text:
    CENTURY INDEMNITY CO. v. NEW YORK TANK BARGE CO.
    No. 13723.
    District Court, E. D. New York.
    Dec. 4, 1933.
    Leo E. Sherman, of New York City (Leo E. Sherman and Miriam Davidson Standard, both of New York City, of counsel), for libelant.
    Foley & Martin (by J. A. Martin), of New York City, for respondent.
   CAMPBELL, District Judge.

In this suit the libelant as assignee of Gulf .Refining Company seeks to recover from the respondent the sum of $3,500, alleged to be damages arising out of an agreement of charter.

On or about the 7th day of October, 1929, a libel was filed in the United States District Court for the Southern District of New York, by Gulf Refining Company, assignor of the libelant herein, against the present respondent, New York Tank Barge Company, on contract, and the tug H. G. Tisdale, on tort, to recover damages alleged to have been caused by the respondents in that action, for injury to the Gulf Refining Company’s barge Cayuga.

The present libelant, the Century Indemnity Company, became the surety in that action upon a stipulation for value in the sum of $3,500, to release the libel which the Gulf Refining Company had filed against the tug H. G. Tisdale.

Negotiations for settlement were had, which resulted in a settlement with the present libelant, the Century Indemnity Company, as such stipulator for value, paying to the Gulf Refining Company, the libelant therein, the sum of $2,400.

Thereafter and on the 22d day of November, 1932, the aforesaid action brought by the Gulf Refining Company against New York Tank Barge Company and the tug H. G. Tisdale was discontinued upon the consent of the libelant, the Gulf Refining Company, and the then respondent New York Tank Barge Company; the consent of New York Tank Barge Company, respondent in that action and this action, by Foley & Martin its proctors, being given on the understanding that a release to it be given by Gulf Refining Company.

A release was subsequently executed by the Gulf Refining Company to the Century Indemnity Company, New York Tank Barge Company, Spentonbush Fuel Company, and the tug II. G. Tisdale, and delivered to the libelant herein, the Century Indemnity Company.

The libelant herein, the Century Indemnity Company, obtained from the libelant in the former action, Gulf Refining Company, an assignment of all its right, title, and interest in and to any claim of Gulf Refining Company against New York Tank Barge Company and the steam tug H. G. Tisdale, for damages sustained by its barge Cayuga while in tow of the tug H. G. Tisdale, on or about October 3, 4, and 5, 1927, under Bond No. S-1928, or otherwise.

Bond No. S-1928 was the stipulation for value in the action brought by Gulf Refining Company against New York Tank Barge Company and the tug H. G. Tisdale, in the Southern District as aforesaid.

. On October 1, 1927, the Gulf Refining Company chartered to the respondent, New York Tank Barge Company, the barge Cayuga, 5,000 barrels’ capacity, for a delivery of 28-gravity oil; time to commence when barge is taken away from its dock on Monday next and until she is returned thereto.

By the terms of said charter, ¿m addition to other provisions, the barge was to be returned to Gulf Refining Company in the same good condition as received by New York Tank Barge Company, usual wear and tear on appurtenances and gear excepted, and the rate for the hire was to be $125 per day, exclusive of towing, which was to be for the account of New York Tank Barge Company and at its risk, and fractions of days to count as half days.

The barge Cayuga was returned in a damaged condition.

On October 3, 1927, the barge Cayuga was delivered to New York Tank Barge Company, and was at that 'time tight, staunch, strong, and in a seaworthy condition, and was loaded at the Sinclair Oil Refining plant at Warners, N. J., from which she was taken to Stanton street, East River, by the tug Tisdale.

She had a full load of light oil.

The barge carried about 5,000 barrels.

She had three double tanks and was constructed of steel, 135' feet long, 34 feet wide, draft light 2 feet, loaded as she was on this occasion 8½ feet, and with a freeboard of about 1½ feet.

The tug Tisdale took the barge Cayuga in tow alongside on . her port side about 11 o’clock a. m., on October 4, 1927, at Stanton street, Brooklyn, bound for the dock of the Sylvester Oil Company, at Mt. Vernon. The barge dragged bottom for about two miles before she reached the dock at City Island, where they tied up and waited for the water to rise. At about 4 or 4:30 o’clock p. m., the tide being flood at the time, the tug Tisdale with the Cayuga in tow left the dock at City Island and proceeded up East Chester creek, where the barge took the bottom about 5 :30 o’clock p. m. The tug Tisdale was unable to' float the barge Cayuga from her position alongside, and the tug put out a line from her bow to the stem of the Cayuga, and pulled on first one side and then on the other in a twisting sort of movement, until she finally floated the barge, at about 6:30 o’clock p. m. They proceeded until about 7 o’clock p. m., when the captain of the barge was ordered by the Tisdale to anchor in the middle of the channel on account of the low water. At 5:30 o’clock a. m. on the following day, the Tisdale again took the Cayuga in tow alongside and proceeded toward Mt. Vernon. The barge again went aground beyond the last bridge at Mt. Vernon, where she took a five-foot list. The port after comer was completely oufe of water and her forward starboard comer was flush with the water. While the* barge was in this position she started to leak. A sewer emptied into the creek about off the Cayuga’s port after corner. The silt deposit from this sewer made a high ridge, on which the Cayuga was resting. The barge lay in that position until the next high water around 4 o’clock p. m., when she floated and proceeded to her destination. She again went aground about 25 feet off the dock of the Sylvester Oil Company, and remained aground until the next flood tide. During this time her cargo was pumped out of her.

As a result of the negligent towing of the tug Tisdale, the barge Cayuga received the damage for which recovery was sought in the first action in the Southern District, and for which libelant as assignee seeks to recover in this action.

Assuming it to be the law that the charterer was liable to the barge' owner for the negligence of the tug, the fact remains that the tug was primarily liable for its negligence. It was made a party to the original suit brought by the barge owner as libelant, and if it had not been made a party, it might have been impleaded by the present respondent under the fifty-sixth rule in Admiralty (28 USCA § 723).

Of course, if the tug had been unable to or failed to respond, the present respondent as charterer would have been compelled to respond, but would have had a right over against the tug for whatever the present respondent had to pay.

The libelant in the original suit, the assignor of the libelant in the present suit, settled its claim with the tug, which had been discharged on the giving of a stipulation for value by the present libelant.

I am firmly convinced that the consent of the proctors of the present respondent to the discontinuance of that suit, and the discharge of the stipulation for value, was given with the understanding that the suit had been finally settled by the party primarily liable, and that as a condition therefor a release was promised.

If this were not so, the present respondent would be without remedy, and I cannot believe there Was any such intent.

The tug having furnished a stipulation for value cannot again be seized, and the stipulation for value being canceled, the present respondent would be without remedy.

The delivery of the release to the present libelant was not solely for its benefit, but also for the benefit of the present respondent; its being furnished being a condition of the giving of the consent to discontinue by the proctors for the present respondent.

If in the original action recovery was sought against the present respondent for negligence, then it and the tug were joint feasors, and 'the release of the tug released the respondent.

If in the' original action recovery was sought against the present respondent on its contract of charter, then the tug was primarily liable and the present respondent only secondarily liable, and the settlement of the action by the respondent tug which was primarily liable, and the giving by the then libelant of the release, was for the benefit of the present respondent.

All of the facts with reference to the settlement of the original action were known to the present libelant, which was the stipulator for value of the tug and as such a party to that action (Elliott v. Lombard (C. C. A.) 66 F.(2d) 662, 1933 A. M. C. 1299), when it took the alleged assignment of claim from the libelant in the original action, and by that assignment took nothing by way of claim against the present respondent as the claim of the libelant in that action had been fully satisfied and released.

A decree may be entered in favor of the respondent against the libelant, dismissing the libel herein, with costs.

Settle decree on notice.

If this opinion is not considered a sufficient compliance with rule 46% of the Buies in Admiralty (28 ÜSCA § 723), proposed findings of fact and conclusions of law in accordance with this opinion may be submitted for the assistance of the court, as provided by the rules of this court.


source: Caselaw Access Project

author: CAPPEY, District Judge.

license: Public Domain

text:
    U. S. COLLOID MILL CORPORATION v. MYERS et al.
    District Court, S. D. New York.
    Feb. 16, 1934.

      Henry J. Luche, of New York City, for plaintiff.
    Albert P. Wollheim, of New York City, for defendant Myers.
    Austin & Dix, of New York City (Howard W. Dix, of New York City, of counsel), for defendant Dix.
   CAPPEY, District Judge.

For convenience I shall refer to the so-called inventions mentioned in the applications described in paragraph 8 of the bill of complaint as if they were inventions in fact, although I shall not determine in this case whether they are inventions or not. That question is not before me.

As I have previously indicated to counsel, this is a contract suit. The primary issues are to determine whether or not the inventions, or any of them, come within the contract of June 15, 1928, between the plaintiff and Mr. Myers, and whether in other respects there has been proof entitling the plaintiff to recover in so far as concerns one or more of the inventions. We are not concerned now with the long line of eases, the most recent of which, so far as I know, being United States v. Dubilier Condenser Corporation, 289 U. S. 178, 53 S. Ct. 554, 77 L. Ed. 1114, 85 A. L. R. 1488, having to do with rights as between employers and employees.

Here, I repeat, we have plainly an unvarnished contract suit. It is not, however, an ordinary contract suit. As was within the rights of the plaintiff, it brought a contract suit of an extraordinary type. The plaintiff asks for specific performance. That removes the case somewhat beyond the rules for the determination of an ordinary action at law for breach of contract, wherein recovery of damages is sought.

The suit being for specific performance, and being of a type which confessedly the plaintiff had a right to resort to, by resorting to it the plaintiff subjected itself to rules which are peculiar to, but thoroughly settled in, that class of actions. Those rules are well stated in Dalzell v. Dueber Watch Case Manufacturing Company, 149 U. S. 315, 13 S. Ct. 886, 37 L. Ed. 749, to which I shall refer later. In substance, the rules are, first, that in order for the plaintiff to recover in an action for specific performance, there must be clarity of meaning .of the contract and of the right on which the plaintiff relies growing out of the contract; secondly, the proof on any issues of fact must be clear and satisfactory.

I realize that in a suit like the present, wherein' because under the law certain of the documents are inaccessible to it, the plaintiff is at a certain disadvantage in establishing its contentions with respect to the facts. There are documents in the hands of counsel for an applicant for a patent which it is the duty of counsel, or in the files at the patent office which it is the duty of the-patent office, to keep secret until the issuance of a patent or other final disposition of the application. That is matter of law. Moreover, the provision of law to this effect rests on a sound basis. But for the preservation of such secrecy, the right of the applicant might be impaired or even lost. Nevertheless, whatever may be the embarrassment of the plaintiff in making proof of facts, the plaintiff has elected to pursue the remedy here invoked. The plaintiff chose the way which is hard. Furthermore, irrespective of who made the election, the applicable rules of law must be obeyed by the court, as well as by litigants. The consequence is that the plaintiff, first, must establish a clear right to the thing for which it asks, and, secondly, by clear and satisfactory evidence must show the facts, which may be essential to maintenance of the suit, to be what it contends them to be.

The questions as they affect the two defendants are somewhat different. I shall, therefore, take them up separately. I shall deal first with the ease as between the plaintiff and the defendant Myers.

The proof establishes that application No. 304,335 covers the identical formula which was the principal subject-matter of the contract of June 15, 1928; and in mentioning the word contract, unless otherwise indicated, I shall have in mind that instrument. Indeed, it is conceded of record that this particular application embraces the invention dealt with in the contract.

As I have indicated heretofore, in conducting this trial, I am bound by the previous decision of Judge Mack. The obligation is well expressed in the Commercial Union Case (C. C. A.) 10 F.(2d) 937, to which I have previously directed the attention of counsel. But for the very frank, and I think proper, statement by counsel for Mr. Myers, probably, by being forced to obey the law of the case, I should be precluded from passing on the question of whether or not the plaintiff is entitled to the invention covered by the contract. However, the defendant Myers agrees that I may take up the question of the relative rights of the parties in so far as the chemical features of the application are involved, regardless of the order of Judge Mack and dispose of it on the merits as I conceive them to be.

The contract, as I construe it, conferred on the plaintiff unambiguous rights to the invention of the dispersing agent referred to or described in the contract and disclosed to the plaintiff at the time the contract was signed. It follows that the plaintiff is entitled to recover that invention, in so far as concerns the chemical formula relating to the dispersing agent dealt with in that formula, unless there exist an obstacle or obstacles arising out of some other ground.

. Two reasons have been urged as to why, even though all that I have said with respect to this invention be admitted, the plaintiff nevertheless is not entitled to recover.

First, it is insisted that, in advance of suit, Mr. Myers demanded an accounting by the plaintiff and the accounting was not furnished. Why the plaintiff did not furnish the accounting has not been suggested.

The contract obligates the plaintiff to keep correct accounts of transactions under the contract and to make quarterly statements to and settlements with Mr. Myers. However, on the evidence, it would have been purely academic for the plaintiff to have rendered a statement on the facts as they have been established at the trial; namely, that nothing ever happened to be accounted for. No use was made of the invention, much less was there a sale of any product growing out of the transaction. It would seem to me, therefore, that it would have been so wholly useless to render an accounting that failure to render it does not afford basis of sufficient substance to create a defense to this suit.

The second ground assigned on behalf of Mr. Myers, as a reason why there should not be a recovery, is that the application for the invention embraced not alone a dispersing agent, and the particular dispersing agent dealt with in the contract, but, in addition, embraced certain mechanisms or mechanical features. Is that good ground for denying relief to the plaintiff, in so far as concerns the chemical features ? Or is it good ground for completely denying relief to the plaintiff, whatever form the relief might take ? Is it enough to disentitle the plaintiff to enjoyment of the fruits of the application as an entirety?

The question is novel. To my mind it is also perplexing. In so far as I have had experience or have discovered, it raises an issue which has never been authoritatively determined by the courts. In New Jersey Zinc Co. v. Singmaster (D. C.) 4 F. Supp. 967, I had before me a somewhat similar question; but there the contract was differently worded. That ease is now working its way up to the Court of Appeals. I cannot be sure what the appellate court will do about it. It seems to me, however, that, sitting as a court of equity, in order to solve the difficulty, I am under the obligation, as nearly as I can, to apply equitable principles.

The choice as to what should be included in the application was made by Mr. Myers. The choice as to what was to go into the application was not made by the plaintiff; nor, so far as the proof discloses, was the matter of what should be covered by the application considered, or at any rate very much considered, by the plaintiff. Apparently from the proof the controversies which existed at the time the application was filed had run off on to other phases of the subject.

If the plaintiff was entitled to the chemical features and Mr. Myers applied for a patent which covered not alone the chemical features, but something else, and, for the sake of the argument, for the moment I shall assume anything else that he might make up his mind to put in, it would seem to me that nevertheless the course of action by Mr. Myers should not have the effect of depriving the plaintiff of any right whatsoever which it already had to the chemical features; that is to say, any right which it had in the invention covered by the contract. On the contrary, inclusion of phases of invention additional to those covered by the contract having been the act of applicant for the patent, the applicant must take the consequences.

The most nearly applicable principle, as it seems to me, which can be employed by a court of equity is the well-established doctrine as to commingling of goods, or, as it is sometimes referred to, confusion of goods. This doctrine is well stated in The Idaho, 93 U. S. 575, 23 L. Ed. 978.

It is argued on behalf of Mr. Myers that the court should scrutinize the application and make a separation of chemical from mechanical features.

In the first place, I see no duty on the part of the court to do this. The confusion results exclusively from the aet of Mr. Myers. In the second place, having examined the doeu-. ments, I find it is impossible equitably to separate into the two elements.

Again, when we get into the field of strict patent law itself, it seems to me there is some support there for the conclusion at which I have arrived on this point in the well-established rule that where a basic patent has been granted to one person and an improvement patent is later granted to another person, the holder of the improvement patent can make no real use of it without the consent of the owner of the basic patent. See the statement of the proposition in Temco v. Apco, 275 U. S. 319, 328, 48 S. Ct. 170, 72 L. Ed. 298.

In the application with which we are dealing there is a combination of something which belongs to the plaintiff with something which is mechanical. The application is not confined to and does not consist exclusively of a dispersing agent. When the specifications and claims are construed together, as they must be construed, it is manifest that the applicant had in mind employing a dispersing agent, in a certain way as described in- the application, by means that he there sets forth. But taking the analogy I have referred to as between the owner of a basic patent and the owner of an improvement patent, it being the law, as I understand it, that the owner of the improvement patent, although he have complete title to it, cannot use it without the consent -of the owner of the basic patent, it seems to me that, having in the application brought in something which he was free not to bring in, but nevertheless by his own aet did bring in, Mr. Myers put himself in a position where there is no help for him. The mechanical features cannot be preserved to him, separate and apart from the rights of the plaintiff so far as concerns the dispersing agent feature. There is no effective way of assuring to the plaintiff the enjoyment of what indisputably is its property, in its own right, unless what has been inextricably commingled with it also go to the plaintiff. It may be that this disposition will interfere with something which otherwise, and but for its inclusion in the application, Mr. Myers may have been himself entitled to. That follows, however, solely from his own fault or mistake.

Only one thing, therefore, is left for the court to do. This is to treat the application as an entirety and to award it to the plaintiff.

What about the other dispersing agent application and the patent issued thereon? The application is No. 304,336 and the patent is No. 1,774,609.

Let us turn to the contract.

The first thing to be observed about the contract, which deals with a dispersing agent for reducing matter to a colloidal condition, is that Mr. Myers therein represents to the plaintiff that the formula covering the dispersing agent is the “only one” developed or owned by him. In other words, by the recital of the contract itself, it was made the basis of the agreement, as between Mr. Myers and the plaintiff, that the dispersing agent which was covered by a secret formula embraced everything Mr. Myers had invented with respect to the employment of a dispersing agent in reducing matter to a colloidal condition.

Here were two people who were contracting, with knowledge on the part of one as to what was the subject of the negotiations' and complete ignorance on the part of the other as to exactly what was included. The plaintiff of necessity was put into position of buying a pig in a poke. The recital, therefore, was of the utmost consequence. So also now it is of the utmost consequence in the interpretation of the contract.

The contract with frequency refers to the formula which was represented in the opening recital to be the only invention with respect to dispersing agents for reducing matter to colloidal condition. The formula is likewise frequently referred to as the invention. The contract specifically provides that, contemporaneously with its signing, a considerable sum shall be paid to the seller. It next provides that then, for the first time, “the formula and method or methods of practicing the invention” shall be disclosed to the purchaser. It also provides for the payment of an additional amount arising out of “royalties or sales price from manufacturers for the use of this formula” and thereafter for an equal division between the parties of “further royalties.”

The contract goes even further in the phase of it which deals with the subject of compensation. It discriminates between the invention referred to in the opening paragraph as a formula, and new formulas having to do with the employment of chemicals as dispersing agents. The new formulas are to become the property of the purchaser. There is no arrangement for a cash payment or any unconditional payment for these. For them the seller is to get only a share of “any royalties received from manufacturers employing” them. The effect, therefore, is further to emphasize that when the contract was entered into Mr. Myers had made but a single invention relating to a dispersing agent for reducing matter to a colloidal condition.

For the sake of the argument, however, let it be assumed that at the time of the signing of the contract Mr. Myers had not conceived the invention embraced in patent 1,774,609. Is there any other provision in the contract under which the plaintiff is entitled to it?

The contract contains another, and wholly separate, clause defining the rights of the parties with respect to inventions. This has been discussed a great deal in argument. It obligated Mr. Myers at all times to work in the interests of the plaintiff. It also obligated him to make prompt and full disclosure of all formulas presently in his possession, thus going back to and being correlated to the expression used in the opening recital of the contract, and, in addition, future formulas or inventions or improvements thereon.

Assuming, therefore, that the invention covered by the patent was conceived by Mr. Myers after the contract was signed, the issue arises as to what kind of future inventions were covered by the contract which, by its terms, Mr. Myers obligated himself to transfer to the plaintiff.'

In describing such future inventions the contract employs these words: “Any future formulas, inventions, or improvements upon, any formula or invention, whether patentable or otherwise, in, upon, or pertaining to dispersing agents, or in means for obtaining colloidal substances.”

It is clearly established that the chemical invention described in the patent we are now discussing did relate to dispersing agents for use in obtaining colloidal substances. In consequence, if it was in fact conceived by Mr. Myers subsequent to the making of the contract, nevertheless, by express terms of the contract, it was included in what by the contract he obligated himself to transfer to the plaintiff.

It may be argued that the obligation with respect to an inventive conception, or to an invention conceived, subsequent to the making of the contract, only covered such things as he conceived, and whieh constituted invention or were of an inventive nature, prior to the termination of his association with the plant of the plaintiff on Long Island. I am inclined to think that this is true. Contracts whereby one man sells products of his mind to somebody else axe to be rather strictly construed. Otherwise we should run into the difficulty of a man mortgaging his own mind, a thing which is to be avoided. Otherwise also we should run into the difficulty of hampering the development of inventions. The Supreme Court in the line of eases to which I have referred, coming right down to the Dubilier Condenser Case, has frequently issued warnings to the courts with care to protect the rights of any individual to the enjoyment of the fruits of his own mind.

Assuming now, first, that at the time of signing the contract Mr. Myers had not already proceeded with the subject-matter of the application and patent, or at least of the chemical features of it, to the extent of its having reached the point of invention; and, secondly, what is practically the same thing, that the conception of the invention on the part of Mr. Myers was something which, within the meaning of the phrase used in the contract, was “future,” then let us inquire whether the proof establishes that the invention was conceived during the period that Mr. Myers was at the plant of the plaintiff and during whieh the contract certainly obligated him to do inventive work in the interests of the plaintiff pertaining to dispersing agents for obtaining colloidal substances.

The application is dated September 6, 1928. Its verification is dated September 5, 1928. Mr. Dix rendered bills, Exhibit 6, as of the dates of July 31 and Augnst 31, 1928. These were for his then current services as patent counsel. On their face I am impressed that the phraseology is not wholly free from ambiguity with respect to whether the services included the particular chemical feature mentioned in the application and the patent. On the other hand, there is nothing to the contrary in the bills. Indeed from their phraseology alone I think it probable that they must be interpreted as showing that the services of Mr. Dix were in part on this particular invention.

Let us now examine the proof. Let us see if it removes the doubt, if doubt there be, as to the date of invention.

The period of activity of Mr. Myers at the plaintiff’s Long Island plant clearly ran to the end of August; almost certainly into September. From this fact alone, I think the inference is inescapable that if this invention was, in the sense of the contract, the result of “future” work of Mr. Myers, it was made while he was engaged at the plaintiff’s plant.

There is another method of approach which, as it seems to me, has some bearing upon the interpretation both of the contract and of the acts of the parties as they affect the particular invention.

Mr. Myers is compelled to take one or the other of two positions in regard to the contract rights of the plaintiff in the invention, at least as to its chemical features. He is in a dilemma. He is forced to concede that the invention either antedated the contract or came into existence while he was in the employment of the plaintiff, the date of the application itself showing that the invention was complete before he quit the plaintiff’s employment. In either event, the invention belongs to the plaintiff. This is so because at the making of the contract he said to the plaintiff, in substance, “I am disclosing to you everything I know on the subject of the employment of dispersing agents,” and the contract conferred on the plaintiff ownership of inventions of Mr. Myers on the subject while in its employ. Accordingly, under the express terms of the contract, it seems plain to me that the plaintiff is entitled to the invention in so far as concerns the chemical features. At the moment I am not dealing with the mechanical features.

Again, let us examine the patent itself.

In order to construe a patent as issued, we must consider both the specifications and the claims; we must consider them together. There are numerous recitals in the specifications which impress me as meaning that the invention embraced a dispersing agent for the accomplishment of the purpose covered by the contract. The words in the contract are, “pertaining to dispersing agents.” What the patent covers not only pertains to dispersing agents, but is a dispersing agent. There are numerous examples of this in the patent itself. A few only need to be cited.

Thus in the specifications, page 1, beginning at line 45, are these words: “Yet another object of this invention is the provision of the use of an improved colloidizing agent of a chemical nature used with any suitable mechanical means.” So on page 1, beginning at line 49, are these words: “Yet another object of this invention is the combination of the improved colloidizing agent with improved mechanical means.”

It is necessarily implied by the language used that one of the elements of the invention is employment of a chemical eolloidizing agent. Numerous other illustrations could be given from the specifications.

Turn now to the claims. Four in specific terms include sulphite waste liquor; the fifth includes sulphite liquor. In other words, every claim calls for the employment of a chemical dispersing agent. And the claims call for use of the dispersing agent for the purpose of producing or assisting in the production of colloidal substances.

It seems to me, therefore, on the face of the document itself, so far established that the subject-matter of the patent, as affects the chemical features, is linked into the use of a dispersing agent for obtaining colloidal substances, that the invention comes squarely, 100 per cent., within the contract.

In addition, the same argument can be made as to this second invention which I have already stated with respect to the first invention, covered by application No. 304,335. I need not repeat it. Here it is plain that the applicant for the patent had in mind the use of certain mechanical means. He made clear in the specifications, as he made clear in the claims, however, that there was to be combination of chemical features and mechanical features. I may be wrong in applying one or the other of the two analogies I have invoked; but it seems to me that by the action of Mr. Myers in bringing into his own application something which, for the sake of the argument, we may concede for the moment the plaintiff would not be entitled to and combining that with something to which the plaintiff is entitled, and combining it in such a way that no court can separate them, the title to the whole passed to the plaintiff, precisely as the title to mingled goods passes to the true owner of a part where the wrongful mixer puts into and confuses with the mass something of his own.

As I see it, therefore, the plaintiff is entitled to recover patent No. 1,774,609.

AH of the other inventions are mechanical. So far as concerns the inventive nature of what is described in the applications covering the inventions, there is no novelty whatsoever that has any bearing on dispersing agents. On the contrary, they are exclusively mechanical. All stand on the same ground. I shall not take up all. I shall, however, specifically discuss the one which has occupied a considerable part of the time at this trial. This is described in application No. 301,804. Is the plaintiff entitled to that ? I think not. [9] Hirst, as affects this invention, the plaintiff has not established the element of futurity, invention after the contract was made. On the contrary, the proof is very persuasive that the device on which a patent was asked by application No. 301,804 had ripened into invention prior to the contract. It is not necessary, however, for me to go that far in order to determine the issue. All that is essential, and of the truth of that I am convinced, is that the plaintiff has failed to show that the invention was made by Mr. Myers before the contract was executed; namely, has not shown it was made on or subsequent to June 1.5,1928. We might stóp there and consider the issue disposed of; but there are other grounds which lead to the same conclusion in favor of Mr. Myers.

At the threshold we should look at the contract and get it clearly in mind 'before going to features of the proof other than the mere matter of date of invention.

When the instrument of June 15, 1928, is read in its entirety, it is perfectly manifest that it was designed to deal with dispersing agents. It does not mention, certainly in specific terms, any mechanical means. There was no mention of flexible rotors. Yet it is apparent from the testimony that flexible rotors were well known at the time the contract was made. The very absence from the contract of the expression “flexible rotors” goes far to persuade me that the parties did not have them in their minds when they entered into the contract.

As I have so often pointed out, the obligation of Mr. Myers was to disclose his existing formula and to make prompt disclosure of future formulas; and, by express language, those formulas and the associated word “inventions,” which brings in the inventions, were to pertain to dispersing agents. Those are features of the contract which are not to be overlooked in our effort to ascertain its meaning.

True, the clause mentioning future inventions pertaining to dispersing agents contains another expression. This follows the words “dispersing agents.” This expression is the only thing in the contract on which the plaintiff bases any claim to the mechanical inventions. The plaintiff predicates its entire ease, so far as concerns mechanical inventions, on this expression. It, therefore, deserves very careful scrutiny.

Let us see if it really covers mechanical inventions. "

The contract obligates Mr. Myers to disclose formulas or inventions “in, upon, or pertaining to dispersing agents, or in means for obtaining colloidal substances.” It is argued by the plaintiff that the use of the word “means” brought into the contract mechanical inventions, if they be employed for obtaining, or in the process of obtaining, colloidal substances, just as fully and completely as there were brought into the contract, by the language throughout, inventions having to do with the employment of dispersing agents in obtaining colloidal substances.

As I read the contract, however, it is almost beyond the imagination that a lawyer drawing it, having in mind the necessity of precision in expressing a fair arrangement between two laymen, so that they should understand it, would ever have thought that, by the use of the word “means,” mechanical inventions, in addition to or as distinguished from chemical inventions, would be included. The proof shows that the instrument was prepared by a member of the bar well known to the court. It may be properly assumed that his purpose was to state what the parties had agreed on and to state it in such way that neither party would have a misconception of the subject-matter it embraced. Without the use of an unambiguous term to make clear to the contracting parties that what they were dealing with included mechanical inventions as well as chemical inventions, I think, in the circumstances, it would be little less than absurd to hold that mechanical inventions were included. To construe the contract as embracing a sale of mechanical inventions, as intended to transfer title to existing mechanical inventions, would, as it seems to me, carry the word “means” so far beyond what would be its ordinary significance that I totally reject the notion that the contract can be interpreted to include mechanical inventions.

Still another thing is to be observed. The word “means” is preceded by the word “in.” It is related back to what precedes. By the relation a reasonable interpretation is that the purpose was to cover only what pertained to dispersing agents. There is, in consequence, a natural field of operation for the word “means” without attributing to it the significance of describing, or ascribing to the draftsman the purpose by its use to embrace, mechanical inventions. As I see it, the object of inserting the added phraseology was to make sure completely to cover all types of improvements in inventions pertaining to the employment of dispersing agents. That is as I read the contract.and that I believe is its meaning.

I have heretofore referred to the Dalzell Case, 149 U. S. 315, 13 S. Ct. 886, 37 L. Ed. 749. As I pointed out to you, the Supreme Court there held that when a plaintiff elects to pursue the remedy of specific performance, not alone does he take over the burden of establishing his cause of action 'by clear and satisfactory evidence, but also lays down the rule that in the interpretation of the contract itself it must be clear to a man of common understanding that it was the purpose of the contract to include the particular thing which the plaintiff seeks to have the court award to him.

In the Dalzell Case, at page 326 of 149 U. S., 13 S. Ct. 886, 890, quoting from a pri- or decision (Colson v. Thompson, 2 Wheat. 336, 4 L. Ed. 253) of the Supreme Court, it was said:

■“The contract which is sought to be specifically executed ought not only to be proved, but the terms of it should be so precise as that neither party could reasonably misunderstand them.”

Can you conceive that, when the two parties read over the contract now under examination, it was not reasonably possible for either of them to understand that mechanical inventions were not included? Consider the length of the arguments to which counsel have resorted at this trial in trying to persuade the court that the use of the single word “means” necessarily brought mechanical inventions into the contract. We axe to remember that we axe concerned with laymen who sat down to sign a contract. They were not lawyers. Bearing that in mind, I certainly cannot say, within the requirement of the rule of law as laid down by the Supreme Court, that it was not reasonable for Mr. Myers to fail to understand that by the contract which he signed on June 15, 1928, he was obligating himself to turn over to the plaintiff every mechanical invention he had made or might make which related to the general subject. On the contrary, I do not think it would be reasonable to say that he did have the idea that, by the employment of the single word “means,” he was assuming an obligation to turn, over his mechanical inventions to the plaintiff.

The court proceeds in the Dalzell Case to say:

“If the contract be vague or uncertain, or the evidence to establish it be insufficient, a court of equity will not exercise its extraordinary jurisdiction to enforce it, but will leave the party to his legal remedy.”

At best, under the language just quoted, there is no warrant for compelling an assignment of the mechanical inventions to the plaintiff.

There are several other features of the case at bar which confirm me in the conviction that the interpretation I have put on the contract is correct.

In very easily understood terms the contract specified what the plaintiff should pay Mr. Myers for the particular formula or invention dealt with by the contract, the formula which he obligated himself to disclose to the plaintiff upon the signing of the contract. It provided that for this there should be a contemporaneous cash payment and later payments of royalties. It also provided for the consideration, in the shape of royalties, to be paid for new formulas. And what kind of new formulas? Look at the language used. In the paragraph as to new inventions is there a suggestion of any payment for mechanical inventions? What does it say? It obligates Mr. Myers “to work in the further development of this or other chemicals as disporsing agents.” It contains no reference to working on any mechanical device. It proceeds: “and any new formulas that ho may develop are to become the property” of the plaintiff. That is his obligation. Then the clause takes up the obligation of the plaintiff with respect to the new inventions. What language is employed to express that obligation of the plaintiff? It is this: “any royalties received from manufacturers employing the new formulas” are to be divided between the parties 50-50.

One may scan the contract fully; but there will not be found a line or suggestion of an obligation assumed by the plaintiff to pay Mr. Myers a cent for mechanical inventions. Where an inventor sells, his purpose ordinarily is to get something out of the sale. Yet if I should interpret the word “means,” in the way insisted on by the plaintiff, to embrace an obligation on the part of Mr. Myers to turn over to the plaintiff all his mechanical inventions, it would mean that he had entered into a contract to make a gift of them to the plaintiff. That would lead to an absurdity. An interpretation which leads to an absurdity is to be rejected.

There are certain other corroborative features which, to my mind, point to the interpretation of the contract, in the way I have construed it, as being correct.

The evidence shows that in August, 1928, there was an experiment at plaintiff’s, plant of the invention Myers claimed to have made involving flexible rotors. This was participated in or was in the presence of the plaintiff and the defendant. Consider everything the witnesses said as to what happened. Out of the evidence there is not to be derived even a suggestion at the time of the notion on the part of the plaintiff that the mechanical invention was the property of the plaintiff.

When on the stand, Mr. Galvin, Sr., seemed to be under the impression that, by mere force of the relationship, an employer becomes the owner of everything invented by one of his employees. This conception goes far beyond what has been settled by the Supreme Court. There is some popular notion that, so far as concerns inventions, employees sell their brains to their employers; but that is not the law. On the contrary, the Supreme Court has thoroughly established that, while certain shop rights in inventions made by an employee while engaged in the work of his employment may accrue to the employer, no title thereto passes unless there be a plain and unambiguous contract obligation by the employee to turn it over to his employer. Only by such a contract can title to the employee’s invention be obtained.

Again, let us pursue the contract between the parties. Mr. Dix presented bills to the plaintiff dated July 31 and August 31, 1928. These were in the hands of the plaintiff approximately on their dates. From them it is manifest that what Mr. Dix had done, as well as what he was doing and was engaged thereafter to do, included services as to mechanical inventions. He was at the plaintiff’s plant when the mechanical invention covered by application No. 391,804 was tested. He was available then and at other times to explain to any who were interested. He was working on the whole problem and, so far as appears, no other lawyer participated in the effort to secure the patents. Yet there was no suggestion that anybody ever addressed to him a question as to whether or not the contract conferred on the plaintiff any right to mechanical inventions.

The facts as to the bills go further. When they were presented to the plaintiff, in substance, the plaintiff said, “The bills are none of my business. You cannot charge me. The work was done for Mr. Myers.” That is the effect of what all the witnesses say with respect to what transpired between Mr. Dix and the plaintiff on exhibition of the bills.

What else happened?

The plaintiff sat still for three years and eight months without moving a finger. The plaintiff remained quiescent and let Mr. Myers incur liabilities to his lawyer for pursuing the applications in the patent office. For the entire three years and eight months the plaintiff made no claim that it had any rights hi or to the mechanical inventions. In view pf these circumstances, it would be so unjust to hand over the application or the issued patent to the plaintiff that the court should lean away from doing so, and should not do so, unless forced to.

A court of equity has some discretion as to whether to award specific performance. It has the right to take into account the conduct of the parties in determining the equities. I think that if the plaintiff ever had any basis for claiming title to the mechanical inventions, its conduct shut it off from the remedy of specific performance.

There remain for consideration the two applications Nos. 394,337 and 304,419.

The plaintiff has not seen these applications. I have examined them. It is clear that both are confined to mechanical inventions. For reasons already given, there can be no recovery by the plaintiff as to either invention.

In addition, there is no proof, and, of course, it is hardly conceivable that the plaintiff could make proof, that, within the sense of the contract, either application covered a future invention by the defendant Myers.

What I have said thus far disposes of the controversies on the merits as between the plaintiff and Mr. Myers. What about Mr. Dix?

What is the plain horse sense of this ease as it affects Mr. Dix? It is undisputed that he was employed with the knowledge of the plaintiff. He filed the applications. He did the various things recited in his bills. This was at the inception. Since then he has pursued the matter for between five and six years. He took it up originally with the plaintiff. He did this before he had gone very far. The plaintiff replied, “I won’t pay you anything. You must look to Mr. Myers.”

It was on the basis of what the plaintiff itself stated that Mr. Dix has relied exclusively on Mr. Myers for compensation. On basis he accepted as security a transfer by Mr. Myers of a one-tenth interest in all the inventions.

It would be a gross injustice to any man, whether lawyer or layman, after a full disclosure by him of what he was doing, to allow him to suffer, and to leave him remediless, through taking away the subject-matter of his security without providing in some way that he be paid; without prescribing that he be paid as a condition to requiring him to transfer back that on which he relied as a security when he performed services; without attaching as a condition precedent to his execution of the transfer some effective means for his protection.

To the extent, therefore, that Mr. Dix shall be called on by a decree in this- ease to execute any documents, so as to clear the title of the plaintiff in the patent office to that which belongs to the plaintiff, in advance he must be paid, or arrangements be made to his satisfaction for payment of, fair compensation for the services which he has rendered and the fair amount of his disbursements in that connection. Unless the items be agreed on, there may be a reference to fix them.

This brings us to the final feature of the ease. That is the form of the relief to the plaintiff in so far as concerns what I have described as the chemical inventions, with the incidents thereto as I have heretofore explained them.

On behalf of Mr. Myers it is urged that the contract docs not obligate him to sign transfers of or to assign applications. If we deal with literal words only, that is true. The duty relating to the procurement of patents on the inventions imposed on Mr. Myers by the instrument was to take several definite steps appropriate to vest in the plaintiff evidence of ownership. That is all. Certain of the specified things to be done by him were executing applications, testifying and furnishing information. The contract does not in express terms say, “When you have signed an application for an invention, you must thereupon also execute an assignment of the application.” But it does say that the object is to vest in the plaintiff title to the inventions and to enable it to procure patents covering the inventions. I am inclined to think that the natural meaning of this, even though not stated in definite terms, is that Mr. Myers obligated himself to execute assignments of the applications. Whether that be so or not, however, it is plain beyond peradventure that the purpose was to assure the plaintiff enjoyment of ownership. With that in mind, in the absence of any contract obligation whatsoever, it is within the province of the court to require the defendant Myers to do all such things as may be essential to the exercise of ownership by the plaintiff.

This means that he should execute and deliver to the plaintiff such appropriate instruments as the plaintiff needs, so as completely to enjoy its ownership of the chemical inventions, with the incidents thereto, and so as completely to do the things in the further prosecution of applications for the patents thereon as it may desire to do in order to procure issuance of the patents. It means further that the documents placed in the hands of the plaintiff, duly executed by Mr. Myers, should be in such form as will enable the plaintiff to put on record in the patent office such evidence of its ownership as may be a warning to the world that the plaintiff is the owner of the inventions.

The decree, therefore, will provide:

First, Mr. Myers shall execute and deliver to the plaintiff assignments of applications Nos. 304,335 and 304,336 and patent No. 1,-774,609, covering the chemical inventions, in suitable form for filing and recording in the patent office.

Second, upon the plaintiff paying to Mr. Dix, or to his satisfaction securing to him payment of, the reasonable value of his services and the reasonable amount of his disbursements in the prosecution of the applications for the chemical inventions, thereupon, in like way, he-shall execute and deliver to the plaintiff suitable instruments assigning to the plaintiff the interest he may have in those inventions.

Third, unless there be agreement between the parties with respect- to the amount which must be paid to Mr. Dix, or the payment of which to him must be secured to his satisfaction, there shall be a reference to ascertain the sum.

Fourth, the plaintiff has no right, as between itself and the defendants, in or to the mechanical inventions covered by applications Nos. 301,804, 304,337, and 304,419.

Fifth, an injunction, somewhat along the lines of the fourth subdivision of the prayer of the bill, sufficient to render the decree effective, shall issue.

Sixth, unless the parties otherwise agree, there shall be an accounting of any earnings on the chemical inventions which may have accrued to Mr. Myers.

Seventh, no costs shall be recovered.

Settle the decree on five days’ notice.

       No opinion filed.


author: GREEN, Judge.

text:
    AMERICAN SAFETY RAZOR CORPORATION v. UNITED STATES.

    No. L-510.
    Court of Claims.
    March 5, 1934.

      John Enrietto, of Washington, D. C. (Charles D. Hamel and Hamel, Park & Saunders, all of Washington, D. C., oil the brief), for plaintiff.
    Ceorge H. Poster, of Washington, D. C., and Prank J. Wideman, Asst. Atty. Gen., for the United States.
    Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.

       For opinion on motion to amend findings, etc., see 7 F. Supp. 196.

   GREEN, Judge.

Plaintiff brings this suit to recover $8,526.35 with interest, being the amount which is admitted to have been overpaid on its income tax for 1923. Of this amount, the defendant admits liability for $631.23 with interest from July 9, 1927, and denies liability on the remainder on the ground that action thereon is barred by the statute of limitations.

It appears from the evidence that during the period involved in the ease the plaintiff had pending in the Bureau of Internal Revenue the question of its liability for taxes for the years 1919 to 1926, inclusive. The principal question in controversy between the plaintiff and the government was a claim for depreciation each year on patents. The other issues were all eventually settled. The claims for depreciation of patents were also allowed and complete settlement made thereon between the Government' and the plaintiff except as to the allowance for depreciation of patents for 1923 which is in issue in the ease now before the court.

The evidence shows that for several years the matter of these taxes was pending in the Bureau, and the plaintiff having paid the amount demanded by defendant had filed claims for refund for the years 1919, 1920, and 1922, together with briefs based on the claim for the allowance on account of depreciation of patents. The Commissioner having issued notice of deficiencies for the year 1922, the plaintiff filed petitions in the Board of Tax Appeals setting out the same grounds that were stated in the claims for refund. While these claims were pending, the Commissioner wrote a letter to plaintiff determining the issues involved therein and, among other things, allowing a claim for depreciation of patents, and the taxpayer thereafter filed claims for refund for the years 1923, 1924, 1925, and 1926, in each claiming allowance for depreciation of patents.

The claims for refund for the years 1923 to 1926, inclusive, were rejected in May, 1928, by the Commissioner. Shortly there • after plaintiff presented to the Commissioner a statement and. computation of the depreciation on patents for each year, and stated therein that depreciation for the patents had been allowed at an annual rate of 15 per cent., and in substance that the computation was in accordance with the Commissioner’s decision. It would serve no useful purpose to further set out in the opinion details of the evidence. It is sufficient to say that thereafter there was a series of communications which passed between the plaintiff and defendant with reference to the further consideration of plaintiff’s claims, and that all of the claims were allowed and settled except for .the year 1923. As to the year 1923, we are satisfied from the evidence not only that plaintiff had reason to believe from the communications it received that its claim would be reconsidered, but that it actually was reopened and considered by the Commissioner. In fact the last communication from the Commissioner’s office dated December 11, 1930, taken together with other evidence, is in effect an admission that the claim had been reconsidered, as it stated: “It is noted that your application for the reopening of your refund claims for the years 1923, 1924, and 1925 was not filed within two years from the date of rejection of such claims, and you are advised, therefore, that the overassessments allowable are limited to the amounts of tax (and interest) paid within the past 5 years.” This was in effect a disallowance of the claim as to the taxes whch were not so paid.

Plaintiff soon thereafter began a suit covering the years 1923,1924, and 1925, but refund was subsequently made for the years 1924 and 1925, and the only issue now before the court is as to refund of the admitted overpayment for the year 1923. The ease turns on the question of whether the period of limitation on the suit began with the date of the rejection of the original claim or at the time it was rejected after reconsideration.

The defense set up is, first, that there was no reconsideration of the original claim for refund, and therefore the suit could not have been begun in time. Our conclusions upon the evidence are that there was a reconsideration, and therefore this defense is not well founded. The other and main defense is that under a Treasury decision in force at the time in question a reconsideration of the claim for refund did not extend the time for bringing suit thereon. This defense will next be considered.'

We have several times held that, where a claim for refund has been reconsidered, the statute of limitations does not begin to run until the final rejection thereof, and this rule has been upheld by other courts. Under this rule the claim was not finally rejected until December 11,1930, and the suit was begun in time. The decision upon which the defendant relies (T. D. 4235, approved October 23, 1928) states, among other things, that: “No reopening or application for reopening will extend the period within which suit must be brought, nor will a reconsideration of a claim he considered as a reopening.”

If this announcement was binding upon all taxpayers, the fact that the plaintiff’s elaim was reconsidered is immaterial, and its action is barred as to the last payment of $7,895.12 on the 1923 taxes. We must therefore determine whether this decision was valid and enforceable.

The provision in question has been spoken of in argument as if it were a regulation. If we were to consider it as a regulation, we think it is an unreasonable one, especially when applied to the circumstances in the ease at bar which show that the plaintiff had reason to believe that its ease would be reconsidered and that it might properly refrain from bringing any suit until it was determined. But this provision was not a regulation in the proper sense of the term. It was an announcement in advance of the ruling which the Bureau of Internal Revenue would make when a certain state of facts appeared, and it also was a decision construing the statute. If a court had prior to the announcement of this decision construed the statute as nearly all courts have since, no one would contend that the Treasury had the right to overrale the court and put a different construction upon the statute. We do not think there is anything in the statute which justifies such a decision. On the contrary, it appears to us that the courts would be led into many contradictions by following it. A case cannot be reconsidered if the former decision is final in the sense that it cannot be reopened, and if reopened the former decision is set aside. If upon reconsideration the determination is in favor of the taxpayer instead of against him, then, under defendant’s theory, we would have two final decisions, the one that was first made and the one that was made on reeonsidei’ation. This would be entirely illogical. We think it dear that, when the statute referred to the time of the rejection of the claim for refund, it meant the final rejection, and that the effect of reconsideration was to set aside the former decision and bring up the matter as if it had not before been acted upon. It appears to us that the decision on which the defendant relies is merely an attempt to change the law by a Treasury decision, and, if we are correct in this, it is clear that the Treasury did not have and could not be given such authority. It is for the courts and not for the Treasury to say what effect a reconsideration of a claim shall have under the statute, or in other words, how the statute shall be construed as applied to a certain state of facts. We do not have before us a case which warrants the application of the rule that re-enactment of a statute after long-continued and uniform administrative construction thereof will cause the courts to give weight to that construction. The 1928 Revenue Act (26 USCA § 2001 et seq.) was passed before the decision was promulgated and therefore has.no bearing. The original petition in this ease was filed December 15, 1930. Not only was the instant case pending when the 1932 Revenue Act (26 USCA § 3001 et seq.) was passed, but there had been two court decisions contrary to this Treasury decision prior to the time when the 1932 act was passed, namely, Mobile Drug Co. v. United States (D. C.) 39 F.(2d) 940, and McKesson & Robbins v. Edwards (C. C. A.) 57 F.(2d) 147, 149.

It is immaterial whether the Treasury decision had been promulgated at the time when the reconsideration took place in the two cases last mentioned. The statute which the courts construed was the same, and the Treasury by making a different holding thereon could not change the meaning of the law as fixed by the courts. For this reason, we think that the McKesson & Robbins Case which was decided after the Heebner Case (D. C.) 50 F.(2d) 904, to which reference will hereinafter be made, practically overruled the Heebner Case. In the McKesson Case, the court had to apply the same provisions which we are now considering. Holding as it did that the claim for refund had been reconsidered, it held further that the limitation now in question did not begin until final rejection after reconsideration. The court also said: “The plaintiff had every ground for supposing that its claim, which was in fact under consideration at least until March 27, 1926, had not been finally rejected before, * * * [and] section 3226, Rev. St. [as amended (26 USCA § 156)], like any other document, is to be read as sensible people would understand it. * * * ” (Italics ours.)

With these decisions before it as to how the statute was to be read and understood, the fact that Congress did not change the provisions of the law in the 1932 act has no tendency to support the contention made on behalf of the defendant, but, if any inference is to be drawn, it is to the contrary.

In Jones v. United States, 77 Ct. Cl. -, 5 F.Supp. 146, 152, we said: “That a reconsideration of a refund claim on the merits constitutes a reopening of the claim is no longer open to doubt.”

This ease also affirms the rule that, “* * * when the Commissioner, upon application made by a taxpayer within the time in which suit could be instituted on a disallowed claim, enters into a reconsideration of the merits of the claim and later makes a decision thereon rejecting the claim, or adheres to his former decision rejecting it, his decision for the purpose of the statute of limitations is in abeyance until he has reached and announced his final decision, and the taxpayer, under section 3226 of the Revised Statutes, as amended (26 USCA § 156), has two years thereafter in which to institute suit.”

The Jones Case was not begun until March 8, 1932, and was decided December 4, 1933. Upon reason and authority, we are clear that the Treasury decision was merely an erroneous construction of the statute by an administrative department and is not binding upon the plaintiff.

What we have said above is not in accordance with the view taken in Heebner v. United States (D. C.) 50 F.(2d) 904. We do not agree with the doctrine laid down therein, and do not think that a taxpayer is bound to take notice of Treasury decisions on legal questions or that even actual knowledge thereof would make them more binding.

It follows that plaintiff is not only entitled to recover the amount of its claim which is admitted not to be barred but the remainder of the overpayment also, together with interest thereon in accordance with law. Judgment will be entered accordingly.

BOOTH, Chief Justice, and WHALEY, WILLIAMS, and LITTLETON, Judges, concur.


author: L. HAND, Circuit Judge.

text:
    HEGEMAN FARMS CORPORATION v. BALDWIN et al.
    District Court, S. D. New York.
    March 10, 1934.
    Samuel Rubinton, of Brooklyn, N. Y., for plaintiff.
    Henry S. Manley, of Albany, N. Y., for defendants.
    Before L. HAND, Circuit Judge, and BONDY and PATTERSON, District Judges.
   L. HAND, Circuit Judge.

The decision of the Supreme Court on March 5, 1934 (Nebbia v. People of State of New York, 54 S. Ct. 505, 78 L. Ed. -) declaring constitutional the “Milk Control Law” of New York (chapter 158 of the Laws of 1933, Agriculture and Markets Law [Consol. Laws, e. 69] § 300 et seq.), has answered the first cause of suit alleged in this bill of complaint. The court there held that the regulation of the price of milk by the “Milk Control Board” was lawful, and that its orders could be enforced. The second cause of suit remains, which is that the Board has in administering this law deprived the plaintiff of its property without due process of law, because its license will be revoked unless it repays to those who sold it milk the difference between the price fixed by the Board and lower prices at which it bought. The Board had fixed minimum prices not only for the purchase of milk, but for the plaintiff’s sales to its customers — shops and restaurants in New York. And it alleges that, though in form only a minimum, this selling price was in effect a maximum price, due to the keenness of the competition between wholesalers. The result has been that the “spread” between what the plaintiff must pay and what it can get, is so small that it can earn nothing upon its very substantial capital invested in the business. This takes away its property under the Fourteenth Amendment. The prayer of the bill is to enjoin the execution of two orders of the Board; one, dated December 29, 1933, which revoked its license under section 308 (3), and which was to become effective January 31, 1934; the other, dated December 30, 1933, which suspended this revocation provided that before January 31, 1934, the plaintiff paid to those of whom it bought milk the difference above mentioned. Since proceedings’by certiorari in the Supreme Court of New York are wholly judicial in character, People v. Willcox, 194 N. Y. 383, 87 N. E. 517, this court, constituted under section 266 of the Judicial Code (28 USCA § 380), has jurisdiction over the suit, regardless of the completeness of that proceeding as a remedy. Bacon v. Rutland R. R. Co., 232 U. S. 134, 34 S. Ct. 283, 58 L. Ed. 538; Prendergast v. N Y. Telephone Co., 262 U. S. 43, 43 S. Ct. 466, 67 L. Ed. 853; R. R. & Warehouse Commission v. Duluth St. Ry. Co., 273 U. S. 625, 47 S. Ct. 489, 71 L. Ed. 807. There is moreover ground for equitable intervention, because the money which the plaintiff is required to pay will be distributed among numerous milk farmers from whom recovery will probably be impossible, and certainly impracticable at any cost which would justify the effort. We are therefore obliged to decide the merits of the second cause of suit.

Although during the period in question, there had been, as we have said, a minimum selling price, the plaintiff cannot complain of that. If it wished to sell at a higher price, it always could, so far as any order of the Board went. If in practice the price could he pushed no higher than the minimum, the order was not responsible for that; it was the competition in the trade which kept down the price. We are not wholly clear whether the plaintiff means further to lay as a grievance the fixing of a purchase price for milk, regardless of any order touching its selling price, but we shall assume that the bill so alleges. That is the inverse of the usual situation, where the costs are left free hut the sales price is fixed; the usual “rate case” of a “utility company,” of which Smyth v. Ames, 169 U. S. 466, 18 S. Ct. 418, 42 L. Ed. 819, is the progenitor. In such situations it is impossible to change the costs, because they are not controlled by the company, and the regulation of the selling price puts it in a strait jacket. But when the cost of.a prime raw material is fixed, unregulated manufacturers who must buy at that cost, will collectively try to “impose the increase on the buyers. It is impossible a priori to foretell how far they will succeed. In some cases the trade may have been selling at margin enough to absorb the cost and still leave a profit; they may have to hear the loss among themselves. If they do, fixing the cost has not deprived anyone of his property, however comprehensively that notion he understood. On the other hand some selling units may have to be eliminated, the “marginal producers” ; a reduction in production will follow and almost always a rise in price. Apparently it is this result which the plaintiff asserts to be a taking of his property. The first effect may be to make all sell at a loss and there may be a marked lag before any adjustment, but plainly the loss cannot be permanent and general, or the trade will perish. The most that the plaintiff can ask of us is to assume that in the eventual accommodation it will prove one of the weak selling units and will go to the wall. We shall take the bill as going ‘so far.

It must be apparent that such a doctrine will have wide effects. All sorts of regulations may affect the price of materials or machinery necessary to another industry. The ehmination of fire hazards may require high rents; they may not be attainable. The observance of sanitary regulations in factories may he expensive; more than the market will bear. Conformity with prescribed standards of quality and packing may turn a living profit into a loss. Excise taxes are a part of manufacturing cost; the buyer cannot always be made to absorb them and the added load may drive out some- producers. Workmen’s compensation or a change in employers’ liability may prove the straw which breaks the camel’s back. If the plaintiff be right, in every case the validity of the regulation would depend upon whether the addition tc the cost resulted in the ehmination of some of the producers'. Legislation could scarcely go on at all if its indirect results, its final incidence, must be so nicely adjusted. Nor does it follow that it ought to be. Surely it is a mild assumption that the more vital interest in the end may demand that there should be less goods sold at higher prices, rather than that all existing manufacturers should remain in business. He would be a hardy exponent of non-interference who should assert the opposite to-day; if for instance the rise in cost was due to improvements in working conditions, or in the hygienic quality of the product. The purpose served by fixing the price of a raw material may be as imperative as either of these; certainly it is not the function of a court to set the hierarchy of social values. In the past, it is true, therewere at times expressions in the books which seemed to say that one kind of governmental purpose would justify interference where another would not. The “Poliee Power” was sometimes spoken of as though it concerned only “health and safety.” That mode has disappeared; the purpose of the State of New York to preserve its dairy industry may involve remote repercussions as mortal to some individuals, as its purpose to abolish sweatshops; but once it be agreed that the state may interpose for either end in the “free play of supply and demand,” the incidents follow. It is not critical that some will find themselves unable to withstand the pressure and will collapse.

So far as we can find, the plaintiff’s argument has not hitherto been put forward; at least we are referred to no decision which touches it, nor can we find any except a caveat in N. Y. Central R. R. Co. v. White, 243 U. S. 188, 205, 37 S. Ct. 247, 61 L. Ed. 667, L. R. A. 1917D, 1, Ann. Cas. 1917D, 620, that compensation awards might become too “onerous” to be “supportable.” It is dangerous to deal in universals, especially in constitutional law, and it might be too much to say that no minimum price could be too high, even though it ruined the whole of other industries, and was quite unnecessary to the protection of that for which it was fixed. The bill lays no such ease; it merely alleges that the plaintiff cannot make any money by selling milk bought at the minimum fixed by the Board. Just as it is exposed to the rubs of competition in what it buys on an uncontrolled market, and must make such fetch to adjust as it can, so it must accommodate its dealings to a price fixed, as we now know, in the plenitude of municipal power. That power once granted, its transmitted disturbances .the Fourteenth Amendment does not neutralize.

Order to show cause discharged.

Bill dismissed.


author: SYMES, District Judge.

text:
    UNITED STATES BUILDING & LOAN ASS’N et al. v. McCLELLAND, State Com’r.
    No. 10266.
    District Court, D. Colorado.
    March 12, 1934.

      Fred S. Caldwell, of Denver, Colo., for plaintiffs.
    Paul P. Prosser, Colorado Atty. Gen., J. Glenn Donaldson, Colorado Asst. Atty. Gen., and Bernard J. Seeman, of Denver, Colo., for defendant.
   SYMES, District Judge.

The three plaintiffs severally allege they are corporations organized and existing under the laws of Colorado and carrying on business therein; that the amount involved in the suit as to each one separately is over $3,000; and that the action arises under the Constitution of the United States.

Next, the bill sets forth verbatim certain sections, but not all, of the recent act of the Colorado Legislature (chapter 47, art. 8, of the 1933 Session Laws of Colorado [page 331]). This is a comprehensive Code creating a building and loan department of the state of Colorado, defining its powers, giving it supervision over all foreign and domestic building and loan corporations doing business in the state, with power to grant certificates to do business. It provides that if the commissioner, after an examination, shall find that any association is conducting its business in an unsafe or unauthorized manner, he may order a discontinuance of such violations or practices, and if the association shall refuse or neglect to comply with the order, or for other reasons set forth, he may revoke the certificate of authority, and with the approval of the Governor first had and obtained, take temporary possession of its property and business assets, etc., and shall give a surety bond, conditioned for the faithful discharge of his duties in connection with the liquidation of the affairs of such association.

It is then alleged that on January 12, 1934, the defendant thfe commissioner, and his deputies, over the'protest of the plaintiffs and their officers, took actual physical possession and seized and carried away the books, records, and other property of each plaintiff, and has since retained such possession to their irreparable damage, etc.; that the statute upon which the defendant relies for his authority violates the Fourteenth Amendment of the Constitution of the United States, in that plaintiffs were not afforded a hearing prior to the seizure of their property, does not afford them due process of law, because the commissioner acts on his own ex parte investigation; and because the commissioner, “belonging to the executive department of the State of Colorado,” exercises under this law powers properly belonging to the judicial department in violation of the Colorado Constitution. Furthermore, that section 15 of article 8 of this statute is (page 344), in effect, a bankruptcy act as it applies to building and loan associations, and therefore violates section 22, tit. 11 of the United States Code (11 USCA § 22). Injunctive relief is prayed for.

The defendant filed a plea to dismiss the complaint for lack of jurisdiction on the ground that there is no diversity of citizenship, and that no substantial Federal question is involved.

The matter has been twice argued and briefs filed. The arguments and briefs were confined to one question — the request of the plaintiffs for a hearing on their application for a temporary injunction before a court of three judges pursuant to section 266 of the Judicial Code, as amended (28 USCA § 380).

The duty of this court under such circumstances is clear. Ex parte Poresky, 290 U. S. 30, 54 S. Ct. 3, 4, 78 L. Ed. 152, decides that in the absence of diversity of citizenship (as is the ease here), it is essential to federal jurisdiction that a substantial federal question should be presented. “ ‘A substantial claim of unconstitutionality is necessary for the application of section 266,’ ” that “that provision does not require three judges to pass upon this initial question of jurisdiction.” Furthermore, that the existence of a substantial question of constitutionality must be determined by the allegations of the bill, and the question thus presented may be plainly unsubstantial, either because it is obviously without merit, or because its unsoundness so clearly results from the previous decisions of the Supreme Court as to foreclose the subject and leave no room for the inference that the question sought to be raised can be the subject of controversy, and “the District Judge clearly has authority to dismiss for the want of jurisdiction when the question lacks the necessary substance and no other ground of jurisdiction appears.”

Three separate corporations join as plaintiffs. The bill alleges they are doing business separately; that the commissioner separately took possession of the property of each. It is at once apparent that a serious question of misjoinder of parties plaintiff is presented, as the facts as to each of the plaintiffs might be different; but in order to avoid delay counsel have requested the court to waive this question.

The first question pressed by plaintiffs is that the building and loan statute, supra, authorizing the commissioner to summarily take possession of the assets and property of the plaintiff, violates the Fourteenth Amendment, in that it deprives them of their property without due process of law. The bill, unfortunately, is deficient in any statements of fact, and abounds in allegations of legal conclusions. No facts are pleaded to show that the controversy as to each of the plaintiffs involves the jurisdictional amount of $3,000- and, after setting forth the statute at some length, the bill merely alleges the legal conclusion that the action of the commissioner violates the plaintiffs’ constitutional rights under the Fourteenth Amendment. Furthermore, the bill leaves us in the dark as to what particular rights protected by the Federal Constitution are infringed. Nor is there a showing of solvency, or claim that the defendant commissioner failed to find the plaintiffs guilty of the business practices that, according to section 9, art. 8 (page 340), justify the defendant’s action.

But, as pointed out in Hall v. Geiger-Jones Co., 242 U. S. 539, 37 S. Ct. 217, 220, 61 L. Ed. 480, L. R. A. 1917F, 514, Ann. Cas. 1917C, 643, we get nowhere by simply declaring that no person shall be deprived of his life, liberty, or property without due process of law, citing Noble State Bank v. Haskell, 219 U. S. 104, 31 S. Ct. 186, 55 L. Ed. 112, 32 L. R. A. (N. S.) 1062, Ann. Cas. 1912A, 487; that a stricter inquiry is necessary, and one relying upon the Fourteenth Amendment must point out specifically what specific right of property is affected, and why its use and enjoyment may not be regulated.

There is no allegation to the contrary, and it is admitted in the briefs and argument that the commissioner, in all things done, acted in the manner prescribed by the statute; so we conclude that the plaintiffs were organized and doing business pursuant to the act in que.'jtion under the required certificates of authority. We also take judicial notice of certain provisions of the act in question .material to this discussion which are omitted from the bill.

Section 10 of article 8 (page 341) provides that when the commissioner has taken possession of any association, it may apply to the state court to enjoin any further proceedings on his part, and have a full hearing on the facts and law; the court may either dismiss the application or enjoin the commissioner from further proceedings, and direct him to turn back the property and assets to the association, with full right of appeal. Further, section 18, art. 8 (page 350), specifically declares that nothing in the act shall be construed to prevent any association or person affected by the action of the commissioner from testing the validity of the same in any court of competent jurisdiction. So the plaintiffs have, under the act, a right to a plenary judicial review of the actions of the commissioner complained of, but have not availed themselves thereof.

The act in question constitutes a complete Code for the government of building and loan associations, and is identical in most respects to similar statutes of many other states.

Practically all the states of the Union grant state bank commissioners summary power to take possession, close and liquidate state banks when, after an examination, the commissioner is of the opinion that they are insolvent. This power, which is practically identical with that here exercised by the defendant, has never been seriously questioned. The Supreme Court of the United States, in Title Guaranty & Surety Co. v. Idaho, use of Allen, 240 U. S. 136, 36 S. Ct. 345, 60 L. Ed. 566, said that the power of a state to confer upon an administrative officer power to close the doors of a bank, in the event of insolvency without awaiting judicial proceedings, was so clear that to state the proposition was sufficient.

If such a power can be vested in a state officer charged with supervision of s'tate banks, I see no reason why a similar power may not be vested in, and exercised by, an administrative state officer charged with the supervision of building and loan associations, especially where, as here, the commissioner before seizing plaintiffs’ property must first make an examination of the association, and obtain the written consent of the Governor of the state and give a good and sufficient bond for the protection of the association. As pointed out in Hall v. Geiger-Jones Co., supra, this is an exercise of the police power of the state -which “is the least limitable of-the exercises of government.” And, as that case points out, the delegation and exercise of power by executive agencies is one of the most essential and common instrumentalities in our form of government, and where a court review on the facts and law of the commissioner’s action is accorded, there is a presumption that the functions entrusted to him “will be executed in the public interest, not wantonly or arbitrarily,” etc.

The federal courts have never attempted to define “due process of law.” Davidson v. New Orleans, 96 U. S. 97, 101, 24 L. Ed. 616. The question depends on the facts presented by each particular ease. Nor does it necessarily imply a regular proceeding in a court of justice. State Savings & Commercial Bank v. Anderson, 165 Cal. 437, 132 P. 755, L. R. A. 1915E, 675, affirmed 238 U. S. 611, 35 S. Ct. 792, 59 L. Ed. 1488; Noble State Bank v. Haskell, supra. And as we have seen, supra, it is not necessarily violated by summary seizure of property without judicial authority.

Building and loan associations exercise quasi-banking functions, solicit the savings and funds of the public, especially of those in more modest circumstances. The Legislature violates no constitutional guaranty in declaring them affected with a public interest, and in providing, within proper limits, supervision and control for the protection of the investor.

The seizure complained of authorized by this act was made only after due investigation, and with the written approval of the Governor of the state. It is temporary in character, and the defendant holds the property only until a court of competent jurisdiction passes upon the propriety of his action, and determines that the seizure was justified and that liquidation should follow, or directs the return of the property. Thus full protection against arbitrary or ill-considered action on the part of the administrative official is afforded. As stated in Noble State Bank v. Haskell, supra, the Fourteenth Amendment does not prohibit the state, where the public interests so demand, from placing the banking business under legislative control, and prohibiting it except under prescribed conditions. The police power of the state may be extended in aid of that which, by strong and preponderant opinion, is thought to be necessary for the public welfare. It is for the Legislature in the first instance, and not the court, to say what limitations on business or commerce the public welfare requires. Nor do the guaranties of the Fourteenth Amendment conflict with the principle that all property is held under the implied obligation that the owner’s use of it shall not be injurious to the community.

Mosher v. Phoenix, 287 U. S. 29, 53 S. Ct. 67, 77 L. Ed. 148, is pressed by counsel for the plaintiff. There, in a previous suit, the Circuit Court of Appeals had held that the contemplated condemnation proceedings of the city that were complained of were not authorized by the statutes of Arizona, so the court therefore held that a federal question was presented when it was alleged that the action complained of was pursuant to that statute.

In conclusion: the Supreme Court of Colorado in People ex rel. v. Colorado Title & Trust Co., 65 Colo. 472, 178 P. 6, 10, in discussing the powers of the Public Utilities Commission, says: “The Legislature could delegate power to determine the facts and things upon the decision of which the operation of the law is made to depend. * * * The exercise of judgment and discretion as an incident- to such power is not the exercise of judicial power within the meaning of the Constitution.”

The third point urged by plaintiffs is: The power given by the Federal Constitution (article 1, § 8, subd. 4) to Congress to pass a uniform bankruptcy act makes the Colorado building and loan act unconstitutional.

The Bankruptcy Act, however, excepts building and loan associations from its operation (section 4, as amended by Act Feb. 11, 1932 [11 USCA §-22]). This leaves them subject in all respects to the jurisdiction of the state under whose laws they are incorporated, or in which they may seek to do business. It is unnecessary to cite authority to the proposition that the state, in the absence of legislation by Congress, has plenary power to provide for the liquidation of corporations that it creates. The only limitations are the provisions of the Banlsruptey Act which apply only to corporations or individuals that specifically come within its terms. Security Building & Loan Ass’n v. Spurlock (C. C. A.) 65 F.(2d) 768, 769, cited by plaintiffs, discusses the question of whether the association there involved was in fact a building and loan association. In determining that question the court said it must look to the state statutes, because building and loan associations are entirely creatures of state statute; that the Bankruptcy Act ceded jurisdiction over such associations to the state, ■with the power to administer their affairs and distribute their assets under state laws and state sujiervision.

The motion to dismiss should he granted, and it is so ordered.


author: STRUM, District Judge.

text:
    LAWLESS et al. v. DUVAL COUNTY, FLA., et al.
    No. 792.
    District Court, S. D. Florida, Jacksonville Division.
    Feb. 16, 1934.
    P. H. Odom, of Jacksonville, Fla., and W. A. MacWilliams and F. D. Upchurch, both of St. Augustine, Fla., for plaintiffs.
    Milam, Mellvaine & Milam, P. L. Gaskins, and Julian E. Fant, all of Jacksonville, Fla., for defendants.
    Before BRYAN, Circuit Judge, and RITTER and STRUM, District Judges.
   STRUM, District Judge.

A bridge across the St. Johns river at Jacksonville was constructed pursuant to chapter 7462, Special Laws of Florida 1917, the entire cost of which was paid from tho proceeds of general obligation bonds of Duval county authorized by that act and chapter 8672, Special Acts of 19-21. No federal moneys were involved. By an election held pursuant to the first-named statute, it was determined by the electors of Duval county that said bridge should he a tollbridge. See State ex rel. Young v. Duval County, 76 Fla. 180, 79 So. 692. Chapter 7462, § 6, provided that the net earnings of the bridge should be used (1) for maintenance and repairs, (2) to pay interest on the bridge bonds, and (3) to provide a sinking fund therefor. Sufficient net earnings have now been received from tolls to retire all said bridge bonds.

Chapter 16400, Special Laws of Florida 1933, provides that tolls on the bridge shall he continued, and that all net earnings above the amount necessary for maintenance and to retire the bridge bonds shall be used for the purchase or retirement of any outstanding bonds of Duval county. With these surplus earnings bonds of Duval county, in amount of approximately $651,000, not pertaining to the bridge, have been retired or funds set aside for that purpose, and it is contemplated to similarly retire other bonds of Duval county, including road bonds.

Chapter 16402, Special Laws of Florida 1933, authorizes Florida Ferry Company to construct another bridge across the St. Johns river near the present county bridge, if approved by the electors of Duval county, which bridge will become the property of Duval county when the cost of erecting and maintaining the same, together with a specified return to the Ferry Company, is paid from tolls to be collected on the proposed bridge. Until that time, however, Duval county is required to maintain a specified minimum toll for use of the present county bridge.

Plaintiffs, four of whom are citizens of Duval county, Fla., residing on the south side of the river, one a citizen of St. Johns county, and one a citizen of Maryland, assert that the continued charging of tolls on the present county bridge is without warrant of law, notwithstanding chapters 16400 and 16402, supra, because the purposes for which the tolls were originally imposed under chapter 7462 have been accomplished, and that collection of tolls cannot be justified for any other purpose.

Plaintiffs point out that they and others who live on the south side of the river and who transact their business and personal affairs on the north side are obliged to use this bridge from time to time; that in Duval county there are viaducts and bridges over navigable streams other than the St. Johns river, all of which are used by the public without charge, which viaducts and bridges were constructed with the proceeds of public bonds which, under chapters 16400 and 16402, are being retired with net earnings from the county bridge, a part of which earnings plaintiffs and others are compelled to pay in order to use the bridge in their daily affairs. For these reasons, and also because the bridge is alleged to be part of a federal-aid highway, plaintiffs assert that by the continued exaction of tolls for the purpoáes now provided by the legislation under attack, plaintiffs’ rights, privileges, and immunities are abridged contrary to the Fourteenth Amendment to the Federal Constitution, and that this suit is brought to redress such deprivation or abridgment of their rights and privileges pursuant to Judicial Code § 24 (14), 28 USCA § 41 (14). The relief sought is that the further collection of tolls be enjoined.

The cause is now before us, pursuant to Judicial Code § 266, 28 USCA § 380, on application for an interlocutory injunction restraining the execution of said state statutes in the respect- stated.

Section 24 (14), Judicial Code, 28 US CA § 41 (14), was brought forward from the Act of April 20, 1871, 17 Stat. at Large, 13, c. 22, entitled “An Act to enforce the Provisions of the Fourteenth Amendment to the Constitution of the United States, and for other Purposes.” That section has reference to actions brought to redress the deprivation of civil rights, primarily — if not exclusively — those secured by the Fourteenth Amendment, -amongst which are the right to make and enforce contracts, to sue and to give evidence, to be secure in person and property, to inherit, purchase, lease, sell, hold, and convey real and personal property. See sections 1977, 1978, Rev. Stat., 8 USCA §§ 41, 42. Clearly the supposed rights here asserted are not of the character contemplated either by the Fourteenth Amendment or by section 24 (14), Judicial Code. So the suit cannot be maintained under the latter section. Holt v. Indiana Mfg. Co., 176 U. S. 68, 20 S. Ct. 272, 44 L. Ed. 374; Farson v. City of Chicago (C. C.) 138 F. 184; Carter v. Greenhow, 114 U. S. 317, 5 S. Ct. 928, 29 L. Ed. 202; Simpson v. Geary (D. C.) 204 F. 507; Salander v. City of Tacoma (D. C.) 208 F. 427.

Moreover, the exaction of tolls for use of the bridge, which is the essence of plaintiffs’ complaint, is common to all who use the bridge. Plaintiffs allege no injury or damage peculiar to themselves and not suffered by all alike, in the absence of which special injury or damage plaintiffs are not entitled to relief against a supposed abridgment of their civil rights. Sidener v. Haw Creek Turnpike Co., 91 Ind. 186; Roberts v. Columbia, etc., Turnpike Co., 98 Tenn. 133, 38 S. W. 587; Laforest v. Town of Thibodaux, 117 La. 266, 41 So. 568; 32 C. J. 47; 19 R. C. L. 1164.

This is in no sense a “taxpayer’s” suit in which one representing a class may sue to redress a public wrong without showing special injury to himself. Plaintiffs have no right in the bridge itself, nor do they assert any right as taxpayers in the earnings of the bridge.

Plaintiffs also urge that the suit is one arising under the Constitution and laws of the United States, because the bill alleges that enforcement of the two statutes in question will deny plaintiffs the equal protection of the law and will deprive them of their property without due process, contrary to the Fourteenth Amendment. That charge does not afford a basis of federal jurisdiction in the absence of allegations — which are here lacking — that the sum or value in controversy exceeds $3,000. 28 USCA § 41 (1); Holt v. Indiana Mfg. Co., 176 U. S. 68, 20 S. Ct. 272, 44 L. Ed. 374; Turner v. Jackson Lumber Co. (C. C. A. 5) 159 F. 923; Fishback v. Western Union Tel. Co., 161 U. S. 96, 16 S. Ct. 506, 40 L. Ed. 630; Teeters v. Henton (D. C.) 43 F.(2d) 175.

■ Injunction denied.