author: BORAH, District Judge. ■

text:
    THE WESTERN WAVE (two cases). THE TEXAN (formerly the Western Wave).
    Nos. 21044, 25, and 20.
    District Court, E. D. Louisiana.
    March 13, 1934.
    Harold A. Moise, of New Orleans, La., and Philip S. Pugh, of Crowley, La., for libelant Board of Com’rs of Port of New Orleans.
    Monroe & Lemann and Nicholas Callan, all of New Orleans, La., for libelant Johnson Iron Works, Dry Dock & Shipbuilding Co., Inc.
    Montgomery & Montgomery and H. F. Stiles, Jr., all of New Orleans, La., for owner and claimant, North American Fruit & S. S. Co.
   BORAH, District Judge. ■

These three suits were consolidated for the purpose of trial, and accordingly may be disposed of in one opinion.

On January 23, 1932, and June 23, 1932, the Board of Commissioners of the Port of New Orleans filed separate libels against the steamship Western Wave and the steamship Texan (formerly the Western Wave) asserting claims due it for dockage, sheddage, etc., and on June 6,1932, the Johnson Iron Works, Dry Dock & Shipbuilding Company, Inc., filed a libel against the Western Wave to recover for repairs furnished to the vessel while in the port of New Orleans. The vessel was seized in each instance and claimed by the North American Fruit & Steamship Corporation as owner. The owner answered the libels and denied that any maritime liens existed on the vessel, on the ground that at the time these claims arose the vessel was being operated under a charter by the New Orleans, Houston & Corpus Christi Steamship Company, Inc., and that under the terms thereof it was stipulated that the charterer was to pay all port charges, etc., and that neither the charterer nor the master had any right to permit a lien to be imposed upon the vessel except for crew’s wages and salvage. As a further ground of defense it is urged that libel-ants in contracting for said wharfage and repairs dealt solely with the New Orleans, Houston & Corpus Christi Steamship Company, Inc., or its representatives, and relied fully on the faith and credit of said company. The owner also filed a cross-libel against the libelant in the above suit bearing Docket No. 2,0 for the damages which it claims to have suffered because of the alleged wrongful and unwarranted seizure of the Texan, which was then under charter to the Gulf Steamship line, Inc.

While the separate libels of the Board of Commissioners of the Port of New Orleans •may be treated as one claim because the principles of law which govern them and the facts under which they arose are identical, it will be necessary to deal with the Johnson Dry Dock & Shipbuilding Company, Inc., claim separately because of the differences in principle involved. However, there are certain facts which are applicable to both claims' and they will first be briefly stated.

The Western Wave is owned by the North American Fruit & Steamship Corporation, a Delaware corporation, and prior to the period in controversy she had been laid up at Walnut street in the harbor of New Orleans. On March 28, 1931, the owner entered into a bare boat charter for the vessel with the New Orleans, Houston & Corpus Christi Steamship Company, Inc., a Louisiana corporation, with its principal place of business in the city of New Orleans, under the terms of which, in so far as material, the charterer agreed (1) to pay all port charges, (2) stipulated that neither the charterer nor the master had any right to permit a lien to be imposed upon the vessel except for crew’s wages and salvage, (3) obligated itself to notify in writing if practicable any person furnishing repairs to the steamer of these limitations which the charter party placed upon its authority and that of the master, and (4) further agreed to fasten to the steamer in a conspicuous place, and to maintain during the life of this charter, a notice reading as follows : “This steamer is the property of the North American Fruit & Steamship Corporation. It is under charter to New Orleans, Houston & Corpus Christi Steamship Company, Inc., and by the terms of the Charter neither the Charterer nor the Master has any right, power, or authority to create, incur, or permit to be imposed upon the steamer any liens whatsoever except forerew’s wages and salvage.”

In compliance with the last-stated condition and with the knowledge of the representative of the owner who was likewise) the auditor of the charterer, there was posted on the vessel on April 30, 1931, in the passageway leading into) the saloon, in the smoking room, in the pilot house and, in the crew’s messroom, notices reading as prescribed. The testimony, however, is all one way that these notices were not observed by the libelants or their representatives, and the probabilities all favor the view that the contrary was not intended; otherwise it is reasonable to assume that the owner’s representative would have required the posting of a notice in the engine room where he knew essential repairs had to be made before the vessel would be in condition to earn the contemplated charter hire. The other remaining facte which are deemed material will be stated in connection with the claims to which they apply.

Claim of the Board of Commissioners of the Port of New Orleans.

The Board of Commissioners of the Port of New Orleans is an agency of the state of Louisiana and was created by Act No. 70 of 1896, as amended by Act No. 36 of 1900' and Act No. 14, Extra Session of 1915. The Board is vested by law with complete jurisdiction of the publiS wharves and landings of the port of New Orleans, and is empowered to charge for the use of the wharves,, sheds, and other structures and for the use of all facilities administered by it such fees, rates, tariffs, and other charges as may be established by the Board.

Acting under the above statutes, the Board adopted and published a tariff in which there appears under the definition “Dockage-Wharfage” the following: “A charge against vessels for the use of the public wharves or mooring facilities based upon the gross tonnage of the vessel. The ship is responsible for this charge.” Under the definition “Sheddage” appears the following: “A charge against vessels for the use of covered wharves based upon the gross tonnage of the vessel. This charge is in addition to the Dockage-Wharfage Charge. The ship is responsible for this charge.” Under the definition “Wharf Tollage” appears the following: “A charge against vessels based on tons of cargo received or discharged while lying at public wharves or mooring facilities. The ship is responsible for this charge!”

The proof shows that the services were rendered to the ship and upon the credit of the ship, and as there is no contest as to the amount of the charges or the correctness thereof, there remains for determination the question of the lien and the extent to which it may be affected by the existing charter party. This precise question was presented in the ease of The Palnatoke, which bears docket Nos. 17, 164-65-67 of this court, and the same defense was made then as is interposed in the ease at bar. In disposing of this contention, Judge Bums in considering the provisions of the Maritime Lien Act of 1910 relating to liens for necessaries as re-enacted in the Ship Mortgage Act of 1920, § 30, sub-secs. P-S (U. S. C., tit. 46, §§ 971-974 [46 USCA §§ 971-974]) said: “Pilotage, wharf-age, etc., are not included in the terms ‘other necessaries’, which 1ms been construed to refer only to things ejusdem generis with ‘repairs, supplies, towage, dry doekage or marine railway.’ Like seamen’s wages, salvage services, and others, they, by the general maritime law, are beyond and above the Act and give rise to a lien ipso faeto, since the admiralty law presumes they are rendered on the credit of the vessel to whose movement as an instrument of commerce they are essential necessaries.” See, also, Ex parte Easton, 95 U. S. 68, 75, 24 L. Ed. 373, and the following decisions from this circuit: The Dictator (D. O.) 18 F.(2d) 131; The Rathlin Head (D. C.) 292 F. 867; Id. (C. C. A.) 299 F. 474; The El Amigo (C. C. A.) 285 F. 868.

In Ex parte Easton, supra, the court upon making the observation that wharves, piers, or landing places were as essential to commerce as ships and vessels, stated: “ * * * that the contract for wharfage is a maritime contract, for which, if the vessel or watercraft is a foreign one, or belongs to a port of a State other than that where the wharf is situated, a maritime lien arises against the ship or vessel in favor of the proprietor of the wharf.” Applying this language to the facts in the instant ease, the conclusion is' inescapable that libelant’s claim to a lien under the general maritime law has been established, as the- evidence shows that the West-em Wave was owned by a Delaware corporation and consequently she was not in her home port while in, New Orleans, even if it be assumed that she was there.enrolled (and the record is silent with reference thereto).The Havana (C. C. A.) 64 F. 496. Indeed, it is held in the Second Circuit that such a lien arises in the “home” port as well. The Scow No. 15 (C. C. A.) 92 F. 1008; The Poznan (D. C.) 297 F. 345.

Claim of the Johnson Iron Works, Dry Dock & Shipbuilding Company, Incorporated. • [2] With regard to this claim it is conceded that the repairs were furnished in a workmanlike manner and that the amount charged was reasonable. The sole issue presented is whether or not the libelant has a lien upon the vessel for the repairs furnished. In addition to the facts previously stated, it appears that negotiations for the repairs were conducted by J. C. Proctor, the vice president and general manager of the New Orleans, Houston & Corpus Christ! Steamship Company, Inc., and that all of his dealings were had with Neal Armstrong, the general superintendent of the Johnson Dry Dock & Shipbuilding Company, Inc. It is therefore quite clear that the libelant, according to the provisions of section 30, subsec. Q, of the Act of June 5,1920 (46 USCA § 972), dealt with a person who presumably had authority from the owner to procure repairs, supplies, and other necessaries for the vessel. Indeed, claimant admits that a charterer by demise of the ship, sometimes called a bare boat charter, is an owner pro hac vice and that such persons having possession of the vessel and charge of her operation are persons to whom her management at the port of supply is intrusted. It follows that libelant has a lien upon the vessel for the repairs furnished unless, under the provisions of section 30, subsec. R, of the act just cited (46 USCA § 973), it knew, or by the exercise of reasonable diligence could have ascertained, that because of the terms of the charter party the person ordering the repairs was without authority to bind the vessel therefor. There is no convincing evidence here which could lead one to believe that at or prior to the time of furnishing repairs libelant knew, or by the exercise of reasonable diligence could have ascertained, the existence of the charter party or that the person ordering the repairs was without authority to bind the vessel therefor. On the contrary, the evidence shows that J. C. Proctor, the person having apparent authority to bind the vessel, made oral representations to Neal Armstrong of the Johnson Iron Works, Dry Dock & Shipbuilding Company, Ine., that they (meaning either J. C. Proetor and his brother or the chartering company) had purchased the vessel and were in fact the owners thereof at the time the contract for repairs was made. Having in mind that these negotiations were carried on between parties who had an acquaintanceship of thirty-five years’ standing, and considering the fact that during these negotiations overtures were made to Armstrong to take stock in this new company, it follows that he was led to believe that the representations made as to the ownership of the vessel were in fact true. Armstrong was further fortified in the belief that the representations made to him as to the ownership of the vessel were' true because of a published article which he had previously observed in the Times-Pieayune, a local paper of large circulation, which contained an announcement by J. C. Proetor, secretary-treasurer of the New Orleans, Houston & Corpus Christi Steamship Company, Ine., that the newly organized company had purchased the steamer Western Wave and would inaugurate weekly sailings between New Orleans and Texas ports. It is true that the authorship of this article was denied, but the fact remains that no public retraction was made thereof though both the Proctors knew of the publication of said article and likewise knew, or should have known, that it was calculated to cause supply men of the vessel to alter their position to their prejudice. Furthermore, the local representative of the claimant and owner positively knew at or about the time of the publication of said article that negotiations were being conducted by the charterer for the repair of the vessel with the Johnson Iron Works Dry Dock & Shipbuilding Company, Ine., and yet he never apprised them who was the owner of the vessel or informed them of the terms of the charter party because, to use his own language, “they never asked him.” Nor does he in any manner seek to justify his silence and inaction, and it cannot be condoned in the absence of a showing that he had received some assurance from the charterer that he had given to the furnisher of repairs the required notice in writing or otherwise.

There is no creditable evidence in this record tending to prove that libelant ever knew, or from" any accessible source of information could have learned, of the existence of the charter party or that the' ownership of the vessel-was'other than it appeared and was claimed to be. But the claimant contends that regardless of how the court views the veracity of the witnesses in regard to the representation's made as to the ownership of the vessel that it is immaterial to the case because the testimony shows that the work was done on the personal credit of the Proctors. I do not agree with this contention. In the first place, the statute declares that any person who furnishes repairs to a vessel shall have a maritime lien thereon and it shall not be necessary to allege or prove that credit was given to the vessel. That lien exists unless the proctors were wrongfully or unlawfully in possession of the vessel (and this is not claimed), or unless it is affirmatively shown to have been waived by the libelant and by an .understanding between the parities that no such lien was contemplated. There is no evidence of any such understanding. On the contrary, it is very clear to me that libelant in making this contract intended to rely on the security of the vessel itself.

Upon the whole the conclusion is warranted that the libelant has met every requirement of reasonable diligence, and the lien will be allowed and the cross-libel will be dismissed.

It is ordered that decrees be entered in favor of the several libelants for the amounts claimed in their several libels and that their proctors may prepare and present decrees accordingly.


source: Caselaw Access Project

author: WO'OLSEY, District Judge.

license: Public Domain

text:
    ISRAELITE HOUSE OF DAVID v. MURPHY.
    District Court, S. D. New York.
    May 23, 1934.

      Lawrence Wiseman, of New York City (H. T. Dewhirst, of Benton Harbor, Mich., on the brief), for the motion.
    Phillips, Mahoney, Leibell & Fielding, of New York City (Jeremiah T. Mahoney and William E. Goldman, both of New York City, of counsel), opposed.
   WO'OLSEY, District Judge.

This motion is granted; and the plaintiff may, on filing of a bond in such amount as I may fix after hearing counsel thereon, have an order providing for an injunction pendente lite preventing further unfair competition with its baseball team by the defendant.

I. This motion arises in a suit between an unincorporated religious and business association made up of citizens and residents of Michigan — by the law of which state it is allowed to sue under the name of Israelite House of David and to use the shorter title “House of David” — against a citizen and resident of Illinois. The necessary diversity of citizenship, therefore, exists and the amount involved is sufficient to give this court jurisdiction of the subject-matter.

The defendant Murphy, who was served with process in this district, has appeared generally herein and thus waived any question of venue.

The jurisdiction of this .court over the defendant is, therefore, unassailable and the merits of the motion alone need to be considered.

II. I find in the ease of National Circle, Daughters of Isabella v. National Order of Daughters of Isabella, 270 F. 723 (C. C. A. 2) — not cited to me by counsel for either party — the recognition of the plaintiff’s right herein to protect itself in equity from the unauthorized and unfair use of its name by the defendant.

III. The papers before me show that for many years — at least for a period beginning some years before 1918 — the plaintiff has maintained a baseball team which has traveled about the country and has played several hundred games each year with other professional and semiprofessional teams. The result has been a substantial income to the plaintiff.

One of the tenets of the plaintiff’s religion is that male members of its sect shall wear beards and its baseball team has always conformed to this rule.

Although it is claimed that the plaintiff’s ball team plays a sound game of baseball, it is fairly inferable that the most notable characteristic of the plaintiff’s team is that the players wear beards, and that across the breast of the uniform of each player are the words “House of David.”

The affidavits show that in 1929 the defendant Murphy commenced to maintain a bearded baseball team, whose members wore, without authority from plaintiff, uniforms with the words “House of David” on them.

The plaintiff shows also that in cities and towns where Murphy knew the plaintiff’s team had games arranged, he has endeavored, in so far as he could, to book — and has often succeeded in booking — games for his team a few days ahead of the date set for the plaintiff’s games, and thus, as it were, diluted the neighborhood’s interest in seeing a bearded baseball team play ball.

In addition, the plaintiff states, in aggravation of its grievance, that the defendant’s spurious team, posing as the “House of David” team, plays a game of baseball far inferior to the game played by the plaintiff’s team, and thus injures the reputation of the plaintiff’s team, and, consequently, its gate receipts.

IV. The plaintiff complains quite bitterly because the defendant’s ball players are all required to wear beards like those of the plaintiff players.

From time immemorial, however, the wearing of beards has been in the public domain. In respect of matters within that domain all men have rights in common. Any man, therefore, if so minded, may — -without being subject to any challenge, legal or equitable — not only grow such beard as he can, but purposely imitate another’s facial shrubbery — even to the extent of following such topiary modification thereof as may have caught his fancy.

The plaintiff’s rights herein, therefore, cannot be soundly based merely on the fact that the members of the defendant’s team, wear beards even if they are precisely like the beards of the plaintiff’s team.

When, however, there is added to the wearing of beards by the defendant’s baseball team, the unauthorized wearing of uniforms bearing the words “House of David,” and that is accompanied by the booking of a team so equipped with obvious intention of competing for gate receipts with the plaintiff’s team, a mens rea on defendant’s part is established, and it becomes clear beyond peradventure that the defendant is actuated by a desire not only unfairly to avail itself of the quaint appearance of the plaintiff’s team, but to masquerade as the plaintiff’s team and thus unfairly to compete with it.

V. Indeed, as I read the papers herein, it seems to me that the only defense seriously urged is alleged laches on the plaintiff’s part. I find, however, that, having regard to all the circumstances here shown, the plaintiff had not been guilty of such acquiescence as should constitute laches barring the relief which it now seeks. Cf., National Circle, Daughters of Isabella v. National Order of Daughters of Isabella, 270 F.(2d) 723, 732 (C. C. A. 2), and eases there cited.

VI. The amount of the bond to be given by the plaintiff will be fixed at the time of the settlement of the order hereon.

Settle order on notice.


author: BYERS, District Judge.

text:
    SOCOLOV v. UNITED STATES.
    No. 13798.
    District Court, E. D. New York.
    March 23, 1934.
    Gazan & Caldwell, of New York City, for libelant.
    Howard W. Ameli, U. S. Atty., of Brooklyn, N. Y., and Tompkins, Boal & Tompkins, of New York City (Arthur M. Boal, of New York City, of counsel), for the United States.
   BYERS, District Judge.

In this cause the libelant seeks to recover damages for personal injuries suffered by him, on June 3, 1932, on the steamship Davenport in New Orleans.

He was an extra hand, having a stand-by job for five days prior to the accident, and acted as a replacement for one member of the regular crew.

He received a head injury through being struck by an iron bar 41 inches long, 2 inches wide and % an inch thick, with a tapered end which was inserted in a vertical wheel that operated the braking gear of the ship’s windlass.

The fact of the injury is not disputed, but the circumstances giving rise to it are the subject of conflicting testimony.

The' libel alleges that, while the libelant was in the performance of his duties and acting within the scope of his employment, he was caused to be struck by the said bar, which so injured him as to cause traumatic insanity; that the accident was not due to any negligence on the part of the libelant, but to the negligence of the respondent and to the defective and dangerous condition of the hand-brake of the said windlass and of the iron bar “which was being used by one of the said incompetent’s officers; in that said incompetent’s fellow servant and superior was careless and negligent in permitting the said iron bar or brake bar to strike the said incompetent,” and in that the brake bands and other parts and appurtenances of the windlass were in an insecure, defective, old, worn, broken and out of repair condition; that the respondent failed and neglected to repair and maintain the windlass, its parts, appurtenances, etc.; that the libelant’s superior officers and fellow servants were negligent in that they failed and neglected to warn him of the dangers to he encountered in the performance “of said work”; also failure to provide the libelant with a safe place in which to work, for the reasons stated, and because the deck was covered with grease and debris, and was in a dangerous condition.

The libelant offered no evidence except his own testimony as to how the accident, happened, and the deposition of a seaman (Spencer) and that of the doctor in the Marine Hospital in New Orleans, and hospital records of that institution.

There is no evidence that the deck was covered with grease or was otherwise in a dangerous condition or that the mechanism referred to was old, out of repair or otherwise defective.

The only possible question of negligence is presented by the libelant’s contention that the first officer permitted the iron bar to strike him.

It is found that the ship, on the morning of June 3, 1932, was at anchor in the Mississippi river at New Orleans, held in position by her port anchor; she was about to proceed under her own power and with the assistance of a tug, to a shipyard a mile or two distant, shortly after daylight; this required that the anchor be heaved, which was conducted by the chief officer, Pitloek, with the assistance of certain seamen, namely, Hopper, the boatswain, and Spencer, an able-bodied seaman; Berger, the libelant, was standing by subject to orders. They were all on the forecastle head when the anchor was heaved.

When that had been accomplished, the anchor was held in place, ready to be dropped instantly if the occasion required, because navigation at that place was dangerous and it might be necessary to let go the anchor at any instant. To accomplish this, the windlass was unlocked by the chief officer, i. e., he tightened the compressor band and threw out the gear, which is a part of the hoisting apparatus. The brake, when functioning, holds the anchor in the position to which it has been raised; the braking gear is operated from a hand wheel through a worm on the braking gear of the windlass; when that is tightened, it compresses the brake band and thereby holds the windlass in place. The hand wheel is operated first by hand and then the bar above referred to is inserted in one of a number of slots in the circumference of the wheel in the top are, and pulled down to a horizontal position. This is the usual type of braking gear, and the disputed question is whether the libelant, who was injured because of what happened while he was manipulating or attempting to manipulate the bar, acted on his own responsibility in attempting to use it and was clumsy or awkward in so doing, whereby the bar slipped out of the receptacle in the slot in which it was engaged at its tapered end; or whether he assisted the chief officer who took or grasped the bar and was pushing it toward the libelant, and did this in such a faulty manner that the bar slipped out of the wheel and struck the libelant the blow which caused the injury.

The chief officer, Pitloek, and the two other seamen testified under deposition, and no one of the three says that he saw the accident. The mate says that he tightened the bands and threw out the gear (hoisting) and then walked forward to the eyes of the ship, in accordance with his duties; that he gave no orders to any one to tighten the compressor, and that his attention was drawn to the libelant by hearing a noise, when he looked around and saw the libelant with his hand on his forehead, which was bleeding; that he motioned to the bridge to indicate that an accident had happened, and the Captain, who was on duty, immediately sent the third officer to the place in question, and the latter took the libelant aft, where, in the course of ten minutes, he received attention.

The mate deposed that he asked the libelant how the accident happened and the reply was: “It is no one’s fault but my own” —that “he thought he would tighten up a little more on the bar,” and the ‘ mate said: “Who told you to?” to which there was no answer.

Spencer, who was a witness for the libelant, said that he was on the forecastle head on the port side, coiling a heavy rope to which was attached a heaving line which would be used as soon as the ship arrived at the yard. He did not see the accident, but he heard the libelant make an exclamation, looked up, saw the blood on his forehead, hastened to him and tendered a clean rag, for obvious use. A statement made by Spencer, which is attached to his deposition dated January 14, 1933, places the chief mate forward in the eyes of the ship at the time of the libelant’s injury.

It would seem likely that this waá the fact; otherwise, if the chief mate had been grasping the bar at the time the accident happened, he would have been closer to the libelant'than Spencer, and the more likely to have tendered something to staunch the flood of blood than Spencer.

The remaining seaman was Hopper, who was acting as boatswain and who testified that his particular work in getting up- the anchor consisted in locking the gears in the locking device, and running the windlass; that he was on the forward part of the windlass when he locked the gears, then went aft of the windlass to handle the throttle, where he stood until he had the anchor up. He said: “These two seamen (Spencer and libelant) who were on the forecastle head were standing by and they were tightening this compressor wheel,” and that the chief officer was standing on the forward port side of the windlass.. He said he did not see the accident, because at the moment it happened he was looking aft toward the tugboat.

His testimony incidentally is to the effect that he handled the port compressor wheel and used the bar while the ship was making her mooring at the yard, and that it fitted fairly well, and that there was no trouble with it.

It is impossible to conclude from an examination of the testimony that the libelant has demonstrated that the chief officer was using the bar in question and called upon him to assist in that operation.

It is equally impossible to conclude whether or not the chief officer gave an order to the libelant to use the bar for tightening the brake band; but, if he did, it is clear that this was such a duty as an able-bodied seaman ought to be able to perform without injury to himself, and the libelant testified that such was his rating.

There can be no doubt that, during the interval which has elapsed since the happening, the libelant has suffered from a serious mental disturbance, and this of course-requires that his testimony should be corroborated as to what took place, for his memory seemingly cannot be relied upon.

The libelant was discharged from the Marine Hospital (to which he was sent promptly by the Master of the Davenport) on about the 11th of June, 1932, and instructed to stay in bed for a week and use an ice-pack on his head. He joined the steamship Ogóntz in New Orleans on June 26, 1932, and was paid off at that port on September 7th of the same year, after making a trip to Spain and Portugal. On that discharge, he applied for a hospital pass, and was given one, and later received extended hospitalization; at the trial, he testified that he had been granted parole from the Brooklyn State Hospital where he had received treatment during the past year.

Upon the whole case, it is impossible to say that the libelant has sustained his burden of proof, and consequently the libel must be dismissed with costs.

Settle order on notice.

If findings are desired, they may be settled at the same time.


author: DAWKINS, District Judge.

text:
    In re NETTER & MEYER.
    No. 4755.
    District Court, W. D. Louisiana. Alexandria Division.
    Aug. 18, 1933.

      Thornton, Gist & Richey, of Alexandria, La., for city of Alexandria.
    John H. MeSween, of Alexandria, La., for tax collector Rapides parish.
    Overton, Dawkins & MeSween, of Alexandria, La., for John M. Barrett et al.
   DAWKINS, District Judge.

This is an application to review the decision of the referee on the question of the relative rights of the landlord as against the claims of the city and state for taxes upon the funds of the bankrupt estate, which are insufficient to pay both classes. The referee has covered the matter fully and since I concur with the conclusion which he reached, his decision is affirmed and the opinion adopted and quoted in full, as follows:

“In this case the trustee realized a total of $727.16, $662.16 from the sale of the merchandise and fixtures and the remainder from other sources which for present purposes need not be detailed. The expenses of administration amounted to $198.67, leaving a balance of $528.49. John M. Barrett has a claim against the bankrupt in the sum of $800 for rent of the store building in which the merchandise and fixtures were contained. The state and parish taxes on the merchandise and fixtures for the years 1931 and 1932 amount to $456.75 and those of the city of Alexandria for 1930, 1931, and 1932 amount to $197.05.

“This controversy involves the manner in which the balance of $528.49 should be distributed. The trustee proposed by his account filed to pay the said fund to Barrett on account of his rent claim and the taxing authorities by oppositions filed claim the right to be paid by preference over ^Barrett.

“Section 64 of the Bankruptcy Act (11 USCA § 104) deals with debts that have priority and are to be paid in full in advance of the payment of dividends and it fixes the order in which they are to be paid, claims of taxes (b) (6) priming rent (b) (7). It has been decided that the funds coming under the operation of this section are those remaining for general distribution after the payment of liens and mortgages affecting particularly property. On the other hand, section 67 (11 USCA § 107) protects valid liens, which are not in any way affected by the bankruptcy proceedings and which must be paid out of the fund created by the sale of the particular property burdened with the lien by prefer-enee over mere priorities. That is the substance of the decision in City of Richmond v. Bird, 249 U. S. 174, 39 S. Ct. 186, 63 L. Ed. 543, where the lessor’s lien was held superior to a mere state priority for taxes. And in City of Dallas v. Ryan, 62 F.(2d) 959, 961, decided by the Circuit Court of Appeals, Fifth Circuit, January 18, 1933 (rehearing denied February 20, 1933), it is said that the priorities of section 64 (b) (7) are such preferences as may on insolvency be given by law to debts due the sovereign, to a debt due by a trustee, or for rent of the like but unsecured by any previous lien.

“The solution of the problem, therefore, resolves itself into the question whether the tax claims of the state of Louisiana and of the city of Alexandria are secured by lien on the movable property within the meaning of the Bankruptcy Act. That Barrett, the lessor, had a true lien on the merchandise and fixtures contained in the leased premises cannot be questioned. Civil Code, arts. 2705, 3218, 3219; Fudickar v. Glenn (C. C. A.) 237 F. 808; Marshall v. Knox, 16 Wall. 551, 21 L. Ed. 481. If it were not for the recent decision in the City of Dallas Case, to which reference has already been made, the matter could be decided upon the authority of Little v. Peyton, 54 F.(2d) 678, decided by the United States District Court for the Western District of Louisiana on May 6, 1931, in which it was distinctly held (following the decision of the Supreme Court of Louisiana in Cleveland Steel Co. v. Joe Kaufman Co., 155 La. 529, 99 So. 428) that taxes on movable property constitute a lien superior to the lessor’s lien thereon. And since the decision in the Cleveland Steel Company Case, the Supreme Court of Louisiana has again held in the ease of Morelock v. Morgan & Bird Gravel Co., 174 La. 658, 141 So. 368, 370; that the state has a privilege on personal property, which primes all others, to secure the payment of taxes due or to become due.

“However, in the City of Dallas Case, the Circuit Court of Appeals was not content to rest its decision on the question of the existence vel non of a lien for taxes on personal property in Texas on the adjudications of the state courts, but on the contrary made a searching, original investigation of the Constitution and statutes to ascertain for itself whether the lien was conferred by law. This is made plain from the following excerpt:

“‘In ascertaining whether under Texas law state, county, or city taxes have a lien adhering to the property or a mere priority arising on insolvency, we need to look to the Constitution, the general statutes, and the' charter of the city of Dallas, which is a special act of the Legislature. Article 8, § 15, of the Constitution, reads: “The annual assessment made upon landed property shall be a special lien thereon; and all property, both real and personal, belonging to any delinquent taxpayer shall be liable to seizure and sale for the payment of all the taxes and penalties due by such delinquent^; and such property may be sold for the payment of the taxes and penalties due by such delinquent, under such regulations as the Legislature may provide.”

“ ‘This section establishes a lien on land for taxes assessed against it. No lien in advance of seizure is provided on personalty, which is left to pass unencumbered from hand to hand. There is, however, nothing in the language to prohibit the Legislature, in providing for the collection of taxes on personalty and as an aid thereto, from establishing tax liens on it.' There are a number of statutory provisions for summarily seizing and selling personal property for state and county taxes when delinquent, and some provisions for such action in advance of delinquency when the property is about to be removed from the county or in cases of assignment to creditors or the insolvency or the death of the taxpayer. None of these statutes mention the creation of a lien except articles 7048 and 7269. The former relates to stocks of merchandise only, and provides that, in eases where the owner has rendered them for taxes or owes an occupation tax and then becomes bankrupt or makes an assignment of his merchandise, the tax collector shall at once demand the payment of the taxes, and, if they are not paid, he shall seize and sell enough of the merchandise to pay the taxes, “and said taxes, until paid, shall constitute a prior lien on said merchandise, goods and wares in default of said taxes.” We understand that the merchandise may be freely sold in the usual course of business, with no lien for taxes following it. It is only in ease of insolvency or assignment, and against the complications then arising that a lien is set up. It is an effort to provide a preference in payment on insolvency, and is a priority under a state law rather than a true lien on property in subjection to which the title of the trustee in bankruptcy vests. Article 7269 relates .to all sorts of property, and provides that, where a taxpayer makes an assignment to creditors, or his property is levied on, or be dies and leaves an insolvent estate and his taxes are unpaid, “the amount of such unpaid taxes shall be a first lien upon all such property.” The taxes are to be paid by the assignee, sheriff, or administrator, and, if not, the tax collector shall levy on and sell the property in whosesoever hands found. Here again no lien exists until the happening of specified events similar to a bankruptcy. There is no incumbrance superior to the trustee’s title, but only a priority of payment on insolvency. Therefore, so far as state and county taxes are concerned, we find no lien securing them within the meaning of the Bankruptcy Act. They stand not as secured debts but as debts having priority under the state laws on insolvency, and would fall under section 64b (7), but since they are also taxes, in that character they fall under section 64b (6).’

“The provisions, both constitutional and statutory, of the Louisiana law are strikingly similar to those of Texas. The Constitution of 1921 (article 10, § 11) provides:

“ ‘Taxes on movables shall be collected by seizure and sale by the tax collector of the movable property of the delinquent, whether it be the property assessed or not, sufficient to pay the tax.’

“Section 33 of Act No. 170 of 1898 reads as follows:

“ ‘Be it further enacted, etc., That from the day said tax roll is filed in said mortgage office it shall act as a lien upon each specific piece of real estate thereon assessed, which, shall be subject to a legal mortgage after the 31st day of December of the current year for the payment of the^tax due on it, but not for any other tax; which mortgage shall prime and outrank all other mortgages, privileges, bens, encumbrances or preferences, except tax rolls of previous years.’

“Sections 41 to 49 of the same act provide the manner in which taxes on movables shall be collected. Section 49 reads in part as follows :

“ ‘Whenever, any sheriff, constable, marshal, receiver, Hquidator, cyndie or other judicial or court officer or functionary shall take possession of personal property it shall be his duty to pay at once all the taxes that may be due or become due upon the same, and if he fails to do so he shall become responsible personally and upon his bond for the payment of the same. He shall file with his provisional and final accounts in the case of proceeding a certificate of the tax collector showing that all taxes upon such property seized or administered have been paid and in the event of failure to do this he shall not be discharged upon his official bond.

“ ‘The Tax Collector shall also have the right to proceed by rule at any time in the Court having custody of personal property or the proceeds thereof, to compel such sheriff, constable, marshal, reeeivér, liquidator or syndic to compel the payment of all taxes due upon the property, without waiting for proceedings on final account or tableau of distribution.’

“Section 45 authorizes the tax collector to seize, without giving the tax debtor the notice required by section 41, any movables when he believes that such seizure is necessary to enable him to collect any tax due by the debtor and, further, upon the collector’s filing an affidavit to the effect that the debtor will conceal, part with, or dispose of the same, the statute provides for the seizure of movables even before the tax is due.

“Article 10, § 14 of the Constitution provides that:

“ ‘All provisions of this Constitution regulating the collection of State taxes and tax sales shall apply to parish, district, municipal, board and ward taxes.’

“Act No. 119 of 1582 confers upon municipal officers authority to enforce collection of municipal taxes in the manner prescribed by laws relative to the collection of taxes due the state.

“In the Cleveland Steel Company Case and also in the Moreloek Case the decision was based on the above quoted provision of section 49 of Act No. 170 of 1898, which provides that the sheriff, syndic, or other functionary into whose custody the movables should come shall at once pay the taxes that are due or may become due on the same under pain of personal responsibility'and confers upon the collector a remedy by rule to compel the functionary to pay the taxes in advance of the distribution of the funds arising from their sale. The following excerpt from the Moreloek Case gives the foundation for the ruling that the taxes on movables are secured by privilege:

“ ‘When the law calls upon such an official as a receiver or a syndic, meaning a syndic of an insolvent estate, to pay taxes, at once, on personal property of the receivership or estate administered by the syndic, due or that may become due, without any conditions or qualifications whatever, dealing with an estate, which in one instance is not uncommonly insolvent and, in the other, always so, and impowers tax collectors to enforce a compliance with this duty by appropriate methods, without waiting for proceedings on final account, the conclusion is inescapable that the law thereby confers on the state, in unmistakable terms, a privilege on personal property, to secure the payment of the. taxes due, or that may become due, thereon, and that this privilege primes all others, for no exceptions are made as to the obligation of the officials, named, to pay, no matter what kind of obligations, and how many, are due by the estate. It is a matter of no consequence, as appears from the context of the law, whether or not the taxes fell due before the official took possession of the property.’

“But there is nothing either in the Constitution or the statutes that fixes a lien on movables prior to actual seizure by the sheriff or in advance of their possession by a syndic, liquidator, or other functionary. Section 33 of the revenue act, as above reproduced, in terms that are certain, confers a lien which primes all other mortgages, privileges, liens, incumbrances, or taxes upon each specific piece of real estate assessed which, according to section 71, is not affected by its sale or mortgage. That the statute is silent as to any lien on movables and that it contains no restriction upon their sale is strongly indicative of the fact that the Legislature never intended to impress them with any lien, which can exist in Louisiana, only when expressly and positively conferred by law and cannot result from mere construction. Applying here the yardstick of the City of Dallas Case, I am.convinced that the statute (section 49) creates no incumbrance in favor of the state on the assessed movables but only a right to priority contingent upon the happening of certain events, i. e., the taking of the property in charge by sheriff, liquidator, syndic, etc. That would put the claims of the state and of the city of Alexandria under section 64, while Barrett’s claim would be entitled to prior payment under section 67.

“It is, therefore, ordered that J. M. Shevnin, the trustee, pay the fund of $528.49 to John M. Barrett, the lessor, on account of his claim.”


author: JOHNSON, District Judge.

text:
    UNITED STATES ex rel. VOORHEES v. HILL, Warden.
    No. 38.
    District Court, M. D. Pennsylvania.
    May 5, 1934.
    Frank J. Voorhees, in pro. per.
    Leo G. Knoll, Asst. U. S. Atty., of Scranton, Pa., for respondent.
   JOHNSON, District Judge.

Prank J. Voorhees, the petitioner, was indicted for the violation of the National Prohibition Act (27 USCA), and on October 24, 1932, Voorhees pleaded guilty and was sentenced, the docket entry showing: “October 24, 1932, * * * Defendant Voorhees sentenced to pay a fine of $200 * * * without costs and stand committed. And to be imprisoned for 18 months at a Penitentiary or Prison Camp and execution of 18 months suspended and defendant placed on probation.”

Voorhees violated his probation and was brought before the sentencing court. On December 8, 1933, after repeal of the Eighteenth Amendment, the court made the following order: “Order of probation revoked and suspension of sentence revoked and defendant remanded to custody of Marshal for execution of sentence of 18 months in a Penitentiary or Prison Camp without costs.”

Voorhees presented to this court a petition for a writ of habeas corpus seeking his release from imprisonment for the reason that his sentence was illegal and that the sentencing court was without jurisdiction to proceed after repeal of the Eighteenth Amendment. This court thereupon ordered the issuance of a writ of habeas corpus.

It is well settled that the repeal of the Eighteenth Amendment did not void final judgments of the courts. Ervin Ellerbee v. A. C. Aderhold, Warden of the U. S. Penitentiary at Atlanta, Ga., 5 F. Supp. 1022 (opinion filed February 29, 1934, D. C. N. D. Ga.); U. S. ex rel. Alfred R. Nerbonne, Appellant, v. Henry C. Hill, Warden, Appellee, 70 F.(2d) 1006 (opinion filed April 18, 1934, C. C. A. 3d ); U. S. v. Chambers, 291 U. S. 217, 54 S. Ct. 434, 78 L. Ed. -, 89 A. L. R. 1510 (decided Feb. 5, 1934).

The question presented by this ease is whether a final judgment was rendered on October 24, 1932, before repeal of the Eighteenth Amendment.

In Miller v. Aderhold, 288 U. S. 207, 53 S. Ct. 325, 326, 77 L. Ed. 702, the Supreme Court said: “In a criminal ease final judgment means sentence.” Therefore if sentence was finally imposed on Voorhees on October 24, 1932, the judgment was final and the writ of habeas corpus must be dismissed.

Under the Prohibition Act the court has power “to suspend the imposition or execution of sentence.” Archer v. Snook (D. C.) 10 F.(2d) 567, 569. In the first alternative no sentence is imposed; in the second alternative the court imposes sentence but suspends the execution of the sentence already imposed. The record in this case shows that the sentencing court imposed a sentence of 18 months but suspended the execution of the sentence. It has been held that the suspension of the execution of a judgment in a criminal ease, unaccompanied by any pending motion for a rehearing or modification of the judgment or other proceedings taken at the term of court when the judgment was rendered, leaves the judgment in full force. U. S. v. Pile, 130 U. S. 280, 9 S. Ct. 523, 32 L. Ed. 904.

In 36 Op. Attys. Gen., 186, it is said:

“The suspension of execution of sentence or grant of probation are acts separate and distinct from the judgment or sentence of the-court and can not be regarded as being part of such judgment -or sentence. * * *
“After sentence has been imposed, even, though its execution has been suspended, it is still a final judgment from which appeal must be taken in apt time in order to preserve tbe defendant’s rights thereto. * * * Where, however, a sentence has been once imposed and only execution suspended; and the suspension of execution is revoked, the original sentence then becomes operative and may be enforced. * * * Apart from statute, an order suspending execution of a sentence can not be regarded as altering the sentence or setting it aside. United States v. Pile, 130 U. S. 280 [9 S. Ct. 523, 32 L. Ed. 904], And the suspension of execution of sentence under the Probation Act should be regarded not as changing the original sentence or final judgment of the court, but merely as relieving the defendant from the execution thereof, subject to later revocation of the suspension within the time limits •specified by the Act. If this view is correct, then, when a sentence has been once imposed and execution suspended, the court is not empowered by the Act, upon revocation of the suspension of execution, to impose a new sentence in lieu of that originally imposed.”

Sentence in the instant ease having been imposed on Oetob'er 24, 1932, the judgment was therefore final, no appeal or other proceedings having been taken at that term. The revocation, on December 8, 1933, of the probation and suspension of execution of sentence (without modifying the original sentence) had the effect of merely executing, carrying into effect, and satisfying the original .and final judgment or sentence of October 24, 1932. If the sentencing court did not have the power to carry into effect this final judgment rendered before repeal, a final judgment would mean nothing.

And now, May 5,1934, the writ of habeas •corpus is dismissed.


author: PATTERSON, pistriet Judge.

text:
    LAMPORT v. 4175 BROADWAY, Inc., et al.
    District Court, S. D. New York.
    Jan. 15, 1934.
    Piseher & Weitzer, of New York City, for plaintiff.
    Charles H. O’Connor, of New York City (Michael J. O’Neill, of New York City, of counsel), for defendants.
   PATTERSON, pistriet Judge.

The motion is to dismiss the complaint for failure to state a cause of action against the defendant Great Atlantic & Pacific Tea Company.

The complaint alleges that the plaintiff rented a store in a building owned by the defendant 4175 Broadway, Inc., to be used for the sale of fruits and vegetables; the lease containing the following clause: “The landlord hereby agrees not to let stores on Broadway in the building on the southwest comer 177th Street and Broadway, of which store herein is a part, for the sale of fresh fruits and vegetables, this however, shall not be deemed to include any chain grocery store which may seE these articles.”

It is alleged that wkEe the lease was stiE subsisting the landlord leased a store adjoining the plaintiff’s to the Atlantic & Pacific, which maintains there “as a distinct business” the sale of fruits and vegetables, and that the Atlantic & Pacific had notice of the restrictive covenant in favor of the plaintiff when it moved in. The relief originally demanded was an injunction, but at the present time there is only a demand for money damages due to the competition of the Atlantic & Pacific in the sale of fruits and vegetables, and the action is now one on the law side of the court.

The plaintiff’s theory in seeking to hold the Atlantic & Pacific liable in damages is that it has committed a tort in knowingly assisting the landlord in a breach of contract. He asserts that there is a liability under the line of cases beginning with Lumley v. Gye, 2 E. & B. 216. See Angle v. Chicago, etc., R. Co., 151 U. S. 1, 14 S. Ct. 240, 38 L. Ed. 55; Lamb v. S. Cheney & Son, 227 N. Y. 418, 125 N. E. 817.

1. It is apparent from the complaint that there has been no breach of contract by the landlord. Its promise was that it would not let the adjoining stores for the sale of fruits and vegetables, the restriction not to apply to a chain grocery store handling these articles: It is matter of common knowledge that the Atlantic & Pacific conducts a chain of grocery stores. It is not conceded in the complaint that this is the ease, but the fact is so commonplace that the court may take judicial notice of it. See Liggett Co. v. Baldridge, 278 U. S. 105, 113, 49 S. Ct. 57, 73 L. Ed. 204; Delaware, Lackawanna & Western R. Co. v. Town of Morristown, 276 U. S. 182, 189, 48 S. Ct. 276, 72 L. Ed. 523. The allegation that the sale of fruits and vegetables by the Atlantic & Pacific was carried on “as a distinct business” does not aid the plaintiff; it is still true that the use made of the store was by a chain grocery store and was therein excluded from the restriction. Ho cause of action is stated against either defendant.

2. The point chiefly argued is quite distinct, and is on the assumption that the lease to the Atlantic & Pacific was a breach by the landlord of the covenant with the plaintiff. The Atlantic & Pacific points out that the complaint does not charge it with having induced the landlord to break the contract and submits that there is consequently no'liability on its part. It is recognized generally that it is a tort to induce another to break his contract, and the question now is .whether it is likewise a tort to make a contract with notice that its performance will involve a breach by the other contracting party of an antecedent contract with another. It was held in Sweeney v. Smith (C. C.) 167 F. 385, affirmed in (C. C. A.) 171 F. 645, certiorari, denied in 215 U. S. 600, 30 S. Ct. 400, 54 L. Ed. 343, that there is no liability in such a ease. There the plaintiff had made a contract to purchase certain bonds from a committee. The defendant then bought the bonds from the committee, with notice of the plaintiff’s prior contract but without any inducing or persuading on the defendant’s part. The plaintiff’s suit was dismissed. There seems to be no ease to the contrary.

It may be argued that there is no difference in principle between a case where the defendant actively induces the breach of a contract between other persons and a ease where he makes a contract which he knows will result in the breach of the antecedent contract; that the injury to the plaintiff in each case is the same. Blit the rule of liability in tort in these cases has never been pushed to its logical limits. It is settled that mere negligent interference with a contract right is not a basis of liability, Robins Dry Dock & Repair Co. v. Flint, 275 U. S. 303, 48 S. Ct. 134, 72 L. Ed. 290; also that mere nonfeasance does not subject a person to liability in tort, although the nonfeasance may result in a breach of the plaintiff’s contract. New York Trust Co. v. Island Oil & Transport Corporation (C. C. A.) 34 F.(2d) 649.

On both grounds the motion to dismiss the action as to the Great Atlantic & Pacific Tea Company will be granted.


text:
    THE BOWLING GREEN. CZARNIKOW RIONDA CO. et al. v. ELLERMAN & BUCKNALL S. S. CO., Limited, et al.
    District Court, E. D. New York.
    May 7, 1934.

      Bigham, Englar, Jones & Houston, of New York City (Richard F. Shaw, of New York City, of counsel), for libelants.
    Kirlin, CampbeE, Hiekox, Keating & MeGrann, of New York City (L. De Grove Potter and William. H. Postner, both of New York City, of counsel), for respondents Ellerman & Bucknaü S. S. Co. and others.
    Purdy & Purdy, of New York City, for respondents Manhattan Lighterage Corporation and the Bowling Green.
   BYERS, District Judge.

Motion to amend Ebel in admiralty on the part of Pinner, Luzunaris Company, one of the Ebelants, in a cause for damages occasioned in the transshipment of cargo from the S. S. City of Manila, in the harbor of New York.

There were five separate shipments, covered by thtough bills of lading, and the cargo was laden in Calcutta, for Matanzas and Puerto Tarafa, respectively.

These particular Ebelants alleged in articles third and twelfth of the Ebel that they became the owners of one of these shipments and, as such, are entitled to recover for the damage thereto while the cargo was being Eghtered.

The Ebel was filed within one year specified as the period of limitation in the biEs of lading. The first two amendments sought by the motion would change the allegations of the said two articles so as to set forth that Pinner, Luzunaris Company were the notify parties named in the bill of lading in question and that they bring suit on then own behalf and on behalf of the shipper and on behalf of the ultimate purchaser of the bill of lading; and that they became the owners, and/or agents for the owners and holders of the biE of lading.

The effect of granting the motion would be to import into the ease a claim by the shipper or owner asserted by an agent. See U. S. v. U. S. Steel Products Co. (D. C.) 27 F.(2d) 547.

The owner or shipper could not do this directly, because his claim would be barred by lapse of the limitation period contained in the bül of lading. Hence to grant the motion would be to accomplish, by indirection, what could not be done directly. The Ebelants urge that the defense could still be pleaded by an amended answer, that the libel was not timely filed. This does not seem to be so, because the libel as amended would date back to the original filing. See CarterCrume Co. v. Peurrung (C. C. A.) 99 F. 888; Underwood Contracting Corporation v. Davies (C. C. A.) 287 F. 776, and eases cited; Hanson v. U. S. (D. C.) 4 F.(2d) 745; Charles Nelson Co. v. U. S. (D. C.) 11 F.(2d) 906.

The argument, that respondents have had fuE knowledge of the claim, and hence no hardship would be imposed by granting these amendments, was examined and rejected in The City of Atlanta (D. C.) 17 F.(2d) 311, at page 313. That ease was cited with approval on that point by the Circuit Court of Appeals for the Second Circuit in Marshall v. International Mercantile Marine Co., 39 F.(2d) 551.

The proposed amendments to articles third and twelfth therefore cannot be allowed.

It is also sought to amend article fourteenth by alleging that Norton, Lilly & Company, as bailees of the cargo, employed the respondent Manhattan Lighterage Corporation to transport the cargo which was damaged from the S. S. City of Manila to the pier of the Munson Line for transshipment; that the employment was accepted, and the work undertaken, and that there was a failure to deliver, i. e., a breach of duty by bailee.

The original libel, in that article alleged that Norton, Lilly & Company took possession of the cargo and caused it to be loaded on the lighter Bowling Green and, by reason of faults specified, the damage ensued.

In other words, these libelants seek to be relieved of the burden of proof initially assumed, but no reason is furnished for permitting them so to do.

The court is not advised, by any affidavit filed in support of the motion, why it should be granted. The issues as made were reached for trial, and the case was marked off at libelants’ instance, the day before this motion was heard.

While it is true that the position of the Manhattan Lighterage Corporation might not be hampered or changed, yet, in the absence of affirmative showing, it must be deemed that no cause has been presented for granting the motion, as to this proposed amendment.

Motion denied. Settle order.


author: PETERS, District Judge.

text:
    BRADLEY v. MERCHANTS’ MUT. CASUALTY CO. et al.
    District Court, D. Maine, S. D.
    May 10, 1934.
    Frank T. Powers, of Lewiston, Me., for plaintiff.
    Cook, Hutchinson, Pierce & Connell, of Portland, Me., for defendants.
   PETERS, District Judge.

•This is a bill in equity brought under the authority of chapter 60, §§ 177-180, of the Revised Statutes of Maine, to reach and apply to a judgment recovered by the plaintiff against the defendant Foss certain insurance money claimed to be due under a policy of automobile liability insurance issued by the defendant insurance company to Foss.

I find -that the substantial facts are not in dispute and are briefly as follows: The defendant Foss operated a motor express freight line in the state, driving his Reo truck himself, with the assistance of a boy who was paid $1.50 per day’for helping in loading and delivering and also driving the truck occasionally when necessary. On April 15, 1933, tlie boy alone was driving tbe truck on the highway on business of Foss and with his authority, when it came into collision with another motor vehicle resulting -in serious injuries to the plaintiff. In consequence he brought a suit against Foss and recovered a judgment for $17,680 damages for which execution issued from the superior court in Androscoggin county on September 16, 1933. This execution is unsatisfied. The boy who was driving the truck was bom on February 24, 1916. Foss, the owner of the truck, had an insurance policy called “an automobile liability policy,” in force at the time of the accident, issued by the defendant Merchants’ Mutual Casualty Company, insuring the owner of the truck against liability for damages due to its operation, with certain exceptions or “exclusions,” so called, the pertinent part of one of which is as follows:

“This policy does not cover any accident occurring while the described motor vehicle is * * * being operated by or while in charge of any person who is either under the age fixed by law for drivers of automobiles, or, who is, in any event, under the age of fourteen years.”

The policy limited to $10,000 the liability of the insurer for one person injured. The purposes for which the insured vehicle was to be used are described in the policy as “commercial.”

At the time the suit was brought by the plaintiff against Foss, the insurance company on being notified denied liability by reason of the clause in the policy above mentioned, but offered to defend the suit at its own expense and to aid in its defense if the insured, Foss, would agree that the rights of the insurer under the exclusion clause should not be waived thereby. That suggestion was rejected and no defense was made to the action, either by Foss or by the insurance company.

The Maine law provides that no person shall operate a motor vehicle on the highways unless licensed according to the provisions of the statute, and under those provisions no license may be issued to a person under the age of fifteen (Rev. St. 1930, c. 29; §§ 33, 39).

The boy who drove the truck at the time of the accident had no driver’s license of any kind; nor could he have secured one as a chauffeur, because, under the Maine statute, such license may not issue to any person less than eighteen years of age (section 36). His age was no bar to obtaining an “operator’s license,” so called, as he was over fifteen. The statute (chapter 29, § 36) provides, however, that an operator’s license shall not entitle a person to operate a motor vehicle as a chauffeur as defined therein, the definition of a “chauffeur” being “any person who operates a motor vehicle other than his own, and who, directly or indirectly, receives compensation for any work or services in connection therewith.”

The Maine statute (Rev. St. 1930, e. 60, § 180) under the authority of which this action is brought, expressly provides that it shall not apply “When the automobile, motor vehicle or truck is being operated by any person contrary to law as to age, or by any person under the age of sixteen years where no statute restricts the age.”

Defense is made on two grounds:

1. That the situation disclosed brings the ease within the above exception, because, as alleged, the truck in question was being operated “contrary to law as to age.” And,

2. That even if the plaintiff was entitled by the Maine statute to bring this suit, he cannot recover, by reason of the exception in the insurance policy to the effect that it does not cover any accident occurring while the vehicle is being operated by any person under the age fixed by law for drivers of automobiles.

Conclusions of Law.

It appears to me that both or neither of these defenses must be good. I fail to find any substantial difference between the language of the exception in the statute and the language of the “exclusion,” so called, in the policy. The one expressly covers operation by a person “contrary to law as to age”; the other by a person “under the age fixed by law for drivers of automobiles.”

Each is intended to cover the same contingency, i. e., the obviously dangerous situation of the operation of a motor vehicle by a person too young to do so. The age limit was fixed by reference to the law, or, if the law should be silent on that point, then sixteen years was to be the minimum under the Statutory exception and fourteen years under the policy exception. The law was not silent, however, and, by virtue of the provisions above referred to, prohibited any person under fifteen from driving at all (with certain exceptions not pertinent) and any person under eighteen from driving as a chauffeur.

The definition of a “chauffeur”- in the Maine statute above quoted is easily broad enough to cover the capacity in which the driver in this ease was acting at the time of the accident. Although driving as a chauffeur, he was prohibited from doing so by law, because he was under the age required for obtaining the necessary license. Was he driving “contrary to law as to age?”

The wording is somewhat concise, but it reasonably can have no other meaning than “contrary to' (the provisions of) law as to (the) age” at which a person may drive.

To state the question is almost to answer it. The driver was operating the truck when it was illegal for him to do so on account of his age. It was “being operated by any person contrary to law as to age.”

The only alternative construction suggested is one based upon the supposed purpose of the law to excuse from liability only in ease the operator is too young, by the terms of any statute, under any circumstances, to drive a car upon the public highways; and that, therefore, the fifteen-year limit of the Maine statute applies and not the eighteen-year limit for a chauffeur, in which capacity I have found the driver was acting at the time of the accident.

That view of the law is supported by various decisions called to my attention by plaintiff’s counsel. Among others, Bitzer et al. v. Southern Surety Co., 245 111. App. 295, Brock v. Travelers’ Ins. Co., 88 Conn. 308, 91 A. 279.

The reasoning in the above cases is not satisfying. The conclusions seem to do violence both to the language and the manifest purpose of the limitation — substantially the same in the statute and in the insurance policy — which purpose manifestly is exclusion from liability on any occasion when, by reason of the age of the driver, the motor vehicle is being operated in violation of the law.

If the driver in this case had been driving his own or the family car, the insurance company could not avoid liability because, although the driver was operating contrary to law, having no license, his age was not a bar to obtaining one.

The operator of the truck here, driving for hire as a chauffeur, was operating it contrary to law, not only because he had no license but because he was under the required age.

The stipulation in both the statute and the insurance policy is plainly directed to the particular situation existing at the time of the accident. It is immaterial that the same driver, if he had been operating under other circumstances, would not have been operating in violation of the law as to age. That principle is established by the case of United States Fidelity & Guaranty Co. v. Guenther, 281 U. S. 34, 50 S. Ct. 165, 74 L. Ed. 683, 72 A. L. R. 1064, and is inconsistent with the principle contended for by the plaintiff here.

The instant ease is wholly on fours with Maryland Casualty Co. v. Friedman (C. C. A.) 45 F.(2d) 369, 371, the decision in which ease rested on the Guenther Case as authority. In the Friedman Case the court stated that the broad purposes of the statute in question there were (1) to prevent any one under- the age of sixteen from operating a motor vehicle on the highways of the state, and (2) to prevent any one under the age of eighteen from operating as a chauffeur. The court said:

“We are of- the opinion that ‘the age limit fixed by law’ was 18 years for the driver of the automobile truck in question under the circumstances disclosed. It is conceded that he was under that age. The liability incurred by reason of the accident was therefore not within the coverage of the policy.”

My conclusion is that the plaintiff has not brought himself within the privileges afforded by the Maine statute on account of the exception above discussed, and that, in any event, the exception in the policy would prevent recovery.

The bill will be dismissed, with costs.


author: WOOLSEY, District Judge.

text:
    BICKFORD’S, Inc., v. FEDERAL RESERVE BANK OF NEW YORK et al.
    District Court, S. D. New York.
    May 15, 1934.

      See, also, 5 F. Supp. 875.
    Abraham H. Simon, of Brooklyn, N. Y., for plaintiff.
    Davis, Polk, War dwell, Gardiner & Reed, of New York City (Theodore Fiendl, Ralph M. Carson, and Francis W". Phillips, all of New York City, of counsel), for defendant Federal Reserve Bank of New York.
    Carl J. Austrian, of New York City (Arthur Ofuer, Edward Feldman, and Warren C. Fielding, all of New York City, of counsel), for defendants Bank of United States and Joseph A. Broderick.
   WOOLSEY, District Judge.

The bill of complaint is dismissed on the merits without leave to amend. The defendants may each have costs.

I. This is a suit in equity, by which the' plaintiff seeks to impress a trust on the proceeds of certain checks, amounting to $99,-166,45.

II. The plaintiff is a corporation of New York, as is the defendant the Bank of United States. The defendant Joseph A. Broderick is a citizen of New York. The Federal Reserve Bank of New York is one of the regional hanks created under the Federal Reserve System.

As both the Bank of United States and the defendant Broderick, at present custodian of its funds, are necessary parties to the suit in order to create any legal nexus whatever between the plaintiff and the Federal Reserve Bank of New York, and as the interests of the Bank of United States are adverse to those of the plaintiff, there does not exist here the diversity of citizenship requisite to jurisdiction on that gnrand in this court, and the jurisdiction thereof must therefore be sought on some other ground.

This is found in the Banking Act of June 16, 1933, which, inter alia, added subdivision b to section 25 of the Federal Reserve Act and now provides (title 13 United States Code, § 632 [12 USCA § 632]) as follows:

“Notwithstanding any other provision of law, all suits of a eivil nature at common law or in equity to which any Federal Reserve bank shall be a party shall be deemed to arise under the laws of the United States, and the district courts of the United States shall have original jurisdiction of all such suits; and any Federal Reserve bank which is a defendant in any such suit may, at any time before the trial thereof, remove such suit from a State court into the district court of the United, States for the proper district by following the procedure for the removal of causes otherwise provided by law. No attachment or execution shall be issued against any Federal Reserve hank or its property before final judgment in any suit, action, or proceeding in any State, county, municipal, or United States court. (Dec. 33, 1913, c. 6, § 35(b), as added June 16, 1933, c. 88, § 15, 48 Stat. 184.)”

This suit was instituted on August 26, 1933, some months after the statute above quoted came into force, and therefore, although the controversy arose before the amendment just mentioned, this court has jurisdiction of it (cf. Richard v. National City Bank, 6 F. Supp. 156, 158), because this is not an attempt by the parties to change by assignment or otherwise a controversy of which this court would not have jurisdiction into a controversy of which it would have jurisdiction, but is a change in jurisdiction made by the Congress to enable the Federal Reserve System to have any litigations in which it might become involved centered in tbe federal courts with an evident intention of promoting as much as possible uniformity of decision in causes involving Federal Reserve Banks.

III. Tbe relief sought in tbe complaint is to impress a trust on tbe proceeds of certain cheeks deposited by tbe plaintiff with tbe Bank of United States for collection and credit, and sent on by it to tbe Federal Reserve Bank of New York for the same purpose.

'[2] The eheeks in question were deposited after hanking hours on December 8, 1930. Tbe Bank of United States, which employed the Federal Reserve Bank of New York as its clearing house agent, delivered the- checks to it in the usual course of business, and by tbe end of banking hours on December 10, 1939, all the eheeks had been collected by the Federal Reserve Bank of New York, for credit to tbe account of tbe Bank of United States. At that time, therefore, the relationship between tbe Bank of United States and tbe Federal Reserve Bank, in respect of tbe money so collected, was that of debtor and creditor. In re Jarmulowsky, 249 F. 319, 321, 320, L. R. A. 1918E, 634 (C. C. A. 2); Gosbom v. Murray, 210 F. 880, 882 (C. C. A. 3).

On December 11, 1930, tbe defendant Broderick in Ms capacity as superintendent of banks closed tbe Bank of United States.

The Federal Reserve Bank, to which the Bank of United States was then heavily indebted, offset against tbe amount wHch tbe Bank of United States owed to it tbe sums collected on plaintiff’s checks and on other cheeks similarly collected. In doing so it was quite withiu its rights for in a situation like tMs it was vis-a-vis banks which were members of the Federal Reserve System, as was the Bank of United States, an agent for collection and credit only. Cf. title 12 United States Code, § 342 (12 USCA § 342), and Regulation J of Federal Reserve Board, § IY, promulgated under authority of 12 United States Code, § 248 (12 USCA § 248).

Indeed, the Federal Reserve Bank, in the absence of any agreement to the contrary, was invested with a lien on the eheeks sent to it by the Bank of United States in ordinary course of business for any moneys owed to it by the Bank of United States. Kane v. First National Bank, 56 F.(2d) 534, 537, 85 A. L. R. 362 (C. C. A. 5). Cf. also, In re Jarmulowsky (C. C A.) 249 F. 319, 321, 322, L. R. A. 1918E, 634.

This lien was superior to tbe plaintiff’s right to its own cheeks when they were being dealt with in ordinary course. In other words, the plaintiff assumed not only the risk of the solvency of its chosen bank, the Bank of United States, but also its situation vis-avis other banks with whom it might deal in ordinary course of banking business without specific instructions from the plaintiff varying such course of business.

Thus the only possible theory of successfully tracing any res is ended when the res itself is swallowed up in the maw of the indebtedness of the Bank of United States to tbe Federal Reserve Bank of New York, its agent for collection and credit.

IV. But even if I am wrong in the philosophy, of the situation hereinabove set forth, as between tbe plaintiff and the defendants, the Bank of United States and Broderick, the situation here involved is res judicata by reason of tbe decision of In tbe Matter of Bickford’s, Inc., v. Broderick, 234 App. Div. 417, 255 N. Y. S. 241,. affirmed by tbe Court of Appeals without opinion, 259 N. Y. 630, 182 N. E. 211, wherein orders of the New York Supreme Court, New York county, impressing trusts on the proceeds of the same checks as are here involved were reversed.

It seems to me that tMs decision also constitutes an insurmountable obstacle to tbe maintenance of any action against the Federal Reserve Bank of New York. For surely, if there be no ground for impressing a trust on the proceeds of these eheeks in the hands of tbe plaintiff’s own bank wherein he deposited them for collection and credit, he could not reach over the only bank with which he was in privity, and impress a trust on funds of another bank with which be was not in privity.

To create the necessary equitable nesus between a cestui and the trust res which is bis objective, there must be an unbroken equitable path leading from the cestui to the res. Here the first bridge is down.

Furthermore, I find the theory of this situation just outlined is confirmed by the law of res judicata, for the scope of the estoppel under the doctrine of res judicata covers the agent as well as the principal, if the issue to be tried is identic as against both. Bailey v. Sundberg (C. C. A.) 49 F. 583, 586, 587; Emery v. Fowler, 39 Me. 329, 331, 332, 63 Am. Dec. 627. Cf. also, Williford v. Kansas City, M. & B. R. Co. (C. C.) 154 F. 514, 516; Emma Silver Mining Co. (Ltd.) v. Emma Silver Mining Co. of N. Y. et al., 7 F. 401, 408 (C. C. A. 2).

V. All questions as to whether there was created here a constructive trust in the plain-' tiff’s favor by reason of the insolvent condition of the Bank of United States at the time when the plaintiff made his deposit of checks with that bank or at any other time before it was taken over by the defendant Broderick is foreclosed against the plaintiff by the decision hereinbefore mentioned. In the Matter of Bickford's, Inc., v. Broderick, 234 App. Div. 417, 255 N. Y. S. 241, affirmed 259 N. Y. 630, 182 N. E. 211.

YI. I do not give the plaintiff leave to amend, for I believe he cannot by means of any amendment escape from the facts of the situation or from the estoppel of the state court order to which I have referred. To allow amendment here would therefore be merely procedural procrastination as to a situation which really can only be tested again by an appeal herein. Cf. Welch v. T. W. Warner Co. (D. C.) 47 F.(2d) 231, affirmed 47 F.(2d) 232, 235 (C. C. A. 2l).

Settle decree on notice.


author: KNOX, District Judge.

text:
    UNITED STATES v. MIDTOWN BANK OF NEW YORK et al.
    District Court, S. D. New York.
    Nov. 29, 1933.
    George Z. Medalie, U. S. Atty., of New York City (Ira Koenig and David Paley, both of New York City, of counsel), for the United States.
    Sherman & Goldring, of New York City (Samuel N. Leiterman, of New York City, of counsel), for defendant Midtown Bank of New York.
   KNOX, District Judge.

This action was originally instituted against Isidor Gainsburg. It was based upon sections 1114 (e) and (f) of the Revenue Act of 1926 (26 USCA §§ 1268a, 1269), upon the theory that Gainsburg, having possession of property belonging to the Jacob Lemer Fur Company, Inc., a taxpayer, against which an assessment had been made, had refused to turn over the property on demand. Thereafter, Gainsburg, claiming that he was a mere stakeholder of the property which had then been reduced to cash, offered to pay the funds into court and asked that Midtown Bank of New York and Jacob Lerner Fur Company, Ine., be substituted as defendants in the action in his place and stead. This was done, and Gainsburg deposited $1214.85 in the registry of the court. The government then served the complaint upon the bank and upon the taxpayer. The latter defaulted, but the bank appeared and answered.

On March 15, 1928, Jacob Lerner Fur Company, Ine., the taxpayer, had filed its income tax returns for the calendar years 1926 and 1927. On May 2, 1929, the taxpayer entered into an agreement with one Jacob Daehis and others, wherein Daehis took over practically all the assets, and assumed all the liabilities, of Jacob Lemer Fur Company, Inc., and released it from any and all liability thereunder. More specifically, Jacob Lemer Fur Company, Inc., assigned to Daehis “any and all of its interest in a suit now pending in the Supreme Court of the State of New York on a fire claim to the said party.” The sum which later came into Gains-burg’s possession was received by him in settlement of the suit mentioned in the assignment. On February 2,1930, Dachis assigned whatever rights he had in the claim against the insurance company to Midtown Bank of New York, with which institution he had a loan that was in default. On February 20 or 21, 1930, the bank notified Gainsburg of the assignment. On February 23, 1930, Gainsburg received $1,214.85 from the insurance company in settlement of the suit. A week later, Gainsburg notified both Jacob Lemer Fur Company, Inc., and Dachis of the assignment' claimed by the bank. The following day Michael Kosis, attorney for the Jacob Lemer Fur Company, Inc., notified Gainsburg that he should not recognize the assignment to Dachis, it being said that Dachis had broken the agreement of assignment, and that for such reason, Jacob Lemer Fur Company, Inc., did not recognize the same as being in force and effect. Thereupon, Gainsburg notified all parties that, in view of the dispute, he would retain the money until the parties agreed upon its disposition, or until a court order directed otherwise. Matters thus remained, the parties doing nothing to adjust their differences. On May 3, 1930, an additional assessment was made by officials of the Bureau of Internal Revenue against Jacob Lemer Fur Company, Inc., in the amount of $1601.30. On August 7, 1930, warrants for distraint in that amount were issued by the Collector for the Third Collection District of New York, and were placed in the hands of a Deputy Collector for service. On September 15, 1930, the said Deputy Collector served such warrants upon Gainsburg, together with a notice of levy on property, in the amount of $1,-601.30. The Deputy also demanded the surrender of the property belonging to the taxpayer. This demand was refused. On the same day a notice of tax lien was filed with the clerk of the United States District Court for this district, and two days later a copy of such notice was served on Gainsburg, along with a demand for the surrender of property in his possession belonging to the taxpayer. This demand was likewise refused, and action was then brought by the government-.

Section 1114 (e) of the Revenue Act of 1926 (26 USCA § 1268a) provides: “Any person in possession of property, or rights to property, subject to distraint, upon which a levy has been made, shall, upon demand by the collector or deputy collector making such levy, surrender such property or rights to such collector or deputy, unless such property or right is, at the time of such demand, subject to an attachment or execution under any judicial process. * * * ”

The essential question before the court is whether at the time of the making of the levy and demand, and under the circumstances recited, Mr. Gainsburg had in his possession “property, or rights to property, subject to distraint.”

It is not disputed that the taxpayer originally placed the suit against the insurance company in Gainsburg’s hands, with authority to collect the proceeds thereof as its agent. If this were all, the taxpayer would have had a clear right to such proceeds when realized, with the result that the fund would be subject to distraint by the government in a proceeding brought against the taxpayer.

But the record establishes that the taxpayer had assigned all its interest in this fund to Dachis, and that he, in turn, had reassigned such interest to the bank long before September 15, 1930, and many months before August 7, 1930, the earliest possible date upon which the government can predicate a lien on the fund.

The government, concededly, can recover only if the original assignment to Dachis was invalid. There is nothing to indicate that it was vitiated by either fraud or mistake. There is evidence, however, that Dachis, in. his agreement with Jacob Lemer Fur Company, Inc., assumed all the outstanding liabilities of that concern, and that he has violated his agreement in reference thereto. The extent of the breach, and whether it occurred before or after the assignment of Dachis to the bank, does not appear. But, in any event, it is highly doubtful if such proof would invalidate any rights that were acquired by the bank. Ordinarily, as between Jacob Lemer Fur Company, Inc., and Dachis, the breach of their agreement by Dachis would give rise merely to an action for damages, and would not serve to set aside the assignment held by Dachis. Upon the proof made at the trial, it is impossible to find that Dachis’ breach, if such there was, brought about a reversion of title in the fire claim to the Fur Company. This necessitates a holding that at the time of levy and demand on the tax claim, the right to insurance moneys had passed to the bank; and that it is, accordingly, entitled to a verdict and judgment for the fund which Gainsburg paid into the registry of the court.


text:
    LEVER BROS. CO. v. JAY’S CHEMICAL CORPORATION.
    No. 7224.
    District Court, E. D. New York.
    May 15, 1934.
    De Forest, Cullom & Elder, of New York City (Neil P. Cullom, Harry D. Nims, and Henry W. Steingarten, all of New York City, of counsel), for complainant.
    Herbert Tenzer, of New York City (N. R. Kaplan and M. P. Kletzky, both of New York City, of counsel), for defendant.
   BYERS, District Judge.

Motion by plaintiff, in equity, for a temporary injunction in an unfair competition case.

Jurisdictional facts are alleged in the bill and are not denied in the defendant’s opposing papers. The affidavits filed by both sides are voluminous, and consideration thereof, for present purposes, yields the following:

Upwards of thirty years ago, the plaintiff began to manufacture and sell in the United States “Lifebuoy” soap, light red in color and having a carbolic or eresylic odor; the business so established has consistently grown and increased through the years, in part as the result of intensive advertising of all kinds. The plaintiff’s business today is of very substantial proportions.

The trade-mark “Lifebuoy” was registered in the United States Patent Office by the plaintiff over forty years ago, and has been renewed, and the trade-mark has been continuously used by the plaintiff to identify the product above described. In 1901 or thereabouts, the cakes of soap in convenient size for personal use were marketed in their present octagonal form, and that practice has continued during the intervening years.

This “Lifebuoy” soap has come to be widely identified by the consuming public and by distributors as the product of the plaintiff; that is to say, the name, color, odor and shape of the soap, in the combination developed by the plaintiff (including the use of the term “health soap”) constitute a commercial property which is distinctive and which is associated with the plaintiff in the public mind.

The defendant company has been in existence for about two years, and in 1933 started the manufacture and sale of a competing article, for which it adopted the designation “Life-Guard Health Soap.” The defendant’s purpose in so doing was to devise a product substantially like that of the plaintiff’s in color, odor, shape and general appearance, and to market it under a name which would be so like that adopted and used by the plaintiff that it can be fairly termed an imitation.

While this purpose is disclaimed in the defendant’s affidavits, the stenographic record of a portion of an interview between an agent of the plaintiff and an officer of the defendant corporation discloses such a purpose.

By way of accomplishment, the defendant has made and sold a toilet-soap in cakes of the same shape and substantially the same size and of substantially the same characteristic odor and color as the plaintiff’s “Lifebuoy” soap, using the name “LifeGuard.”

Before adopting a formula for the manufacture of this soap, the defendant caused the plaintiff’s product to be analyzed in order to determine the nature and quantity of the chemical employed by the plaintiff to impart the characteristic odor above referred to, and then adopted the same constituent in its own product, sufficiently to accomplish its said purpose. The color of defendant’s soap, while of a slightly different shade from that of “Lifebuoy,” is sufficiently close to it to cause confusion between the two articles, in the absence of opportunity to compare them in a natural light; that is to say, under conditions that do not exist in the ordinary retail store.

Had the defendant masked its purpose by adopting only one of the characteristic properties of the plaintiff’s product — if, for instance, it had adopted a blue color or green instead of the red; or if it had adopted the same color and a different odor, and had not employed the word “Life-Guard” in obvious simulation of the plaintiff’s trade-mark — the mere use of the octagonal shape cake or the term “Health Soap” could not well be the subject of complaint; but the aggregation by the defendant of all of the characteristics of the plaintiff’s product, as described, makes it abundantly clear that the defendant intended to imitate the plaintiff’s product and to enter into unfair competition with it, and there are no allegations of fact contained in the defendant’s affidavits which point to a different conclusion.

.The defendant relies on the alleged fact that toilet soaps of a reddish color and having a carbolic odor have been manufactured and sold in the past. This is not susceptible to present determination, but the only instance which the defendant’s papers disclose of the manufacture and sale of a carbolic acid soap artificially colored red, which was on the market when the defendant company was organized, is that of J. Eavenson & Sons, Inc., whose “Jeseo” oval cake may be thought to have been shown in then current sale in the Philadelphia market; but that fact does not prove that the defendant had the right to imitate plaintiff’s product. The defendant is not making something which simulates the Eavenson product, while such is the compliment that it is paying to the plaintiff.

Much is said in the defendant’s papers about monopoly and other things which have no bearing on this controversy. The disposition of this motion is not to be taken to indicate that the plaintiff is thought to be entitled to monopolize the manufacture and sale of red carbolic toilet soap. It is tó be taken to indicate that the plaintiff has shown sufficiently for the purposes of a temporary injunction, that the defendant has almost completely copied the plaintiff’s product in an effort to gain an advantage from the good will of the plaintiff’s business. In other words, it is thought that the plaintiff has brought itself clearly within the language of the opinion in the case of Harvey Hubbell, Inc., v. General Electric Co. (D. C.) 262 F. 155, 160, in which it is said:

“Nor is this in conflict with the now well-established rule that, if an article has a leading and striking characteristic, which characteristic is designedly given by its maker, and advertised and exploited, and afterward recognized, particularly by purchasers, because of such characteristic, the right to make and use the characteristic can be protected by an action, if an imitation is perpetrated. This rule finds its support in what is referred to in the cases as nonfunctional unfair competition. It presupposes that the appearance of the article, like its descriptive title, has a secondary meaning, and has been associated in the public mind with the first comer as a manufacturer or source, and if a second comer imitates the ártiele exactly, so that the public will believe his goods have come from the first and will buy, in part at least, because of that deception, the court will enjoin the second comer.”

To apply the foregoing to this case, it may be observed that_ the plaintiff was the first comer as the manufacturer of “Lifebuoy” soap, which possesses easily recognizable non- • functional characteristics of color, odor, and form, which the public has come to regard as desirable, since the business has developed into a substantial enterprise.

It does not change that fact, nor lessen its legal implications, to assume without deciding, that there may have been at odd times and in sundry places, here and there, red colored, so-called carbolic soaps, which may have enjoyed a brief popularity. The defendant has not undertaken 'to capitalize the advertising efforts of defunct or obscure enterprise, nor to imitate products other than that of the plaintiff.

It follows that the plaintiff is entitled to a preliminary injunction against the defendant, enjoining the latter pendente lite from:

(1) Making or selling or offering for sale or otherwise disposing of any soap, not made by or for the plaintiff, which is of a light red or coral color and possesses a carbolic ■ or cresylic odor;

(2) Using the name “Life-Guard” or any other imitation or simulation of the word “lifebuoy.”

The amount of security to he given by the plaintiff may be agreed upon by the parties and, if this is not possible, the court will fix it on the settlement of the order to be entered hereon.

Settle order on three days’ notice.