author: CLANCY, District Judge.

text:
    THE MARTIN KEHOE. THE BERNARDSVILLE.
    District Court, S. D. New York.
    March 28, 1945.

      Purdy & Lamb, of New York City (Edmund F. Lamb, of New York City, of counsel), for libellant.
    John E. Morrissey, of New York City, for claimant.
   CLANCY, District Judge.

At 8:30 p. m. on March 6th, 1943, the Bernardsville, a Lackawanna tugboat, 95 feet long, entered the slip on the south side of pier No. 41, North River, to pick up a railroad car float which she intended to move to Hoboken. The pilot, mate, a stern line man and a float man constituted her deck crew. The evening at that time was overcast but apparently fair visibility obtained. The Bernardsville had two staff lights and her running lights and head light. She entered the slip head-on and nosed against the float, the bow end of which was toward the river and her mate put a line on the middle bow cleat of the float. Her float man then suspended a lamp on the bottom rung of the box car at the port bow of the float so that it hung below the floor of the car and thus was visible from both front and side. He left a second light on the floor of the float at its port stern and dislodged the lines to the pier. Thereupon the tug backed until she was 150 feet inside the pier end when she had stopped her engines and was drifting backward blew a slip whistle. Pier No. 40, adjoining to the south, is about 150 feet shorter than pier No. 41. After blowing the slip whistle which elicited no response, the tug proceeded to back, the stern line man standing on her stern as lookout. When her stern was 15 feet beyond the pier end he reported all clear to the pilot. The tug then shifted her line to the starboard bow cleat of the float and backed beyond the pier head where her stern swung upriver. By working the tug’s engines her pilot then proceeded to work the float out of the slip and into the river so that when the tug was about 150 feet into the river she was stem to the float near its third starboard cleat to which it had shifted the line and substantially up and down stream. The bow of the float was about 180 feet beyond the pier head and the float was moving, but slowly. It was then that the tug’s pilot saw the Martin Kehoe, whereupon he blew a single blast.

The tug Martin Kehoe had been proceeding north in the river at a speed of eight knots on a flood tide bound for pier No. 52% where she was to pick up a tow. She had her staff, head and running lights showing. The Martin Kehoe was moving about 200 feet off the pier ends. Six barges whose tops were 13 feet above the water extended about 180 feet into the river off the end of pier No. 39. When he was 1,200 feet below pier No. 41, the captain of the Martin Kehoe saw the staff lights of the Bernardsville. When he was off pier No. 38 and 700 feet from the port side of the railroad float which the Bernardsville was managing he had already seen the lighted float moving out slowly within the line of the outermost barge off pier No. 39. Then he heard the Bernardsville blow one blast. The master of the Martin Kehoe in return blew twice whereupon the Bernardsville blew an alarm. Nevertheless the Martin Kehoe did not stop her engines. When she was about 300 feet from the side of the float her engines started to back, despite which she struck the port bow corner of the float.

Libellant argues that regardless of the negligence of the Kehoe the Bernardsville was at fault for her failure to maintain a lookout posted on the bow of the car float or the top of the cars; for her failure to hold back immediately upon observing the Kehoe; and for her failure to blow her slip whistle until clear of the pier.

The slip whistle was sufficient under The Supply No. 4, 2 Cir., 109 F.2d 101, which requires that it be blown until the vessel is clear of any obstruction from behind which it may be proceeding. The staff lights of the Bernardsville, because pier No. 40 was 150 feet shorter than was pier No. 41, were visible in the pilot house of any northbound vessel within navigating distance despite the barges off pier No. 39 which they topped. They were actually seen by the Kehoe’s master when leaving the slip so that even if the whistle had been defective, no causal relation between any such deficiency in it and the collision can be identified.

Since the stern lookout of the Bernardsville had correctly reported nothing in sight within the scope of his vision as limited by the barges which extended 180 feet off the end of pier No. 39 and the Bernardsville had immediately thereafter swerved upriver so that her master in his pilot house could see everything that a man on the roof of the cars on the float could see, the complaint of deficiency in lookout in this case means that the master’s attention alone was insufficient. But the very existence of the barges off the end of pier No. 39 secured the safety of his vessel and of the float until they were beyond the outermost barge, and he therefore was free to bring the float out under control that far even though he was laboring under the obligation to anticipate the presence of vessels negligently hugging the pier ends. The Supply No. 4, supra. It was before his float reached such thus far safe position that he saw the Kehoe approaching from the south. The Kehoe was already aware of the float’s presence. The Kehoe had plenty of time to stop. She was 700 feet off the float then. The Bernardsville’s master had no doubt of her ability for the signal he immediately gave indicated that judgment. The Kehoe’s master, who ought to know her ability better than anyone, said that the float was 300 feet away from her when he ported his wheel. He had earlier testified that it was after that porting that he attempted to stop and the complete stop was almost accomplished when he reached the float. The engineer and the master of the Kehoe both said she was backing one minute, but the time during which she was backing is irrelevant to the distance through which she moved before stopping. This is all the testimony in the case on the ability of the Kehoe to stop but she is a comparatively small tugboat and we think it sufficient to warrant a conclusion that she had ample time to take her headway off and come to rest. If it be thought insufficient it is an instance of defect in the proof required of the libellant whose burden it was to prove any inability of the Kehoe to effect a stop in that distance and the reason why such inability should be recognized by another vessel.

As we see this case, the Kehoe was intent on making her destination a few blocks north on as straight a line and with as little delay as possible and persisted in her course and her speed despite the plain signs of danger lying in her course when she moved so fast and which she must have recognized without any notice. Her master took a chance on crossing the float’s bow and lost. He knew the Bernardsville was coming out and had a right to come out and his awareness of this obliged him to give way. Restatement of the Law of Torts, 301. Comment c. The Bernardsville’s first "signal fortified her right. Restatement, idem. So did the fact that he was a wrongdoer pursuing his course so near the shore. When- the Bernardsville’s first signal was blown she was in an altogether safe position with respect to the Kehoe despite the Kehoe’s wrongful course. Therefore nothing in that position or the slight motion of her float which was subject to her control was negligent. Her reaching that position was not negligent. The Bernardsville must be judged by what transpired in fact thereafter.

In complaining that the Bernardsville proceeded further out into the river after giving its original signal, libellant stresses McWilliams Bros., Inc. v. Payne, 2 Cir., 276 F. 917. The Bernardsville’s float was in motion, as we have found, but we recall no convincing testimony that the tug proceeded in any direction under power during the brief interval that intervened between the port passing signal and the alarm, and if it did go ahead it had the right to while it awaited acceptance of its ,ignal. Further it would have been in accordance with its own signal. The vessel in the case cited really crossed her own signal when she proceeded further into the river under power.

The libel is dismissed.


source: Caselaw Access Project

author: SAVAGE, District Judge.

license: Public Domain

text:
    WATERS v. NATIONAL LIFE & ACCIDENT INS. CO., Inc.
    Civil Action No. 1437.
    District Court, N. D. Oklahoma.
    Aug. 14, 1945.

      Marvin T. Johnson, of Tulsa, Okl., for plaintiff.
    Valjean Biddison and Floyd L. Rheam, both of Tulsa, Okl., for defendant.
   SAVAGE, District Judge.

Edgar J. Waters, who died on July 18, 1944, was covered by a life insurance policy issued by National Life & Accident Insurance Company for $5,000 payable to Rubie E. Waters, with an additional equal sum payable under the double indemnity clause in the event of death resulting from accidental means. The company paid the face amount of the policy and this action was brought to recover under the double indemnity provision.

Death was caused by accidental electrocution. By the terms of the policy the company was not to pay double indemnity if the injury causing death was “sustained in connection with violation of law by the insured.” Conceding the accidental death, the company contested liability on the ground that death was in connection with violation of law and assumed the burden of proof. The plaintiff offered no evidence. The Court reserved ruling on defendant’s motion for an instructed verdict. The verdict of the jury was for plaintiff, and the cause is now before the Court on defendant’s motion for judgment notwithstanding the verdict.

Waters owned and occupied a suburban home a few miles from Tulsa, Oklahoma. He had there a barn, feed lot, two horses, and a few turkeys. He lived alone, having been divorced from his wife, Rubie E. Waters, the beneficiary of the policy. Mrs. Myers, a neighbor, frequently observed him about the premises. She saw a light in the house and heard his radio at night. She noticed him the evening before his death watering the turkeys and livestock, clad in his bathing suit.

Responding to a telephone call disclosing •the discovery of the body, deputies in the sheriff’s office went to the Waters’ residence about seven o’clock, P. M. They found the body, clad only in shorts, lying face down on the cement floor of a room in the barn. One hand was grasping the globe and socket end of an electric drop cord. The other end of the cord was plugged into a wall socket in the room. The body was burned where it lay across the cord and fingers of the hand holding the broken globe and socket were also burned. The parties agree that death was occasioned by accidental electric shock. No effort was made to fix the exact time of death.

The room was about twelve feet square, had no windows and the only door opened into the interior of the barn. The electric lights with which the room was equipped were not burning. The officers found in the room a 100 gallon, unlicensed still; pasteboard cartons containing 100 gallon jugs filled with non-taxpaid corn whisky; a 40 gallon jar three-fourths full of non-taxpaid whisky; a jar placed under the spigot of the still filled with corn whisky; a 22 caliber rifle, and nothing more.

The still was set up and in actual operation. The room was “hot and steamy.” One of the officers cut off the gas feeding the fire. Water was running through a hose into the cooling barrel. The barrel had overflowed and water covered the floor. The container receiving whisky from the spigot of the still had likewise overflowed. Several barrels of mash were located in the loft of the barn immediately above the still room. Nine gallons of whisky were found in the house.

Operation of the unlicensed still and the manufacture and possession of non-tax-paid whisky constituted violations of both state and federal law.

The motion for judgment notwithstanding the verdict should be sustained if defendant was entitled to favorable action on its motion for a directed verdict. Federal Rules of Civil Procedure, rule 50(b), 28 U.S.C.A. following section 723c; Baltimore & Carolina Line, Inc. v. Redman, 295 U.S. 654, 55 S.Ct. 890, 79 L.Ed. 1636. The Court must view the evidence in the light most favorable to plaintiff and give to the plaintiff the benefit of every legitimate inference to be drawn therefrom. But if upon such survey of the evidence, the facts are found to be so persuasive . that reasonable men, exercising sound and impartial judgment, could but agree that the injury causing death was sustained in connection with violation of law by the insured, the Court must set aside the verdict of the jury and enter judgment for the defendant. Brady, Adm’x, v. Southern R. Co., 320 U.S. 476, 64 S.Ct. 232, 88 L.Ed. 239; Ottertail Power Co. v. Duncan, 8 Cir., 137 F.2d 157; Baltimore & Ohio R. Co. v. Muldoon, 3 Cir., 102 F.2d 151; Stutler v. Heflin et al., D.C.D.C., 46 F.Supp. 539.

While no eyewitness was available to say that Waters was preoccupied with the operation of the still at the moment of death, the undisputed facts heretofore detailed lead irresistibly to such conclusion. He alone occupied the premises. His body was found on the floor of the room in which the still continued to function for an indeterminate period of time after death. A gas fire was burning under the boiler. Water was running into the overflowing cooling barrel. Whisky was flowing from the spigot of the still into an overflowing receptacle. A 40 gallon jar was partially filled with whisky. He was barefooted and wore nothing but shorts, raiment well adapted for occupancy of a small hot room on a July day in Oklahoma. Waters must have been engaged at the time of death in the operation of this still in violation of law.

But the plaintiff argues that the company has a further burden of proving that the violation of law was the direct and proximate cause of death, and that a causal connection between operation of the still and death is not a necessary inference from the facts in evidence. Defendant on the other hand asserts that the insured at death occupied the status of a law violator and that coverage was suspended while he was thus engaged.

The decisions of the Supreme Court of Oklahoma must first be examined, as directed by Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, but that court has not settled the question. In both Mid-Continent Life Insurance Co. v. Dunnington, 177 Okl. 484, 60 P.2d 1047 and Sovereign Camp, W.O.W. v. Wright, 184 Okl. 301, 86 P.2d 977, cited by plaintiff, the court held that the insurer had failed to prove the alleged violation of law and it therefore failed to reach the problem of causal connection.

Authorities from other jurisdictions have been cited which support both contentions. Careful analysis of the cases discloses that the conflict is more apparent than real. In the main, the apparent diverse views are compelled by the varying provisions of the contracts under consideration. Quite generally courts have construed contracts relieving insurance companies from liability for death “by reason of” or “resulting from” or “in consequence of” some particular activity to require proof of causal connection between the inhibited conduct and death, as the language clearly compels. Travelers Insurance Co. v. Seaver, 19 Wall. 531, 86 U.S. 531, 22 L.Ed. 155; Supreme Lodge, K. P. v. Beck, 181 U.S. 49, 21 S.Ct. 532, 45 L.Ed. 741; Interstate Life Assurance Co. v. Dalton, 6 Cir., 165 F. 176, 23 L.R.A.,N.S., 722; Bloom v. Franklin Life Insurance Co., 97 Ind. 478, 49 Am.Rep. 469; Hancock Mutual Life Insurance Co. v. Long, 285 Ky. 757, 149 S.W.2d 510. And generally, too, the courts have read policies absolving the insurer from liability “while” or “when” the insured is under the influence of narcotics or of intoxicating liquor, or in military or naval service, or participating in war or riot, or engaged in violation of law as exonerating the insurer if death occurs while the insured occupies the forbidden status. Order of United Commercial Travelers of America v. Tripp, 10 Cir., 63 F.2d 37; Order of United Commercial Travelers v. Greer, 10 Cir., 43 F.2d 499; Flannagan v. Provident Life & Accident Insurance Co., 4 Cir., 22 F.2d 136; Provident Life & Accident Insurance Co. v. Eaton, 4 Cir., 84 F.2d 528; Bradshaw v. Insurance Co., 107 Kan. 681, 193 P. 332, 11 A.L.R. 1091. It has been said that:

“ * * * if the parties to a contract of insurance provide that same shall not cover a given risk while insured is engaged in certain conduct, or occupying a certain status thought to involve an increase of hazard, there would seem to be nothing for the courts to do but to enforce their contract as they have made it. * * * ” Hutto v. Atlantic Life Insurance Co., 4 Cir., 58 F.2d 69, 71.

Plere the policy permits the company to escape liability if the injury causing death was sustained “in connection with” violation of law. This language suggests the necessity for a causative connection between the violation of law and death, although it falls short of requiring a showing that the violation of law was the proximate cause of death. It was thus decided by the Supreme Court of Georgia in National Life & Accident Insurance Co. v. Sutherland, 64 Ga.App. 72, 12 S.E.2d 183, 187, where the court, interpreting this identical policy, said:

“ * * * the insurance company is exempted from liability if it is shown that the insured was engaged in a violation of law,' not necessarily the proximate cause of his death, but one which had some causative connection with his death or from which the death of the insured was a reasonable consequence. * * * ”

The question next arises as to whether a causal connection between the operation of the still and the death of Waters is the only reasonable inference to be drawn from the evidence. Death came through use of the electric drop cord. With the still in actual operation and whisky pouring from the spigot in a windowless room, it seems certain that Waters was using the artificial light or intended to use it in connection with and in furtherance of his unlawful activity. It is highly improbable that his attention was diverted from the unlawful enterprise at the moment of death. The material and equipment in the room was limited to that useful in the illicit manufacture of whisky. The absence of feed, garden tools and the like from the room negatives any suggestion that the light was in his hand for any lawful purpose. An assumption that the violation of law had no causative connection with the insured’s death finds no support in the evidence. Men of reason must agree that death came to Waters while engaged in the unlawful operation of a still and that there was a causal connection between such violation of law and his death.

The reference by Justice Cardozo in Travelers Protective Association of America v. Prinsen, 291 U.S. 576, 54 S.Ct. 502, 78 L.Ed. 999, to cases holding that the proscribed activity must aggravate the hazard in order to enable the insurer to avoid liability has not been overlooked. But with a causal connection demonstrated between the forbidden conduct and death, it seems inappropriate to speculate as to whether such conduct increased the risk.

The motion for judgment notwithstanding the verdict is sustained, the verdict of the jury set aside and judgment entered for defendant.


author: STRUM, District Judge.

text:
    UNITED STATES ex rel. YAROSLAWITZ v. FALES, Commanding General, et al.
    No. 858 J.
    District Court, S. D. Florida, Jacksonville Division.
    July 23, 1945.

      Solomon Badesch, of New York City, and Laura H. Hyde, of Jacksonville, Fla., for relator.
    Damon G. Yerkes, Asst. U. S. Atty., of Jacksonville, Fla., and Major Reid B. Barnes, Fourth Service Command, of Atlanta, Ga., for respondents.
   STRUM, District Judge.

Claiming to be a theological student preparing for the Jewish rabbinate, relator unsuccessfully sought a class IV — D exemption from military service. 50 U.S.C.A. Appendix, § 305(d). He was classified 1 — A, inducted into the Army on February-23, 1945, and now seeks release by habeas corpus, asserting that the Local and Appeal Boards acted arbitrarily and capriciously in so classifying him.

The registrant, relator here, was first classified 1 — A and ordered to report for pre-induction physical examination on March 9, 1944. This order was later can-celled, and relator directed to again report to the Board on March 20, 1944. On March 14, 1944, the Local Board transmitted relator’s file to the Director of Selective Service for New York City, with the request that the case be considered by the Advisory Panel on theological classifications. The file was returned to the Local Board for further consideration as to whether relator was physically acceptable for military service. It being found that he was, the file was returned to the Director for consideration by the Theological Panel. This Panel was composed of seven prominent Jewish rabbis and Hebrew laymen, one of whom was chairman of the Board of Directors, and another a member of the faculty, of the Seminary registrant was attending. This faculty member was personally known to registrant. Of the remaining five members of the Panel, two were Rabbis, two were Justices of the Supreme Court of New York, and one a Justice of the City Court of New York. ' All of them occupied prominent places in Jewish education and activities.

On June 28, 1944, this Panel heard relator at length, and on the same day made its report containing in part, the following findings: “Registrant is a student at one of the several Talmudic Academies in this area '* * *. While these courses embrace the subject matter upon which candidates for traditional rabbinic certification are examined, students taking such courses are not necessarily preparing for the ministry. * * * Upon all the information presented and our examination of registrant, this Panel is of the opinion that registrant is not a serious student preparing for an active career in the rabbinate, and that his current religious studies at this time are prompted by extraneous considerations.” The Seminary itself, by letter dated October 18, 1944, concurred in the finding of the Theological Panel, stating that “* * * in this particular case the Yeshiva (College) abides by the finding of the Panel on theological students. (Signed) Samuel L. Sar, Dean of Men.”

On July 11, 1944, the above report of the Theological Panel was transmitted by New York City Headquarters of Selective Service to Local Board No. 204, with a letter stating that while the Local Board should give careful consideration to the recommendation of the Advisory Panel, “the responsibility of determining the registrant’s classification must rest with the Board itself.” After consideration, the Board adhered to its A — 1 classification, and ordered registrant to report for induction, from which action registrant appealed. The Appeal Board unanimously sustained the 1 — A classification.

On November 13, 1944, the Seminary addressed a letter to registrant, signed by its Dean of Men, advising registrant that he had been discharged as a student, and his name removed from the Seminary’s record. A similar letter, dated December 1, 1944, was addressed to New York City Selective Service Headquarters, and transmitted by it to the Local Board, stating that “we do not consider him (Yaroslawitz) a student on our registry any more. (Signed) Samuel L. Sar, Dean of Men.”

Relator was given a further hearing by the Board on January 16, 1945, at which he personally appeared, following which he was again classified 1 — A. Again he appealed, and on February 7, 1945, the Appeal Board again sustained the classification by a vote of 4 to O. Registrant was then inducted on February 23, 1945.

Just before his induction, registrant asserted that he was still paying tuition at the Theological Seminary, and was in good standing there as a student. This was investigated by the Local Board, which found that tuition was payable only in the Yeshiva (College), the secular branch of the institution, and that no tuition was charged or payable in the theological department. The Dean of the Seminary also advised New York City Headquarters, as of February 21, 1945, that the position taken in the letter of October 18, 1944, acquiescing in the Panel’s findings as to this registrant, and the letter of December 1, 1944, advising that registrant had been discharged as a student, remained unchanged. This information was communicated to the Local Board, which, on February 20, 1945, also had before it the letter from the Seminary, dated October 18, 1944, concurring in the Panel’s findings as to this registrant. However, under date of January 11, 1945, a letter was written by the President of the Seminary, “To Whom it may concern,” stating that if registrant received a IV — D classification, he would be reinstated in the Yeshiva (College). On February 20, 1945, the Registrar of the Seminary also informed registrant that his status as a student had been “reconsidered,” and his name reentered as a student. All of the above matters, and many more, were before the Local and Appeal Boards for consideration, as this case wound its tortuous way through the Administrative agencies for nearly a year.

By the Selective Service Act, approved September 16, 1940, 50 U.S.C.A. Appendix § 301 et seq., Congress declared it the duty of “every” male person between the ages of 18 and 65, residing in the United States, to present himself for, and submit to, registration for military duty. Ministers of religion and students preparing for the ministry in recognized schools were exempted from training and service, but not from registration. By the same Act, Congress confided to the Administrative authority, therein created, the power and responsibility of classifying registrants under the Act. Such Administrative classification is “final.” 50 U.S.C.A. Appendix, § 310.

Where, however, a Board acts in excess of its powers, or its proceedings have been so manifestly unfair as to preclude a fair investigation, or there has been an abuse of discretion manifested by arbitrary and capricious action amounting to a denial of due process, the Courts will intervene to correct such abuse. But Courts are not authorized to pass upon the propriety of such classifications, nor to review the Board’s action for mere error, nor to determine whether or not upon the same evidence the Courts would have reached the same conclusion. Where the Board has acted within its power, and has accorded the registrant a fair opportunity to be heard, after reasonable notice, and there is evidence to support the Board’s findings, the Courts will not interfere.

The Boards do not have the power to induct, against his will, a student preparing for the ministry in a recognized theological school, in the face of the express exemption by Congress of such student. But the Boards do have the power and responsibility of determining whether or not the petitioner is, in fact, such a student. In discharging this function, the Boards are not required to follow the formal requisites of a Court trial. They may not only hear witnesses, they may act on other matters within their knowledge, whether in evidence or not.

The burden of proof is not upon the Board to show that the registrant is liable to service. It is upon the registrant to establish that he is entitled to the exemption he seeks. Harris v. Ross, 5 Cir., 146 F.2d 355, a case identical with this except that it involves a minister rather than a student.

In United States ex rel. Trainin v. Cain, 144 F.2d 944, the Court of Appeals of the Second Circuit approved the use of an Advisory Theological Panel such as was employed here. It affirmed an order of the District Court dismissing a writ of habeas corpus applied for upon grounds identical with those here presented. In the subsequent case of United States ex rel. Levy v. Cain, 2 Cir., 149 F.2d 338, certain limitations were placed upon the use of such a Panel, and the registrant there ordered discharged because the Local Draft Board acted exclusively upon the findings of this Panel, thus substituting the Panel for the Board. In the present case, however, it is convincingly plain that the Local and Appeal Boards exercised informed and independent judgment, based not only upon the recommendation of the Panel, but upon many other evidentiary facts as well. Thus the fault with the use of the Advisory Panel,-pointed out in United States ex rel. Levy v. Cain, is entirely lacking here. The other limitations imposed upon the use of the Panel in the Levy case are also satisfied here.

An examination of the record and evidence in this case convinces the Court that the Administrative Boards, after reasonable notice, heard this registrant’s claim patiently and thoroughly, rejecting the same after due consideration of the many facts before them. While the Local and Appeal Boards may have been influenced by the recommendation of the Theological Panel, they did not act upon that recommendation alone. There is much evidence, aside from the recommendation of the Theological Panel, to support their findings.

Whether or not these Boards reached a just and correct conclusion on all the evidence is not for the Courts to decide. The power -and responsibility of weighing and evaluating the evidence bearing upon classification, and of reconciling conflicts therein, is reposed in the Selective Service Boards, not the Courts. A finding by the Court in this case that the Selective Service Boards acted arbitrarily and capriciously would be unwarranted by the record and evidence before this Court. The Board may have acted erroneously, but it did not act arbitrarily or capriciously, nor did it act beyond the scope of its power. To order this petitioner released from military service would require this Court to condemn the Board’s order for mere error of judgment. This the Courts are not authorized to do. Harris v. Ross, 5 Cir., 146 F.2d 355; Lehr v. United States, 5 Cir., 139 F.2d 919; United States ex rel. Steinberg v. Graham, D.C., 57 F.Supp. 938; Cramer v. France, 9 Cir., 1945, 148 F.2d 801; Ex Parte Stanziale, 3 Cir., 138 F.2d 312. Cf. United States ex rel. Rubin v. Magruder, D.C., 55 F.Supp. 947, a case much stronger for the petitioner on the facts than the present case.

Writ of habeas corpus quáshed.


author: GODDARD, District Judge.

text:
    HARBOR MARINE CONTRACTING CO. et al. v. LOWE, Deputy Com’r, U. S. Employee’s Compensation Commission, et al.
    District Court, S. D. New York.
    April 30, 1945.
    John P. Smith, of New York City (Charles F. Bachmann, of Boston, Mass., of counsel), for plaintiffs.
    John F. X. McGohey, U. S. Atty., of New York City (Thomas G. Donlan, Asst. U. S. Atty., of New York City, of counsel), for defendant Lowe.
    Max L. Katzman, of Brooklyn, N. Y., for defendant Riviello.
   GODDARD, District Judge.

Motions by plaintiffs and by defendants for summary judgment.

The suit is to set aside a compensation award made by the defendant Samuel S. Lowe as Deputy Commissioner of the United States Employee’s Compensation Commission in favor of the defendant Riviello under the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C.A. §§ 901-950. The plaintiffs are Harbor Marine Contracting Company, the employer of Biagio Riviello, the deceased husband of Frances Riviello, and Liberty Mutual Insurance Company, the insurance carrier of the employer.

The grounds on which the plaintiffs seek to set aside the award are:

1. That the findings and award of the Deputy Commissioner are not supported by the evidence;

2. That the deceased did not sustain an accidental injury within the meaning of the Longshoremen’s and Harbor Workers’ Compensation Act; and

3. That death did not result from and was not related to an accidental injury.

The contention particularly urged by the plaintiffs is that there was no accident on which a finding of an accidental injury could be based.

It appears from the record of the hearings before the Deputy Commissioner that on February 15, 1943, Riviello entered the employ of the Harbor Marine Contracting Company which was engaged in the repair and cleaning of the boilers on a ship designated as Hull No. 162, at Pier 92, East River. For some five years previous Riviello had been employed by the W.P.A. He was put to work sweeping up the soot on the floor of the ship’s boiler room. The air in the boiler room was filled with dust and the men had cloths over their noses and mouths for protection. After about an hour Riviello complained of not feeling well and he was transferred to the lighter task of carrying paper bags of soot from the ship to the dock, a distance of about one block. The bags of soot weighed about fifteen pounds each, and he carried one bag on each trip. After doing this work for about forty-five minutes, he again complained that he was not feeling well. He was taken to an Army doctor on the pier and from there was removed to the hospital, where a diagnosis of coronary thrombosis was made. He was discharged from the hospital on March 30, 1943. On April 17th he had a severe pain over his heart and on April 26th he was returned to the hospital where he died on May 5, 1943, of Coronary Sclerosis and infarct of the left ventricular wall.

The Deputy Commissioner heard testimony from the wife of the deceased concerning his general health; from the foreman in charge of the deceased on the day he was working for Harbor Marine Contracting Company concerning the conditions of the work and the actions of the deceased; from two doctors representing the insurance carrier, and from the doctor who had had the care of the deceased while he was in the hospital. The last doctor testified that the work the deceased did was competent to induce the injury. He testified that one coronary artery in the heart of the deceased was 1/10 of normal size, and hence the heart could not obtain all the nutrition necessary to continue functioning under a strain; that this artery had probably been gradually getting smaller, but it was the exertion from the work that produced an extra strain on the heart and caused or aggravated the infarction. Because of the infarction, the heart was not able to obtain sufficient nourishment for the extra task and some of the heart tissue died and was replaced by scar tissue, resulting ultimately in the death of Riviello.

From all of the testimony, the Deputy Commissioner made findings of fact, including—

“That his illness was due to a coronary infarct which was induced by the work and the working conditions on the morning of his employment; * * * that he died on May 5, 1943 of coronary sclerosis, infarct of the left ventricular wall, adjesive pericarditis, congestion of lungs, liver, spleen and pleural effusion; that death was the result of the accidental injury sustained in the course of the deceased’s employment on February 13, 1943.”
Section 902(11) of the Act states “ ‘Death’ as a basis for right to compensation means only death resulting from an injury.” Section 902(2) says: “The term ‘injury’ means accidental injury or death arising out of and in the course of employment, and such occupational disease or infection as arises naturally out of such employment or as naturally or unavoidably results from such accidental injury Hi H: H= ”

These motions raise the usual question presented in a suit to review an award made under the Longshoremen’s and Harbor Workers’ Act, which is whether there was any substantial evidence to support the Commissioner’s findings. Grain Handling Co. v. Sweeney, 2 Cir., 102 F.2d 464, certiorari denied 308 U.S. 570, 60 S.Ct. 33, 84 L.Ed. 478. When the finding of the Commissioner is supported by the evidence, it is not subject to judicial review. Bernatowicz v. Nacirema Operating Co., 3 Cir., 142 F.2d 385.

Included in the findings of the Commissioner is one “that death was the result of the accidental injury sustained in the course of the deceased’s employment on February 15, 1943.” The plaintiffs contend that there is no substantial evidence to support a finding that there was an accident which caused the injury.

The Commissioner has in effect found from the testimony that the illness which terminated in Riviello’s death was brought about by “a coronary infarct [clogging] induced by the work and the working conditions on the morning of his employment.” The Commissioner also found that “at the time of and preceding his employment * * * deceased had coronary disease.” The fact that an employee suffers from pre-existing condition and is abnormally vulnerable to injury does not deprive him of protection under the statute. Grain Handling Co. v. Sweeney, Sup., 102 F. 464, 465-6.

I think there was substantial evidence to support the finding of the Commissioner that decedent’s death was the result of an accidental injury as those terms are used in the Longshoremen’s and Harbor Workers’ Act. Pacific Employers’ Ins. Co., et al. v. Pillsbury, 9 Cir., 61 F.2d 101; Hoage v. Employers’ Liability Assur. Corporation, Ltd., 62 App.D.C. 77, 64 F.2d 715.

Plaintiffs’ motion for summary judgment is denied. Defendants’ motions for summary judgment are granted.

Settle orders on notice.


author: PICARD, District Judge.

text:
    UNITED STATES v. O’DELL.
    No. 3053.
    District Court, E. D. Michigan, S. D.
    June 29, 1945.
    United States District Attorney, for plaintiff.
    Meyers & Keys, of Detroit, Mich., for defendant.
   PICARD, District Judge.

The government herein sues defendant personally to collect certain social security taxes that were assessed against the Howie Company for which he became trustee. The action is under Section 3710(a) and (b), 26 U.S.C.A. Int.Rev.Code, and is personal because it is claimed that when levy and demand were made on defendant by the Collector of Internal Revenue he had property or rights to property in his possession subject to distraint which he refused to surrender.

The facts have been stipulated.

The Howie Company in 1941 was bankrupt and had been for some time. It owed the City of Detroit, County of Wayne and State of Michigan taxes dating back as far as 1933, which none of these political entities had been able to collect. On the 2nd of June 1939 the company appointed one William G. Starr trustee for the benefit of its creditors and later defendant, who succeeded Starr proceeded to liquidate the corporation assets depositing the cash with The Detroit Bank.

On September 9, 1941, the Collector of Internal Revenue made demand and levy upon defendant for payment of past due Social Security taxes dating back to 1938 and totaling $1336.84. On that day the company money was in defendant’s name in a special account at the bank. There is no evidence of demand being made for any of those taxes due before the above date even for the one item appearing as #17 in the stipulation for Federal taxes ($101.55), the only tax that came before those owed the municipalities. Sections 3670, 3671, 26 U.S.C.A. Int.Rev.Code.

At that time the total owed the City of Detroit, County of Wayne, and State of Michigan for taxes amounted to more than the cash assets of the Howie Corporation. Under the Michigan statute and Detroit charter such taxes would be a lien upon the personal property of the taxpayer that had become “determined, specific, complete and perfected.”

There are two questions involved—

First, did defendant have in his possession “property or rights to property” subject to distraint upon refusal to surrender which he became personally liable under the Code?

Second, do perfected liens of municipalities (city, county, and state) becoming so by operation of statute or charter provisions before demand and levy by the Collector of Internal Revenue for payment of social security taxes have priority on funds of the taxpayer?

Conclusions of Law

The provisions of section 3710 above referred to are as follows:

“(a) Requirement. 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.
“(b) Penalty for Violation. Any person who fails or refuses to so surrender any of such property or rights shall be liable in his own person and estate to the United States in a sum equal to the value of the property or rights not so surrendered, but not exceeding the amount of the taxes (including penalties and interest) for the collection of which such levy has been made, together with costs and interest from the date of such levy.”

Defendant cites a number of cases to substantiate his position that under the admitted facts he has neither “possession of property or rights to property, subject to distraint”, and while these are not directly in point they do throw some light on construction to be given this section.

We analyze those cases—

In United States v. Bank of United States, D.C., 5 F.Supp. 942, the bank claimed money of the taxpayer in its possession and when served with notice of levy refused to surrender the funds. While action in this particular case was properly against the bank rather than the taxpayer the opinion does not decide that the taxpayer who put the money there is in possession of property or rights to property.

United States v. Marine Midland Trust Co., D.C., 46 F.Supp. 38, merely decides that where the taxpayer’s bank record carried the words “special account” after his name, the bank could not refuse to turn, over to the collector cash in its possession merely because the words “special account” might indicate that others had an interest in those funds superior or equal to the taxpayer himself.

Commonwealth Bank et al. v. United States, 6 Cir., 115 F.2d 327, is authority that the bank could not refuse to surrender taxpayer’s money to the collector to protect a claim of its own by challenging the government’s right to a lien.

In United States v. National City Bank, D.C., 32 F.Supp. 890, the bank merely claimed a lien, but the case is not in point while United States v. City State Bank, D.C., 19 F.Supp. 775, simply held again that the bank could not attack the assessment of the tax.

United States v. Long Island Drug Co., 2 Cir., 115 F.2d 983, 986, held that the drug company didn’t have “property, or rights to property” in its possession based on the unearned wages of the taxpayer, and

United States v. Ætna Life Ins. Co. of Hartford, D.C., 46 F.Supp. 30, involved the right of the collector to the cash surrender value of some insurance policies.

All these concern themselves with actions brought directly against the bank or the insurance company and while it is apparent that in the case at bar the Collector of Internal Revenue might better have made demand and levy upon the bank, at the same time as he did upon defendant, none of these cases holds that the Collector’s failure to do this was fatal insofar as personal liability of a trustee such as defendant is here or the taxpayer himself. But in the instant case it is admitted that by no construction was defendant in actual possession of “property”, to-wit, the cash in the bank. The issue is — was he in possession of “rights to property” ?

Illuminating is the very interesting discussion found in United States v. Metropolitan Life Ins. Co, 2 Cir, 130 F.2d 149, 150, where the court on pages 150 and 151 makes these observations concerning an attempt by the Collector of Internal Revenue to collect the cash value of certain insurance policies which policies were in possession of taxpayer and which, of course he refused to surrender—

“Thus it appears that between 1866 and 1926 if the taxpayer’s chattels were in the possession of a third person who refused to surrender them, the collector had no means of enforcing a surrender and could not make delivery in performance of his contract of sale.”

This situation brought forth the above Section 3710 (a) and (b), 26 U.S.C.A. Int. Rev.Code. Later in discussing the words “rights to property” the court states—

“That function is” (Sec. 3710 (a) and (b) above) “to cover cases in which third persons, such as trustees or the like, are in possession of documents — notes, bonds, etc.— which belong to the taxpayer; perhaps it also covers cases in which the chose in action is not embodied in any document, even though that strains the meaning of the word ‘possession’ a little.”

And on page 151 of 130 F.2d—

“In the first place, as we have seen, it is probable that the words ‘rights to property’ in § 3692 were used to describe dioses in action in contrast with ‘property’ which stood for chattels, and it is certain that whatever meaning they have in § 3692, they have in § 3710 (a).”

The court held that defendant insurance company did not have property or rights to property in its possession subject to dis-traint basing its decision somewhat on the fact that the insured refused to surrender the policies. This would seem to indicate that the proper party defendant was the insured, or in the case at bar, the trustee.

But there is no denying that a bank book is only an evidence of indebtedness on the part of the bank to the depositor and Judge Hand noticeably does not include the words “bank book” when referring to choses in action. He says “such as notes, bonds, etc,” which belong to the taxpayer. Surrendering the bank book to the collector couldn’t have gained the collector anything. It took a positive further act on the part of the trustee and there is nothing to show in any construction so far given to the words “rights to property” indicating that Congress intended an interpretation that required a trustee, who is a third person, to withdraw money from the possession of somebody else, then pay it to the collector, in order to escape personal responsibility. That is not the import of this statutory provision. It was merely to furnish the collector with a means of enforcing a surrender of rights to property that of themselves took the place of property. This is not true of a bank book and the surrendering of that bank book couldn’t have helped the Collector of Internal Revenue one iota without the aforementioned further positive act which is not required by the statute.

Passing to the second point, we believe defendant finds himself on even surer ground. The statute, 31 U.S.C.A. § 191, gives the United States of America priority rights in insolvent estates over state, -county or city but that does not give it priority equivalent to a specific and perfected lien. Where a taxpayer is insolvent and owes both the municipality and federal government and the federal government has taken a lien prior to or as of the same day as the state, county, or city, the federal lien comes first, but not before prior liens of these municipalities. The receiver of an insolvent corporation always takes the property subject to the city, county and state liens. The matter is entirely covered in In re Ever Krisp Food Products Co, 307 Mich. 182, 11 N.W.2d 852, and need not be further enlarged upon in this opinion.

For the above reasons we believe the bill of complaint should be dismissed and a decree to that effect may be presented to this court for his signature.


text:
    KING v. WATERMAN S. S. CORPORATION.
    District Court, S. D. New York.
    April 7, 1945.
    Richard M. Cantor, of New York City, for plaintiff.
    Gay & Behrens, of New York City (Russell C. Gay, of New York City, of counsel), for defendant.
   GODDARD, District Judge.

This is a motion for summary judgment dismissing the complaint.

The plaintiff is a seaman and sues under the Jones Act, 46 U.S.C.A. § 688. In the complaint two causes of action are alleged; one for negligence; the other for maintenance.

The defendant’s answer generally denies the allegations of negligence and of injuries, and sets forth the affirmative defense that on December 13, 1943, the plaintiff duly executed a general release releasing the defendant from any and all liability for the injuries alleged in the complaint.

A seaman may settle his claim for injuries and execute a valid release. Garrett v. Moore-McCormack Co., Inc., 317 U.S. 239, 63 S.Ct. 246, 87 L.Ed. 239; Ames v. American Export Lines, Inc., D.C., 41 F.Supp. 930, and cases therein cited. However, seamen are regarded as wards of the Admiralty and a ship owner who, in defense of an action by a seaman for personal injuries, sets up the seaman’s release, is under the burden of proving that it was executed fully, without deception or coercion, and that it was made by the seaman with full understanding of his rights; and the adequacy of the consideration and the nature of the medical and legal advice available to the seaman at the time of signing the release are relevant to an appraisal of this understanding. Garrett v. Moore-McCormack Co., Inc., supra.

It appears from the affidavits submitted and depositions taken that the S. S. Fair-land left Philadelphia on April 22, 1943, for a voyage to foreign ports. She carried two extra life boats — steel twenty-four feet long, weighing two and one-half tons each. They rested on supports estimated to have been eight to fifteen feet above the deck.

On April 28th the Master ordered that the starboard boat be moved over near the rail so as to be ready for launching in the event of an attack by submarines. Bridles from the bow and stern of the life boat were hooked on to the block and fall leading from the derrick boom to the sampson post. The plaintiff, King, was told to get up into the life boat to keep the rope fall from kinking. The boatswain was at the steam winch which operated the derrick. As the life boat was being lifted, there was a sudden jerk on the winch line as a result of too much power being applied by the boatswain as the Master says, or as King says, the “little click that locks that thing is broke”; the life boat tilted violently and King was thrown to the deck according to his statement; either jumped or fell, according to the Master. King was carried to the ship’s hospital where he was examined and treated by the ship’s doctor; the following day he was removed to a hospital at Panama where he remained until June 15th when he was returned to this country and went to his home in West Virginia where he remained until December 1st, when he came to New York to sign on another ship, which he did around December 20th, and he has been at sea most of the time since then.

No doctor’s report is submitted, but in the affidavit of the attorney for plaintiff he states — “The hospital record at the Canal Zone evidence that plaintiff sustained a complete fracture of the right ilium with displacement, fracture of head of radius, left, fracture lower end of the radius.” This affidavit also states that on July 28th, 1944 King visited the Beekman Street Hospital which reported — ■“ * * * Examination reveals marked muscle atrophy above the right elbow and also in the region of the head of the radius. Referred to neurological clinic on Tuesday, August 1.” King was also treated four or five times by his local doctor while he was at home in Virginia after the accident, but there is no report from him. King’s base pay was $110 per month and keep, and he had been receiving a 100% bonus.

King returned from Panama on a passenger ship which landed at New Orleans and on the way to his home in Virginia he stopped off at Mobile and called on the agent of the steamship company who paid him $810. On December 13th, when he came to New York, he went to the steamship company’s New York office, and said that he still had some disability, and asked for additional money. He was paid $100 and signed general release.

Insofar as form is concerned, this is a perfectly valid release. At the top, in large red print, appear the words: “Release of all rights. Read carefully — by signing this you give up every right you have,” and in answer to one of the questions in the release, “What is this paper you are signing?” King has written, “Release of everything,” and also that he has read it.

There is nothing to indicate that any misrepresentation was made to King, and I think it is equally clear that King knev? that he was signing a release of all his rights against the steamship company. However, I am not satisfied that he knew what his full rights were. He had no lawyer to advise him. If the uncontra-dicted statement of King as to the manner in which he received his injuries is true, the steamship company would appear to have been negligent and liable for damages, and in view of the indicated injuries, an award of more than $910 might reasonably be expected.

My impression from the affidavits and the testimony is that King, like many of his fellow seamen, was unfamiliar with such matters and may not have had a full understanding of his rights. Not only was he without legal advice, but insofar as it appears he was not fully informed as to the nature of his injuries or advised regarding settlement by the doctor in Virginia who treated him without charge, or by the doctor at Beekman Street Hospital where he received treatment as an out patient. As the facts now stand a settlement of $910 appears to have been inadequate and was accepted without a full understanding of his legal rights and with inadequate information regarding his injuries.

There should be a trial of the issues at which the burden will be on the defendant to sustain the release “as fairly made with and fully comprehended by the seaman.” Hume v. Moore-McCormack Co., Inc., 2 Cir., 121 F.2d 336, 347.

Motion for summary judgment denied.

Settle Order on notice.


author: J. F. T. O’CONNOR, District Judge.

text:
    BAIRD v. ASSOCIATED PIPING & ENGINEERING CO., Inc.
    Civil Action No. 3919 O’C.
    District Court, S. D. California, Central Division.
    Feb. 9, 1945.

      George R. Maury, of Los Angeles, Cal., for plaintiff.
    Francis B. Cobb, of Los Angeles, Cal., for defendant.
   J. F. T. O’CONNOR, District Judge.

The plaintiff brings this action to recover $1,069.28 liquidated damages under the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. The plaintiff was employed by the defendant from March 15, 1943, to June 30, 1944, at the following rates of pay:

From March 15, 1943, to July 1, 1943, at $225 per month.

From July 1, 1943, to July 15, 1943, at $250 per month.

From July 15, 1943, to January 15, 1944, at $300 per month.

From January 15, 1944, to June 30, 1944, at $350 per month.

The court finds that the plaintiff was a non-exempt employee from March 15, 1943, to July 15, 1943, and was entitled to liquidated damages as provided by the Act. The court finds that the overtime compensation and liquidated damages during the period of March 15 to July 15, 1943, amounted to $222.36.

The court finds further that a reasonable attorney fee for plaintiff’s attorney is $150 and said sum is allowed under 29 U.S.C.A. §216.

The court finds that from and after July 15, 1943, the plaintiff was exempt from the provisions of the Fair Labor Standards Act; that he was from and after that date, until the time of his discharge by the defendant, in charge of the M. C. Division; that he attended morning meetings with the executives; that he made recommendations with respect to his department or division; that he employed secretaries and a switchboard operator, and generally assisted and directed employees in his division; that he used his own discretion in obtaining materials and determining whether materials should be sold from the stock in the warehouse of the defendant, or purchased from others; that the important question of shipment and the date of delivery and the quantities of material required for various projects were under his direction and control. It is clear to the court that he was an exempt employee from and after July 15, 1943, to June 30, 1944, and not, therefore, entitled to liquidated damages or compensation for overtime.

The court also gives some consideration to the fact that from July 15, 1943, to January 15, 1943, compensation of plaintiff was increased to $300 per month or a raise of $50 per month; and from January 15, 1943, to June 30, 1944, his compensation was increased to $350 per month or a raise of another $50 per month.

The plaintiff will prepare findings of fact and conclusions of law, serve the same upon the defendant, and file the same with the court within ten days from the date of this order.

Costs will ¡be allowed the plaintiff.


author: GRAVEN, District Judge.

text:
    WALLING, Adm’r of Wage and Hour Division, U. S. Dept. of Labor, v. NEWMAN et al. SAME v. GEHAN et al.
    Civil Actions Nos. 222, 224.
    District Court, N. D. Iowa, W. D.
    June 26, 1945.

      Douglas B. Maggs, Sol., and Archibald Cox, Associate Sol., both of Washington, D. C., Reid Williams, Regional Atty., and Henry J. Smith, Associate Atty., both of Kansas City, Kan., and Joseph I. Nachman, Associate Atty., of Washington, D. C., all of United States Department of Labor, for plaintiff in both cases.
    Louis S. Goldberg, of Sioux City, Iowa, for all defendants in both cases.
   GRAVEN, District Judge.

Two actions consolidated for purposes of trial in which injunctions are sought to enjoin alleged continuing violation of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq., hereinafter referred to as the Act. There is involved in each case the question of “administrative” exemption under the Act. There is only one employee whose status is invoked in each case. In the first case it is the status of one A. M. Johnsen which is involved, while in the second case it is the status of one Arthur Anderson, each of whom have the title of office manager and bookkeeper. The defendants admit that they are engaged in interstate commerce; that the regulation promulgated by the Administrator of the Wage and Hour Division of the United States Department of Labor as to “administrative” exemption is a proper exercise of his power under the Act; and that the burden is upon them to establish the exemption.

Congress in Section 13(a)(1) of the Act, 29 U.S.C.A. § 213(a)(1), provided for exemption from the minimum wage and overtime provisions of the Act “any employee employed in a bona fide * * * administrative * * * capacity * * * (as such terms are defined and delimited by * * * the Administrator).” The Administrator did not at first give a separate definition and delimitation to the term “administrative,” but on October 12th, 1940, he did so by Section 541.2 of Title 29, Chapter V. of the Code of Federal Regulations. That Regulation provides as follows:

“Section 541.2. Administrative.
“The term ‘employee employed in a bona fide * * * administrative * * * capacity’ in Section 13(a)(1) of the act shall mean any employee—
“(A) Who is compensated for his services on a salary or fee basis at a rate of not less than $200 per month (exclusive of board, lodging, or other facilities), and
“(B) (1) Who regularly and directly assists an employee employed in a bona fide executive or administrative capacity (as such terms are defined in these regulations), where such assistance is nonmanual in nature and requires the exercise of discretion and independent judgment; or
“(2) Who performs under only general supervision, responsible nonmanual office or field work, directly related to management policies or general business operations, along specialized or technical lines requiring special training, experience, or knowledge, and which requires the exercise of discretion and independent judgment; or
“(3) Whose work involves the execution under only general supervision of special nonmanual assignments and tasks directly related to management policies or general business operations involving the exercise of discretion and independent judgment.”

Sub-paragraphs (1) to (3) of Paragraph B of the above regulation being in the disjunctive, it is only necessary for an employee to meet the conditions of any one of those sub-paragraphs, plus the salary requirement of Paragraph A. George Lawley & Son Corporation v. South, 1 Cir., 1944, 140 F.2d 439, 151 A.L.R. 1081. The defendants in the instant cases claim the employees in question are exempt under sub-paragraph (2) of Paragraph B. It is authoritatively stated that while interpretive statements of the Administrator are not issued as regulations under statutory authority, yet they carry persuasiveness. Overnight Motor Co. v. Missel, 1942, 316 U.S. 572 (note 17), 62 S.Ct. 1216, 86 L.Ed. 1682. It is also clear that well paid employees are not to be denied the benefits of the Act. Jewell Ridge Corporation v. Local No. 6167, 1945, 65 S.Ct. 1063, 89 L.Ed. 1011. See also, George Lawley & Son Corporation v. South, supra. It is well settled that exemptions from the Fair Labor Standards Act are to be strictly construed and claimed exemptions therefrom must be established by a clear preponderance of the testimony. Smith v. Porter, 8 Cir., 1944, 143 F.2d 292. Accord, Fleming v. Hawkeye Pearl Button Co., 8 Cir., 1940, 113 F.2d 52, 56.

It seems clear that the Administrator promulgating regulations within the limits of the power given him by Congress is his own lexicographer, so far as assigning therein particular meanings to particular words and terms. Such assigning may be either done specifically or by context. When, however, the Administrator has not assigned a definite meaning to particular words and terms, a court must assume that such particular words or terms are to be given their generally and ordinarily understood meaning. For a court not to do so would make a regulation a judicial snare and trap for the well-intentioned and the law abiding.

In the instant cases, the controversy between the parties centers around (1) the meaning to be given the word or term “non-manual”, and (2) whether the particular employees in question were in the performance of their duties “exercising discretion and independent judgment.” The first point of controversy would seem to have to do with a general rule, while the second point of controversy would seem to have to do with the particular fact situation as to each of the two particular employees in question. In effect, it is the position of the defendants in the instant cases that their claims for exemption are fully sustained by the interpretations of the Administrator, and that the inspection department or division of the Regional Office for the Wage and Hour Division is misinterpreting the Administrator’s interpretations.

The defendants in each case are co-partners engaged in the live stock commission business at the Sioux City Stockyards at Sioux City, Iowa. In each case the partnership consists of two partners all of whom are active partners. The different live stock commission firms at the Sioux City Stockyards'have their offices in what is known as the Exchange Building, which is apparently a building of considerable size. The Sioux City Livestock Exchange is an organization which constitutes the governing agency for the marketing agencies operating at the yards. That organization has its office with a secretary and staff in the Exchange Building. The Sioux City Stockyards is subject to the provisions of the Packers and Stockyards Act, 7 U.S.C.A. § 181 et seq., and there is a government Market Supervisor stationed at the Exchange. The different livestock commission firms must furnish reports of their activities under that Act, and such firms keep closely in touch with the Market Supervisor. It appears that the Exchange Building constitutes what might be called the “control” center, or “nerve” center, or “focal” center for the livestock commission business at the Sioux City Stockyards. The livestock pens where livestock are bought and sold, are a distance from the Exchange Building. The livestock commission business as typified by the firms in the instant cases is rather unique in that the owner-executives spend most of their time away from the office out in the yards, where assisted by salesmen and yardmen they sell livestock on commission.

The greater portion of the livestock brought to the yards arrives by truck, consigned to a particular commission firm. While generally the entire truck load is consigned to a particular firm, yet in certain cases, a truck load contains livestock consigned to more than one firm. Upon or shortly after arrival ownership tickets for the livestock are delivered to the particular firm to which it is consigned. After the livestock is sold out in the yards, sales tickets come back to the office with the weights and sale prices on them. In a great many cases the shipper either comes along with the shipment or follows it in. The great majority of the patrons call at the offices during the year in regard to current shipments or for information and advice as ■to matters connected with the livestock industry and prospective operations and shipments. It appears that the usual first place of stopping for current and prospective shippers is at the office of the particular firm of which the shipper is a patron or a prospective patron. Frequently shippers wish a substantial advance on their livestock after it has been consigned but before it is sold. Shippers also call at the office to have adjusted complaints in regard to sales or service. Shippers also call at the office to get the information as to probable market trends as to feed and feed trends, price ceilings and other governmental regulations, and such other information as would be of assistance to them in regard to the carrying on of their livestock operations and marketing their livestock. Shippers who come along with their shipments or follow them in, generally and usually call at the office after the livestock has been sold and receive settlement. It appears that as to the business of a particular livestock commission firm that the office of the firm is what might be termed the “control” center, the “nerve” center, or “focal” center.

Mr. A. M. Johnsen, the employee whose status is in question in the first case, is 41 years of age. He has had a high school education followed by a course in accounting. He has been employed by the defendant, Sioux City Livestock Commission Company, since 1936. He was a deputy county clerk in Nebraska for ten years and with the Firestone Tire & Rubber Company for one year before entering upon his present employment. He is individually a member of the Sioux City Livestock Exchange. He started at $100 a month, which continued for three months or until August 1st 1936. On August 1, 1936, his salary was raised to $125 a month, and continued at that rate until April 1, 1938, when it was raised to $150 a month. On March 1, 1939, it was raised to $175 a month. On January 1st 1941, it was raised to $200 a month. On January 1, 1942, it was raised to $210 a month, and on July 1, 1943, it was raised to $235 a month. Since January 1, 1945, he has had an agreement that in addition to his salary of $235 a month, he is to receive ten per cent of the net profits of the firm. At the current rate of profits this will amount to $70 a month additional. Mr. Johnsen’s title is that of office manager and bookkeeper. He is the only full time office employee. After the firm’s employees in the yards have completed their work there they come in and assist in the office, and he directs their work. During the course of a year around seventy-five per cent of the firm’s customers come to the office. In addition to handling the matter of a particular sale for such shippers, he goes over with them the present and future market conditions, the feeding of livestock and the feed situation. He keeps in touch with the changing governmental rules and regulations relating to the livestock business, for the benefit of his firm and its customers, and is consulted by the firm’s customers in regard to them. He makes out the reports required under the Packers and Stockyards Act and confers with the Market Supervisor. The firm’s sales are cleared through the office of the Secretary of the Exchange, and Mr. Johnsen attends at the office of the Secretary daily in connection therewith, and also confers with the Secretary as to matters having to do with the livestock commission business. He buys the greater part of the advertising for the firm, and prepares advertising for the firm. He submits the advertising so prepared to the members of ,the firm for approval. He writes checks on the firm’s bank account without countersignature. Mr. Johnsen makes settlement with the customers for the livestock sold by the firm. He directs the work of the employees in the yards when the owners are away and sometimes when they are not away. He purchases the supplies for the firm and most of the office equipment. His suggestions as to re-arrangement of the office and the installation of a new system of accounting were fol-I lowed. He irons out and adjusts complaints of shippers as to sales or service. Mr. Wilson, one of the members of the firm, spends around two hours a day in the office, while Mr. Newman, the other member of the firm, is very seldom in the office. Mr. Johnsen regularly and constantly makes recommendations to the members of the firm as to the conduct of the business, and participates in management conferences with them. They rely upon Mr. Johnsen’s discretion and judgment in handling and dealing with customers and as to general business operations and he has the authority to make and does make on the spot decisions relating thereto. Mr. John-sen decides whether a shipper or his shipment is such that an advance can be made against the shipment and the amount of the advance. The firm makes livestock loans. Mr. Johnsen prepares financial statements and the loan papers and makes recommendations to the members of the firm as to the safety of the loan. The volume of livestock commission business is variable. It appears that the heaviest livestock runs are on Mondays, which necessitates long hours of service on that day. It appears that the runs slacken off until there is a very small run on Friday and none on Saturday. Apparently Mr. Johnsen is putting in from 48 to 50 hours a week, with much of the so-called overtime occasioned by the long hours on Mondays. It appears that Mr. Johnsen averages from 20 to 25 hours a week doing bookkeeping work, and the balance of his time is taken up with the other duties referred to.

Arthur Anderson- the other employee whose status is in question is 40 years of age. He had a high school education, followed by two years of business college training, and has completed two home study courses in accounting.- He has been employed by the defendant, Gehan Livestock Commission Firm since July 1st 1940. Prior to that he- had been employed for nine years by a produce company. Apparently his duties with that employer were in the office. He had also worked in various departments of the Cudahy Packing Company for about a year. He started on July 1, 1940, with a salary of $125 a month plus overtime. From July 1, 1942, to August 1, 1942, he was paid $135 a month plus overtime. From August 1, 1942, to August 2, 1943, he was paid $150 a month plus overtime. From August 2, 1943, to October 1, 1943, he was paid $155 a month plus overtime. From July 1, 1944, he has been paid at the rate of $200 a month and no overtime. There is a woman in the office with Mr Anderson who does stenographic work. There are some variations in the situation as between-the two employees. For instance, Mr. Anderson’s firm does not engage in the livestock loan business. Mr. Anderson puts in some time stimulating business for his employers in the vicinity of his former home in Minnesota. However, the parties in the instant cases regard the status of the two employees as substantially similar, and witness so testified. However, it should be noted that Mr. Johnsen has been with his firm around nine years and Mr. Anderson has been with his firm around four years; and that while Mr. Johnsen’s salary is considerably larger than Mr. Anderson’s, that Mr. Anderson’s salary has been increasing at about the same rate as Mr. Johnsen’s. It is believed also that because of his longer period of service and longer experience that Mr. Johnsen has been entrusted with somewhat more responsibility and authority than has Mr. Anderson. It is also believed that there is not sufficient difference in their situations as to necessitate a distinction between them as to their status under the Act. Both of the livestock commission firms involved in these cases are old and long established firms.

It appears that in the case of livestock commission offices that the transition from a routine bookkeeper to an office manager exercising independent judgment and discretion in the management of the firm’s business is one that may not take place or that may take place gradually. It is believed that it is a fair inference that employees who did not evidence capabilities for such growth and change are apt to be replaced by those that do, for the work of conducting the livestock commission business is such that something other than a mere routine bookkeeper is needed at the office. When such an employee starts his status is doubtless that of a routine bookkeeper, who as to decisions relating to the general business operations has to have such decisions made by the members of the firm during the brief periods when they are in the office, or with some difficulty and delay relay the information out to the members of the firm out in the yards and get the decision back. If such an employee begins to show that he has the judgment and ability to deal and handle situations, more and more on the spot decisions are left to him. If he shows a good and growing grasp of business and business policies, the firm gradually begins to value his views and opinions as to such matters and accept his recommendations, until the time finally comes when he plays an important and responsible part in guiding and managing the business. It would seem to be a question of fact in each particular case whether a particular employee has reached that stage where he has passed from the status of a routine bookkeeper to that of being a part of management. In another connection having to do with the change from one situation to another, Chief Justice Marshall in the case of Brown v. State of Maryland, 1827, 12 Wheat. 419, at page 441, 25 U.S. 419, on page 441, 6 L.Ed. 678, by way of illustration stated: “The power, and the restriction on it, though quite distinguishable, when they do not approach each other, may yet, when the intervening colors between white and black, approach so nearly, as to perplex the understanding, as colors perplex the vision, in marking the distinction between them. Yet the distinction exists, and must be marked as the cases arise.” In 25 Iowa Law Review 405, appears this statement: “We can easily see the two different colors, but we cannot easily discern where one ends and the other begins.”

While it is easy to classify as such one who is purely a routine bookkeeper, and easy to classify a department head as being part of management, yet where there is gradual evolution from routine bookkeeping to becoming a part of management, and where there is a shading from routine duties into duties of management the task of distinguishing one from the other is not always easy. It would seem that in some cases there is what might be called a “twilight” zone in the gradual change from one to the other. There is nothing in the Fair Labor Standards Act that makes an employee’s condition static so far as passing from nonexempt to an exempt classification is concerned, or in any way to indicate that an employee is “frozen” into one status or classification.

In both of these cases all parties rely upon and cite two documents having to do with interpretation of the Regulations relating to the “administrative” exemption, both of which are in evidence. One document is designated as “Report and Recommendations of the Presiding Officer at Hearings Preliminary to Redefinition,” which is prefaced by the following:

“Statement of the Administrator
“The construction of Regulations, Part 541, as amended, which the Wage and Hour Division will follow in enforcing the act thereunder (unless and until the regulations are set aside in whole or in part bj-amendment or by authoritative decision» of the courts) will be found in this Report and Recommendations.
“Philip B. Fleming,
“Administrator.”

For convenience this interpretive bulletin will be hereinafter referred to as the Report.

The other document is an interpretive statement of the Administrator known as the Press Release of October 28, 1940, which will be referred to as the Release

On page 26 of the Report in connection with the $200 a month salary required in the “administrative” exemption, it is stated: “ * * * it may be reiterated here that a salary criterion constitutes the best and most easily applied test of the employer’s good faith in claiming that the person whose exemption is desired is actually of such importance to the firm that he is properly describable as an employee employed in a bona fide administrative capacity.” If the term “administrative” were not defined and delimited it would be considered to have been used in its general and ordinary sense. As used in that sense it would not have included a mechanic however highly paid. However, as pointed out on page 28 of the Report, if the administrative exemption were to be based alone on salary, it would allow the exemption to highly paid tool and die workers, cutters, and a number of others whose duties could not in any sense be considered as administrative in character. Therefore the Administrator, to avoid the inclusion of workers in the exemption who were merely receiving the requisite pay, but whose work was not in reality administrative in character, prescribed the additional requirements contained in the sub-paragraphs referred to.

On page 26 of the Report it is stated (italics supplied) : “In the definitions of ‘executive,’ ‘professional,’ (and ‘outside salesman’) both as originally drafted and as proposed herein, there is a clause, in varying forms, barring an employee from the exemption if he performs a substantial amount of nonexempt work. It is not proposed that a similar clause be included in the definition of ‘administrativeIt is believed that the employees in the administrative group are so heterogeneous in function that it would present a disproportionately weighty problem in administration to determine what constitutes nonexempt work. However, when this valuable guard against abuse is removed, it becomes all the more important to establish a salary requirement for the exemption of administrative employees, and to set the figure therein high enough to prevent abuse.”

Thus, it clearly appears that the two employees in the instant cases cannot be denied their exemptions (if otherwise entitled to it) because they did a substantial amount of bookkeeping. In the case of Stanger v. Glenn L. Martin Co., D.C.Md., 1944, 56 F.Supp. 163, it was held that the performance of clerical work even up to forty-five to fifty per cent of the time was not fatal to the administrative exemption. The Court on page 168 of 56 F.Supp., states: “So, whether it was forty-five or fifty per cent of their time which, as they claim, they devoted to work of a clerical nature, or whether it was much less, is not conclusive of the issue before us. The important question, as the Regulation of the Administrator sets forth, is the extent to which the exercise of discretion and independent judgment was involved.”

There are certain words and terms used in the subparagraphs referred to which are not specifically defined, some of these are “general supervision,” “responsible,” “non-manual,” and “exercise of discretion and independent judgment.”

In the instant cases it clearly appears that the two employees perform their duties under “general supervision.” The supervision given them by their employers is extremely and noticeably general in nature, and very few office employees are as much “their own bosses” so far as their work is concerned as they are. It clearly appears that an employee in charge of and managing an office of a livestock commission firm is of the greatest importance in holding and building up a firm’s good will and patronage, and upon such an employee is dependent the smooth functioning of the firm’s operations. One witness described such an employee as a “liaison officer” between the owners of the firm and its patrons. One witness in an illuminating and' reminiscent way compared them to “top-sergeants” in the army, who to a large extent can, the witness stated, “make or break” their commanding officers. Using; further military terminology, it seems to be the view of the defendants that the two employees are in reality top-sergeants in the army of business, and that they are not merely privates drawing top-sergeants’ pay.. The evidence is clear that for an office-manager in charge of a livestock commission firm to satisfactorily perform the duties of manager requires specialized training, experience and knowledge, and a high degree of tact, diplomacy and good judgment. It is clear that the two employees in question are performing their duties as. office managers in a manner highly satisfactory to their employers, and that they have such experience, tact, diplomacy and good judgment. The competition in the livestock commission business at the Sioux City Stockyards is vigorous, keen and aggressive. To conduct such a business with profit and success, old patrons must be well served and skilfully handled, and there must be a constant campaign for new business. The office manager of a commission firm, plays a vital and responsible part in enabling a livestock commission firm to carry-on a profitable and successful business.

As heretofore indicated, one of the points of vigorous controversy is the meaning to be given the term “non-manual work.” The importance of the construction is made manifest by the testimony of the Regional Supervising Inspector who testified that if an employee did any manual work at all he could not be exempt as an administrative employee. It is then asserted and argued that the keeping of books is manual work, and that because the two employees in question do make bookkeeping entries, they are by that fact disqualified for the administrative exemption. It is the claim of the defendants that there is not involved the question of whether the doing of any manual work disqualifies an employee from the “administrative” exemption, because the keeping of books is not manual work, either as commonly and ordinarily understood or as construed by the Administrator.

It would seem that the term “manual work” is a somewhat broader term than “manual labor” in that “manual labor” is generally regarded as being a more heavy and laborious type of activity than “manual work.” However, in the ordinarily and generally understood meaning of the term, a person keeping books is not regarded as being a manual worker. Persons engaged in keeping books are commonly and ordinarily referred to as being clerical workers and not manual workers. In the Report on page 28 it is stated that the employees exempted under the three sub-paragraphs have the common characteristic of being what is known as white collar employees. A case that bears somewhat on this question is the case of Arizona Eastern R. Co. v. Matthews, 1919, 20 Ariz. 282, 180 P. 159, 7 A.L.R. 1149, where there was involved the question of whether a billing clerk was within the provisions of a state employers liability act giving protection to those doing “manual labor”. The Arizona Court on page 162 of the Pacific citation, states:

“One of the canons of interpretation of words used in a statute is that they must be taken in their common and ordinary sense, unless, from the context, it is evident some other meaning was intended. When we speak of a person doing manual labor, the mind is instantly directed to some kind of toil in which the physical predominates the mental. The words would never call to mind the office man engaged in keeping books or making out bills or statements or operating a typewriter.”

That the Administrator does not' regard the keeping of books as “manual work” under the Regulation would seem to be clear from page 3 of the Release where in dealing with the “administrative” exemption the Administrator states (italics supplied) : “To take bookkeepers as an example : the ordinary bookkeeper performs routine work and thus cannot qualify for exemption. Furthermore, over 90 per cent of all bookkeepers are paid less than $200 a month and thus are automatically barred from exemption. There are, however, a few persons whose work includes bookkeeping who will be exempt. Characteristically the bookkeeper who is paid as much as $200 also serves as an office manager or performs other functions sufficiently important to justify the payment of what is a comparatively high salary. In these rare instances the bookkeeper-office manager, etc., will meet all of the requirements of the administrative definition.”

Thus the Administrator clearly and definitely states that an office manager (who is paid not less than $200 a month) may also keep books and still be exempt as an administrative employee. The interpretation of the Regional Inspection Division that bookkeeping is manual work and that being manual work the doing of it is fatal to the exemption, is not in accord with the Administrator’s statement. The Administrator’s interpretation will govern.

It seems clear that in order to retain “administrative” status under the Act, it is not necessary that an employee be constantly and continuously engaged in exercising “discretion and independent judgment.” In Section 541.3 relating to those employed in a “professional” capacity, it is provided that one of the requirements for that status is “the consistent exercise of judgment and discretion.” The word “consistent” has been omitted in the Regulation relating to “administrative” status. The Administrator’s statement that the doing of bookkeeping by an office manager does not of itself deprive him of “administrative” status, is consistent with the omission of the word “consistent” from the Regulation relating to the “administrative” exemption.

While the words “office manager” are not specifically defined by the Administrator, yet since he regards an office manager as having “administrative” status, it would seem that he regards an office manager as one who is in charge of an office working under only general supervision at responsible work directly related to management policies or general business operations along specialized or technical lines requiring special training, experience or knowledge, and who can and does exercise discretion and independent judgment. It is believed that the two employees in question do meet these tests of an “office manager”, and that they are both “office managers” in fact as well as in name.

The two employees in question testified as witnesses which gave an opportunity for close observation by the Court. It was plainly obvious that these two men are not the routine bookkeeper type. Their conduct, mental reactions and bearing and appearances on the witness stand indicated they were keen, alert, quick thinking, able and capable young business men.

The parties cite a number of authorities. The case of Helena Glendale Ferry Co. v. Walling, 8 Cir., 1942, 132 F.2d 616, is cited by the plaintiff. The facts in that case are more fully set forth in the opinion of the trial court reported in 5 Labor Cases, # 60,994. From the district court opinion it appears that the maximum salary of the young women in question was $17.50 per week, so they obviously did not meet the first requirement of administrative exemption, i. e., a salary of not less than $200 a month. The plaintiff also cites the case of George Lawley & Son Corporation v. South, supra. That case had to do with the sufficiency of the evidence to support a jury verdict, which in effect found that the plaintiff was merely a combination bookkeeper and messenger who “paraded in the plumage of an administrative official.” [140 F.2d 445] The plaintiff cites the case of Patton v. Williams, D.C.Okla. 1943, 61 F.Supp. 884. In that case the salary of the employee in question a bookkeeper in a stockyards office, was $150 a month which is again a case where the employee did not meet the salary requirement. The plaintiff cites the case of Wagner v. American Service Company, D.C.S.D. Iowa, 1944, 58 F.Supp. 32. That case involved the question of the status of a chief engineer as an executive, and did not involve the question of the administrative exemption. In addition Judge Dewey found that a large percentage of his work around the plant was manual labor. The plaintiff cites the case of Timberlake v. Day & Zimmerman, D.C.S.D. Iowa, 1943, 49 F.Supp. 28. That case had to do with the lieutenant or captain of some company guards. Judge Dewey held that as such guard officer the plaintiff was not a bona fide executive or administrative officer of the company. The situation in that case is not sufficiently analogous to those in the instant cases to be of much assistance. The plaintiff also cites Moss v. Postal Telegraph-Cable Co., D.C. Ga., 1941, 42 F.Supp. 807. In that case the maximum pay was $30 a week. The plaintiff cites the case of Lorber v. Rosow, D.C. Conn., 1944, 58 F.Supp. 341. The Court in its findings of fact which appear in Labor Cases citation, states:

“23. The plaintiff’s duties were to check the filling of customers’ orders in the drug department. Salesmen brought in the orders. The plaintiff placed them in a pile on a stand. Workmen in the drug department took the orders from the stand, assembled the items, and placed them in bins, one order in each bin used. The plaintiff checked the items with the order, handling each item in checking into an adjoining bin. In cases of error, excess items were removed from the bins by the plaintiff and placed on a shelf above the bins. If an item was missing, the plaintiff called that to the attention of the workman who had filled the order, and the workman supplied the item omitted.
“24. The duties of the plaintiff in connection with the checking of customers’ orders, as described in Paragraph 23, took about 80% of the plaintiff’s working time each day.”

In the opinion on page 344 of the Federal Supplement, in denying the administrative exemption the Court stated that the employee failed to qualify as an administrative employee “because of the manual nature of the greater part of his work.” However, it would seem that the nature of the employee’s work and the extent to which the employee exercised independent judgment and discretion in that case is not analogous to the situation in the instant cases.

The defendants cite the case of Distelhorst v. Day & Zimmerman, Inc., D.C.S.D. Iowa, 1944, 58 F.Supp. 334. In that case a claimant, one Robert J. Plazard, who was an assistant to the chief safety engineer, was held not to be included in the Act. However, that claimant’s exemption was clearly based upon sub-paragraph (1) of Paragraph B, relating to those who assist those engaged in an executive and administrative capacity. The defendants in the instant cases claim exemption for the employees in question under sub-paragraph (2) of Paragraph B, and not under sub-paragraph (1). The defendants rely upon the case of Walling v. General Industries Co., D.C.Ohio, 1945, 60 F.Supp. 549, 550, in which an assistant paymaster was held to have met the requirements of the administrative exemption. However, that again is a case where the exemption was under sub-paragraph (1) of Paragraph B, and not under sub-paragraph (2). In that case it was stated in regard to the employee, “most of his working time was spent in operating and adjusting tabulating machines.”

The defendants cite the case of Baird v. Associated Piping and Engineering Co., D.C. Cal., 1945, 61 F.Supp. 970. By that case an employee who was in charge of a division of his employer’s business and who received from $300 to $350 a month, was held to be exempt as an “administrative” employee. The court in holding that the employee was such an employee referred to, among other things, that the employee “attended morning meetings with the executives, and made recommendations with respect to his department or division.” The defendants cite the case of Horist v. Weco Products Company, D.C.Ill., 1944, 8 Labor Cases #62,182. In that case it was held that an employee hired for executive and supervisory work, was exempt under Section 13(a) (1) of the Act, even though in connection with his work he incidentally performed work of a laborious character.

The two employees in question both testified they were desirous of being classed as having an “administrative” status. While this is without legal significance, yet the reasons given by them and the testimony of the different livestock commission men, indicates an interesting crystallization of thinking on the part of some as to the “administrative” exemption. It is apparent that it is the view of some that to meet the rather high requirements of the “administrative” exemption, is a mark of distinction and a symbol of success. Among the reasons given for the desirability of the “administrative” exemption was that it brought the employees in closer contact with the members of the firm; that it gave them better standing and prestige with the firm’s customers; that it made them feel they were successfully advancing. It would seem that the employees regard the'attainment of “administrative” exemption as marking a graduation from one status to another; as marking a change from one “who merely works around the place,” to one who has something to say about “running the place”; as a change from working by and with the clock, to flexibility of hours governed by the ebb and flow of- business. It was evident from the testimony of the various livestock commission men who testified that they are paying what might be called a “premium” in the way of salaries to their office-managers in order to give them “administrative” status. This willingness seems to be occasioned by the desirability for flexibility in hours for such 'managers in a business subject to great variation in volume; and, because of the prestige and standing given such managers with shippers and others with whom they have business contacts; and, because of the morale effect upon such managers. It would seem .to be a reasonable inference that in these types of cases the desire of the employers for “administrative” status for their office managers tends to be a protection to employees having such status against reduction of salary below $200 a month and operates as a protection to them against being placed on an hourly basis at a rate which even with overtime would give them less pay for the same or longer hours.

It is the holding of the Court that both of the employees in question in the instant cases are exempt from the minimum wage and overtime provisions of the Fair Labor Standards Act as bona fide “administrative” employees as defined by the Administrator. The defendant, Sioux City Livestock Commission Company, did prior to January 1, 1941, violate the provisions of the Act in not paying Mr. Johnsen the minimum salary of $200 a month. It is not shown that the defendant, Gehan Livestock Commission Company, has at any time violated the provisions of the Act in regard to Mr. Anderson. However, injunctions do not issue for the purpose of punishing past violations, but to restrain future violations. The plaintiff’s ground for the injunctions is based upon the theory that the two employees in question do not have “administrative” status. The Administrator does not claim that any other violation is involved or threatened. It is the holding of the Court that the plaintiff’s applications for injunctions in each case be denied, and that the cases be dismissed on their merits.