author: HOUGH, District Judge.

text:
    UNITED STATES v. BROWN et al.
    No. 18585.
    District Court, W. D. Kentucky.
    Dec. 16, 1933.

      T. J. Sparks, U. S. Atty., and Claude Hudgins, Asst. U. S. Atty., both of Louisville, Ky., and Byron E. Tatum, Sp. Asst, to Atty. Gen., for the United States.
    Arthur B. Bensinger and Woodward, Hamilton & Hobson, all of Louisville, Ky., for defendants.
   HOUGH, District Judge.

The defendants in the above-entitled case were indicted by the grand jury on the 27th of September, 1933, for violation of section 88, title 18 USCA, section 37 (Rev. St. § 5440) of the Criminal Code, for conspiracy.

The indictment alleges that Brown and Jones at various times violated the 10 per cent, loan limit provisions of title 12 USCA § 84, Rev. St. § 5200, and that the defendant Latta was the borrower in some instances, with knowledge of such violations. The defendants filed separate demurrers to the indictment, which have been submitted to the court upon oral arguments and briefs. The allegations of the indictment bring it squarely under a conspiracy to commit an offense against the laws of the United States. No claim is made or suggested that it is a conspiracy to defraud the United States. The offense complained of is found in title 12 USCA § 93, Rev. St. § 5239, wherein it is provided: “And in cases of such violation (referring to overloaning the ten per eent. limit of section 93), every director who participated in or assented to the same shall be held liable in his personal and individual capacity for all damages which the association, its shareholders, or any other person, shall have sustained in consequence of such violation.” The only question raised by the demurrer of sufficient import to discuss is whether or not the language used by Congress, just quoted, may be construed to come within the purview of the penal section under which the indictment is drawn, wherein it makes the crime of conspiracy “to commit any offense against the United States.”

The position of the government is that section 84, title 12 USCA, Rev. St. § 5200, does not permit the loaning of the funds of a national bank in excess of 10 per cent, of its authorized capital, and that so doing is against the law, and therefore an unlawful act, which brings it within the construction requirements of the term “offense” as used in the conspiracy statute. Pettibone v. United States, 148 U. S. 197, 13 S. Ct. 542, 545, 37 L. Ed. 419; U. S. v. Hutto et al., 256 U. S. 524, 41 S. Ct. 541, 65 L. Ed. 1073; U. S. v. Winner (D. C.) 27 F.(2d) 295. The earlier eases construed the term “offense” as used in the penal section to apply only to contemplated or perpetrated acts in violation of the criminal laws. But it is contended that, in the later decisions, particularly the three just cited, the courts have broadened the interpretation of the term to include any unlawful act contrary to public policy. In the Pettibone Case, supra, the court laid down the principle that “A conspiracy is sufficiently described as a combination of two or more persons, by concerted action, to accomplish a criminal or unlawful purpose.” In the Hutto Case, supra, the court said on page 529 of 256 U. S., 41 S. Ct. 541, 543: “And we deem it clear that a conspiracy to commit any offense which by act of Congress is prohibited in the interest of the public policy of the United States, although not of itself made punishable by criminal prosecution, but only by suit for penalty, is a conspiracy to commit an 'offense against the United States.’ ” The District Court in the Winner Case, supra, had before it the construction of the patent laws in reference to mismarking of patents, and the penalty thereto attached recoverable in a civil suit, and held, in passing upon a demurrer to the indictment brought under the conspiracy section, that the act was an “offense,” and that the vital question is not whether it is a criminal offense or punishable by criminal proceedings or whether the penalty is enforceable by civil action brought by the United States or exclusively by an informer for the benefit of the United States and himself, but whether the act is prohibited in the interest of public policy. In the Pettibone Case, the court had before it a conspiracy indictment based upon the violation of a penal law punishable by fine or imprisonment or both (Rev. St. § 5399 [18 USCA § 241]), and in the Hutto Case it had before it, as the foundation for the offense under a conspiracy indictment, the penal section (25 USCA § 68, Rev. St. § 2078), providing that “Any person offending herein, shall be liable to a penalty of $5,000, and shall be removed from his office.”

These decisions must be construed in the light of the respective situations and facts before the court. Those decisions are without doubt authority for a broader legal conception of the term “offense” than was permissible under the earlier decisions. This authority may not be extended beyond the limits and purview of the eases the courts had before them and upon which the announcements were based.

That the applicable portion of section 93 is remedial and provides only for a civil remedy is not open to successful contradiction. Stephens v. Overstolz (C. C.) 43 F. 465; Bowerman v. Hamner, 350 U. S. 504, 39 S. Ct. 549, 63 L. Ed. 1113. The import of the language itself used, is, it is believed, sufficient to indicate that Congress did not have in mind the assessment of a penalty in the premises. It is simply a statutory enactment of a common-law liability to recover civil damages for the amount of the loss and very likely for any additional damages flowing therefrom. The court is of opinion that “offense” as used in the conspiracy statute must have for support, in order to legally carry out its purpose, the violation or contemplated violation of a law of the United States, carrying for its violation some type of penalty.

The demurrer may be sustained.


source: Caselaw Access Project

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

license: Public Domain

text:
    PARRIGAN v. UNITED STATES.
    No. 1255.
    District Court, E. D. Kentucky.
    Nov. 3, 1933.
    C. R. Luker, of London, Ky., and Robsion, & Sampson, of Barbourville, Ky., for plaintiff.
    Mac Swinford, U. S. Dist. Atty., of Covington, Ky.
   ANDREW M. J. COCHRAN, District Judge.

This action is before me on defendant’s motion for new trial. It is an action on a war risk insurance policy. It was tried to a jury which found a verdict for plaintiff. The principal ground of the motion is that defendant was entitled to have the jury instructed peremptorily to find for the defendant. The right to siieh instruction depends on whether there was substantial evidence before the jury to the effect that, at the time of plaintiff’s discharge from the army, which was on November 21, 1919, he was totally and permanently disabled from following continuously any substantially gainful occupation. In order to recover, it is essential that he was then totally so disabled and that such total disability was permanent; i. e., would endure for the rest of his natural life. The burden was on plaintiff to establish that such was the fact by a preponderance of the evidence. This was a heavy burden in view of the fact that his action was belated. He refrained for over twelve years in asserting it. In the absence of any showing to the contrary, it should be taken that he knew that his policy provided for the payment of $10,000 in ease of total permanent disability as well as of death. Such is the very first provision in it. That he asserted no claim under it for so long a time can hardly be accounted for save on the ground that he did not consider that he had been totally permanently disabled.

In the ease of United States v. Linkhart (C. C. A.) 64 F.(2d) 747, 748, it was said: “While under the successive statutes enlarging the time wherein such actions may be brought the long delay does not of itself bar the action, it is a fact to be considered with all the other facts in determining, even upon appeal, whether there is substantial evidence to support the claim.”

In the case of Keelen v. United States (C. C. A.) 65 F.(2d) 513, it was said: “This suit was brought on August 31, 1929, more than' ten years after plaintiff’s discharge from the service. During these ten years plaintiff neither paid premiums on his policy nor asserted claim under it. Under these circumstances plaintiff was under a heavy burden to 'show, by evidence contemporaneous with the life of the policy, the then totality and permanence of his disability as a fact existing and accepted, or * * * conditions then existing which, read in their own light and in the light of subsequent events, make it reasonably probable that, though then unclaimed and unrecognized, total and permanent disability did then in fact exist.’ Wise v. U. S. (C. C. A.) 63 F.(2d) 307, 308.”

The affliction relied on as bringing about the required disability within thirty-one days after November 21,1010, .the date of discharge, is tuberculosis. It is particularly hard to make out a ease of such disability at such an early date where such an affliction is the ground for the claim of total permanent disability. It is not so hard to make out a ease of total disability. If it is a case of active tuberculosis, as it usually is, the disability must be taken to be total. Such a case requires complete rest until the disease is conquered. The difficulty presented is in making out that the disability is permanent. This is so because in such eases usually, if not invariably, the disease is in its incipient stage, and whilst it is in such stage it is curable. It is a matter of common knowledge that such is the case. With nothing more to go on than the existing conditions at the time of the soldier’s discharge, it is well-nigh impossible to make out that such incipient tuberculosis, though in an active stage, is a permanent condition. It can only be made out that such was the case by subsequent events. Subsequent events may make out that it is permanent, and hence they should be considered in determining the permanency of the disease.

In the case of United States v. Jones (C. C. A.) 65 F.(2d) 652, it was said: “What happens to-morrow may throw a white light on what exists to-day.”

So it is that it is possible that, if a veteran waits for ten or twelve years before bringing his action, he may be able to recover, though if he had brought it shortly after his discharge he would have failed. Of course a delay to ascertain whether the affliction is permanent should not be counted against the veteran. But the fact that the disease has been of such a character as to totally disable the veteran for such a period of time, if it is possible for it to persist for so long without a fatal result, does not necessarily establish that the disability was permanent at the time of the discharge. That it has persisted so long may be due to the fact that the veteran has neglected to take proper treatment. If he has neglected to do so, it cannot be said that the persistence of the disease establishes that it was permanent at such time.

In the ease of Wise v. United States (C. C. A.) 63 F.(2d) 307, 308, it was said: “It is undisputed that the condition of his shoulder and ankle could have been remedied by a comparatively minor operation. It certainly cannot be said that an injury which in its nature is alleviable by proper treatment is permanent, because many years afterward, no such treatment having been given, it still persists.”

Though possibly, as a rule, it is more easy in such eases to establish total than permanent disability, it should be borne in mind that it is not sufficient to show that there is., permanent 'disability at the required time. It must be shown that such disability is total.

In the ease of Wilks v. United States (C. C. A.) 65 F.(2d) 775, 776, it was said: “Granted that when discharged from the army he had a disease which was certain to incapacitate him in the future, partially at first, and totally in time, such proof is insufficient. A condition of both total and permanent disability must exist before his policy lapsed.”

In the case of Garrison v. United States (C. C. A.) 62 F.(2d) 41, 42, it was said: “As has been pointed out in a number of recent cases, the mere fact that a man has tuberculosis does not necessarily mean that he is totally and permanently disabled. The tuberculosis may not result in total disability, and, even if it have this result temporarily, unless the condition is such as to preclude the possibility of arresting the disease, it cannot be said that the disability is permanent.”

The difficulty of making out a case of total and permanent disability at the time of the veteran’s discharge may be brought out by certain statistics. In the six volumes of the 60 F.(2d)’s now out there are reported twenty-six eases where tuberculosis was relied on to make out such ease. They are the following, to wit: U. S. v. Rentfrow (C. C. A.) 60 F.(2d) 488; U. S. v. McCreary (C. C. A.) 61 F.(2d) 804; Garrison v. United States (C. C. A.) 62 F.(2d) 41; U. S. v. Diehl (C. C. A.) 62 F.(2d) 343; U. S. v. Rosborough (C. C. A.) 62 F.(2d) 348; U. S. v. Peters (C. C. A.) 62 F.(2d) 977; U. S. v. Stack (C. C. A.) 62 F.(2d) 1056; U. S. v. Thompson (C. C. A.) 63 F.(2d) 111; Andrews v. U. S. (C. C. A.) 63 F.(2d) 184; Walters v. U. S. (C. C. A.) 63 F.(2d) 299, 301; Schmidt v. U. S. (C. C. A.) 63 F.(2d) 390; Mason v. U. S. (C. C. A.) 63 F.(2d) 791; U. S. v. Hodson (C. C. A.) 64 F.(2d) 119; U. S. v. Perkins (C. C. A.) 64 F.(2d) 243; U. S. v. Thomas (C. C. A.) 64 F.(2d) 245; U. S. v. Bass (C. C. A.) 64 F.(2d) 467; U. S. v. Howard (C. C. A.) 64 F.(2d) 533; U. S. v. Dunaway (C. C. A.) 64 F.(2d) 535; U. S. v. Linkhart (C. C. A.) 64 F.(2d) 747; Bailey v. U. S. (C. C. A.) 64 F.(2d) 779; Falbov U.S. (C. C. A.) 64 F.(2d) 948; McCleary v. U. S. (C. C. A.) 64 F.(2d) 1016; Meyer v. U. S. (C. C. A.) 65 F.(2d) 509; Le Blanc v. U. S. (C. C. A.) 65 F.(2d) 514; U. S. v. Jones (C. C. A.) 65 F.(2d) 652; Combs v. U. S. (C. C. A.) 65 F.(2d) 787. The plaintiff recovered in three only of these cases. They are the cases of U. S. v. Thomas (C. C. A.) 64 F.(2d) 245; U. S. v. Bass (C. U. A.) 64 F.(2d) 467; U. S. v. Jones (C. C. A.) 65 F.(2d) 652. The defendant succeeded in the other twenty-three. In three of these the case was left to the jury, and it found for the defendant. In the other twenty it was held that the defendant was entitled to a peremptory verdict. The trend against these tuberculosis cases can be made more emphatic by noting that in these six volumes there were altogether eighty-one of these war risk insurance cases, and plaintiff succeeded in twenty-seven of them. It is in the 50 F.(2d)’s that this trend first manifested itself. It so did in the case of Nicolay v. U. S. (C. C. A.) 51 F.(2d) 170, 173. This, is the leading tuberculosis ease. It was followed in those volumes by Nalbantian v. U. S. (C. C. A.) 54 F.(2d) 63; Hirt v. U. S. (C. C. A.) 56 F.(2d) 80; Roberts v. U. S. (C. C. A.) 57 F.(2d) 514; Eggen v. U. S. (C. C. A.) 58 F.(2d) 616; Long v. U. S. (C. C. A.) 59 F.(2d) 602. In each of these five eases a judgment for the defendant on a directed verdict was upheld. The only tuberculosis case in these volumes in which the plaintiff succeeded was that of McNally v. U. S. (C. C. A.) 52 F.(2d) 440. The tuberculosis cases cited in support of its holding were Mulivrana v. U. S. (C. C. A.) 41 F.(2d) 734; Malavski v. U. S. (C. C. A.) 43 F.(2d) 974; U. S. v. Meserve (C. C. A.) 44 F.(2d) 549; U. S. v. Phillips (C. C. A.) 44 F.(2d) 689. The Meserve Case was referred to as marking the limit beyond which no court has gone in the case of U. S. v. Perkins, supra. In that earlier day I slipped up in the case of Humble v. U. S. (D. C.) 49 F.(2d) 600, note of which was taken in U. S. v. Rentfrow, supra.

Concerning these tuberculosis cases in the 60 F.(2d)’s and 50 F.(2d)’s, referred to above, where the defendant succeeded, it should be mentioned that in many if not most of them there was a work record which bore heavily against plaintiff’s claim that he had been totally and permanently disabled by the disease. There is no such record here. But these cases have a general hearing, in that they show that frequently the disease of tuberculosis does not totally and permanently disable its victim. In the Nicolay Case it was said: “It is a matter of common knowledge' that many such incipient tubereulars respond readily to the simple treatment of rest and nourishment; the activity is arrested, and, while there probably always'will be a susceptibility of recurrence, they are able .to, and do, live out their lives following gainful occupations. On the other hand, there are some that do not respond to treatment, and their condition is incurable from the start. The burden of proof is upon the plaintiff; if his evidence leaves it a mere matter of speculation as to the permanence of his condition in May, 1919, he cannot recover.”

It is not important to say anything about the three tuberculosis eases referred to above where the plaintiff recovered, as they are not in point here.

This brings me to the case in hand. Here there is no question but that the plaintiff was afflicted with tuberculosis, probably in an active form, at the time of his discharge and whilst his policy was in force. The only question is as to whether by reason thereof he was then totally and permanently disabled from following continuously a substantially gainful occupation. Before his enlistment he worked on a farm during the summer and for the Louisville & Nashville Railroad Company during the winter. He had a common school education up to the eighth grade. His health was good. He enlisted February 25, 1918, and was discharged November 21, 1919. He embarked for Europe July, 1918, and was in certain offensives from July 28 to November 11, 1918. After this he was with the Army of Occupation. About April, 1919, whilst so engaged, he contracted a cough, lost weight, and had no appetite. He embarked for this country July 1,1919, arrived at Camp Taylor near Louisville, Ky., some time in that month. Whilst being examined for discharge his cough was discovered, and he was sent to base hospital at Louisville. He remained there until August 1, 1919, and was then transferred to the tubercular hospital at McPherson, Ga. The cause of his transfer was that he had pulmonary tuberculosis. He remained there until November 20L, 1910, when he was honorably discharged on a S. C. D.. certificate. He at once returned to his home with his widowed mother in Laurel county in this district embracing about ten acres of land, and has continued to live there ever since, except about a year and a half. He married in May, 1924, and has a daughter. He was twice again hospitalized at government hospitals for tuberculosis. The first time was at Greenville, S. C., from October, 1921, to February, 1922, and the other time at Outwood, Dawson Springs, Ky., from April, 1926, to July, 1926. His testimony as to his physical condition except when so hospitalized and otherwise than as to- his ability to work was confined mainly to the time of his transfer to the Georgia hospital, whilst there, and to the time of his discharge. As to this he said that he did not have much strength, was just sick, his breast hurt him, he coughed and spit, could not rest. He had night sweats very often, his cough was pretty bad, he spit blood and mucus. This was not continuous. It would probably be two or three days before it would happen again. This condition kept right on until he was discharged. He continued coughing and spitting blood, felt weak, and breast hurt. Apart from this he merely said that he had grown worse since July, 1919. He took vocational training at Berea not far from his home, from April, 1924, to September, 1925. It is probable that it was during this time that he did not live at home as above stated. The training was for farming, specializing in poultry. It does not appear that he made any use of such training as he received. His testimony as to his working from the time of his discharge and when not hospitalized was that he had not been able to work regularly. Whilst taking vocational training he had to go home at times and rest and was not able to continue it. He had not been doing anything for -a living since he quit training because not able. In addition to this testimony of his own, he introduced the diagnosis of his condition as made by Dr. G. S. Brock on behalf of the Veterans’ Bureau February 19, 1920,' June 20, 1921, and April 11, 1921, and the testimony of former neighbors, a cousin, and of Dr. J. W. Crook, his family physician. The diagnoses made by Dr. Brock were February 19, 1920, “Tuberculosis of the lungs, chronic quiescent,” June 20, 1920, “Pulmonary Tuberculosis chronic,”' and April 11,1921, “Pulmonary Tuberculosis, active, and advanced.” The four neighbors testified that his health was good before he entered the army, and as to his condition on his return all testified that he was not able to and did no work. Further, one testified that he complained of his breast and cough and looked bad; another, that he was pale and swarthy looking, coughing and seemed in run-down condition and his physical condition since was poor; •another, that he looked mighty weak; and another, that he did not look much healthy, looked pale and swarthy, and his condition since has been about the same. His cousin testified that on his return he was weak, looked bad, nervous, was coughing, had pains in his chest, and spit up blood, -and that he slept with him one night when he rolled about all night, seemed very nervous, sat on bed and coughed and spit all night, and kept him awake practically all night. He testified further that since then up to' the time of the training he looked bad, still coughed, and complained of being weak' and nervous. Dr. Crook testified that he had treated him and his family for twelve or fourteen years; would see him possibly two or three times in some months and maybe of tener; other times go for several months without seeing him; at times condition seemed favorable and at other times would flare up, be unfavorable, it would, be active and he would be running a temperature; sometimes it would be quiet and he would not have any rise in temperature; he had been afflicted with pulmonary tuberculosis for twelve or fourteen years; he examined him a few days before the trial, and his temperature was 99%, and he thought it indicated some activity of his tubercular condition ; his condition would continue; it depended on the way he is treated and how he treats himself, and that he had serious doubts whether he would ever recover.

This is in substance all the evidence introduced by the plaintiff. That introduced by the defendant consisted mainly of the diagnoses made by physicians of the Veterans’ Bureau. Very shortly after his discharge in January, 1920, he applied for compensation, was awarded it, and has continued to draw it ever since. He received first $90 per month, then $67.50, then $45-, and then $22.50'. Whilst taking vocational training he received $135 a month. He was receiving $50 a month at the time of trial. It does not appear how long he had been receiving this amount, possibly since he quit taking vocational training. During all this time he was receiving eompen-sation he was examined at different intervals by the physicians attached to the Veterans’ Bureau. He was examined more than twenty times. The first examination was by Dr. G. S. Brock February 19, 1920-, and the last by Dr. H. G. Lightner January 25, 1932. It is the diagnoses made on these occasions that defendant introduced in evidence. The three made by Dr. Brock have already been stated.

The others were as follows: March 17, 1920, by Dr. C. B. Neidhamer, “Tuberculosis Pulmonary, Chronic, apparently arrested.” September 18, 1920, by Dr. C. B. Neidhamer, “Tuberculosis, Chronic, activity questionable.” September 20, 1920, by Dr. John F. Scott, “Chronic Pulmonary Tuberculosis active.” June 3, 1921, by Dr. John W. Scott, “Chronic Pulmonary tuberculosis, active incipient.” , August 2,1921, by Dr. E. J. Murray, “Active chronic pulmonary Tuberculosis, moderately, advanced.” October 10,1921, by Dr. J. D. Maguire, “Chronic Pulmonary Tuberculosis, active, moderately advanced.” October 11, 1921, by Dr. John C. Lewis, X-Ray specialist, “Findings indicate tuberculosis, pulmonary, chronic, most marked in the upper part of the left lung. I think this is an active case.” December 10, 1921, by Drs. W. H. Walters and James E. Dedman, at Green-ville Hospital, “Tuberculosis, chronic, pulmonary, moderately advanced active.” April 5, 1922, by Drs. Raiboum and James E. Dedman, at Greenville Hospital, “Tuberculosis, Pulmonary, chronic, quiescent.” December 12, 1922, by Dr. John W. Scott, “Tuberculosis, chronic, pulmonary active.” May 16, 1923, by Dr. R. W. Porter, “Tuberculosis chronic pulmonary, apparently arrested.” November 1, 1923, by Dr. John C. Lewis, X-ray specialist, “Findings indicate tuberculosis, chronic, pulmonary, activity should be determined by physical and laboratory findings.” November 15, 1923, by Dr. H. S. Chase, “Tuberculosis, chronic, moderately advanced, apparently arrested.” March 6,1924, by Dr. A. E. Williams, “Tuberculosis, pulmonary arrested.” March 7,1924, by Dr. H. S. Chase, “Tuberculosis, chronic, pulmonary, moderately advanced, arrested.” December 22, 1925, by Dr. John C. Lewis, X-ray specialist, “Indicate Tuberculosis, chronic, pulmonary, From an X-Ray standpoint this is an apparently arrested case.” December 22, 1925, by Dr. L. J. Godby, “T. B. Chronic, Pulmonary, Minimal, arrested.” April 23, 1926, by Dr. John C. Lewis, X-ray specialist, “Moderate tuberculosis, chronic, pulmonary. The physical and laboratory findings should be considered in determining the activity.” April 23,1926, by Dr. R. W. Porter, “Tuberculosis, pulmonary, moderately advanced, active. Hospitalization recommended and reexamination in one year.” May 17 and 18, 1926, by Dr. W. A. Hodges, at Outwood Hospital, “Tuberculosis, pulmonary, far advanced, active (a) improved.” September 27, 1927, by Dr. L. J. Godby, “Tuberculosis, chronic, pulmonary, quiescent.” March 28, 1928, by Dr. J. I. Taylor, “Pulmonary Tuberculosis, Minimal, apparently inactive.” March 6,1939, by Drs. H. G. Lightner, H. S. Chase, and O. H. McDonald, “Chronic pulmonary tuberculosis, arrested, minimal.” January 25, 1932, by Dr. H. G. Lightner, “Chronic pulmonary Tuberculosis Minimal, apparently cured.”

At all these examinations the sputum was found to be negative. In addition to these diagnoses, defendant introduced the testimony of Dr. L. G. Owsley, local physician at the place where plaintiff lived. He testified that on June 12, 1927, and a few days afterwards he treated plaintiff for acute diarrhea and again on January 3, 1929, and several days thereafter he treated him for influenza. On each occasion he examined him thoroughly and found no indication of tuberculosis and plaintiff made no complaint of having it.

Conceding that at the time of plaintiff’s discharge he had active tuberculosis and by-reason thereof he was then totally disabled, there was nothing then existing tending to show that the disability was then permanent, and subsequent happenings do not make out that such was the case. Their tendency, to say no more, is to establish that it was not permanent. The diagnoses of April 30,1923, November 1, 1923, November 15,1923, March 6, 1924, and March 7,1924, made before plaintiff began to take vocational training, show that the disease was arrested. Those of December 22, 1925, after such training, show that the disease was still arrested. Those of April 23, 1926, just before he went to Out-wood Hospital, and those of May 17 and 18, 1926, whilst there, show a recurrence of the trouble. But all the diagnoses made after that hospitalization show that the disease was arrested and that he was cured. That of September 27, 1927, was “quiescent”; that of March 28, 1928, “Minimal apparently inactive” ; that of March 6, 1930, “arrested minimal”; and that of January 25, 1932, “minimal apparently cured.”

In connection with these later diagnoses is to he considered the testimony of Dr. Owsley as to plaintiff’s condition in June, 1927, and January, 1929. The effect of this is to establish that plaintiff’s affliction at the time he brought his action and at the time of the trial had been cured. The testimony of Dr. Crook was of such vague character as to be of no real value. The testimony as to the inability to work given by himself and neighbors cannot avail as against it. That of his neighbors was not competent. U. S. v. Sauls (C. C. A.) 65 F.(2d) 886. Concerning such statements by the plaintiff, it was said in the case of Garrison v. U. S., supra, that they “are easy to make and hard to refute.” He was drawing $50 a month on an average as compensation. Many persons will' not work if they do not have to. Then by working he might jeopardize his compensation.

That there can be no. recovery unless plaintiff is totally and permanently disabled at the time of trial was decided’in Personius v. U. S. (C. C. A.) 65 F.(2d) 646. The defendant on this view of the case was entitled to a peremptory instruction. Certainly the verdict was against the weight of the evidence as to his condition at the time of the trial and defendant would he entitled to a new trial on this ground if no other. But there is a feature of this case which renders it inescapable that the defendant was entitled to such instruction. The plaintiff testified that, at the time he was discharged from the hospital at McPherson, Ga., he was advised to go to a hospital for tuberculosis at Oteen, N. C., and he refused to take this advice. His testimony was that the hospital physician advised the transfer, that he would not accept it, and that the Lieutenant Colonel in the ward in which he was said that he could not live six months if he came home, that he would go to work and could not stand it and would die right there, and advised the transfer to finish the complete treatment. Then again he left the hospital at Greenville against the advice of the hospital physician. In the report of Dr. James E, Dedman, senior surgeon at that hospital, of April 5, 1922, he answered “Yes” to the question “Do you advise hospital care?” and “No” to the question “Will claimant accept hospital care?” The plaintiff testified that he was not discharged from the hospital. In his statement to Dr. R. W. Porter, on his examination of May 16,1923, plaintiff stated that “He went home on furlough and did not go back,” and, in answer to the question as to whether he “Would accept hospital care,” he said, “Not at the present on account of widowed mother and no one to stay with her.” That this feature of the case is fatal to plaintiff’s right to recover is upheld in the case of Walters v. U. S., supra, where it was said: “It is evident that, when appellant was discharged from the army, his tuberculosis was in the earlier stages. He was afforded every opportunity to receive adequate treatment without expense in government hospitals. While he frequently took advantage of such treatment, he always left these hospitals of his own accord,, against medical advice. It was his duty to remain until cured or discharged as incurable.”

The motion for a new trial is sustained.


author: SLICK, District Judge.

text:
    CHESAPEAKE & OHIO RY. CO. v. INDIANA FIBRE PRODUCTS CO.
    No. 392.
    District Court, N. D. Indiana, Fort Wayne Division.
    Feb. 20, 1934.
    Albert H. Cole, of Peru, Ind., for plaintiff.
    Hugh B. Olds, of Fort Wayne, Ind., for defendant.
   SLICK, District Judge.

Plaintiff is a common carrier by rail and operates a railroad extending from the city of Newport, Va., through Virginia, Kentucky, Ohio, and Indiana, to Chicago, Ill. Its lines pass through Deep Water, W. Va.

The defendant is an Indiana corporation and operates a factory at Marion, Ind. . From November 5, 1928, to April 1, 1930, defendant delivered to the Virginian Railroad Company certain carloads of freight to be transported by said Virginian Railroad Company from Army Base in the city of Norfolk, Va., to Deep Water, W. Va., there to be delivered to the plaintiff and by plaintiff transported to the defendant at Marion, Ind.

From November 5, 1928, to August 1, 1929, thirty-seven carloads of freight were so delivered, and the commodity composing such shipments was designated as “rolls, reels or bales of unmanufactured wood pulp.” Beginning August 1, 1929, and continuing until April 1, 1930, twenty-five carloads of the same commodity were transported in the same manner, but beginning on August 1, 1929, the commodity was designated as a “given number of reels or rolls of wood pulp board or wood pulp boards.”

Plaintiff brings this suit against defendant to charge defendant for the difference in freight rate between “wood pulp board” and “wood pulp,” the established rate for “wood pulp board” from Army Base, Va., to Marion, Ind., being 35½ cents per hundred pounds, and the lawful and established rate for “wood pulp” between the same localities being 31½ cents per one hundred pounds.

The commodity shipped was a raw material imported from Finland and was transported by rail from the seaboard (Army Base) to the manufacturing plant of the defendant at Marion, Ind., where said material was used up in the manufacture of pie plates. This raw material was called by some of the experts “wood pulp” and by others “wood pulp board.” There is very little difference, and it was hard for the manufacturers, who were experts on this subject, to differentiate between the different samples that were submitted during the trial — some calling one sample “wood pulp” and others calling the same sample “wood pulp board.”

Defendant insists that the prevailing rate is controlled by the rates promulgated by the Interstate Commerce Commission and should be the rate on an imported raw material. Plaintiff claims that the scheduled, published, and promulgated rate for “wood pulp board,” being a domestic rate, should prevail.

The evidence brought out at the trial was quite lengthy and consists of testimony of so-called experts offered by both plaintiff and defendant. This ease and the testimony adduced brings out clearly what the dean of the law school of the University of Iowa meant when he described an expert as “a common man far away from home.”

Whether the commodity shipped was “wood pulp” or “wood pulp board”; whether N. O. I. B. N. means “not otherwise indexed by name herein,” or “not otherwise indexed by name in the official classification as described in the title page hereof”; whether the legal rate to be charged is that found in the schedule of rates fixed for import commodities, or is the domestic rate promulgated and found in the official and consolidated Freight Classification No. 5, which is Plaintiff’s Exhibit No. 34, were questions which the experts attempted to solve for the court, and a consideration of this testimony leads to “confusion worse confounded.”

Plaintiff, through its agents, solicited this freight business from the defendant at Marion, Ind., and suggested the classification adopted and paid on by defendant, and, while as plaintiff says, this cannot relieve defendant from paying the lawful and proper tariff, still it does throw some light on the question at issue.

The witnesses differed materially as to whether the commodity was “wood pulp” or “wood pulp hoard,” and as to the proper interpretation to. he given to the published tariff schedules. Plaintiff argues that, becausé an imported ad valorem duty was paid on the commodity as “wood pulp board,” when “wood pulp” is admitted free of duty, conclusively establishes that the commodity was “wood pulp board.” But this is only a circumstance to be considered in attempting to solve the question. At most it only shows the classification adopted by the customs officials. It is persuasive, but not conclusive. On the other hand, the classification fixed by the solicitors and agents of the plaintiff is persuasive as to its correctness, but not conclusive. The evidence of witness Cox, concerning customs and rules adopted and used in interpreting the tariff schedule, stands uncontradieted in the record, and the abbreviation N. O. I. B. N. must be taken under the evidence to mean “not otherwise indexed by name herein.”

There is no question that this commodity was purchased in and shipped from Finland. Its character then became fixed as an imported article of commerce and took the rate prescribed as an article of foreign commerce, and its character as such was, under the authorities, not changed by the necessary incidents of transportation.

This being true, defendant paid the correct and proper rate, 31% cents per one hundred pounds, and plaintiff has received its full compensation under the lawful rate.'

Judgment will be for defendant and against plaintiff for costs.


author: CAMPBELL, District Judge.

text:
    In re KINGS COUNTY REAL ESTATE CORPORATION.
    No. 23295.
    District Court, E. D. New York.
    Jan. 3, 1934.
    Henry Hetkin and Irving Rozen, both of Brooklyn, N. Y., for Realty Associates Securities Corporation.
    Samuel C. Duberstein and Max Schwartz, both of Brooklyn, N. Y., for trustee.
    J. Hunter Lack, of Brooklyn, N. Y., for landlord.
   CAMPBELL, District Judge.

This is a motion to review an order granted November 22, 1933, by a referee in bankruptcy, which grants the motion of Helen S. Nesmith, as landlord of the premises located at 86th street and 22d avenue, Brooklyn, N.- Y., and directs Aaron L. Palmer, as trustee, to pay out of the rents collected and segregated by him as trustee from the premises, pursuant to the terms of the stipulation dated December 2, 1932, between Helen S. Nesmith and Aaron L. Palmer, as trustee, the sum of $513.32 to Helen S. Ne-smith, or J. Hunter Lack, Esquire, her attorney, as the fair rental value of the use and occupancy of the said premises.

The bankrupt was not the owner in fee of the premises located at 86th street and 22d avenue, Brooklyn, N. Y., but was in possession under a lease at the time of the filing of the petition in bankruptcy, in and by which lease a certain rent was reserved, and Helen S. Nesmith was and is the landlord in respect to said premises.

Realty Associates Securities Corporation was and is the owner of a mortgage on- the lease of said premises.

There would be no security for the said mortgage unless the rent reserved in said lease was paid, and such rent was an expense of the management of the said premises by the trustee.

The trustee was liable for the use and occupation of said premises to the landlord, and this court could not compel the landlord to allow the trustee to occupy these premises for a considerable time without payment of the reasonable value for use and occupation, even for the benefit of the bankrupt’s estate, and certainly could not do it for the benefit of a mortgagee on the lease, which mortgage must have been and was subject to the rent reserved in said lease, and I am unable to see any reason why in good faith and equity the trustee, who in reality held this property for the benefit of the mortgagee on this lease, should be compelled personally to pay such rent solely for the benefit of the mortgagee, nor why the landlord’s claim for rent should not be satisfied from the rent of said premises in the hands of the trustee.

The rent reserved in said lease was much greater than the rent which the trustee could secure from said property, and if the trus-' tee had elected to disavow the lease, and surrender the property to the landlord, the security for the mortgage on the lease would have disappeared.

To prevent this and to keep intact the lease on which the mortgagee relied, and to reduce 'the liability on such lease, the trustee in the interest of both the mortgagee and the bankrupt’s estate, on December 2, 1932, entered into a stipulation with the landlord to pay to the landlord, and the landlord agreed to accept in full payment for all rent which the trustee is obligated to pay to the lessor, by reason of his possession of said premises, as an asset of the estate of said bankrupt, all rents, issues, and profits of said premises collected by the trustee or his agent after paying the necessary expenses and carrying charges, ■ including minor repairs. This stipulation was approved by the referee in charge of this ease on December 29, 1932.

The Realty Associates Securities Corporation secured from a judge of this court, on December 29, 1932, an order which included the following provision:

“Ordered, that Aaron L. Palmer, trustee of the bankrupt be, and he hereby is directed and required to segregate and hold for the benefit of the petitioner, as its interest may appear, subject to the allowance to the said trustee of necessary and reasonable expenses incurred in the general administration of the mortgaged premises.

The Realty Associates Securities Corporation must have known that payment of rent by the trustee was part of the general expenses to be incurred in the general administration of the mortgaged premises, and the effect of that order was to require the trustee to segregate for the benefit of the mortgagee only the rent collected over and above the general expenses of administration of the mortgaged premises, which included the amount to be paid by the trustee for use and occupation.

The Realty Associates Securities Corporation cites as authority for its position In re Kings County Real Estate Corp’n (Lincoln Savings Bank v. Realty Associates Securities Corporation), 67 F.(2d) 895-, decided by the Circuit Court of Appeals of this Circuit December 4, 1933, in a per curiam opinion (New York Law Journal, December 29, 1933), but that decision does not seem to me to be in point. In that case there was an order for segregation of rents in favor of a junior mortgagee, and subsequently a senior mortgagee secured from the District Court an order to the trustee to apply the rents already collected by him; first, to the payment of any taxes, water rates, and assessments then due, and next, to the second mortgagee; and for the future to collect all rents for the first mortgagee; and this the Circuit Court of Appeals held it could not do, but that the whole rents collected up to the time of the first mortgagee’s application should be paid to the second mortgagee without abatement. In that ease the order allowed the trustee to pay expenses, and assuming that to include taxes, the trustee was not bound to pay them, as the mortgagee assigned the rents, not the net rents after payment of taxes. '

That ease is clearly distinguishable from the ease at bar, where the mortgage itself covered only the lease, which was subject to the payment of the rent reserved, and where the trustee could not continue to occupy the premises and collect any rents without becoming personally obligated for the payment of the reasonable value of use and occupation for payment for which, if not made, would cause the lease to be wiped out, and therefore the value of use and occupation was a part of the general expense of management which the trustee was, by the order of segregation, entitled to make to protect him from personal liability.

A number of eases have been cited by both sides relative to the segregation of rents, where the mortgage covered real estate the fee of which was covered by a mortgage, but they are not in point where the mortgage covers only a lease upon real estate* which is dependent upon payment of the rent reserved.

The motion to review the said order of the referee is denied and the order confirmed. _


author: COXE, District Judge.

text:
    LEE et al. v. SWEDISH AMERICAN LINE.
    District Court, S. D. New York.
    Dec. 21, 1933.
    Jacob C. Spiro, of New York City, for plaintiffs.
    Haight, Smith, Griffin & Deming, of New York City, for defendant.
   COXE, District Judge.

The passage ticket in this ease required notice of claim to be given within forty-five days after death, and that suit be commenced within one year “after the lodging of claim.” These provisions are binding, even though the deceased was a 3 year old infant traveling on her mother’s ticket [The Finland (D. C.) 35 F.(2d) 47]; and, inasmuch as the suit was not commenced until one month and nineteen days after the expiration of the one-year limitation period prescribed in the ticket, the action was barred [Martin v. Royal Mail Steam Packet Co. (D. C.) 1933 A. M. C. 1553, affirmed (C. C. A.) 65 F.(2d) 1919, certiorari denied (October 16, 1933) 54 S. Ct. 88, 78 L. Ed. --]. Neither is it an answer that notice of claim was given within forty-five days after death, as both requirements of the passage ticket must be met before the action can be maintained.

The motion to dismiss is therefore granted.

         Jury trial;- no opinion.


author: KENNERLY, District Judge.

text:
    Ex parte LOPEZ.
    No. 480.
    District Court, S. D. Texas, Laredo Division.
    Feb. 20, 1934.

      M. J. Raymond, of Laredo, Tex., for petitioner Lopez.
    H. M. Holden, U. S. Atty., and M. S. McCorquodale, Asst. U. S. Atty., both of Houston, Tex., for respondent Keene.
    M. C. Gonzales, of San Antonio, Tex., for intervener government of Mexico.
   KENNERLY, District Judge.

This is a hearing on petition of Luis Lopez for the writ of habeas corpus.

The facts are as follows:

(a) Lopez stands charged by indictment in the United States District Court for the Western District of Texas, at San Antonio, with violation of the United States narcotic laws. He was under bond to appear early in January, 1934, before that court to answer to such indictment. He did not appear, and his bond was forfeited. Thereafter, an affidavit was filed with a United States commissioner at Laredo, in this district, charging petitioner to be a fugitive from justice, and the commissioner issued a warrant for petitioner’s arrest. He was arrested on or about January 20, 1934, by Deputy United States Marshal Keene, at Laredo, and carried before the commissioner, and is now held in custody of such deputy marshal under process issued by the commissioner, awaiting order of removal to the Western district for trial under such indictment.

(b) January 23, 1934, petitioner filed in the state court his petition for the writ of habeas corpus, and, upon application of Deputy Marshal Keene, the ease has been removed into this court. Counsel for petitioner concedes that the case is properly here, and petitioner on January 31, 1934, filed in this court, his amended petition for the writ of habeas corpus. In such amended petition petitioner sets forth that he is a citizen of Mexico, and that on or about January 20, 1934, while he was in Nuevo Laredo in Mexico, he was seized by four men and forcibly brought across the Rio Grande (the international boundary between the United States and Mexico) into the United' States, and there arrested by such deputy marshal, as stated. He prays for the writ of habeas corpus, and that he be discharged.

February 10, 1934, the government of Mexico intervened, making substantially the same allegations as are made by petitioner, and setting up existing treaties between intervener and the United States of America, and praying that petitioner be surrendered to the custody of intervener. Such allegations are in part as follows:

“Where he will be detained and held under provisional arrest, if requested, pending further disposition in accordance with the form and procedure in such cases made and provided, under and by virtue of the Treaty between said Governments; all to the end that the friendly relations existing between the Government of the United States of America and the United States of Mexico may continue unimpaired by reason of the unhappy occurrence of the invasion of the sovereignty of Intervenor, and the abduction of one of its citizens from its soil, and that the solemn compact between said governments may not be nullified by the unlawful and illegal acts of individual citizens of either of said governments.”

Respondent (Deputy Marshal Keene) demurs to petitioner’s petition, and in answer thereto, and to such intervention, sets forth that he holds petitioner in custody under such process issued by the commissioner, awaiting removal to the Western district fdr trial under such indictment.

(c) It is shown that petitioner’s parents were bom in Mexico. When they came to the United States is not shown, except that they came before the birth of petitioner, and have resided in the United States at San Antonio, Tex., since before petitioner’s birth. Petitioner was bom in the United States at San Antonio, Tex., in 1893 or 1894. Soon after finishing school, he obtained a job as city fireman in the city of San Antonio, where he served some months. After leaving such employment as city fireman, he states that he went into the “bootlegging” business, in which business he has continued down to about the time of his indictment, except that during such period he has been three times convicted and sent to the penitentiary for violation of the liquor and narcotic laws.

When petitioner was required to register under the United States draft laws during the World War, he claims that he. registered as a Mexican citizen.

About October, 1933, petitioner left San' Antonio and went to Nuevo Laredo, Mexico, across the river from Laredo, Tex. The evidence is not clear whether or not he purposed to remain there permanently. There is no evidence of any effort or proceedings to change his status as a citizen of the United States.

(d) About 9 p. m., January 20, 1934, petitioner, while at the place where he was stopping in Nuevo Laredo, was seized by four men and carried in an automobile to the Rio Grande, which forms the boundary line between Mexico and the United States. There he was compelled to hold to a tub, while two of the men towed him and the tub across the river to United States territory. His arrest by Deputy United States Marshal Keene, as stated above, followed. The only person whom petitioner was able to identify as being connected with these transactions was one Hernandez, a citizen of Mexico, and one Monterola, a captain in the Mexican Army and a citizen of Mexico. These were two of the four men. He also claims to have identified one Villarreal, a constable of Webb county, Tex., as being in company with Deputy Marshal Keene at the time he was arrested by Keene.

1. That persons bom in the United States (as was petitioner) are citizens of the United States need not be discussed. Section 1, article 14, of the Amendments to the United States Constitution. There is no evidence of a change of petitioner’s citizenship.

2. Therefore, as between petitioner and respondent, Keene, the facts present a case of a citizen of the United States charged with a violation of its laws seeking and obtaining an asylum in Mexico and being there seized by four men (two of whom at least were citizens of Mexico) and forcibly returned to the United States. The cases are practically all one way that petitioner may not, under such circumstances, be discharged in a habeas corpus proceeding. Ker v. Illinois, 119 U. S. 438, 7 S. Ct. 225, 30 L. Ed. 423 (See, also, Ex Parte Ker [C. C.] 18 P. 169); Mahon, v. Justice, 127 U. S. 700, 8 S. Ct. 1204, 32 L. Ed. 287; Cook v. Hart, 146 U. S. 191, 13 S. Ct. 40, 36 L. Ed. 938; In re Johnson, 167 U. S. 120, 17 S. Ct. 735, 42 L. Ed. 103; Pettibone v. Nichols, 203 U. S. 217, 27 S. Ct. Ill, 51 L. Ed. 159, 7 Ann. Cas. 1047; Ex Parte Morton Campbell (D. C.) 1 F. Supp. 899; U. S. ex rel. Voigt v. Toombs, 67 F.(2d) 744 (U. S. C. C. A. 5th, decided December 7, 1933).

3. The intervention of the government of Mexico raises serious questions, involving the claimed violation of its sovereignty, which may well be presented to the Executive Department of the United States, but of which this court has no jurisdiction. State v. Brewster, 7 Vt. 121.

It follows that such intervention should be dismissed, the writ of habeas corpus denied, and the petitioner remanded to the custody of the marshal, to await an order of removal to the Western district, for trial under such indictment. Let an order be drawn and presented accordingly.


author: WOOLSEY, District Judge.

text:
    HARVEY BROKERAGE CO., Inc., v. AMBASSADOR HOTEL CORPORATION. CENTRAL HANOVER BANK & TRUST CO. v. AMBASSADOR HOTEL CORPORATION et al.
    District Court, S. D. New York.
    April 6, 1934.
    Larkin, Rathbone & Perry, of New York City (Hovey C. Clark, of New York City, of counsel), for Central Hanover Bank & Trust Co.
    Samuel Hoffman, of New York City, for Jennie Wiand.
    Dawes, Abbott & Littlefield, of New York City (Charles W. Littlefield, of New York City, of counsel), for receivers.
    Rosenberg, Goldmark & Colin, of New York City, for Bondholders’ Committee.
    Lorenz & Lorenz, of New York City (Joseph Lorenz, of New York City, of counsel), for Ambassador Hotel Corporation.
    Charles Braunhut, of New York City, representing minority bondholders’ interest.
   WOOLSEY, District Judge.

This motion is granted to the extent that an order may issue enjoining and restraining Jennie Wiand, all others in whose behalf or for whose benefit she purports to act, her attorney or attorneys, and each and all of them, from continuing the prosecution of a suit heretofore brought by her in the New York Supreme Court for New York County entitled “JENNIE WIAND (suing on behalf of herself and all other bondholders and trust beneficiaries, similarly situated, with respect to an Indenture of Trust dated on or about the 15th day of June, 1927, whereunder the Ambassador Hotel Corporation was the oblig- or and the Central Hanover Bank & Trust Company is now acting as Trustee) Plaintiff, against CENTRAL HANOVER BANK & TRUST COMPANY, Defendant,” until the suit in this court, of which the title is given in the caption hereof and which is No. 64 — 142 on the equity docket of this court, and the receivership of the property of the Ambassador Hotel Corporation mortgaged under the said indenture of June 15, 1927, shall have been finally terminated.

I. In the state court proceeding against which the petition of the Central Hanover Bank & Trust Company asks an injunction, Jennie Wiand brings a representative suit on behalf of herself and other bondholders of bonds of the Ambassador Hotel Corporation against the Central Hanover Bank & Trust Company, one of the plaintiffs in the above-entitled action, Equity No. 64 — 142, alleging a right to an accounting from the Central Hanover Bank & Trust Company, and prays as the remedy sought the following:

“(a) That the Central Hanover Bank & Trust Company account for its management of the property described in the trust indenture and that such accounting be had before a Referee and that a proper interlocutory judgment enter to such effect.

“ (b) That any and all income of the trust properties, not necessary for the upkeep of the trust property, be distributed equitably, among plaintiff, and all other bondholders and that an interlocutory judgment to said effect be entered.

“(c) That the trustee be directed forthwith to expeditiously account in the premises and take such steps as is necessary to protect the interests of bondholders and to cause the removal of the receivers in foreclosure and in equity from the mortgaged premises described in the indenture and referred to in this complaint.

“(d) That plaintiff have such other and further relief in the premises as to the court may be deemed just and proper in the premises.”

This suit impinges directly on a suit in equity and a receivership created thereunder which has been pending for some time in this court. It amounts, in effect, to a collateral attack on that receivership.

II. The instant motion has been fully briefed and argued and I have given it specially careful consideration because of the nature of the relief sought.

There does not seem to be any question whatever that this court has a right to issue a protective injunction under such circumstances in order to prevent the impairment of its jurisdiction and its acts and its authority and to preserve from interference any relief by sale or otherwise which may be given under its orders and decrees herein.

Although the facts were somewhat different, the same principle was involved on an application for a protective injunction which I granted in the case of Guaranty Trust Company of New York v. Broadway & Seventh Avenue R. Co. (D. C.) 43 F.(2d) 130.

I find that the suit in the state court here involved is an attempt at a more serious interference with the orderly procedure of this court than was the suit 'for money due on unpaid coupons whieh was involved in the ease just cited. For here the relief asked seeks to interfere with interlocutory equitable remedies whieh this court has granted, and to prevent or at least hamper a plaintiff in pursuing those remedies in a cause of which this court has jurisdiction.

It seems to me there is not any question but that this court has jurisdiction to protect its litigants against such improper interference. Additional authorities supporting the jurisdiction here exereised are found in the eases of Beaver Board Companies v. Imbrie (D. C.) 275 F. 437, 438, and Swift v. Black Panther Oil & Gas Co., 244 F. 20, 29 (C. C. A. 8).

III. As this is a protective injunction, it is not necessary that the petitioner should file a bond under title 28 United States Code, § 382 (28 USCA § 382). Guaranty Trust Company of New York v. Broadway & Seventh Avenue R. Co. (D. C.) 43 F.(2d) 130, 134; Swift v. Black Panther Oil & Gas Co., 244 F. 20, 29 (C. C. A. 8).

Settle order on notice.


author: MAJOR, District Judge.

text:
    UNITED STATES ex rel. BEHEN v. RUPPEL.
    District Court, S. D. Illinois, S. D.
    April 2, 1934.
    A. M. Fitzgerald, Lee Ensel, and George E. Draeh, all of Springfield, Ill., for petitioner.
    Frank K. Lemon, U. S. Atty., and Marks and James P. Dillie, Asst. U. S. Attys., all of Springfield, Ill., for respondent.
   MAJOR, District Judge.

Criminal information filed against the petitioner on March 15, 1932, charged him with a violation of the National Prohibition Act. A plea of guilty was entered on June 14th of the same year, and the court imposed a fine of $150 and costs, and a jail sentence of sixty days to begin June 20th. On June 16th a petition for probation was filed which was withdrawn the same day; on June 20th the court ordered a stay of execution of sentence for sixty days; on August 19th a further extension was ordered until September 20th; on September 17th an extension was ordered until October 17th; and on the latter date a further stay of sentence was allowed until November 17th. These extensions were all allowed during the same term as the imposition of the fine and jail sentence. On the 20th day of February, 1934, the clerk of the District Court, in compliance with the judgment above referred to, executed and delivered to the United States marshal, the above-named respondent, an order of commitment, and, by virtue of such order, the said respondent, on the 27th day of February, 1934, took into custody and imprisoned the petitioner. It is such imprisonment that petitioner, in his application for a writ of habeas corpus alleges is illegal and in violation of law.

The specific reason alleged in the petition in which it is claimed the petitioner should be discharged from said imprisonment is that, with the adoption of the Twenty-First Amendment to the Constitution repealing the Eighteenth Amendment, all pending prosecutions, fines, and sentences not completely executed were automatically terminated and completed.

In the argument before the court, counsel for petitioner stressed the fact that petitioner was not actually committed until after the adoption of the Twenty-First Amendment. While it is not alleged in the petition, yet it is claimed and was argued before the court that the imprisonment is unlawful on account of the unreasonable length of time which elapsed between the entry of judgment and the order of commitment as issued by the clerk of the court.

It is claimed for petitioner that, inasmuch as the execution of sentence was stayed by the court at various times, the court retained jurisdiction and the prosecution is still pending. There is nothing to this contention. The judgment entered on June 14,1932 was a final and complete judgment, and, while a careful reading of the decisions of the various federal courts leaves me in doubt as to the authority of a court to enter such orders, after the entry of judgment, even for a definite period and during the same term, as was done in the instant case, yet there can be no question but what an indefinite suspension of sentence or a suspension which would extend into the next or a succeeding term of court is void and of no effect, and as such would be of no aid to the retention of jurisdiction. The apparent conflict in the federal authorities on this question arises largely between a class of cases where the imposition of sentence has been postponed and in another class of cases where the sentence has been imposed and its execution suspended.

In the former eases, as in Miller v. Aderhold, 288 U. S. 206, 53 S. Ct. 325, 77 L. Ed. 702, while it was held that the court did not lose jurisdiction by a void order suspending sentence, it was treated as the continuation of the cause for the purpose of entering judgment on a plea of guilty entered at a preceding term. In the case just cited it is said, on page 210 of 288 U. S., 53 S. Ct. 325, 326, “In a criminal case final judgment means sentence,” and in the instant case, sentence pronounced and entered June 14, 1932, constituted a final judgment. It is doubtful if the court had any further jurisdiction over the cause, and certainly it had none after the conclusion of the term at which sentence was imposed.

Having thus concluded, the question is directly presented as to whether a final judgment, entered before the adoption of the Twenty-First Amendment, is effected thereby, and whether petitioner, who was imprisoned after said amendment became effective as a result of said judgment, is unlawfully detained.

The decision of the question is important, as well as far reaching in its consequences, and the authorities to which the court’s attention has been called throw very little light on the subject. -The general rule with reference to a final judgment in both civil and criminal eases seems to be that no act of a legislative body can affect a valid subsisting judgment. In McCullough v. Virginia, 172 U. S. 102, on page 123, 19 S. Ct. 134, 142, 43 L. Ed. 382, the court said: “It is not within the power of a legislature to take away rights which have been once vested by a judgment. Legislation may act on subsequent proceedings, may abate actions pending,, but when those actions have passed into judgment, the power of the legislature to disturb the rights created thereby, ceases.” R. C. L. vol. 25, p. 941, par. 194, in dealing with criminal statutes, states the rule as follows: “After final judgment has been rendered and sentence pronounced, the power of the court over the subject matter is at an end, and all that remains to be done is the mere ministerial act of doing execution, and the repeal of the law under which a defendant has been convicted will not arrest the execution of the sentence.”

Counsel for petitioner cite and rely upon the recent case of United States of America v. Claude Chambers and Byrun Gibson, 54 S. Ct. 434, 436, 78 L. Ed. -, 89 A. L. R. 1510, but a careful study of the opinion in that ease can afford the petitioner little, if any, comfort. In fact, I am inclined to think, if it has any bearing on the question under consideration, it is unfavorable rather than favorable to the contention of the petitioner.

Stress is placed upon the quotation in the opinion from Chief Justice Marshall in the ease of Yeaton v. U. S., 5 Cranch, 281, 283, 3 L. Ed. 101, as follows: “It has been long settled, on general principles, that after the expiration or repeal of a law, no penalty can be enforced, nor punishment inflicted, for violations of the law committed while it was in force” — and it is insisted that the words “no penalty can be enforced, nor punishment ' inflicted” are .particularly applicable here as a penalty is being enforced and a punishment inflicted. In place of holding that petitioner is now imprisoned as a result of a penalty or punishment for a violation of the prohibition law, it seems more accurate to conclude that the penalty or punishment provided for the violation of said law was merged in the judgment of the court, and that the petitioner is imprisoned by reason of the execution of the provisions of the judgment. It must also be remembered that, in the case in which Judge Marshall was writing and from which he is quoted, as well as in the Chambers Case, supra, no such question was presented as we are now dealing with. In both eases the court was considering solely the question as to the effect which the repeal of a statute would have on pending prosecutions and not cases where the matter in controversy had been reduced to a final judgment.

Whatever doubt there may be as to what the court intended in its opinion in the Chambers Case, supra, is to my mind eliminated by the last few lines of the opinion, as follows: “We are not dealing with a case where final judgment was rendered prior to that ratification. (Reference to Twenty-First Amendment.) Such a ease would present a distinct question which is not before us.” It was entirely unnecessary, of course, for the Supreme Court to make this statement with reference to a question not before it, and different minds may differ as to the purpose the court had in mind in making such a plain and unequivocal statement. To my mind, however, the court was apprehensive, lest its opinion might be construed, as counsel for petitioner in this case seek to construe it, and that it is a plain warning that the rule announced in its opinion is to have no application to eases where a final judgment was rendered prior to the adoption of the Twenty-First Amendment.

It is therefore my opinion, and I so hold, that the ratification of the Twenty-First Amendment to the Constitution thereby repealing the Eighteenth Amendment and laws enacted thereunder, has no effect upon a person serving a sentence in prison as a result of a final judgment entered prior to such adoption and such repeal. I am also of the opinion that there is no merit in the contention that petitioner is unlawfully detained because of an unreasonable delay in executing the sentence of the court.

When the judgment of the court was made final, It had nothing further to do in the matter. The order of commitment issued by the clerk was a ministerial one, and, even though there Was delay, it was not one in which the court or any of its officers could have been interested. While the record before the court does not definitely reveal the cause of the delay, it is a fair assumption that it was at the request of the petitioner and for his benefit. Certainly that part of the delay occasioned by the postponement of the execution of the sentence by the court, whether with or without authority, was at the request of the petitioner. Some Illinois authorities are cited as holding that an unreasonable delay in the execution of a sentence will invalidate an imprisonment, but the Supreme Court of the United States, in Miller v. Aderhold, supra, has considered a situation with reference to what was claimed to be an unreasonable delay, and on page 210 of 288 U. S., 53 S. Ct. 325, 326, say: “He may at any time put an end to it by requesting the court to pronounce judgment, which the court no doubt would do unless good cause to the contrary were made to appear. In the absence of such request he must be held to have consented to the indefinite delay, and cannot complain.”

The petition for writ of habeas corpus is therefore dismissed, and the petitioner remanded to the custody of respondent.


text:
    In re CLAUDON.
    No. 2740.
    District Court, S. D. Illinois, N. D.
    March 19, 1934.
    C. V. O’Hem, J. J. Alloy, Ira J. Covey, and E. L. Covey, all of Peoria, Ill., for alleged bankrupt.
    Greenebaum & Bums, of Pontiac, Ill., for petitioning creditors.
    Adsit, Thompson & Herr, of Pontiac, Ill., and Miller, Elliott and Westervelt, of Peoria, Ill., for trastee.
   MAJOR, District Judge.

On December 22, 1927, an involuntary petition in bankruptcy was filed against A. B. Claudon, and on December 31, 1927, a subpoena, together with a copy of the involuntary petition, was served upon Mis. A. B. Claudon, wife of the alleged bankrupt, at the home of N. J. Claudon, a son of the alleged bankrupt, who now appears in this proceeding as administrator of the estate of the alleged bankrupt.

It is claimed and admitted that this service was illegal and void.

The matter was referred by the clerk of the court to the Honorable George K. Foster, referee in bankruptcy, where an adjudication was made on January 21, 1928. C. R. Voris was selected as trustee and his bond was approved.

The alleged bankrupt was the president of the Claudon State Bank of Fairbury, Ill., which closed prior to the time of the filing of the involuntary petition and from that time until several years later, the whereabouts of the alleged bankrupt were unknown.

During this period certain legal papers were filed in the recorder’s office of Livingston county, signed by A. B. Claudon and acknowledged before N. J. Claudon, and the files in the case indicate that the said N. J. Claudon had knowledge of his father’s whereabouts.

The proceedings took the usual and ordinary course before the referee, in which the said N. J. Claudon participated. On October 12, 1927, N. J. Claudon filed for record in the recorder’s office of Livingston county, a lease on a 480-aere farm owned by the alleged bankrupt, in which the said N. J. Claudon was mentioned as tenant, and which lease was afterwards assigned by N. J. Claudon.

The estate of the alleged bankrupt was of considerable proportion and the trustee, among other things, sold property, including a right of way over farm land.

Prior to the filing of the involuntary petition, a number of creditors commenced attachment proceedings against the alleged bankrupt in the circuit court of Livingston county, which proceedings were dismissed after the order of adjudication. During the course of administration, numerous claims were filed against the alleged bankrupt.

On January 7, 1931, the alleged bankrupt appeared in court by Bracken, Livingston & Murphy, his attorneys at that time, and filed a motion which questioned the jurisdiction of the court, on the grounds that no legal service had been had on the alleged bankrupt. The alleged bankrupt did not appear in person and the motion was supported by affidavits made by various members of his family.

On October 28, 1931, an order for alias subpoena was entered, which was personally served on the following day. November 9, 1931, the alleged bankrupt filed a motion to dismiss the involuntary petition on the grounds that it failed to charge him with an act of bankruptcy. This motion has never been passed upon and is now before the court.

On October 20, 1933; N. J. Claudon filed a petition in which it was alleged that A. B. Claudon, the alleged bankrupt, died August 8, 1932, and, as administrator of the said bankrupt estate, renewed the motion filed by A. B. Claudon on November 9, 1931, to dismiss the involuntary petition; and it is this motion with which the court is now concerned.

The involuntary petition charged but a single act of bankruptcy and is as follows:

“And your petitioners further represent that said A. B. Claudon is insolvent, and that within four months next preceding the date of this petition the said A. B. Claudon committed an act of bankruptcy, in that he did heretofore, to-wit, on the 9th day of September, A. D. 1927, permit attachments to be entered in the Circuit Court of Livingston County, and levied upon property of the said Á. B. Claudon.”

It is claimed by counsel for the alleged bankrupt that the act of bankruptcy charged is fatally defective for the following reasons:

First. It is not charged that the alleged bankrupt was insolvent at the time of the levy of said alleged attachment.

Second. It is not charged that the alleged bankrupt did not vacate or discharge the said attachment within thirty days from the date of such levy.

Third. It is not charged that the alleged attachment became a lien on any property of the alleged bankrupt, or that such attachment resulted in a preference of the attaching creditors over other creditors of the same class.

It is admitted by counsel for petitioning creditors that this, allegation of bankruptcy is not sufficient, but on January 9, 1934, and before the court had passed upon the motion to dismiss, filed a petition praying leave to amend the original petition so that the same may read as follows:

“And your petitioners further represent that the said A. B. Claudon is insolvent and that while insolvent, within four months next preceding the date of this petition, the said A. B. Claudon committed an act of bankruptcy, in that he did, heretofore, to-wit: on the 9th day of September, A. D. 1927 permit attachments to be entered in the Circuit Court of Livingston County, Illinois, and levied upon the property of the said A. B. -Claudon; that the said A. B. Claudon, while insolvent, suffered or permitted certain creditors, (naming creditors with the amounts of their respective claims) to obtain through legal proceedings commenced on said date, in the Circuit Court of Livingston County, Illinois, attachment writs, which were duly and regularly issued out of said Court and duly and regularly delivered to J. A. Searratt, Sheriff of said County, who; on September 13th, 1927, by virtue of said attachment writs, levied on the real estate of the said A. B. Claudon, to-wit: (description of real estate); and that the said A. B. Claudon did not vacate or discharge the same, and the lien created thereby, to be vacated or discharged within thirty days from the date of said levies.”

In support of said petition for leave to amend, there is included paragraphs 4, 5, 6, 7, 8, 9, 10, 11, and 12 which respondent has moved to strike as being scandalous, impertinent, and redundant, and it is conceded by the respondent “that the matter's and things set forth in said petition, exclusive of the paragraphs sought to be stricken, contain a sufficient showing under General Order in Bankruptcy No. 11 (11 USCA § 53), to permit said petitioning creditors to amend said original involuntary petition, provided the court has the right to permit the petitioning creditors to amend the same, and allow such amendment to relate back to the date of the filing of the original petition in bankruptcy.”

The paragraphs objected to in the main were a recital of the proceedings in this cause as shown” by the files, and, in view of the conclusion which I have reached, I do not believe they are subject to the criticism, made. If the court has discretion to permit the amendment sought, the allegations in this petition to amend are material as to the exercise of that discretion. Therefore, the motion to strike the paragraphs referred to is denied.

The main and essential question which the court is called upon to decide is whether or not it is vested with the authority to permit the original involuntary petition to be amended in the manner sought and, if so, can the amendment be made effective as of the date of the filing of the original petition.

Counsel for the respective parties, in addition to oral argument, have presented extensive written briefs and arguments in which many authorities are cited and quoted from and they, no doubt, appreciate the serious nature of the question presented, and which the court is called upon to decide.

A decision involves a construction of Equity Rule 19 (28 USCA § 723) promulgated by the Supreme Court of the United States, which provides as follows: “The court may at any time, in furtherance of justice, upon such terms as may be just, permit any process, proceeding, pleading or record to be amended, or material supplemental matter to be set forth in an amended or supplemental pleading. The court, at every stage of the proceeding, must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties.”

General Order in Bankruptcy No. 11 (11 USCA § 53), provides in part: “The court may allow amendments to the petition and schedules upon application of the petitioner.”

The Bankruptcy Act (section 2 (15) of the act, 11 USCA § 11 (15), itself, in defining the jurisdiction of courts of bankruptcy, provides: “Make such orders, issue such process, and enter such judgments in addition to those specifically provided for as may be necessary for the enforcement of the provisions of this act [title].”

In Armstrong v. Fernandez, 208 U. S. 324, on page 330 of the opinion, 28 S. Ct. 419, 421, 52 L. Ed. 514, it is said: “The power of a court of bankruptcy over amendments is undoubted and rests in the sound discretion of the court.” This statement has been quoted and followed in many cases.

See In re Cleveland Discount Company (D. C.) 5 F.(2d) 846; In re Bieler et al. (C. C. A.) 295 F. 78; Harney Shoes, Inc., v. National Fabric & Finishing Co. et al. (C. C. A.) 44 F.(2d) 517; Kay v. Federal Rubber Co. et al. (C. C. A.) 46 F.(2d) 64.

The court on page 858 of 5 F.(2d) in Re Cleveland Discount Company, supra, said: “An amendment may be allowed at any stage in the proceedings as justice may require. The power of the court is not limited in this respect. * * * All of these defects, jurisdictional defects, may be cured by an amendment filed at any time, even though it be more than four months after the act of bankruptcy alleged in the original petition, and the amendment is held to relate back to the filing of the original petition.”

In the ease of In re Fidelity Savings & Loan Association (D. C.) 53 F.(2d) 241, on page 243, it is said: “That the original petition is defective in substantial particulars we have no doubt. We are equally certain that the petitioning creditors are not entitled, as a matter of right, to file an amended petition, but that, on the contrary, the granting or denial of permission to file the same is a matter which rests in the sound discretion of the court.”

In Volume 7, Corpus Juris, § 132, page 79, it is said: “Amendments may be made at any stage of the proceedings, regardless of the time which has elapsed, if otherwise authorized; and when made, relate back to the time of the filing of the original petition.”

It seems the Circuit Court of Appeals of this Circuit has been even more liberal with reference to the authority vested in courts tp permit amendments in bankruptcy proceedings than the courts generally in the country. One of the leading eases which has often been quoted with approval is that of In re Shoesmith (C. C. A.) 135 F. page 684, on page 688, where the court said: “It it contended that because the first petition filed by the creditor was defective, and a sufficient amended petition was filed more than four months after the last fraudulent transfer of the property, the court had no power to permit an amendment, and was therefore without jurisdiction to entertain the proceedings. The district court had jurisdiction of the parties. It had jurisdiction of the subject-matter. It has general and exclusive jurisdiction of bankruptcy proceedings. The objection goes to the want of equity exhibited by the petition, not to the want of power in the court. There was jurisdiction to determine the sufficiency of the petition, and it was complete to permit any amendment. The jurisdiction in such eases comes from the statute, and is not conferred by the accuracy and precision of the averments made in the petition. (Citing eases.) And the amendment, when filed, relates to and takes effect as of the date of the filing of the original petition.”

In Chicago Motor Vehicle Company v. American Oak Leather Co. et al., 141 F. 518, on page 520, the opinion rendered by the Court of Appeals of this Circuit, where the right of the District Court to permit a petition to be amended was raised, the court said: “The ease in that respect is ruled by the decision of this court in Re Shoesmith, 135 F. 684, 688, 68 C. C. A. 322, and the allowance was within the judicial discretion, whether necessary or unnecessary at that stage.”

In the case of Morrison v. Rieman, 249 F. 97, on page 102, an opinion by the Court of Appeals of this Circuit, it is said: “The general power to permit amendments within sound discretion inheres in bankruptcy as well as in other courts.”

In re Pangborn (D. C.) 185 F. 673, it was held that where a petition alleges insolvency only at time of filing petition, it may be amended to show insolvency at the time of the commission of the alleged act of bankruptcy.

In the 11th Edition of Collier on Bankruptcy, page 1197, in commenting upon the effect of General Order in Bankruptcy No. 11, it is said: “This power of amendment is substantial and conferred for effecting the broad purposes of the Act, and is not confined to niceties of diction or other immaterial or merely formal matters. To hold that it does not embrace the insertion of material and essential averments in any stage of the proceedings before judgment would reduce it to a shadow.”

In Re Hollywood Land & Water Co. (D. C.) 41 F.(2d) 778, on page 779, Remington on Bankruptcy is quoted as follows: “There is a right of amendment to an ineffective and inefficient petition in bankruptcy, and the courts are as lenient in this respect as in reference to pleadings in other eases. There must be something, however, in the original petition by which to amend. The right to amend can go no further than to bring forward and to make effective that which in some form is already there.”

In Harney Shoes, Inc., v. National Fabric & Finishing Co. et al., supra, the court on page 518 of 44 F.(2d), said: “The general allegation of preferences to persons unknown, while insufficient, was amendable, as held by the Court of Appeals in the Second Circuit in Bradley v. Huntington, 277 F. 948. The defect was not jurisdictional. If the respondent had seasonably asked for a hearing on the motion to dismiss, it might perhaps have been granted, but with leave to amend.”

In Re Yellow Motor Company of St. Louis (C. C. A.) 34 F.(2d) 118, on page 120, the court said: “On the other hand, if the original pleading is sufficiently specific to identify the cause of action, however defective and imperfect it may be, and it appears that the amended pleading introduces no new cause of action, but merely enlarges, amplifies, or makes more definite and certain the allegations of the original pleading with reference to the same cause of action, then the amended pleading ought to relate back to the date of the filing of the original pleading.”

It would serve no useful purpose to quote further what the courts have said with reference to the power of the court to permit amendments in bankruptcy proceedings. It seems to me, however, that the power is clearly vested in the court, subject, of course, to the exercise of a sound discretion. A reading and study of the many eases cited by counsel for the respective parties, while apparently disclosing a considerable conflict among the various courts, are convincing that the opinions in the various eases have rested largely upon the particular facts in the ease, under consideration.

It can also be said that most of the cases lay down a general rule, often expressly referred to as such, applicable to an ordinary case. No case is cited where the facts are even similar to those in the present ease, and I doubt if such facts have before been presented to a court. It is not an ordinary case where a general rule might be controlling.

If the court does not have the authority to permit an amendment such as is sought, Equity Rule 19 (28 USCA § 733) and General Order in Bankruptcy No. 11 (11 USCA § 53), with reference to amendments, are idle gestures, and, as was said concerning the latter by Collier on Bankruptcy, supra, “would reduce it to a shadow.”

It is true, of course, there must be something on which to base an amendment, but to hold that the original petition can only be amended with reference to technical and informal matters and that amendments of a substantial or material matter cannot be permitted, would circumvent the intention of the rule and would likewise deprive the court of the right to do equity and justice between parties involved. It is true and conceded that the original petition is not sufficient and that it omits essential and material averments; it is likewise plain to me that the amendment sought to be made describes the same act of bankruptcy as was sought to be set forth in the original petition. Each charges A. B. Claudon with committing an act of bankruptcy within four months; each charges the act to have been committed on the same day; and each charges that it was committed by permitting attachments to be levied upon his property in the same court and in the same county.

Having concluded that the authority to permit this amendment is vested in the court, it seems to me that the ends of justice require that the court’s discretion should be exercised in allowing the amendment. What harm can be done this alleged bankrupt estate by permitting such action? . It may result, it is true, in the application of the assets to meet the provable claims filed against it; certainly this is what the law intends should be done. On the other hand, to refuse the petitioning creditors the right to amend and dismiss the petition would mean that all the proceedings heretofore had are declared null and void. If no one was concerned except the petitioning creditors, a different situation might be presented, so far as the exercise of the court’s discretion in this matter is concerned, for they are at least partly responsible for the predicament in which they find themselves. However, numerous parties relying upon the legality of this proceeding have acquired and been divested of property rights which they otherwise would have had or not lost. Attaching creditors have lost their liens on the property of the bankrupt estate; creditors whose claims have been filed in the court of bankruptcy against this estate would lose their rights, and it is apparent under the Illinois law, it would be too late for them to file their claims in the probate court against the estate of the alleged bankrupt. The trustee, who, so far as this court knows, has acted in the utmost good faith, under bond and under the supervision of this court, might be in a serious predicament.

To dismiss the petition and hold that all proceedings in this bankruptcy matter are null and void, it seems to me, would mean, that all the estate would be turned over to the administrator and the heirs, free of debts and claims, and. the creditors and others who have acquired rights would be left without any recourse whatever.

As some of the opinions heretofore quoted have said: “The Court has jurisdiction of the parties and the subject matter” and it likewise has the authority and duty to do justice between the parties. The proceedings in this ease convince me that the alleged bankrupt in his lifetime, as well as some members of his family who are now interested as his heirs, have played “hide and seek” with the court, and should not at this late day be permitted to take that which by law belongs to the creditors. I realize that the result which the court anticipates might follow, should the petition to dismiss be allowed, has no bearing upon the question as to whether or not the court is vested with the power to permit this amendment, but having determined that that power rests in the court, the result which might be expected to follow in such event, it seems to me, is not only material, but controlling upon the court in the exercise of a discretion which will do, so far as lies within the power of this court, justice to the parties concerned.

The motion by respondent to dismiss the original petition is therefore denied and the motion by the petitioning creditors for leave to amend the original petition will be allowed as requested, and the same will date back and be effective as of the date of the filing of the original petition.