was to be taken and did not request that he examine it or question its quality, but directed that the barge was ready to receive the oil. It must be assumed that it was well understood between the parties that this was a product similar in kind and quality to that which the defendant had been buying from the plaintiff for past several months.

Considering the question of delivery, 1 think the Kentucky statutory provision should govern. Kentucky has adopted the uniform sales act. Section 361.460, subsection 1, of the Kentucky Revised Statutes provides that delivery of the goods to a carrier for the purpose of transmission to the buyer is a delivery. Also, subsection (4) (b), of § 361.190, K.R.S., states that a delivery to a carrier for the purpose of transmission is an unconditional presumption that the seller has delivered the goods to the buyer and it is expressly provided that this presumption is applicable, although by the terms of the contract, the buyer is to pay the price before receiving delivery of the goods and the goods marked with the words “collect on delivery” or their equivalent. We see from this statutory enactment that it is the whole purpose of the law of sales, and the uniform sales act, to definitely fix a time for the passage of title to goods and to avoid uncertainty and speculation in so far as it is possible. I cannot but conclude here' that there was a substantial compliance with the contract when these goods were delivered into the barge and the barge was ■ approximately full and the difference between the amount to which it was to be filled, as directed by the buyer, and the amount to which it was filled, as shown by the proof, was at most five or six inches.

The case of Nelson Bros. Coal Co. v. Perryman-Burns Coal Co., Inc., 2 Cir., 48 F.2d 99, 100, seems to be a case in point. In the opinion the court said:

“In general, where a sale is made f. o. b. the point of shipment, title passes to the seller upon delivery to the carrier, and the goods sold are at the buyer’s risk. United States v. R. P. Andrews & Co., 207 U.S. 229, 28 S.Ct. 100, 52 L.Ed. 185; Standard Casing Co. v. California Casing Co., 233 N.Y. 413, 135 N.E. 834; Rosenberg Bros. & Co. v. [F. S.] Buffum Co., 234 N.Y. 338, 137 N.E. 609. This rule would seem to apply with special strength where the coal was loaded into a barge belonging to the purchaser. In the present case the buyer was to pay both freight and insurance as well as trimming and other expenses at Undercliff. A right to inspect and reject the coal if it did not meet contract requirements would not prevent the passage of title.
“In Louisville & Nashville R. R. v. United States, 267 U.S. 395, 45 S.Ct. 233, 236, 69 L.Ed. 678, where the United States reserved the right to test coal after transportation and reject it if it did not come up to specification, it was held that such a right ‘was not inconsistent with transfer of title * * * at the time of delivery of the coal on cars at the mine.’ Delaware, Lackawanna & Western R. R. v. United States, 231 U.S. 363, 34 S.Ct. 65, 58 L.Ed. 269; Illinois Cent. R. Co. v. United States, 265 U.S. 209 44 S.Ct. 485, 68 L.Ed. 983.”

A much quoted case on this question is United States v. F. R. P. Andrews & Co., 207 U.S. 229, 28 S.Ct. 100, 104, 52 L.Ed. 185. The fundamental rule taken from the opinion is: “That, as a general rule, the delivery of goods by a consignor to a common carrier, for account of a consignee, has effect as delivery to such consignee, is elementary. That where a purchaser of goods directs their delivery for his account to a designated carrier, the latter becomes the agent of the purchaser, and delivery to such carrier is a legal delivery to the purchaser, is also beyond question. Certain also is it that when, on the delivery of goods to a carrier, bills of lading are issued for the delivery of the goods to the consignee or his order, the acceptance by the consignee of such bills of lading constitutes a delivery.” See to same effect in Kentucky, Woodbine Children’s Clothing Co. v. S. Goldnamer & Son, 134 Ky. 538, 121 S.W. 444, 20 Ann.Cas. 1026; Fisher v. Commonwealth 147 Ky. 821, 145 S.W. 737, 44 L.R.A.,N.S., 435.

It is strongly urged by the defendant that no delivery was completed because the quantity of oil that had been ordered by the defendant was a barge-load of oil and since the barge was not filled at the time it was sunk, the agreement to deliver a barge-load of oil had not been fulfilled. Thus it is reasoned that since something remained to be done by the seller, the buyer was not bound to accept less than a barge-load and no delivery was completed.

In considering this phase of the case, the court takes into consideration the prior custom of dealing between the parties in relation to this oil. It appears that there was a definite understanding which had been in effect for several months, that the defendant was to take all the oil of this type off the plaintiff’s hands at an agreed price. This was not a separate and distinct contract but was rather a continuation of dealings had between the parties in relation to all of the plaintiff’s heavy fuel oil. In other words, the understanding between the parties was not so much that there should be delivered •a barge-load of oil at this particular time as that the defendant was to take whatever amount of oil the plaintiff had on hand. This previous course of dealing between the parties, which in reality relates back to an understanding of several months prior to the 29th of April, is one element strongly pointing to the intention of the parties.

G. I. Frazier v. Owensboro Stave & Barrel Co., 162 Ky. 301, 172 S.W. 652.

I must conclude that this was not so much the sale of a unit of oil (that quantity identified as a barge-load), but was a delivery of a part of the whole quantity of oil produced by the plaintiff, which it had agreed to deliver to the defendant whenever this oil, (a by-product), accumulated in sufficient quantity to approximate a barge-load, which might be either a little more or a little less than a full barge-load.

Prior to the adoption of the uniform sales act, the Kentucky courts had adhered to the rule that title passed at the time the contract of sale was entered into, regardless of payment of purchase price or delivery, and it held in a number of cases that the property and risk of accident vested in the buyer as soon as the bargain was struck. Thompson v. Brannin &c., 94 Ky. 490, 21 S.W. 1057; Newcomb, Buchanan & Co. v. Cabell, &c., 10 Bush, Ky. 460.

In the case of Howard v. St. Louis Jewelry Co., 146 Ky. 160, 142 S.W. 241, the buyer of a quantity of jewelry declined to pay for it. His defense was that on the night he received it, it was destroyed by fire and he had never had an opportunity to inspect it. The trial court declined to submit this issue to the jury and this action was approved by the Kentucky Court of Appeals. In that case the whole question was whether or not a sale had been consummated.

It is my judgment that, under all the circumstances and conditions of this case, there had been a full and complete delivery of the goods within the meaning of the terms of the contract or arrangement between the parties and that the loss sustained should fall upon the buyer.


author: BYERS, District Judge.

text:
    UNITED STATES v. 11 ACRES OF LAND, MORE OR LESS, SITUATE IN VILLAGE OF HICKSVILLE, TOWN OF OYSTER BAY, NASSAU COUNTY, N. Y., et al.
    No. 69.
    District Court, E. D. New York.
    July 20, 1945.

      Harry T. Dolan, Sp. Asst. to the Atty. Gen. (Thomas J. Gallagher, Sp. Atty., of Brooklyn, N. Y., of counsel), for petitioner-plaintiff.
    Paul Kelly, of Freeport, N.Y., and Charles V. McDonald, of New York City, for claimant Alexander Verity.
   BYERS, District Judge.

The Court is called upon to determine the measure of fair compensation to be paid to the claimant in this proceeding for the taking of his property by the Government in Condemnation.

Having heard and considered the testimony, and visited the property, I do now make and state the following:

Findings

1. The damage parcel is part of a tract of farmland containing 20.7478 acres, situate at the corner formed by the easterly side of Bloomingdale Road, also known as New South Road, and the northerly side of Mulberry Street, Hicksville, Nassau County, State of New York, and within the Eastern District of New York, and more particularly shown on the Damage Map, Government Exhibit 1.

2. The parcel taken comprises 11.0126 acres, and consists of the northerly part of the said tract, and is bounded and described as follows:

“Beginning at a point on the easterly line of Bloomingdale Road, sometimes called New South Road, distant 375.28 feet northerly from the intersection of the northerly line of Mulberry Street and the easterly line of Bloomingdale Road, said point of beginning being a monument located at the southwesterly corner of the property intended to be described herein; thence running North 5° 00' East and along the easterly line of Bloomingdale Road a distance of 500.00 feet to land now or formerly of Peter Gilweiler; thence South 81° 10' 30" East and along the southerly line of land now or formerly of Peter Gilweiler 837.48 feet to the southwesterly line of land of the Long Island Railroad; thence South 38° 36' East and along the southwesterly line of land of the Long Island Railroad 426.88 feet to land of McGunninge or Vogel; thence South 5° 00' West and along land of Mc-Gunninge or Vogel 135.00 feet to a monument; thence North 85° 00' West 1130.00 feet to the monument on the easterly line of Bloomingdale Road at the point or place of beginning.
“Containing within said bounds 11.0126 acres of land, more or less”.

3. Judgment was entered in this court on November 9, 1944, confirming the vesting of title to said land in the United States of America on November 8, 1944, pursuant to Declaration of Taking filed on that day.

4. An order had been made and entered on September 26, 1944, granting to the petitioner the immediate use and occupancy of the premises pursuant to Petition in Condemnation.

5. The property so taken was farmland, in use for agricultural purposes on the date of said last mentioned order.

6. The best available use of the said land at that time was for agricultural purposes.

7. The fair and reasonable value of the said 11.0126 acres on September 26, 1944, was $900.00 per acre, or $9911.70.

8. The claimant in this proceeding did not sustain any consequential or severance damage in addition to the sum last above stated, by reason of the taking of the said 11.0126 acres from the original tract consisting of 20.7478 acres.

The foregoing require but little comment or explanation. The property taken is part of a farm applied to dairy uses, for which the annual rental at the time of taking was $900.00.

The proximity of the farm to the plant of the Grumman Air Craft Corporation imparted to it, as to all other holdings in the vicinity, an element of potential value for possible requisition in connection with the air craft industry, which depended upon the course of the War, and the extent to which the necessities arising therefrom might involve plant extension. That condition was present in September of 1944, and explains some of the sales of property upon which the experts on both sides based their opinions.

Mr. Edwards, testifying for the claimant,, gave it as his opinion that a price of $1400.-00 per acre was the proper basis of valuation, whether the property be deemed best fitted for industrial or residential purpose's, i. e., development.

Messrs. Strauss and Browne, for the Government, were respectively of the view that $700.00 and $723.00 per acre represented the correct value.

All but one of the sales considered by all witnesses were at $750.00 per acre or less, and that one was the McGunnigle sale to Grumman, in November of 1943, of 55 acres at $1250.00 per acre.

I do not believe that transaction can be accepted as establishing a standard acreage price for the ensuing two years, for all property in the vicinity, even though it is close in point of time and contiguity; nor is it possible to dismiss it entirely because it is not strictly a comparable transaction as to extent of acreage or physical characteristics of the property; the concrete highway running through the McGunnigle property rendered that acreage peculiarly desirable, since transit through it, by the large number of employees using motor cars to and from the Grumman plant, must have been an important element in the acquisition of so large a factory property.

Another apparent but not actual exception is the Pflegler sale to Di Gaitano, in September of 1943, of a 10 acre farm including buildings at $9500.00, since the valuation of the structures thereon erected is not shown.

The elusive element, in the effort to assign to farmland an added factor of value because of the near presence of an airplane plant and its possible requirements for expansion, resides in the reflection that if the need for planes for the purposes of war should come to an end, as surely it must, the potential value would disappear with that happening, and no other industrial use was observable, in September of 1944, as likely to affect the demand for this property; which means that the hidden factor, as of that time, was necessarily of limited duration, so far as the then visible future was concerned. In the effort to add to what may be termed the stable value of this land which I believe to have been $700.-00 per acre, an additional reasonable element of transitory value ascribable to the conditions that have been indicated, I have concluded that $900.00 per acre would fairly and reasonably compensate this claimant for the 11.0126 acres taken in this proceeding.

Mr. Edwards was also of the opinion that an award should be made for consequential or severance damage, since he thought that the value of the remaining portion of the property, not taken, was adversely affected by the loss of the original frontage on the railroad right of way included in the portion taken, there being no such frontage in the remaining 9.7352 acres, which contain the residence, barn, etc.

I do not consider that severance damage has been demonstrated.

It is of course conceivable that the 9.7352 acres remaining to the claimant of his original tract might be offered as a factory site and rejected because there is no frontage on the right of way of the Long Island Railroad, but in view of all conditions known and established on September 26, 1944, that suggestion may be ascribed to hope rather than expectation; to the seductive reveries inspired by the character of the witnesses’ calling, rather than to any tangible foundation exposed in the evidence.

There is equally no justification for awarding such special damage by reason of a possible diminution in the claimant’s reduced holding, for there is no showing in the evidence that the remaining acreage was of-less unit value after the taking than before, because of the taking. There is testimony that 10 acre farms are in demand, and that is practically what the claimant now owns. There is a suggestion that it is less desirable as a farm because of the presence now of a manufacturing plant on the 11.0126 acres which have been taken, but that is the opinion of a real estate expert, not of a farmer. No one engaged in that essential calling testified as a witness, on that or any other subject.

The conclusion that so-called severance damages have not been established is based upon a consideration of what was written in Sharp v. United States, 191 U.S. 341, 24 S.Ct. 114, 48 L. Ed. 211; United States v. Miller, 317 U.S. 369, 63 S.Ct. 276, 87 L. Ed. 336, 147 A.L.R. 55; and Baetjer v. United States, 1 Cir., 143 F.2d 391.

Settle order in accordance herewith.


author: JAMES ALGER FEE, District Judge.

text:
    In re SWENSON.
    No. 21338.
    District Court, D. Oregon.
    June 30, 1945.
    No appearances noted.
   JAMES ALGER FEE, District Judge.

The petitioner seeks to become -a citizen of the United States by a judgment of this court. He has the imprimature of the examiner who, according to his statement in the record, is bound by instructions of the Central Office to recommend Swenson. The examination of petitioner took place in open court. His knowledge of the form of government and the content of the Federal Constitution is sketchy and confused. He reads English with extreme difficulty and cannot interpret what he has read. But according to his testimony, he is sixty-seven years old. He has been in this country for forty-four years. He has never married.

The examiners have heretofore, in like proceedings, informed the court that under instructions from the Central Office, no attempt is made to establish educational qualifications of applicants for citizenship for persons over the age of sixty. Such a rule does not carry out the intent of the-legislation governing admission to citizenship. Numerous examinations of applicants has shown that the Central Office regularly directs that a petitioner be recommended for admission although he cannot, write or read English, and although he-speaks and understands English very imperfectly. This practice contravenes the-statute which requires that no one shall be naturalized upon his own petition “who cannot speak the English language.”

The ability to mumble a few common English words and banal expressions in a foreign accent, and to understand a few simple questions, or directions, does not demonstrate the capacity to speak English in connection with a requirement of attachment to the principles of the Federal Constitution. The court would be entitled to consider the fact that admission of applicant would make him a citizen of the State of Oregon as well as of the United States. Literacy is required for the exercise of civil rights in this state.

It is of no avail to urge that the native-born need not possess these qualifications. The alien is only entitled to citizenship when he proves he possesses the statutory requisites. Any reasonable doubt should be resolved against the applicant. A clear exposition of this feature is contained in the opinion of Judge Yankwich entitled United States v. Bergmann, D.C., 47 F.Supp. 765, 766. It is there said:

“Naturalization is a privilege. It is granted only upon strict compliance with the conditions laid down by the Congress. 8 U.S.C.A. § 701 et seq. As said by the Supreme Court in Luria v. United States, 1913, 231 U.S. 9, 23, 34 S.Ct. 10, 13, 58 L.Ed. 101: ‘These requirements plainly contemplated that the applicant, if admitted, should be a citizen in fact as well as in name, — that he should assume and bear the obligations and duties of that status as well as enjoy its rights and privileges. In other words, it was contemplated that his admission should be mutually beneficial to the government and himself, the proof in respect of his established residence, moral character, and attachment to the principles of the Constitution being exacted because of what they promised for the future, rather than for what they told of the past.’ See United States v. Beda, 2 Cir., 1941, 118 F.2d 458, 459; Samras v. United States, 9 Cir., 1942, 125 F.2d 879, 881.
“Thus, in many respects, more is demanded of an alien than of a native-born citizen. A native-born citizen need not be literate to exercise his civil rights, unless the state law so requires. But an alien must know the English language. 8 U.S. C.A. § 704. No matter how well educated he might be in other languages, ignorance of English is a bar to citizenship.
“A native-born citizen may be a conscientious objector. An alien, even a woman, who refuses to bear arms, cannot be naturalized. United States v. Schwim-mer, 1929, 279 U.S. 644, 49 S.Ct. 448, 73 L.Ed. 889; United States v. Macintosh, 1931, 283 U.S. 605, 51 S.Ct. 570, 75 L.Ed. 1302; United States v. Bland, 1931, 283 U.S. 636, 51 S.Ct. 569, 75 L.Ed. 1319; In re Warkentin, 7 Cir., 1937, 93 F.2d 42.
“A native-born citizen may be immoral. And, unless he is convicted of a felony, he cannot be denied his civil rights. But an alien must be of good moral character before he can be admitted to citizenship. 8 U.S.C.A. § 707.
“More, a native-born citizen may be opposed to the principles of our constitutional government. And, unless he actually advocates its overthrow, by force, he may go unmolested. But an alien must be ‘attached to the principles of the Constitution of the United States, and well disposed to the good order and happiness of the United States.’ 8 U.S.C.A. § 707. (And see United States v. Tapolcsanyi, 3 Cir., 1930, 40 F.2d 255, 257; Kjar v. Doak, 7 Cir., 1932, 61 F.2d 566, 569.)”

The question as to whether the petitioner should be admitted is very much in balance as a result of his examination to this point. The subsequent testimony developed a situation which is conclusive. The petitioner admitted under pressure that he had been making moonshine in 1922, or 1923, and was driving while intoxicated about 1924, and was arrested on each occasion. Within the last five years he has been arrested and convicted of drunkenness three times, according to statements made on the preliminary examination. While these matters are not controlling alone, the attitude of petitioner on the stand regarding them indicated a desire to mislead the court and conceal the facts.

The court asked whether in view of the attitude of the petitioner, and the matters disclosed upon examination, the examiner desired to adhere to his former recommendation. The answer was as follows: “We are bound by instructions of the Central Office.”

The court concludes that the petitioner has not the moral character, or other qualifications to be admitted as a citizen of the United States.

Detailed findings will be prepared as a basis for an order denying admission.

      This practice is improper as has been, shown before. See In re Boric, D.C., 61 F.Supp. 133, note 4.

       Act of October 14, 1940, c. 876, Title I, Subchap. Ill, § 304, 54 Stat. 1140, 8 U.S.C.A. § 704.

       Ex parte Shahid, D.C., 205 F. 812; In re Vasicek, D.C., 271 F. 326; In re Goldberg, D.C., 269 F. 392; In re Meakins, D.C., 164 F. 334; In re Kanaka Nian, 6 Utah 259, 21 P. 993, 4 L.R.A. 726.

       O.C.L.A. § 81-103; see Petition of Katz, D.C., 21 F.2d 867.

       ln re Boric, supra.

       The above case was reversed upon the grounds that in a cancellation proceeding the evidence must be clear, un-equivocable and convincing, but nothing was said which militated against the expressions above quoted. See Bergmann v. United States, 9 Cir., 144 F.2d 34.


text:
    POTTS v. ELLIOTT.
    No. 336.
    District Court, E. D. Kentucky, Lexington Division.
    July 3, 1945.
    J. A. Edge, of Lexington, Ky., for plaintiff.
    Henry T. Duncan, of Lexington, Ky., for defendant.
   SWINFORD, District Judge.

The defendant, J. Nathan Elliott, is the duly appointed, qualified, and acting Referee in Bankruptcy for the Eastern District of Kentucky. He held this office at all times mentioned in the record. The plaintiff, Mary Burgin Potts, was duly adjudged a bankrupt on the 20th day of August 1943 and, by order of reference, her case was pending before the defendant, J. Nathan Elliott, as Referee in Bankruptcy.

Certain steps were had and hearings held before the Referee in the prosecution and administration of the bankruptcy matter and on January 6, 1944, the defendant filed his certificate with the Honorable H. Church Ford, United States District Judge of the court under which he was serving as Referee, alleging that the plaintiff here had disobeyed certain orders of the bankrupt court and should be considered by the District Judge in the light of contempt of court and adjudged such punishment as the Judge deemed proper.

Upon a hearing of the contempt proceeding it was determined by the District Judge that the order which the bankrupt (plaintiff here) had allegedly violated was not such an order, the violation of which was properly punishable for contempt and the case was remanded to the Referee for such further proceedings as might be necessary, without prejudice to any proceeding that might thereafter be instituted for contempt.

Thereafter this action for libel was instituted by the bankrupt against the Referee. The defendant filed a proper petition for removal under the Judicial Code, § 33, as amended, 28 U.S.C.A. § 76. The plaintiff has filed what is denominated “An Answer to the Petition for Removal and Plea to the Jurisdiction of the District Court of the United States and Plea in Abatement to the Removal.” The answer denies all of the allegations in the petition for removal. There were, however, certain facts of which the court must take cognizance and which, even though there is an allegation and denial, are, of necessity, disclosed by the record.

The first is that the defendant is a Referee in Bankruptcy under an appointment by this court and is therefore an official of the court within the meaning of the removal statute. It cannot be seriously disputed that, as a matter of law, a referee in bankruptcy is such an officer of the court as was contemplated by the Congress when section 33 of the Judicial Code, and the amendment thereto, was enacted. He is in fact really more than an officer of the court as that term is usually understood. He is doing more than merely carrying out the orders of the court but rather acting in the place of the court and as the court in a judicial proceeding. My research on this question has failed to disclose any case in which a referee was involved. I find, however, that in the case of Buttner v. Miller, Fed.Cas.No.2,254, 1 Woods 620, as reported in the Federal Digest, Removal of Causes @^22, an action to recover damages for alleged slanderous words spoken by a United States Collector of Customs, while in the discharge of his official duty was properly removed to the United States Court. An action involving the good faith of a Federal Court receiver based on alleged delinquencies and associations with other defendants is removable under this statute. American Locomotive Co. v. Histed, D.C., 18 F.2d 656; Newell v. Byram et al., D.C., 18 F.2d 657.

An examination of the authorities discloses that the courts have been very liberal in construing the statutory provision and have held that it includes commissioners and receivers appointed by the courts. Matarazzo v. Hustis, D.C., 256 F. 882.

In the comparatively recent case of Brann et al. v. McBurnett et al., D.C., 29 F.Supp. 188, 190, the court, using a quotation from the North Carolina Court, said:

“It is the policy of the courts to give a liberal construction to the provisions of the removal statute under consideration. As stated in State of North Carolina v. Sullivan, C.C., 50 F. 593, 594: ‘This statute is highly remedial, and I am of opinion that it should receive a liberal construction in all courts * * *. This statute is not a usurpation of authority in disregard of the rights of the states. It certainly cannot be considered as unjust and unreasonable for the federal government to assert the constitutional and essential right to investigate in its own courts the alleged wrongful conduct of its own officers when acting under color of its authority, and in obedience to its mandates.’ ”

The gravamen of this action on which the plaintiff must rest her case is the certificate of the Referee to the Judge of the District Court. The plaintiff, by her answer to the petition for removal, denies that, at the time of the commission of the acts complained of in her petition, the defendant was acting under color of his office as referee or by authority of the laws of the United States of America or in the performance of his official duty.

The court must consider this denial as a mere conclusion as it is evident from the whole record and from the allegations contained in the plaintiff’s petition as filed in the state court, that the conduct and action of the Referee, whether it be determined to be proper or improper, grew out of the bankruptcy hearing. As was said in the case of Ex parte Dierks, D.C., 55 F.2d 371, color of office under which an officer’s acts must be done may cover a claim which is later proved to be groundless.

In considering this whole question and notwithstanding the fact that there may be certain issues of fact raised by the pleadings through- the denial of the allegations of the petition for removal, I must conclude from the whole record that this is an action reasonably within the contemplation of section 33 of the Judicial Code and that the case should not be remanded to the state court.

An order to that effect is this day entered.


author: GALSTON, District Judge.

text:
    POST et al. v. UNITED STATES.
    Civil Action No. 4932.
    District Court, E. D. New York.
    June 12, 1945.
    Julian S. Bush, of New York City (W. Kintzing Post, of New York City, of counsel), for plaintiffs.
    Samuel O. Clark, Jr., Asst. Atty. Gen., Andrew D. Sharpe, and Frederic G. Rita, Sp. Asst. to Atty. Gen., and Miles F. McDonald, U. S. Atty.,. and Frank J. Parker, Asst. U. S. Atty., both of Brooklyn, N. Y., for defendant.
   GALSTON, District Judge.

Both parties have moved for summary judgment.

The facts are not in dispute. The suit is one for the recovery of federal estate taxes alleged to have been assessed erroneously and illegally against and collected from the plaintiffs in the amount of $1404.-63. It appears that Mary Lawrence Post, the decedent, executed a deed of trust which provided that the income on the trust fund was to be paid by the trustees to and for the use of all of the children of Henry Grafton Chapman and Martha Chapman then and thereafter born, and the lawful issue of any child of theirs who may die during the term of the trust.

Upon the termination of the trust by the death of the survivor of Elizabeth Chapman and Robert Perkins Chapman, children of Henry Grafton Chapman and Martha Chapman, the principal of the entire fund was to go to the lawful .issue then living of Henry Grafton Chapman and Martha Chapman, or failing any such issue, then to the. lawful issue then living of the trustor.

The settlor, Mary Lawrence Post, on May 6, 1930, when the deed of trust was executed by her, was fifty-nine years old; Henry Grafton Chapman and Martha Chapman, his wife, were respectively forty-two and thirty-three years old; their children, Elizabeth and Robert, were respectively seven and five years old. Moreover, at that time the settlor had living six children and four grandchildren.

The settlor died on August 12, 1939 at the age of sixty-nine years. She was survived by Henry Grafton Chapman and Martha Chapman, as well as by their children, Elizabeth and Robert Chapman, their only children at that date. The settlor was survived by six children and eight grandchildren.

On March 8, 1943 the Commissioner of Internal Revenue determined a deficiency in the estate tax, of which $1227.18 resulted from the inclusion by the Commissioner, on the authority of Section 811(c) of the Internal Revenue Code, 26 U.S.C.A. Int. Rev.Code, § 811(c), of an alleged rever-sionary interest of the decedent under the aforesaid deed of trust. On April 8, 1943, plaintiffs paid the additional assessment with interest, and now seek by this action to recover it, having made due demand upon the Collector who rejected the refund claim.

It is the contention of the Government that in the circumstances recited, the settlor retained a reversion in the trust corpus so as to make the trust property taxable and part of the settlor’s estate, as determined by the Commissioner under Sec. 302 (c) of the Revenue Act of 1926, 26 U.S. C.A. Int.Rev.Acts, page 227. (Provisions of the Statute will be found in the margin.)

The defendant argues that the trust deed having provided, “upon the termination of this trust, by the death of the survivor of said Elizabeth Chapman and Robert Perkins Chapman, the principal of the entire fund shall go and belong to the lawful issue then living of said Henry Grafton Chapman and Martha Chapman * * * or failing any such issue, then to the lawful issue then living of the settlor * * if all the designated persons had pre-deceased the settlor, the trust corpus would have reverted to the settlor. The contention is that since a person’s issue cannot be determined until his death, no remainder was ever created by the attempted conveyance to the issue of the settlor. It is argued that this interest did not pass until the settlor’s death, and that the value of the corpus, less the value of the two outstanding life estates, was properly included in her taxable estate, citing Helvering v. Hallock, 309 U.S. 106, 60 S.Ct. 444, 84 L.Ed. 604, 125 A.L.R. 1368; Fidelity-Philadelphia Traction Co. v. Rothensies, 65 S.Ct. 508, and Commissioner v. Field’s Estate, 65 S.Ct. 511.

However, the principle laid down in Hel-vering v. Hallock, supra, is not clearly applicable in this case. There the trust involved a gift of the income to the wife of the settlor for her life and on her death the corpus was to pass to the settlor, if then living, and if dead to the children. The court said [309 U.S. 106, 60 S.Ct. 448]:

“The statute taxes * * * inter vivos transfers that are too much akin to testamentary disposition as not to be subjected to the same excise. * * * bringing into the gross estate at his death that which the settlor gave contingently upon it.”

In a very able brief the plaintiffs, analyzing the application of Helvering v. Hallock and the litigations which follow that case, find they fall into varying categories, depending upon their facts.

The first group is such as Commissioner v. Estate of Lester Field, supra, which as in Helvering v. Hallock discloses a trust wherein the settlor expressly reserved the possession or the right of disposal of the property, if alive at the termination of the trust. In' a second group, which includes Fidelity-Philadelphia Trust Co. v. Rothen-sies supra, the settlor reserved a life estate for himself and also a power of appointment over or a reversion in any undis-posed of residue.

A third group, falling outside of both of the foregoing categories, consists of cases which disclose a situation in which the trust corpus is disposed of independently of the settlor’s death, and not contingent upon it, and in which the settlor has neither reserved a life estate nor any reversion or possibility of reverter on ultimate failure of the trust. Commissioner v. Kellogg, 3 Cir., 119 F.2d 54; Lloyd’s Estate v. Commissioner, 3 Cir., 141 F.2d 758; and the recently decided case in this court, Fifth Avenue Bank of New York v. Nunan, 59 F.Supp. 753.

The terms of this trust in principle fall within the doctrine of the cases last cited. Clearly under the Post trust the devolution of the property proceeds wholly independently of the settlor’s death and is in no way contingent upon it. She provided, as a measure for the termination of the trust, the death of the survivor of Elizabeth Chapman and Robert Perkins Chapman. There was no reversionary provision for the settlor or for any other exercise of power by the settlor. There is no suggestion in the whole instrument to indicate any power in the settlor of disposition or control over the trust fund or its income whether she died before the termination of the trust or subsequent thereto. The most that can be said is that the trust fund might pass “to the lawful issue then living of the trustor.” But in the event that that contingency arose, such surviving issue of the testator — and she had fourteen in number —would according to the law of the State of New York, as set forth in Guaranty Trust Company v. Harris, 267 N.Y. 1, 195 N.E. 529, 531, take “their contingent interests by purchase and not by descent.”

Lloyd’s Estate et al. v. Commissioner of Internal Revenue et al., supra [141 F.2d 761], referring to the Hallock case, said:

“We think it is clear that the Hallock case was neither intended to nor did work any change in the test applied in the Klein case [Klein v. United States, 283 U.S. 231, 51 S.Ct. 398, 75 L.Ed. 996] for determining whether there had been an inter vivos transfer of an interest intended to take effect in possession or enjoyment at or after the transferor’s death. The Hallock case expressly approved and quoted, inter alia (309 U.S. at page 111, 60 S.Ct. at page 448, 84 L.Ed. 604, 125 A.L.R. 1368) from the Klein case as follows: ‘It is perfectly plain that the death of the grantor was the indispensable and intended event which brought the larger estate into being for the grantee and effected its transmission from the dead to the living, thus satisfying the terms of the taxing act and justifying the tax imposed.’ ”

The Third Circuit, in the Lloyd case, had before it facts falling within the principle of the Post trust. There the settlor created a separate inter vivos trust for each of his two sons for life, with- respective trust powers and provisions as to the remainders. In the trust instrument Lloyd reserved to himself the power to modify the trust but not to revoke the same in whole or in part. Later, pursuant to this power, he did amend the trust by providing that the trust principal was to be paid to the son’s wife and his descendants according to the Pennsylvania intestate laws, and if none such survived the son, then the trustee was to pay over the corpus to the settlor or to his legal representatives. The Third Circuit reversed the decision of the Board of Tax Appeals holding that the possibility of reverter in the settlor as thus provided did not constitute “transfer * * * intended to take effect in possession or enjoyment at or after his death”, Revenue Act 1926, Sec. 302(c), 26 U.S.C.A. Int.Rev.Acts, page 227.

In the instant case the realities must be faced; and if faced clearly the inference is inevitably that the settlor reserved no economic or any other benefit of any kind. It was a purely inter vivos gift. Viewed in the strictest light, it cannot be interpreted as a devious device to avoid an estate tax by parting with property during her life. After all, one must search for the intention of the settlor and be guided by such intention as is clearly manifested in the instrument itself.

Accordingly the motion of the; plaintiffs for summary judgment will be' granted; and the motion of the defendant denied.

       “Sec. 302. The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated.
      ***«»*♦*
      “(c) To the extent of any interest therein of which the decedent has at any time made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, except in case of a bona fids sale for an adequate and full consideration in money or money’s worth. Where within two years prior to his death but after the enactment of this Act and without such a consideration the decedent has made a transfer or transfers, by trust or otherwise, of any of his property, or an interest therein, not admitted or shown to have been made in contemplation of or intended to take effect in possession or enjoyment at or after bis death, and the value or aggregate value, at the time of such death, of the property or interest so transferred to any one person is in excess of §5,000, then, to the extent of such excess, such transfer or transfers shall be deemed and held to have been made in contemplation of death within the meaning of this title. Any transfer of a material part of his property in the nature of a final disposition or distribution thereof, made by the decedent within two years prior to-his death but prior to the enactment of this Act, without such consideration, shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this title; * * Title 26, Sec. 811(c).


author: BRIGHT, District Judge.

text:
    UNITED STATES v. CERTAIN LANDS IN TOWNS OF WOODBURY AND HIGHLANDS et al.
    District Court, S. D. New York.
    June 13, 1945.
    Harry T. Dolan, Sp. Asst. to Atty. Gen., of Brooklyn, N. Y., for petitioner-plaintiff.
    White & Case, of New York City, for Forest of Dean Iron Ore Co.
    James A. Beha, of New York City, for John J. Redner, et al.
   BRIGHT, District Judge.

This application is by Benson R. Frost, special master, for an order fixing his allowance for services and directing payment thereof by the petitioner-plaintiff. Plaintiff opposes, contending that it was not a party to the order appointing the special master and that the allowance requested should be apportioned between the particular defendants involved in the dispute which the master was to determine.

These proceedings were commenced to condemn lands in the towns mentioned above, and an interlocutory judgment of condemnation was filed on April 10, 1940. One of the parcels condemned was a tract of about 156 acres under the waters of Po-polopen Lake, together with the site of the dam, fiowage rights over certain other lands, two islands in said lake, and the waters thereof, all purporting to be owned by the defendant Forest of Dean Iron Ore Company. After the interlocutory judgment, a declaration of taking of the property signed by the Secretary of War, was filed on June 24, 1940, and there was deposited with it in the registry of the court the sum of $27,500, the amount ascertained by the Secretary as just compensation for such property. Judgment upon that declaration was filed on July 3, 1940. A motion was thereafter made by the Forest of Dean Iron Ore Company for an order directing that the clerk of the court pay over to it the moneys so deposited, and that if there were objection thereto by reason of the claims of other parties, that the issues be determined by the court. Objection was made by counsel representing the defendants Florence Gibney and John J., Helen and Margaret Redner, and thereupon, it became necessary to determine the title to the parcels mentioned. An order was filed on May 20, 1941, referring the issues raised with respect to the title of lands within the boundaries of Popolopen Lake and to the lands adjacent thereto and bordering thereon, together with the issues of title respecting lands of any of the parties to the proceeding, to Mr. Frost, as special master, to hear and report to this court his findings of fact and conclusions of law, as fully as though said issues were tried before the court.

It is clear that plaintiff did not provoke a determination of that title, and its only interest in it is to learn to whom just compensation for the taking is to be paid. It would seem to be well settled that the expenses incident to a determination of such question of title cannot be taxed against the United States in the absence of some special statutory authority, of which there is none shown. United Spates v. Chemical Foundation, 272 U.S. 1, 20, 47 S.Ct. 1, 71 L.Ed. 131; Carlisle v. Cooper, 2 Cir., 64 F. 472-475; United States v. Certain Lands in Town of Hempstead, D.C., 43 F.Supp. 418-424; United States v. 254.-35 Acres of Land, D.C., 46 F.Supp. 913, 914; United States v. 125.71 Acres of Land, D.C., 54 F.Supp. 193, 195.

The allowance to the special master will be fixed at $2500 and shall be payable out of the moneys deposited in the registry of this court. Settle order on notice.


author: LOVETT, District Judge.

text:
    WALLING v. BANK OF WAYNESBORO, GA.
    No. 332.
    District Court, S. D. Georgia, Augusta Division.
    July 6, 1945.
    Geo. A. Downing, Regional Atty., of Atlanta, Ga., for plaintiff.
    Roy V. Harris, of Augusta, Ga., for defendant.
   LOVETT, District Judge.

This is an action to restrain the Bank of Waynesboro, situated in Waynesboro, Georgia, from violating the minimum wage and record-keeping provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.A. § 201 et seq., in the case of its employee, Henry Lewis, employed as janitor and porter.

The Act provides:

“ (a) Every employer shall pay to each of his employees who is engaged in commerce or in the production of goods for commerce wages at the following rates— * h= *
“(4) * * * not less than the rate * * * prescribed in the applicable order of the Administrator issued under section 8 (29 U.S.C.A., Sec. 208).” Fair Labor Standards Act of 1938, Sec. 6(a) (4), 52 Stat. 1063, 29 U.S.C.A. § 206(a) (4).

A minimum rate for the finance industry of 40 cents per hour was prescribed by order of the Administrator effective July 17, 1944 (9 F.R. 6939).

The Act also provides:

“Every employer * * * shall * * * keep * * * such records of the persons employed by him and of the wages, hours and other conditions and practices of employment, maintained by him * * * and shall make such reports therefrom to the Administrator as he shall prescribe * * Fair Labor Standards Act of 1938, Sec. 11(c), 52 Stat. 1066, 29 U.S.C.A. § 211(c).

This court entered an order to show cause why a preliminary injunction should not be issued, and the case came on for hearing on May 21, 1945. Evidence and argument have been heard. Briefs have been considered. The case is ready for final decision.

In its answer filed at the hearing defendant admits that it is engaged in interstate commerce as alleged but denies that Henry Lewis, its janitor-porter, is so engaged. It also denies that it has failed to comnensate Lewis in accordance with the Acf

The issues, then, are: (1) is Henry Lewis engaged in interstate commerce within the meaning of the Fair Labor Standards Act, and (2) if so, has defendant complied with the minimum wage and record-keeping provisions of the Act in the employment of Henry Lewis ?

Lewis’ position is that of a typical small town colored handy man. Primarily he is the bank’s janitor. He goes to the bank in advance of the regular opening hours to attend to the heating or cooling facilities and to open the windows and clean and dust the bank’s quarters before the arrival of the other employees. Similarly, after closing time, he remains after the other employees to lock up.

In addition to his janitorial services, he also acts as porter, and in that capacity performs many duties directly connected with and involved in the general commercial banking business conducted by the defendant. A number of his duties are those which would ordinarily be performed by a bank runner or messenger. Each day he carries the bank’s mail to and from the post office. On many days he goes to the post office to cash money orders which have been cashed by the bank for its customers. He often carries the bank clearances to the •other local bank and brings back the clearances on the defendant bank. Also, he regularly delivers to the bank’s customers •all returned items, drafts for collection, cotton warehouse receipts, notices of overdrafts and other notices which the bank does not care to send through the mail. He changes the date daily on the cancellation machine and cancels all of the depositors’ checks paid by the bank. He picks up some of the daily deposits of some of the bank’s customers and carries them to the bank.

All of these are regular duties. Some of them are daily, some more frequent and some less frequent. Lewis acts as the link between the bank and the instrumentalities of commerce used by the bank in carrying on its business. He is the conduit through which a considerable portion of the bank’s interstate business flows into the channels of commerce. Though many of his duties no doubt involve only intrastate transactions, many also involve the handling and carrying of interstate items, and it is settled law that if a substantial part of an employee’s activities relate to goods moving in interstate commerce he is covered by the Act. Walling v. Jacksonville Paper Co., 317 U.S. 564, 63 S.Ct. 332, 87 L.Ed. 460.

It is my conclusion, then, that Lewis is engaged in interstate commerce within the meaning of the Act.

The remaining question for decision is whether or not the terms of the Act have been complied with. After being inspected by an inspector of the Wage and Hour Division and being told that records must be kept of the hours worked by Lewis, defendant directed another employee, Mrs. Naomi Scott, to tabulate his time. The evidence indicates that it is her practice to record only the time actually spent in the performance of his banking duties. He is paid a minimum of $7 per week, which would be adequate compensation for 17% hours at 40c per hour. When Mrs. Scott’s records indicate he has spent over 17% hours in the performance of his duties he is compensated for the extra hours at the rate of 40c per hour.

However, it is apparent from the manner in which the bank operates and from the nature of the services it requires of Lewis that there are other periods of time when Lewis is standing by on call waiting for work. For these periods there has been no compensation. Such time spent by messenger employees in waiting for calls is time worked and compensation must be made therefor. Walling, Adm’r, v. Allied Messenger Service, D.C., 47 F.Supp. 773.

“Of course an employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen. Refraining from other activity often is a factor of instant readiness to serve, and idleness plays a part in all employments in a stand-by capacity. Readiness to serve may be hired, quite as much as service itself * * *. Whether time is spent predominantly for the employer’s benefit or for the employee’s is a question dependent upon all the circumstances of the case.” Armour & Co. v. Wantock, 1944, 323 U.S. 126, 65 S.Ct. 165, 168.

“In general, the answer depends ‘upon the degree to which the employee is free to engage in personal activities during periods of idleness when he is subject to call and the number of consecutive hours that the employee is subject to call without being required to perform active work.’ ” Skidmore v. Swift & Co., 1944, 323 U.S. 134, 65 S.Ct. 161, 164.

“It is of course possible for an employer to make a number of independent contracts of employment, each one of which calls for employment at a different period of time, or to make one contract calling for separate and independent jobs at different times. Under such a contract the time between the two working periods would not be included.” Travis v. Ray, D.C., 41 F.Supp. 6, 8.

In the testimony of defendant’s president he undertook to establish that his trade with Lewis was of that nature. I am not so convinced. Rather it appears that Lewis was to be available during the interim.

The evidence is uncontradicted that outside of his job with the bank Lewis earned approximately $20 per week for performing janitorial service and other odd jobs for about ten other business concerns and citizens of Waynesboro. It was the contention of the defendant that Lewis performed many of these odd jobs during banking hours while he was not engaged on business for the bank. However, his own testimony, the only positive evidence on the matter, shows that all these odd jobs were performed after banking hours and that all his time during banking hours was available for use by the bank.

In his testimony Lewis also stressed the fact that he was satisfied with the terms of his employment and had no complaint to make whatsoever. Such consideration, however, is of no value. “The legislative history of the * * * Act shows an intent on the part of Congress to protect certain groups of the population from substandard wages and excessive hours which endanger the national health and well-being and the free flow of goods in interstate commerce. The statute was a recognition of the fact that due to the unequal bargaining power as between employer and employee, certain segments of the population required federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency and as a result the free movement of goods in interstate commerce.” Brooklyn Savings Bank v. O’Neil, 1945, 324 U.S. 697, 65 S.Ct. 895, 902; see also Tennessee Coal, etc., Co. v. Muscoda Local No. 123, 321 U.S. 590, 602, 64 S.Ct. 698, 88 L.Ed. 949, 152 A.L.R. 1014.

The government having established that the employment of Henry Lewis is subject to the Fair Labor Standards Act and that the defendant down to the time of the hearing has violated the minimum wage and record-keeping' provisions of the Act, an injunction should issue and the prayers of the petition will be and are hereby granted.