author: VAUGHT, District Judge.

text:
    UNITED STATES v. BOARD OF COM’RS OF COMANCHE COUNTY, OKL.
    No. 5047.
    District Court, W. D. Oklahoma.
    Feb. 10, 1934.
    Wm. Earl Wiles, Asst. U. S. Atty., of Oklahoma City, Okl.
    Dwight Malcolm, Co. Atty., of Lawton, Okl., for defendant.
   VAUGHT, District Judge.

This is an action by the plaintiff on behalf of its Indian ward, Neda Birdsong, née Parker, against Comanche county, Okl., to recover $986.23 taxes paid on account of taxing her allotment during the period of 1918 to 1925, inclusive, together with interest on said taxes so paid.

The following facts are stipulated:

That Neda Birdsong is the daughter of Quanah Parker, and is an adult member of the Comanche Tribe of Indians in Oklahoma, allottee No. 2249. That, under the Act of Congress approved June 6, 1900 (31 Stat. 672), the said Neda Birdsong was allotted the northeast quarter of section three, township 2 north, range 14 west of the Indian Meridian, in Oklahoma. On the 25th day of August, 1901, the United States of America issued to said allottee, Ne-dale or Laura Parker, now known as Neda Birdsong, a trust patent for said lands containing the restriction clause, said restriction running for twenty-five years. The trust period contained in said trust patent was extended by Executive Order to August 25, 1936. That on or about the 24th day of August, 1917, during said trust period, without any application on behalf of or consent by said allottee, the Secretary of the Interior issued and delivered to said allottee a fee-simple patent to said lands, which was recorded in Book 147, p. 443, of the land records of Comanehe county. The county assessor of said county, for the years 1918 to 1925, inclusive, assessed said lands for taxation purposes, and there was levied and collected on said lands during said term of years $986.23. That on June 2,1927, said fee-simple patent was canceled and since that date said lands have been removed from the tax rolls of said county. In addition to the stipulation, evidence discloses that the allot-tee protested vigorously the issuance of the fee-simple patent and that the patent was issued over her protest and without hex application and delivery was made to her over her protest, and, at the time of the delivery, that the allottee was advised that, if this fee-simple patent were not placed of record, the allottee would be in grave danger of losing her allotment. These facts were testified to by the allottee as well as by the Superintendent of the Kiowa Indian Agency, who handled the matter.

The Superintendent testified: “When these patents came out, * * * I went to her home and offered her the patent, and she declined to accept it; protested very strenuously and then I went down to the telegraph office at the railroad station at Cache and sent to the Commissioner of Indian Affairs at that time a long telegram, in which I transmitted Mrs. Birdsong’s refusal to accept the patent, and likewise my own protest over the action that had been taken by the Department, and analyzed the reason for my protest. In other words, I objected to the issuance of this patent just as much as Mrs. Birdsong did, * * * but I received a telegram from Washington directing me to deliver the patent.”

After receipt of the telegram, the delivery is described by the Superintendent as follows: “I went to Mrs. Birdsong’s home and told her the Department had directed me to dehver the patent and here it was, and I then forced the patent on her, that'was all. I had been directed so to do, and I forced the patent on her. * * * In accordance with our practice, I notified the County Assessor that the patent had been issued, and it has always been my impression that the land went on the tax rolls based on my letter to the County Assessor, rather than upon any recording of the patent. I have never known whether the patent was recorded.”

The allottee testified as follows:

“Q. Tell the court under what circumstances it was left with you [referring to the patent]. A. He just left it on the table; that is, just left it there at my place and I told him I didn’t want it, and they just left it and drove off. * * *

“Q. What did you do about putting it on record? A. Well, they told me I had to put it on record, so I went to the courthouse and told them I was putting it on record, but I was protesting it all the way through.

“Q. What did Mr. Stinehcomb (the Superintendent) tell you about putting it of record? A. He told me I had to put it on record.”

With reference to the payment of the taxes the allottee testified:

“Q. Did you make any written or formal protest with the County Treasurer at the time you paid the taxes? A. No, but I never failed to tell every time I paid my taxes that I was paying under protest.

“Q. Yerbal protest? A. In writing; a lot of my receipts were marked ‘Under protest’, and when I didn’t write it I told her.

“Q. How were these receipts designated as being protested; was it in the form of cheeks? A. No, most of them were written on the cheeks, on the bottom of the eheeks, and some of them were written on the tax receipts, and then I told her besides.

“Q. Paid under protest? A. Yes.”

There is little or no contention in this case that this patent was not issued by the government over the protest, without the consent, and without any application on the part of the allottee.

It is clear that this allottee was allotted her lands under the provision of the General Allotment Act of February 8, 1887 (24 Stat. 388), and under that act she had a right to maintain her lands as restricted and free from all taxation. This right was a vested property right to her, and she could not be divested of it even by Congress without her consent. See Morrow v. United States (C. C. A.) 243 F. 854; United States v. Benewah County (C. C. A.) 290 F. 628; Iyall v. Yakima County, 130 Wash. 537, 228 P. 513; Choate v. Trapp, 224 U. S. 665, 32 S. Ct. 565, 56 L. Ed. 941; English v. Richardson, 224 U. S. 680, 32 S. Ct. 571, 56 L. Ed. 949; Carpenter v. Shaw, 280 U. S. 363, 50 S. Ct. 121, 74 L. Ed. 478.

The refusal to accept a patent by the Indian renders the patent void, and his lands are not subject to taxation. See citations above.

The government recognized its mistake in issuing this patent by later canceling the patent, as above set out, and in the court's judgment the reason why the government canceled the patent was that it recognized that it was a void patent.

The question most strongly urged by the defendant is that the statute of limitations interferes with granting the relief prayed for. The statute of limitations, however, does not apply where the United States is a party. United States v. Minnesota, 270 U. S. 181, 46 S. Ct. 298, 70 L. Ed. 539.

This action was instituted by the government in its governmental capacity on behalf of its ward, and the limitations do not operate against the United States when the action is brought in public interest. United States v. Rickert, 188 U. S. 436, 23 S. Ct. 478, 47 L. Ed. 532; United States v. Kagama, 118 U. S. 375, 6 S. Ct. 1109, 30 L. Ed. 228; United States v. Nice, 241 U. S. 597, 36 S. Ct. 696, 60 L. Ed. 1192. Neither can laches be pleaded against the United States. United States v. Dewey County, S. D. (D. C.) 14 F.(2d) 784; United States v. Insley, 130 U. S. 263, 9 S. Ct. 485, 32 L. Ed. 968.

The court is of the opinion, therefore, that these lands were not taxable because the patent was void and not binding as a valid patent against the allottee.

On the question of interest, the court appreciates the position of the defendant. Where taxes are paid under protest, the collecting authority can only hold them in trust, and since Comanche county would be regarded in this ease as a trustee, this court knows of no provision for the payment of interest except by taking the interest from some other fund whose application had been provided by statute.

Judgment will be rendered in favor o£ the plaintiff and against the defendant in the sum of $986.23 and for the cost of this action. A proper form of judgment may be submitted.


source: Caselaw Access Project

license: Public Domain

text:
    HAYNES v. PIERCE et al.
    No. 4481.
    District Court, W. D. Oklahoma.
    Feb. 28, 1934.
    Maris & Maris, of Ponca City, Okl., and Howard W. Patton, of Woodward, Okl., for plaintiff.
    Cress, Tebbe & Cress, of Perry, Okl., for defendants.
   VAUGHT, District Judge.

The plaintiff brings this action, as receiver of the Billings National Bank, against the defendants, as members of the board of directors of said bank, charging said directors with negligence in failing to see that the cashier was properly bonded, and also in permitting the bank to acquire $30,000 of Covington Pipe Line bonds and carrying said bonds in the assets of said bank for a period of two and a half years.

Joseph W. Baek, defendant, died in February, 1933, and the cause is revived against Anna Back as executrix of his estate.

The evidence discloses the following state of facts:

Defendant Pierce is a farmer living near Billings and is living upon the same farm that he acquired in the opening of the “Strip” in 1893.

In 1904 a state bank was organized in the small town of Billings which is situated in a strictly agricultural community. This bank, after continuing as a state bank for many years, finally became the Billings National Bank, defendant Pierce continuing as a director in said banks all the while and in 1924 was president of the bank, but not feeling personally capable of operating the bank, he went to A. E. Stephenson of Enid, president of the Central National Bank, and asked for his recommendation of a good man for cashier. Defendant Chatbum was recommended by Stephenson as a competent, able, reliable, and trustworthy man for that position. At that time Chatbum was connected with a bank in Covington, and was associated with defendant Fitzgerald. A contract was entered into between Pierce, on the part of the bank, and Chatham, whereby Chat-bum became cashier of the bank, the owner of 5 shares of stock, and a director.

Defendant Adrianee is an ex-soldier, was at the time of the trial 35 years of age, had been a bookkeeper in the bank and assistant cashier, and was acting cashier at the time Chatbum came into the bank. On account of his health, however, Adrianee found it necessary to retire from the bank for a time, but later came baek as assistant cashier.

Defendant Back was a farmer and business man in the community and had been connected with the bank for some years.

Defendant Frazier had been connected with the bank as bookkeeper and cashier, but his active connection with the bank was many years ago. At the time of the trial he was a man 73 years of age.

In October, 1924, after Chatbum came into the bank on July 1, Pierce sold to defendant Fitzgerald a controlling interest in the bank; Fitzgerald becoming a director. Fitzgerald also was president of the American State Bank at Covington, some thirty miles distant.

' The evidence discloses that the management of the bank was almost entirely handled by Chatbum as cashier and Fitzgerald as a director and principal stockholder; he having in October, 1924, purchased 130 shares out of a total of 250 shares of the capital stock of the bank.

" The evidence further shows that directors’ meetings were held regularly every month, sometimes not exactly on the'day of the month provided in their by-laws, but the meetings were held every month and the semiannual meetings on the 1st of July and the 1st of January were held approximately on those dates but with regularity. In these various directors’ meetings, particularly in the semiannual meetings, the assets of the bank were carefully gone over, the cash counted, and the usual functions of a board of directors were performed. In the monthly meetings a cheek of the assets of the bank was not always had, but the notes, particularly the short time notes, were cheeked and discussed and the ordinary duties of a board of directors were performed.

That on the 19th of October, 1926, an election was held in the town of Covington, Garfield county, Oklahoma, at which was voted $35,000 of Gas Pipe Line bonds. The bonds were to run 25 years, provided for a tax levy to meet payments for the sinking fund and interest, and the usual provisions were made that are ordinarily made for the issuance of municipal bonds. The bonds were duly executed by the proper town officials, submitted to the county attorney and county clerk of Garfield county for their approval and certificate, and were later submitted to, examined, and approved by the Attorney General of the state. Defendant Fitzgerald was the city treasurer of Covington. No contest or suit of any character questioning the validity of the said bonds was begun until October 26,1927, at which time a suit was instituted by a taxpayer of the town of Covington in the district court of Garfield county, contesting the validity of said bonds, and alleging particularly that the election was not held in strict accordance with the statute, in that the qualified voters of the town of Covington living in Otter No. 1 were permitted to vote at the polling place in said Otter No. 1, and that any qualified voter living in Otter ISTo. 3 was permitted to vote at the polling place in said Otter No. 3. The voting place of each precinct in the town of Covington was regularly designated by the election officials. One of the said voting places was in Ward 1, the other in Ward 2; there was no voting place in Ward 3; and the voters in said town, offering to vote, were permitted to and did vote in said election, not according to their residence in wards, but according to their residence in precincts Otter No. 1 and Otter No. 3. No one was permitted to vote who was not a qualified voter of said town of Covington.

The said suit filed in Garfield county challenging the validity of said bonds was decided on the 26th of November, 1927, the judgment of the court being that said bonds were illegal, and the town was enjoined from negotiating said bonds or any of them. The bonds, however, had already been executed by the president of the town board and the town clerk, the proper county and state authorities, and were in the hands of Fitzgerald. In August, 1927, prior to filing the action in district court, Fitzgerald brought $25,000 of said bonds to the Billings National Bank and advised Chatbum, the cashier, that these bonds would be a good buy for the Billings National Bank. Chatburn examined the bonds, saw that they were properly executed by the town officials and had been regularly approved by the county attorney and county clerk and by the Attorney General of the state, and after checking them with Adrianee, agreed to buy them at par. No discussion was had by Chatbum with any other member of the board of directors of said bank except Fitzgerald and Adrianee. Later Chatbum and Fitzgerald explained to the board of directors that these bonds were good, that they had been regularly issued, and the certificate of the Attorney General of the state was attached thereto. At the time of the sale of said bonds, however, Fitzgerald reserved the right to repurchase said bonds at par, and requested Chatbum to keep the bonds in the bank at Billings because he might want some of them at any time. On January 10, 1928, he did purchase $10,000, and on March 26 he sold back to the Billings National Bank $15,-000 of said bonds. In August, 1928, Chat-bum saw an article in an Enid paper in which it was stated that the bonds had been held void by the court. He talked with Fitzgerald about it, and Fitzgerald told Chatbum not to tell the other directors, and the other directors knew nothing about the questionable character of said bonds until the day the bank closed. On October 13, 1930, Chatbum told Adrianee that the Covington bonds were invalid, having been held so by the court. Adrianee got in touch at once with the members of the board of directors, who immediately met, and the board decided to close the bank immediately until this matter could be straightened out. The bank was closed, and it is now the contention of the plaintiff, the receiver of said bank, that this transaction was the result of the negligence, carelessness, and failure to perform the proper duties of the individual members of the board of directors.

The defendants, with the exception of Fitzgerald and Chatbum, have answered and in their answers admit that they were members of the board of directors, but contend that as members of such board they performed the duties ordinarily performed by members of a board of directors of a national bank and in no respect did they violate the laws of the United States in failing to perform the duties exacted of them by the national banking laws.

The evidence further shows that Fitzgerald, up to the time the Billings bank closed, was regarded as a safe, successful banker and business man, and that he had the confidence of the people of the town of Covington, where he resided, and where he was president of the American State Bank, as well as city treasurer. No rumors of any suspicions or of a discrediting character, concerning Fitzgerald, had ever reached the members of the board of directors of the Billings bank.

Chatbum came to Billings with splendid recommendations, bearing the personal indorsement of Stephenson, the president of the Central National Bank at Enid, one of the outstanding bankers of the state. After coming to Billings, Chatbum at once entered into the civic life of the town, was a member of the school board, active in church work, and in civic club work. In fact, no act of Chatbum, prior to the closing of the Billings Bank, has been disclosed by the record which would cause an ordinarily prudent person to suspect any wrong doing on his part.

The bank, was doing a successful business. The record discloses no evidence of bad loans, worthless paper, or any other questionable asset approved by the directors. The sole charge against the defendant directors, therefore, upon which the plaintiff urges their personal liability, is the purchase and retention of the Covington bonds, and the fact that the cashier was under only a $5,000 bond.

The statutory duty exacted of directors of a national bank is set forth in section 93, 12 USCA (Rev. St. § 5239): “If the directors of any national banking association shall knowingly violate, or knowingly permit any of the officers, agents, or servants of the association to violate any of the provisl&ns of this chapter, all the rights, privileges, and franchises of the association shall be thereby forfeited. . Such violation shall, however, be determined and adjudged by a proper district, or Territorial court of the United States, in a suit brought for that purpose by the Comptroller of the Currency, in his own name, before the association shall be declared dissolved. And in cases of such violation, every director who participated in or assented to the same shall be held liable in his personal and individual capacity for all damages which the association, its shareholders, or any other person, shall have sustained in consequence of such violation.”

This statute has been construed by the appellate courts, but one of the leading cases is Briggs v. Spaulding, 141 U. S. 132, 11 S. Ct. 924, 35 L. Ed. 662. This is a lengthy opinion and is. what is known as a five-four opinion, the dissenting opinion being an extended one also. I shall not quote extensively from this opinion, because counsel for both plaintiff and defendants have cited this ease and quoted copiously therefrom, and I assume they are familiar therewith. However, a few quotations from this rather famous case would be appropriate. As to the duties of directors as to the management in general, the court held: “If nothing has come to the knowledge to awaken suspicion that something is going wrong, ordinary attention to the affairs of the institution is sufficient. If, upon the other hand, directors know, or by the exercise of ordinary care should have known, any facts which would awaken suspicion and put a prudent man on his guard, then a degree of care commensurate with the evil to be avoided is required, and a want of that care makes them responsible.” [USCA Title 12, § 93.] As to the degree of care required, the court held: “The degree of care to which the bank directors are bound is that which ordinary, prudent, and diligent men would exercise under similar circumstances, and in determining whether such care has been exercised the restrictions of the statute and the usages of the business should be taken into account.” [USCA, Title 12, § 93.] As to the delegation of duties, the court held: “The directors are not called upon to devote themselves to the details of the business management, and may properly commit these to their duly authorized officers, but they are not absolved from the duty of reasonable supervision.” [USCA Title 12, § 93.]

As to what is meant by “knowingly violate or knowingly permit,” the court, in Tates v. Jones National Bank, 206 U. S. 158, 27 S. Ct. 638, 51 L. Ed. 1002, said: “Directors of a national bank who merely negligently participated in or assented to the false representations as to the bank’s financial condition contained in the official report to .the Comptroller of the Currency, made and published conformably to U. S. Rev. St. § 5211 [12 USCA § 161], cannot be held civilly liable to any one deceived to his injury by such report, since the exclusive test of such liability is furnished by U. S. Rev. St. § 5239 [12 USCA § 93], which makes a knowing violation of the provisions of the title relating to national banks a prerequisite to such liability.”

In Thomas v. Taylor, 224 U. S. 73, 32 S. Ct. 403, 56 L. Ed. 673, the court held:

“ ‘The test of liability was not negligence, but the fact that the act was violated knowingly. * * * It-is clear, therefore, that the words of the statute “knowingly violate, or knowingly permit to be violated,” still stand as the test of civil liability. These words are not obscure or of doubtful meaning, and must be given effect in applying the statute.’ * * *

“Mere negligence, without proof of an intentional violation, is insufficient to create such liability.” [USCA Title 12, § 93.] Jones National Bank v. Tates, 240 U. S. 541, 36 S. Ct. 429, 60 L. Ed. 788.

In Briggs v. Spaulding, supra, the court, in the body of the opinion also said: “The evidence fairly establishes that this bank was in good credit up to the time of its failure. It had been in existence for 18 years; had been prosperous; had paid dividends regularly down to and into 1881, and its stock had for years stood far above par, — at 50 per cent, above, October 3, 1881, according to complainant. Neither the defendants, nor the bank’s customers, nor the community, appear to have entertained the least suspicion as to its solvency. The losses which it is claimed rendered it insolvent, and for the recovery of which losses this action was instituted, occurred by reason of the discounting by Lee of the paper of persons engaged with him in outside business and speculations, who-were not adequately responsible for their engagements. The vice in the situation lay, not in the reports nor in the books, upon their face, but in the unreliability of the bills receivable.”

In Wheeler v. Aiken County Loan & Savings Bank, 75 F. 781, 784, the Circuit Court for the District of South Carolina said: “Men of extraordinary prudence and financial foresight might have foreseen the end, hut directors of a small bank in a small town cannot be justly held to personal accountability for failing to select as its managers men of extraordinary gifts. Such men are rare anywhere, and it cannot be imputed as a fault to these directors that such services were not secured for the meager salaries paid to the officials of this corporation.”

In Bates v. Dresser, 251 U. S. 524, 40 S. Ct. 247, 249, 64 L. Ed. 388, the court said: “We are not prepared to reverse the finding of the master and the Circuit Court of Appeals that the directors should not be held answerable for taking the cashier’s statement of liabilities to be as correct as the statement of assets always was. If he had not been negligent without their knowledge it would have been. Their confidence seemed warranted by the semi-annual examinations by the Government examiner and they were encouraged in their belief that all was well by the president, whose responsibility, as executive officer; interest, as large stockholder and depositor; and knowledge, from long daily presence in the bank, were greater than theirs. They were not bound by virtue of the office gratuitously assumed by them to call in the pass books and compare them with the ledger, and until the event showed the possibility they hardly could have seen that their failure to look at the ledger opened a way to fraud.”

The common-law duty is set forth in 12 USCA § 73 (Rev. St. § 5147): “Each director, when appointed or elected, shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such association, and will not knowingly violate or willingly permit to be violated any of the provisions of this title, and that he is the owner in good faith, and in his own right, of the number of shares of stock required by this title, subscribed by him, or standing in his name on the books of the association, and that the same is not hypothecated, or in any way pledged, as security for any loan or debt. The oath shall be taken before a notary public, properly authorized and commissioned by the State in which he resides, or before any other officer having an official seal and authorized by the State to administer oaths, except that the oath shall not be taken before any such notary public or other officer who is an officer of the director’s bank. The oath subscribed by the director making it, and certified by the notary public or other officer before whom it is taken, shall be immediately transmitted to the Comptroller of the Currency and shall be filed and preserved in his office for a period of ten years.”

As stated above, the acts upon which the plaintiff alleges liability as to the defendants are the purchase and retention of the Covington bonds and permitting the cashier to remain under an inadequate bond.

The reports of the national bank examiner, which were introduced in the evidence, over a period of years immediately preceding the closing of the bank and prior thereto, set out the Covington bonds as assets of the bank. No complaint was made by the examiner of those bonds, neither was any exception taken by the examiner to the fact that the cashier was under a $5,000 surety bond protecting the bank against theft or embezzlement, and not for the faithful performance of his duties.

This court has never had very extensive banking experience, but his observation has been rather extended, and rarely do you find a bank in a small town, or even a large city, where the directors generally attend the meetings of the board of directors more punctually and carefully than in the ease at bar. These directors testified and told how they attended the meetings, with what regularity, and what they did at these meetings, and all of the evidence in this case is to the effect .that at least twice a year all of the assets of the bank were carefully cheeked, and in the contention of the plaintiff he does not rely upon the fact that these meetings were not regularly- held and the assets regularly checked, but he contends that the grievous error was in purchasing these bonds. These bonds were voted by the town of Covington, were duly executed by the town officials as provided by the statute, were duly certified by the county attorney and county clerk, were further examined, approved, and certified by the Attorney General of the state, and at the time of the purchase by the bank at Billings these bonds on their face were valid obligations against the town of Covington. There was nothing on their face to suggest that they were invalid, and who wquld question the validity of those bonds from such an examination of them as a director in a bank would be expected to make?

In Board of Education v. James, 49 F.(2d) 91, 99, in a case which went up from this court, the Tenth Circuit Court of Appeals said: “It is well settled that, where a municipal corporation has lawful authority to issue bonds on condition that certain facts exist or certain acts be done, and the statute entrusts the power and imposes the duty upon an official or officials to ascertain, determine and certify the existence of such facts at the time of issuing the bonds, the certificate of such official or officials will estop the municipality as against a bona fide holder of such bonds from proving its falsity to defeat them (Independent School Dist. v. New [C. C. A. 8] 111 F. 1, 55 L. R. A. 364), where there is nothing on the face of the bonds to show that the recital is untrue. Gunnison County v. Rollins, 173 U. S. 255, 270, 271, 19 S. Ct. 390, 43 L. Ed. 689; Chaffee County Com’rs v. Potter, 142 U. S. 355, 363, 12 S. Ct. 216, 35 L. Ed. 1040.”

Assuming, therefore, that there might have been conditions actually existing at the time of this election which would invalidate the bonds, what was there that the board of directors could do toward the examination of these bonds which could satisfy them as to their legality? Counsel has indicáted that they might have visited Covington. That would have been a very valuable acquisition of knowledge — see the town of Covington and find out that an election had been held. At the particular time when the bonds were purchased, nothing had been done, and nothing was done for some time thereafter, toward testing the validity of these bonds in court. But this court does not feel that it was the duty and the function of the members of the board of directors of ordinary banking intelligence to presume to pass upon the validity of a bond issue. They had employed a cashier in good faith, who had come highly recommended to them by one of the leading bankers of the state, and up until the time that the bank closed not one word of criticism had ever come to the directors which would cause the slightest suspicion as to the proper conduct of Chatbum and Eitzgerald. Eitzgerald had purchased the controlling interest in the Billings bank; he was the president of the American State Bank at Covington; was the city treasurer; and those directors had a right to assume that the cashier and, in effect, the managing director had exercised reasonable business judgment in the purchase of these bonds. These bonds bore 6 per cent, interest; they were good bonds at the time they were purchased so far as these directors knew.

It is true that Eitzgerald knew that he had no right to sell these bonds; that he was holding them as city treasurer of Covington; ' that he had no right to put them in the assets of the Covington bank, and that when he sold the bonds to the Billings bank, that he was perpetrating fraud and deception on that institution. Chatbum, the cashier of the Billings bank, more than two years prior to the close of the bank, knew that there was a serious question as to the validity of these bonds, that they had been held void by the district court of Garfield county, and that the case was on appeal to the Supreme Court, and that that information should have been disclosed by him to the board of directors; but he, at the suggestion and request of Eitzgerald, said nothing to the other members of the board of directors. Clearly the conduct of Eitzgerald and Chatbum was reprehensible and also constituted such a violation of the national banking laws as to make them hable under the complaint filed herein.

As to the defendants Pierce, Frazier, Back, and Adrianee, there is no evidence in this ease that their conduct was anything but in good faith or that they knowingly or willfully violated any regulation governing national banks, or in fact that their conduct was anything other than that which would have been expected of ordinarily careful and prudent persons in their places.

Judgment will be rendered as prayed against defendants Fitzgerald and Chatbum. Judgment will be rendered in favor of defendants Pierce, Frazier, Back, and Adriance. Proper form of judgment may be prepared and submitted consistent with this opinion. An exception is allowed the plaintiff and to the defendants Fitzgerald and Chat-bum.


author: L. HAND, Circuit Judge.

text:
    ALBEE GODFREY WHALE CREEK CO., Inc., v. PERKINS, State Industrial Commissioner, et al.
    District Court, S. D. New York.
    March 14, 1933.
    Paul Koch, of New York City, for complainant.
    John J. Bennett, Jr.-, of New York City, for defendants.
    James G. Mitchell, Edward Gluck, and J. Prank Phillips, all of New York City, amici curia.
    Before L. HAND, Circuit Judge, and BONDY and PATTERSON, District Judges.
   L. HAND, Circuit Judge.

The cause comes up upon two motions; one by the plaintiff, for an injunction, pendente lite, in a suit in equity to enjoin the Industrial Board of New York from proceeding to hear certain claims for workmen’s compensation; the other by the defendants, to dismiss the bill for insufficiency in law. The plaintiff was a sub-contractor, doing work upon a prison for the City of New York on Hikers Island in the East River; the contractor in chief was the P. J. Carlin. Construction Company. As the workmen did not live on the island, it was necessary to carry them back and forth from Manhattan across navigable waters. The Carlin Company for this purpose made a contract with one Forsyth and others, the owners of a steamer, by which they agreed to ferry the men, who were each to pay them ten cents a trip. The Carlin Company was to make up the daily difference between the amount received and sixty dollars, and to take any surplus to make up deficits which it had had to pay earlier. While carrying a shipload of workmen, among whom were many of the plaintiff’s employees, the steamer blew up in the stream and substantially everyone on board was killed or wounded. Some of the injured, and the administrators of the dead, have brought actions against the plaintiff, but with these this suit is not concerned; it is filed to enjoin further proceedings begun by the Industrial Board, which has sent out notices to the plaintiff, to the injured and to representatives of the dead employees, of a hearing to determine its jurisdiction under the New York Compensation Law. The plaintiff was insured in the State Insurance Fund, and stood under no liability to pay any awards, but it was a member of a group of employees out of whose premiums, under section 92 of the act (Consol. Laws N. Y. c. 67), a fund has been accumulated as security against catastrophes of the kind here in question. This reserve fund amounts to $38,000, in which .the plaintiff has an interest of undisclosed amount; if the proceedings result in awards, it will be exhausted by their payment.

The first question is whether we have jurisdiction over the cause at all. Section 380 of title 28-, U. S. Code (28 USCA § 380), requires us not only to act when the constitutionality of a state statute is in question, but also when an unconstitutional “order” is to be enforced by a board or commission of the state. The Board here has issued notices to the plaintiff and to all the claimants to attend a hearing on the point of its jurisdiction. If this were on application of either party it would be an “order,” for the act so calls it (section 2,0 of the N. Y. Workmen’s Compensation Law [Consol. Laws N. Y. e. 67]). Apparently the Board issued the notice sua sponte, hut this in our judgment makes no difference; it was a direction to the plaintiff to appear and present its evidence, and would have been followed by an award. Certainly it is similar to original process in an action or a suit. It appears to us that the situation is within the section. Oklahoma Natural Gas Co. v. Russell, 261 U. S. 290, 43 S. Ct. 353, 67 L. Ed. 659.

Proceedings by the Board ending in an award are judicial under the law of that state. Its findings are conclusive, section 20, and though reviewable in point of law, section 23, they are so> in nothing else; they are the last decision upon issues arising inter partes and ending in an award of money. The Court of Appeals has declared them res judicata in other suits between the parties. Royal Indemnity Co. v. Heller, 256 N. Y. 322, 176 N. E. 410. This being true, the plaintiff may intervene at once without waiting till the claimants’ rights have been finally decided by the state courts. Bacon v. Rutland R. R. Co., 232 U. S. 134, 34 S. Ct. 283, 58 L. Ed. 538; Prendergast v. N. Y. Telephone Co., 262 U. S. 43, 43 S. Ct. 466, 67 L. Ed. 853; R. R. Commission v. Duluth St. Ry. Co., 273 U. S. 625, 47 S. Ct. 489, 71 L. Ed. 807. The case is not therefore within Prentis v. Atlantic Coast Line, 211 U. S. 210, 29 S. Ct. 67, 53 L. Ed. 150; or Porter v. Investors’ Syndicate, 286 U. S. 461, 52 S. Ct. 617, 76 L. Ed. 1226, where the party aggrieved ordinarily must wait till administrative remedies are concluded before seeking a federal tribunal. Indeed, were this not true, he would have no recourse at any time to a federal tribunal except by appeal to the Supreme Court from the final decision of the state court.

The merits of the bill, however, we decline to consider on the motion to dismiss under Equity Rule 29 (28 USCA § 723). This is a substitute for a demurrer, and while it is common to test the bill by it, when the questions are clearly presented upon which the equity of the cause depends, that is by no means as of course. The issues may.be of .such grave consequence that it is better not to decide them without full consideration of the facts. Kansas v. Colorado, 185 U. S. 125, 22 S. Ct. 552, 46 L. Ed. 838; Wisconsin v. Illinois, 270 U. S. 634, 46 S. Ct. 354, 70 L. Ed. 772. In general the question rests in the discretion of the court, which will decline to pass upon the hill when it thinks it more convenient and just to reserve the question for trial. American Creosote Works v. Powell, 298 F. 417, 422 (C. C. A. 5); Dixon v. Hopkins, 56 F.(2d) 783 (C. C. A. 5); Rankin v. Miller (C. C.) 130 F. 229; Snyder v. DeForest Wireless Tel. Co. (C. C.) 154 F. 142, 144; Smith v. Bowker Torrey Co. (D. C.) 199 F. 985; Ralston Steel Car Co. v. National Dump Car Co. (D. C.) 232 F. 590; Oneida Community, Limited, v. Fouke Fur Co. (D. C.) 286 F. 757; White v. Federal Radio Com. (D. C.) 29 F.(2d) 113; Street, Federal Equity Practice, § 963. There are good reasons here why we should not decide the merits at this stage of the ease. As we shall show, there is no present reason to intervene by injunction, and there never may be. The equity of the bill depends on how the Board proceeds; if the plaintiff is not required to submit to undue prolixity of litigation, the questions can all be properly decided in the state courts, normally the proper tribunals. It is always a delicate function to assume jurisdiction over the accredited public authorities of a state, and to take from its courts the decision of matters primarily theirs. We should have' to declare ourselves on the merits of the controversy, merely upon those allegations which the plaintiff chose to make; and our declaration, if we denied the motion, would not be res judicata, since it would not be a final judgment; yet it might well be an embarrassment in the conduct of the cases by the Board, and upon the appeals; and indeed it might involve a conflict between, the two jurisdictions, the possibility of which we should avoid while we can. Moreover, if there turn out to be a valid waiver under section 113, our decision might be brutum fulmen anyway. Again, the state courts may hold that the men while on the boat were not in the course of their employment. Since there are therefore good reasons why at this time we should not decide What may later turn out to be moot questions, and every reason why we should not, we will deny the motion of the defendants without prejudice, and leave the validity of the bill to be decided, if at any time it becomes necessary to rule upon it.

As to the motion for an injunction pendente lite, there is no reason for it, unless there be some present and pressing danger to the plaintiff. Even though it may have recourse to a federal court whenever there is no legal remedy, it must still show that failure to enjoin the proceedings will expose it to a prejudice which equity recognizes as sufficient. This is established by many decisions of the Supreme Court, in some of which the proceedings to be enjoined were judicial, strictissimi juris. Cavanaugh v. Looney, 248 U. S. 453, 39 S. Ct. 142, 63 L. Ed. 354; Massachusetts State Grange v. Benton, 273 U. S. 525, 47 S. Ct. 189, 71 L. Ed. 387; Gilchrist v. Interborough Transit Co., 279 U. S. 159, 49 S. Ct. 282, 73 L. Ed. 653; Northport Power & Light Co. v. Hartley, 283 U. S. 568, 51 S. Ct. 581, 75 L. Ed. 1275; Matthews v. Rodgers, 284 U. S. 521, 52 S. Ct. 217, 76 L. Ed. 447; Stratton v. St. L. S. W. R. Co., 284 U. S. 530, 52 S. Ct. 222, 76 L. Ed. 465. The Workmen’s Compensation Law, (§ 23), gives an appeal to the employer from the Board to the Appellate Division, and thence to the Court of Appeals; those courts are equally charged with observing the United States Constitution as we. If the question can be presented to them unimpeded, and without harassing the plaintiff by the defence of a multiplicity of suits, we can see no equity to justify our interposition. The plaintiff answers that the Board has already instituted proceedings upon aE possible claims, and that it must defend in aE. Next, that the procedure before it is most informal, (section 118), and the eonstitutionaEty of its jurisdiction may be cloaked by its findings of fact, which being conclusive upon the state courts, (section 20), wEl prevent consideration of the point upon the appeals. As to each it is enough that the danger is as yet speculative, and that the time has not come to fend against it. Even though we enjoined the Board, nevertheless we should allow the claims to be filed, and anything else to be done that was necessary to protect the claimants against the statute of limitations. In other respects no- doubt we would stop the proceedings until we had decided the main issue ourselves. But if the Board itself selects one claim as a test and does not proceed with the others until the Gourt of Appeals has decided the question, the results wül be substantiaEy the same. Such a course will not involve the plaintiff in a multipEeity of suits. There is no reason at the moment to assume that the Board means to act otherwise. It has merely sent out notices to the plaintiff and to aE claimants of a hearing to consider its jurisdiction; if it appears, as it must, that the same facts determine that question in all the eases in which there can be an award, we see no reason to suppose that it wEl insist upon a separate trial in each upon that point. Certainly if the plaintiff agrees that they are alike, the Board is not likely to put it gratuitously to the labor of a separate record for each claim; or to press to a conclusion the Equidation of any award tiE its jurisdiction is settled.

The second ground is even more tenuous. While the. Board may indeed proceed informally, and is not bound by the rules of evidence, it is difficult to see how this freedom can mask the undisputed facts on which its jurisdiction turns. The critical facts as to jurisdiction are the place -where the injuries occurred, the existence of the relation of master and servant, the character of the services, and whether the injury arose out of or in the course of the employment, section 10. The first is indisputable; the plaintiff alleges the second in the bill; there is no reason to suspect that the facts on which the third and fourth depend will not be fairly stated. We should be obliged to impute to the Board a disposition to avoid any review of its determination, should we assume that it would shroud the issue by its findings. If the plaintiff comes to a federal court only because it supposes the chance of a favorable outcome better than in the state courts, that is an interest which we, least of all, may recognize. Later developments may change the situation; the Board may insist upon the litigation of the issue of jurisdiction in a number of claims, being unwilling to await the determination of the state courts; or it may press some to liquidation. Again, it is conceivable, though hardly, that in a test ease the issue may be so concealed by the findings of fact that the plaintiff can not raise the point on appeal. These are remote possibilities; we decline to foreshadow what, if anything, we ought to do, should they become actual. It is enough for the disposition of this motion that the plaintiff now cries out before it has been hurt.

Motion to dismiss the bill denied, without prejudice.

Motion for a temporary injunction denied; ex parte stay vacated.


author: MeCLINTIC, District Judge.

text:
    UNITED STATES v. FANNING et al.
    District Court, S. D. West Virginia.
    Feb. 22, 1934.
    George I. Neal, Dist. Atty., and Okey P. Keadle, Asst. Dist. Atty., both of Huntington, W. Va., and Charles M. Love, Asst. Dist. Atty., of Charleston, W. Va., for the United States.
    John R. Pendleton, of Princeton, W. Va., for Fanning.
    Alfred G. Fox, of Bluefield, W. Va., for Thornton.
   MeCLINTIC, District Judge.

At a term of this court, which was held at Bluefield beginning on the 20th day of June, 1933, an indictment was returned by the grand jury at such term against one, William Mullens, and also an indictment was returned by the grand jury at such term against one William R. Albert. Each was tried and convicted by a jury, and each was sentenced to a term in the federal prison, and on the 22d and 23d days of June, 1933, -respectively, the court, by virtue of process issued under the laws of the United States, committed William R. Albert and William Mullens to the Mercer County Jail, at Princeton, W. Va., in this district, to await transportation to the place at which their sentences were to be served.

At the request of the county authorities of the county of Mercer, the sheriff of Mercer county, the defendant J. C. Fanning was directed to keep William R.' Albert until after he had testified as a witness in a criminal ease pending in one, of the courts of such Mercer county. William Mullens, by counsel, requested that the sentence in his ease be suspended until he could make application for an appeal to the Circuit Court of Appeals for the Fourth Judicial Circuit. Accordingly, his sentence was suspended for a sufficient time to enable his counsel to prepare the proper bills of exception, and apply for an appeal.

Both Albert and Mullens, while thus in the charge of the defendant Fanning, as sheriff of Mercer county, and of Thornton, as jailer, appointed by Fanning, escaped from the Mercer County Jail about the hour of 12 o’clock m. on Thursday, the 3d day of August, 1933.

The record in this proceeding shows that the defendant Fanning was duly elected sheriff of Mercer county on the 8th day of November, 1932, and assumed the office and duties of sueh sheriff on the 1st day of January, 1933, and by virtue of the laws of the state of West Virginia, he, as sheriff, became, from the time he assumed office as such, chargeable with the duties of the office, and likewise it became his duty to assume the custody of the inmates and prisoners in the Mercer County Jail and be responsible for the safe-keeping of sueh prisoners, and to discharge or release such prisoners only upon the expiration date of their respective sentences, or upon the proper order from a court of competent jurisdiction, and in the case of prisoners placed in his custody by the United States marshal, awaiting transportation to a federal prison, to which they were sentenced, until the further order of such marshal or sueh District Court.

The defendant C. W. Thornton was duly and legally appointed jailer of the Mercer County Jail on the 1st day of January, 1933, and on that date assumed the duties thereof, and remained continually as day jailer, in sole charge of the jail and the prisoners therein, until and including the 3d day of August, 1933. He was required to be on duty from 7 o’clock a. m. until 7 o’clock p. m. of each and every day during that time. A Mr. - Long was night jailer, and was required to be on duty from 7 o’clock p. m. of each day until 7 o’clock a. m. of the next day.

The record further shows that on the 1st day of January, 1932, the United States entered into a contract with the then sheriff of Mercer county, wherein the parties thereto mutually agreed, among other things, as follows : “1st. That during the period of this agreement, the party of the first part agrees to receive federal prisoners, committed by process or order issued under authority of the United States, and to provide for their safekeeping, care and subsistence.”

This contract was in force during the year 1933, and it was under this contract that the prisoners, Mullens and Albert, were received at the Mercer County Jail.

■ Under this contract, there was paid by the United States to Sheriff Fanning, for the period from the 1st day of January, 1933, to the 1st day of August, 1933, for the keeping and subsistence of prisoners of the United States, the sum of $3,100.35.

Under the law of West Virginia (chapter 7, article 8, § 2 of the Official Code of 1931), the sheriff of each county becomes the keeper of the jail, but he may, with the assent of the county court, appoint one or more jailers. Sueh jailers may be deputies of the sheriff, and shall take an oath like other officers. Such jailers are removable at the pleasure of the sheriff.

This section further provides certain duties for the sheriff and jailer, and makes the failure on the part of the jailer to perform any of the duties therein required, with respect to any prisoner in his jail, a contempt of any court of record under whose commitment such prisoner is confined, and shall be punished as contempt of sueh court.

“It is the duty of sheriffs, as ex officio jailers of their counties, to keep literally in jail persons sentenced to confinement therein, except when at labor under some statute authorizing their employment at work as therein directed.” State v. Cyrus, 83 W. Va. 30, 97 S. E. 412.

Section 8 of the article and chapter mentioned above provides that the jail of any county may be used for the confinement of persons committed thereto under the laws of the United States, and the jailer thereof shall receive, keep, and discharge such persons pursuant to the commitment, as provided in the laws of the United States.

Under the law of the state of West Virginia, and the contract with the sheriff, the United States had the lawful right to the use of sueh jail in which to confine prisoners committed by the authority of the United States, and the defendants were charged with responsibility for the execution of the writs of the United States court, as keepers of such jail, and for such purposes they were officers of the United States District Court for the Southern District of West Virginia.

On the 29th day of December, 1933, the district attorney, in due form of law, filed an information, charging Fanning and Thornton with voluntarily sjiffering and negligently permitting Mullens and Albert to escape from the jail, in the manner and method set out in such information, and with obstructing the administration of justice, and willfully permitting the escape of such prisoners, and a citation was issued, directing Fanning and Thornton to show cause, on the 16th day óf January, 1934, why they and each of them should not be adjudged in contempt of this court.

On that day, each of them appeared, in person and by counsel, and filed their separate answers and returns to such information, so filed.

Later, on the 24th day of January, 1934, the United States, by its district attorney, and each of the defendants, by their respective counsel, appeared, and the court heard testimony relative to the matters and things set up in such information and in such answers.

It was proven that there was an average number of prisoners in this jail, for the period of seven months, from January 1, 1933, to August 1, 1933, of 165 for each day; that the number of prisoners seldom, if ever, ran less than 135, and on some special occasions exceeded the number of 200 at one time; that the defendant Thornton was a man sixty-five years of age, and had had no previous experience as a jailer or in work of like nature; that the only two persons employed by the sheriff, in connection with the keeping of the jail, were Thornton and Long; that no guards or assistant jailers were employed; that under these two jailers, there were employed a number of prisoners in the jail, under the title of “trusties,” who performed the duties of cook and cleaners, and in effect guards, for the conduct of the prison and the control of those incarcerated therein.

These “trusties” were appointed or named by the sheriff alone. Apparently no record was kept of their names or the times of such employment, and it was not shown in the evidence (although asked for) how many there were at any one time. However, it seems plain that the number must have been from 7 to 10, including all those classed as such in the whole jail. No salaries or wages -were paid to these trusties, but they were given many privileges, such as being allowed to go out of the prison, to visit their homes, to spend week-ends with their families, and not to be locked in their cells, as other prisoners were, and to be allowed the run of the jail.

Apparently, these privileges were considered by the sheriff and the trusties to be full payment for the work done by them in. the conduct of the jail. As stated, no money was paid to these trusties by the sheriff for any of their work.

There was paid to each jailer the sum of $126 per month, which, for seven months, would amount to the sum of $1,764.

There was paid to the sheriff, for the keeping and subsistence of state prisoners, the sum of 42 cents per day for each prisoner, and there was paid to the sheriff for the keeping and subsistence of federal prisoners the sum of 55 cents per day for each prisoner.

Thus, taking the average of 165 prisoners for each day, at 42 cents per day, the sum paid to the sheriff for their keeping would be $70 for each day. For 212 days (being the number of days from January 1 to July 31, 1933, inclusive), the total payment to the sheriff therefor would be the sum of $14,840.

As stated above, the payment by the United States to the sheriff for the 212 days was the sum of $3,100.35, which, at 55 cents per day, would amount to the number of 5,637 days. The additional payment of 13 cents for each of these days would amount to the sum of $732.55. For the sake of convenience leaving off the $2.55, the total paid to the sheriff would be $15,570 for the 7 months.

The evidence tended to show that the cost of the food for each prisoner per day was about the sum of 20 cents for each day, although the general belief is that, in many of the jails, the amount is less than that. However, at 20 cents a day for 165 prisoners, the cost would be $33 for the food for one day, and for 212 days the amount would be $7,000. Adding to this sum the amount paid to the jailers, to wit, $1,764, and deducting the same from the total received by the sheriff, there would be left a net profit for the sheriff, for the seven months, of $6,806. In my opinion, this is the minimum, and, in fact, the profits for that period were likely more than this sum.

Under the laws of West Virginia, the sheriff is paid a salary fixed by statute, and the salary of the sheriff of Mercer county is fixed at the sum of $3,800 per annum, and this salary is intended to be in full for his services as such officer. The regular deputies were paid salaries by the county.

In addition, it was shown by the evidence that the son of Sheriff Fanning, a boy now eighteen years old, kept, in a place apparently provided for such purpose in the jail, such articles as candies, eigarets and other forms of tobacco, chewing gum, potted. ham and crackers, and possibly other articles, for sale to the prisoners, which sales, according to the evidence of the young man. who was attending school, were made by these trusties, and the profits came to him. The amounts of such profits were not shown by the evidence.

The,reason I set this out in this opinion is: Was it not gross negligence on the part of the sheriff to turn over to one man like Thornton, sixty-five years old, and without any proper experience, the management and control of an average of 165 prisoners confined in this jail? Thornton testified that his duties required him to keep the bool® — that is to say, the books which showed the incoming and outgoing of all prisoners — to receive all prisoners at the entrance while he was on duty, to receive all food supplies brought into the jail, and generally to be in sole charge of the jail, in all of its departments, while on duty.

He further testified that it was impossible to do this without the aid and assistance of the numerous trusties, who were, necessarily, not sworn officers, in any way, and who were confined in the jail for some crime, by order of some court.

The sheriff and the jailer each admit that they knew that Mullens and Albert were men of very bad reputation, each being a resident of Mercer county, and that they were generally regarded as outlaws therein.

The jail is what is called a new and modem jail, having been in use for only a short time — probably not more than a year — when the sheriff took office. It is situated on top of the building called the Courthouse building. The entrance is in the basement, where there is a locked, steel barred door from the outside. The jailer’s office is in this basement, and he has the opportunity, if he takes the proper seat, where his books are kept, to observe the entrance to the jail, the entrance to the elevator, which goes up to the third story, and the entrance to the stairway, which likewise goes up to the third story. The offices of the clerks, prosecuting attorney, and sheriff are on the first floor of the building. The courtrooms and the jury rooms are on the second floor of the building, with the jail on the top, or third, story of the building. The entrance to the jail proper is either by the stairway, from this basement, or by the elevator from this basement. There is a steel barred, locked door from the basement up the stairway. There is another at the top of the stairway, at the entrance to the jail proper. There is a portion of the jail called the “federal section,” where federal prisoners were usually segregated to themselves. There is another portion where colored men are segregated to themselves. There is another portion where the white state prisoners are segregated to themselves. There is another portion set off for the women. There is another portion set off for city prisoners.

Although I personally inspected the jail and the places where the federal prisoners were kept, and the cells from which Mullens and Albert escaped, I do not feel that I can give, on paper, an adequate description thereof, beyond saying that apparently it was the “last word” in jail construction, and that with proper management and supervision by attentive officers, there was no possibility of any prisoner escaping therefrom.

It is shown in the evidence that some days before the escape of the prisoners Albert and Mullens, information was given to the chief deputy United States marshal in this district at Charleston, W. Va., that these prisoners had saws and were sawing bars in the jail, with the expectation of escaping, and this information was promptly communicated to the jailer, the defendant Thornton. The defendant admits receiving this information, and upon examination it was found that in the portion of the jail where these prisoners were then confined, saws had been used for the purpose of making an opening through the iron bars, and a Ford jack, presumably brought in for the purpose of breaking certain bars at the window, was found, and a strong rope, capable of sustaining the weight of two men, was likewise found. Theh it was these two men were transferred to a part of the jail called the “sweat” cells.

On my own examination, and from the evidence, it seemed that with any reasonable supervision, it would have been impossible for any prisoners to have escaped from this last place.

There were four cells, with eight prisoners therein. The two federal prisoners were transferred there just one week before they escaped. With them went three state prisoners, and three other state prisoners refused to go.

The question of visitors to Mullens and' Albert becomes very important in this case. The evidence of the defendants themselves on this point is that after Albert and Mullens, were brought into the jail, there were only two visiting days, Sunday and Thursday of each week. However, the evidence is conclusive, in my opinion, that certain visitors were allowed to come to see these two persons, practically speaking, any day they wanted to from the time they were incarcerated, after their conviction, until they escaped. In other words, these prisoners had special privileges in the way of visitors, and the visitors were allowed to bring them articles, and hand them through the bars to them, without any inspection or investigation of any kind as to what they were. In that way, the saws and 'other implements were brought to them, whisky was brought to them, and especially did their visitors make the arrangements with them for their escape after they got out of jail. No proper, or in fact any kind of, supervision was exercised by the sheriff and the jailers over the visitors to these two prisoners. Thornton admits that after the removal of Albert and Mullens from the federal part of the jail to the “sweat cells,” he found saws and whisky bottles in the place which they had vacated. With the full knowledge of their previous attempts to escape, and with the full knowledge of what the visitors had brought to them, yet they were permitted to have these same visitors in the sweat cells, without any investigation or supervision of the visitors, or search of them, or search of the articles which were brought by them.

On the Sunday preceding August 3d, Thornton admits taking a victrola to the cell occupied by Mullens, a privilege never before or since given to any other prisoner.

A woman by the name of Mrs. Kelly was a very frequent, if not almost a daily, visitor to see Mullens. She was allowed the privilege of getting as dose to him as the open bars would permit, and they were given seats on either side of the bars, and had communication with each other for long periods of time, sometimes as long as an hour and a half or two hours. She was permitted to bring various packages and hand them to Mullens, without search, let, or hindrance. One cannot help but infer that there was an agreement or conspiracy, between this woman and one or more of the trusties, to admit her at any time she wished to enter the jail.

The evidence shows that the trusties distributed liquor in this jail while Albert and Mullens were prisoners therein.

After Albert and Mullens were incarcerated in the sweat cells, they sawed completely two iron bars, so that when they wished they could escape (the exact date of such sawing is not conclusively shown, but it was some time between Sunday and Thursday of the week in which they escaped).

Thursday, the 3d day of August, 1933, was another of the visiting days. On that day the elevator was not running, because the county court thought the expense of the electricity was too heavy, so the entrance to the jail proper on the top floor was by the stairway. As stated before, this stairway had four steel barred doors, but on that fated day each was wide open, and any one could visit the top floor of the jail without let or hindrance, and any one could likewise,' without let or hindrance, if they were not locked up in the cells of the jail, go out of the jail by this way.

Mrs. Kelly visited the prisoners, as usual, without search or supervision, and went out to provide the automobile for the eseape of the prisoners. She placed it at a point convenient to the jail entrance. Thornton was called to the portion of the jail where the colored prisoners were kept, by a helpful trusty, to quell what was no doubt a pre-arranged disturbance for the purpose of getting his attention. He had to go by the.door of the sweat cells on his way to this other portion of the jail. Mullens and Albert kicked out the sawed bars, Mullens crawled through the hole first into the corridor, and immediately went down and got into the automobile; Albert followed through the hole. Then three of the state prisoners followed. They stood, for a few minutes, in a recess where there was a shower bath. Then they went down the stairs, like Mullens had done before them, and all of them got into the automobile provided by Mrs. Kelly and departed.

One of the trusties, the cook, was seated in the basement office, talking over the telephone to a relative, and, happening to glance up, saw the last ones going out of the jail. The sheriff was conveniently absent. After-wards the sheriff claimed that he made every effort to recapture them. The three state prisoners came back and gave themselves up. Albert later was either arrested, or gave himself up, when he was pursued by federal officers. Mullens is yet at large. The sheriff, by his answer, and in his evidence, stresses his search for Mullens after his eseape; but his diligence, if real, comes too late.

The specific charges of negligence on the part of the sheriff are:

First. That he put one comparatively old man, without any experience in that kind of work, in charge of a prison in which there were never less than 135, and usually more, prisoners at one time, all sentenced to jail or awaiting trial, or having been tried and sentenced and awaiting transportation to some penitentiary.

Second. Instead of employing, out of the ample funds derived from the allowance for the keeping and subsistence of prisoners, the proper persons for such duty, he, by means of giving privileges to prisoners, made some of them into so-called guards, under the name of “trusties.”

Third. Allowing the trusties virtually to have control, of the jail and of its inmates, and to admit visitors to favored persons, like Albert and Mullens, at, practically speaking, any time they wanted to come in, and permitting special privileges to them when they got in.

Fourth. In permitting visitors, whether on visiting days, or any other day, to come into the jail without proper search of the articles which they had, and without proper search of their respective persons for weapons, saws, jacks, or anything else that might be useful to the prisoners in escaping, or doing any other criminal act in the jail.

Fifth. With full and complete knowledge of the outlaw reputations which Albert and Mullens were known to have, in not especially examining and testing the bars of the cells wherein they were incarcerated for the last week before their escape, and in not especially having the jailer, or some other officer, present at any conversation between them and any visitor, and in not making a full and complete search of every visitor coming to see them, and a full and complete search of every package of every kind that such visitors might want to deliver them, or either of them.

In reference to the first specification, it is proper to call attention to the fact that after the escape, the sheriff showed plainly that he recognized his own negligence in making Thornton jailer by first transferring him from the position of day jailer to that of night jailer, and, second, by absolutely dismissing him on the 4th day of October, 1933.

It appears, from the evidence, that prior to his nomination and election, the sheriff promised the defendant Thornton, presumably for political reasons, to make him jailer if he were elected to the office of sheriff. After his dismissal, Thornton, on the 12th day of December, 1933, together with some other persons, filed certain charges in the circuit court of Mercer county, under chapter 6, article 5, § 6, of the Official Code of West Virginia, to have the sheriff removed from office, because, in violation of such law, the sheriff had, when expecting to hold the office of sheriff of Mercer county, contracted to sell and let to farm such office, and had agreed and contracted to share with another person a part of the emoluments of such office. In such charges it was averred that the defendant Fanning had entered into a contract with one C. W. Caffee, by which Caffee was to share with the defendant Fanning a' part of the emoluments of the office of sheriff, to wit, 40 per cent, of the net profits to be derived from the feeding of prisoners confined in the county jail of Mercer county; also, a contract with one J. H. McMullen to appoint him to the office of court deputy of Mercer county; and also, he agreed, in the event of his election, to appoint one J. E. Kade as one of his deputies, and that Kade should have the privilege of purchasing all of the supplies for the jail, for the feeding of the prisoners confined therein. Incidentally, Kade is now day jailer at such jail.

The law required five signers to such charges, and it is plain, from-the evidence, that the defendant Fanning, or some of the deputies interested with him in the office, succeeded in getting two of the five signers to withdraw their names, and the court dismissed the first charges.

Again, on the 28th day of December, 1933, Thornton, through his counsel, again succeeded in having charges filed, based upon the same allegations, for the removal of Sheriff Fanning, and, as shown by the evidence, and admitted by Fanning, this public proceeding was, in my opinion, improperly and illegally compromised by the payment, on the part of Fanning, or some one for him, to Thornton of the sum of $400, and Thornton was permitted to withdraw the charges.

It was gross misconduct on the part of Sheriff Fanning to make the promise he did to Thornton, and in view of the danger to the public, it was worse, if possible; to appoint him to this position of jailer when he ¡became sheriff, and I cannot imagine anything worse than his contract with Caffee to pay him 40 per cent, of what they are pleased to call “profits” from poor starving jail prisoners, and the man who takes such dirty money is 'no better than the man who promises to give it.

It was evident, from the appearance of Thornton, that he was not physically able to cope with prisoners, and I cannot help but believe that if he had been in his office when the escaping prisoners came down the stairway, he would have amounted to nothing if he had attempted to stop them. He, himself, testified that when he went around to quell the disturbance in the negro quarters of the jail, he took a number of trusties with him for his own protection.

Therefore, under this specification, the evidence compels me to find as a faet that there was gross negligence at least, if not criminal carelessness, in appointing Thornton as the only official person in eharge of the jail from 7 o’clock a. m. until 7 o’clock p. m. of eaeh day.

Second. This specification is based on the faet that it is gross negligence, if not criminal carelessness,-to make persons either eonvieted of crime, or accused of crime, in effect, jailers and jail guards. The mere statement of the principle is sufficient, without any amplification by argument. It requires the sheriff to give them illegal privileges and opportunity for illegal profits, in return for the work done by them. In addition thereto, unless there is some special reason to the contrary, their sympathies, and, in any way they can, without hurting themselves, their help, is with the prisoners. The old adage still holds good, “A fellow feeling makes one wondrous kind.” Each one in jail wants his liberty. One cannot help but draw the inference from the evidence here that the unnamed, unproduced, and not found trusties were really controlled by Mullens, who was allowed to have all the money he wanted in the jail.

The third specification relates to the faet that, regardless of what Thornton and Fanning may say, the evidence proves conclusively that the good friend, Mrs. Kelly, was admitted whenever she really wanted to be, without supervision, and without being searched.

The architect of the jail had provided a place where inmates could talk to any visitors, and where it would have been impossible for the visitors to have gotten anything through to the persons on the inside. Other prisoners in the jail were compelled to talk in that way to their relatives and friends, but Mullens, being a favored prisoner, notwithstanding his reputation, was permitted to have his friend, Mrs. Kelly, come to the bars, which were a distance of three inches apart, and there be caressed by her, and anything that she desired to give him went through the bars.

Likewise, the trusties themselves brought him liquors, and likely other articles, and passed them through the bars.

The place provided by the architects for inmates to talk to visitors was a part of the iron door, and the holes therein were so made that one could not even put a eigaret through one of them, and probably not even a match. This situation again illustrates the old adage that in spite of everything the architect may do in the construction of a jail, such jail is not a safe place of confinement for prisoners without a jailer.

The fourth specification has been touched upon somewhat, but it is necessary to reiterate that no person, especially visitors to prisoners with the outlaw reputations of Albert and Mullens, should have been permitted, at any time, to see them without a proper officer being present to hear every word that was said between the visitor and the inmate, and without every package delivered to the prisoners being first carefully searched. This was especially true in this particular case, as both defendants had actual knowledge of the previous attempts to escape, and of the previous visits of Mrs. Kelly.

The fifth specification is but an amplification of the one preceding, with the addition that the jailer should have continually tested the bars of this sweat cell, after the removal of Albert and Mullens thereto. Previous knowledge seems not to have impressed upon the sheriff or the jailer the fact that added caution and care should have been exercised in the ease of these two prisoners. Instead of doing that, the jailer very kindly takes up a vietrola to them, a privilege never allowed to any one else, and also kindly carried up ice cream by the quart.

The sheriff attempts to make a point in his favor that Mullens was originally arrested with the help of one of his deputies, and that Albert was likewise so arrested. Just why this was brought in, I do not know, because he was arrested by Mr. Peterfish, a state policeman, Mr. Wilson, the chief of' police of the city of Princeton, and Mr. Bailey, deputy sheriff. Albert was arrested by Mr. Crawford, a state policeman, Mr. Stacey, a state policeman, and Mr. Bailey.

The record shows that the sheriff appeared as a voluntary witness for Mullens when he was tried in the federal court last June. His evidence was not very material, but apparently he wanted to be helpful.

Summing up the whole situation, here were two bad men, known to be such by the defendants, eaeh sentenced to a long term m the federal penitentiary, eaeh known to have attempted to escape, eaeh known to have had saws and other implements, to be used for the purpose of escaping, delivered to them; yet, notwithstanding this especial knowledge on the part of each of the defendants, nothing* was done for their safe-keeping except they were placed in another cell, where, presumably, there were already five dangerous prisoners.

Necessarily, I am compelled to find as facts the five specifications set out above.

Then, as a conclusion of law, on the basis of those findings of fact, I necessarily hold that the defendant J. C. Fanning and the defendant C. W. Thornton are guilty of actual contempt of the orders of this court.


author: McCLINTIC, District Judge.

text:
    SUTTON, STEELE & STEELE et al. v. GULF SMOKELESS COAL CO. et al.
    No. 417.
    District Court, S. D. West Virginia.
    Oct. 28, 1933.
    A. S. Pattison, of Washington, D. C., D. J. F. Strother, of Welch, W. Va., and George Richardson, Jr., of Bluefield, W. Va., for complainants.
    Price, Smith & Spilman and Russell S. Ritz, all of Charleston, W. Va., and Fisher, Boyden, Bell, Boyd, & Marshall, of Chicago, HI., for defendants.
   McCLINTIC, District Judge.

This is a suit instituted by the complainants against Gulf Smokeless Coal Company, a corporation, in 1926, for the purpose of obtaining an injunction to restrain the alleg-ed infringement by Gulf Smokeless Coal Company of certain patent rights claimed by the complainants, Sutton, Steele & Steele, and their licensee, American Coal Cleaning Corporation; to require an accounting by the defendant by reason of its alleged infringement, and to recover gains, profits, and advantages accruing to the defendant by reason of its alleged infringement and damages resulting therefrom to the complainants. Roberts & Schaefer Company appeared in the proceeding, assumed the defense of the suit, and was made a party defendant. There was entered in the cause on July 20,1928, a decree adjudging the patents of the complainants valid and infringed by the defendants Gulf Smokeless Coal' Company and Roberts & Schaefer Company. That decree provided that the complainants recover from the defendants the profits, gains, and advantages which the said defendants had received or made or which had arisen or accrued to them by reason of the complainants’ inventions and letters patent and also the damages which the complainants had suffered by reason of the infringement; and the cause was referred to Luther G. Scott as master to ascertain, state, and report an account of the extent of said infringement, of the profits, gains, and advantages which the said defendants had received or which had arisen or accrued by resuson of their infringement, and to assess the damages suffered by the complainants by reason of said infringement. Further, by that decree, the defendants Gulf Smokeless Coal Company and Roberts & Schaefer Company were enjoined from making, selling, or using any device or apparatus infringing the patent rights of the complainants.

From the said decree, an appeal was prosecuted to the United States Circuit Court of Appeals, Fourth Circuit, where the cause was heard as ease No. 2825 and decided on October 15, 1929, 35 F.(2d) 433. The said appeal presented three questions: (1) Whether the patents sued on were valid; (2) if so, whether the coal company had been guilty of infringement; and (3) whether the court acquired jurisdiction of Roberts & Schaefer Company. Each of the three questions was resolved in the affirmative, and the decree of this court was accordingly affirmed. A petition for rehearing was filed, and, by per curiam opinion handed down November 18, 1929, denied. (C. C. A.) 36 F.(2d) 224. On December 18, 1929, a petition for certiorari was filed in the Supreme Court of the United States; but this petition was denied, 280 U. S. 609, 50 S. Ct. 158, 74 L. Ed. 652, and the mandate of the Circuit Court of Appeals received in the clerk’s office of this court on January 17, 1930.

Thereupon Luther G. Scott, as, special master of this court, proceeded to execute the decree of reference, holding hearings, taking testimony, and considering argument, as set forth in his report filed herein. Pending that hearing, a petition was filed in this court by the defendants, seeking to limit and confine the inquiry before the master to the infringement of complainants’ patents at the, Covel Mine of the defendant Gulf Smokeless Coal Company. That petition was denied.

To the report of the master commissioner both the complainants and the defendants made timely exceptions, the complainants submitting fourteen exceptions, Gulf Smokeless Coal Company two exceptions, and Roberts & Schaefer Company nine exceptions. Upon their several exceptions counsel for the respective parties have submitted their briefs and oral argument.

Much emphasis is placed upon the bona fides vel non of the defendant Roberts & Schaefer Company in respect to their infringement. And properly so; since, if they were innocent infringers, they should be held to one measure-of accountability and to another if they have, in reckless disregard of the rights of others, deliberately for their own profit infringed upon these patent rights, consideration of the whole case, the testimony of the witnesses taken ore tenus in the infringement suit as well as the further evidence taken before the master, the circumstances under which the defendant was informed of these cleaning tables and plans of the complainants to develop the business of producing and selling them, the difficulty in reaching an agreement as to the compensation to Roberts & Schaefer Company for selling the same under a contract over an extended period, the reluctance of the witness Arms to agree to the proposed contract and especially to the payment of consideration for sale of auxiliary equipment, the development of infringing tables while continuing to sell those of the complainants, the sale of infringing tables after notice from the complainants of their claim that these tables did infringe their patent rights and during the long period the issues between the parties were undetermined at a price scarcely in excess of what is now represented to be the cost of production, so as to take all available business with no appreciable profit to be accounted for should the issue of infringement be decided adversely — a full consideration of all these things can leave no doubt of the fact, clearly apparent from the record in this case, that the defendant Roberts & Schaefer Company designedly and willfully set about contriving means to take from the complainants business which they could not obtain under acceptable contractual terms, and so cannot be regarded as innocent infringers.

It appears that the defendant Roberts & Schaefer Company manufactured and sold to coal operators in the United States 96 tables held to infringe complainants’ patent rights, and that 9 such tables were manufactured and sold for use outside of the United States. Inasmuch as the infringement by this defendant was through manufacturing and selling, all of which was accomplished, and to the advantage of the defendant, in the United States, no sufficient reason occurs to me why the defendant should not be held to account for all tables so manufactured and sold by it, and, accordingly, the first exception by the complainants will be sustained to the extent of holding the defendant Roberts & Schaefer Company accountable for 105 machines instead of 96, as found by the special master.

Rinding, as I do, that this defendant deliberately and wrongfully set about the infringement for which it is called to an accounting, I cannot feel that it is entitled to be accorded those considerations recognized in proper eases in respect to the innocent infringement of patent rights, and I am of opinion to sustain the plaintiffs’ exceptions 2, 3, 4, and 5 as to the allowance of depreciation, interest on the investment of Roberts & Schaefer Company in the building and equipment used for producing the infringing tables, and apportionment of profits on account of other patented parts included in the infringing tables; and by the same token I would overrule the defendants’ exceptions 1 and 2. This is more clearly proper in view of the fact, as appears from the evidence, that the profits accounted for were those produced only by the manufacture and sale of these tables, and did not include any profits on auxiliary equipment manufactured or sold in connection with these tables, from which this defendant undoubtedly derived substantial profits in addition to those shown in its accounting. But this becomes of little practical importance by reason of the larger recovery for general damages which undoubtedly will be taken instead of the recovery of profits.

The special master’s finding that the 96 tables sold by the defendant Roberts & Schaefer Company represented sales lost to the complainants is sustained, except that the number of sales, as heretofore stated, is increased to 105. It plainly appears from the evidence that the complainants were ready and prepared to supply tables for the infringing sales, that their patent rights gave them a monopoly in the field until invaded by the defendants’ infringement, and that this was done because the industry demanded such a process as complainants’ patents covered.

Exact ascertainment of the damage resulting to complainants by reason of the infringing sales is, of course, not only difficult but impossible of accomplishment, but it is perfectly apparent from all the evidence that the complainants were seriously and greatly damaged in the exploitation of their patent rights by the infringing sales contrived in furtherance of a sales campaign initiated for the development of complainants’ business. The exact damage not being proved or susceptible of calculation and determination with reasonable certainty, the special master properly fixed an amount of recovery by way of general damages. USCA title 35, § 70. The amount fixed, viz., $1,000 for each of the 96 machines sold, is certainly not an excessive allowance, and is accordingly, sustained, but as to 105 machines instead of 96.

In addition to the direct damages attributable to sale of infringing tables, the complainants claim a considerable sum by way of damages in the nature of lost profits on sales of auxiliary equipment to be used in connection with the cleaning tables. There is no doubt that the tables required for their operation considerable auxiliary equipment, it being estimated by one witness that the sales value of such equipment would be approximately $15,006 for each cleaning table, and this estimate was corroborated by the special master, who found that, in connection with 63 of the infringing tables, auxiliary equipment and engineering services were provided by the defendant at a price averaging $16,-233 per table. It is apparent also that such sales were profitable, and division of the profit resulting therefrom was the rock upon which broke the negotiations between American Coal Cleaning Corporation and Roberts & Schaefer Company for sales representation. The sale of this auxiliary equipment was in line with the established business-of Roberts & Schaefer Company, and it is perfectly apparent that its interest might have been advanced by selling the infringing tables at a small enough profit to capture the markets and augment that profit through sales of additional equipment. But the claim here asserted is for indirect damages; and, while it is presented with much plausibility, it does not appear to have been substantiated with such proof as is necessary to sustain a reeovery of indirect damages. Accordingly, the complainants’ seventh exception to the special master’s report should be overruled.

In like manner I find that the complainants have failed to establish their claim for damages in their alleged loss suffered by rear-son of reduction in the price of their tables because of the competition of defendants’ infringing machines and would overrule complainants’ exception No. 8. While it does appear that the defendant put its machines upon the market at a price greatly below the list price of the complainants’ tables, and that the complainants in their competitive sales thereafter did sell their tables at a price below the list price, it does not appear from the evidence with that certainty or sufficiency necessary to sustain a recovery of damages just what reduction in price was made on the several sales shown in evidence, nor that the offering of the infringing tables in the market at a lower price forced the reduction. It is significant that no evidence is offered to show re-establishment of the higher price price claimed by complainants after the infringing sales were enjoined.

This proceeding, commenced in June, 1926, has of necessity entailed very considerable litigation expense, $27,109.63 in connection with the infringement suit and the further sum of $16,510.08 in connection with the accounting up to June 1,1931, or a total of $43,619.71. This litigation was made necessary by the defendant’s infringement continued for a great while after full notice of complainants’ claim. The nature and extent of the trespass provoked litigation necessarily attended by considerable expense; and, while such expense is not commonly allowed as an item of recovery in such suits, it is not to be disregarded in determining the sufficiency of general damages allowed on the basis of proved losses. Having in mind the deliberate nature of defendant’s infringement in this ease and the showing made in respect to complainants’ expense in prosecuting this suit, I do not think the special award of $14,400 is enough, but would increase that to 40 per cent, of the principal sum, viz., $105,000, making a total of $147,-000.

The award of general damages, being for the infringing sales, should carry interest from the date such infringement ceased. The special master’s award should, accordingly, be amended to include interest upon the full rev covery by way of general damages, viz., $1,-000 for each of the 105 machines sold from October 15, 1929, the date on which the infringement ceased. And the additional award of 40 per cent, should bear interest from the date of the master’s report.

The complainants in this case seek to recover the gains, advantages, and profits resulting to the defendant Roberts & Schaefer Company from their infringement by manufacturing and selling, and in addition the gains, profits, and advantages resulting to the Gulf Smokeless Coal Company and other vendees of Roberts & Schaefer Company from their infringement upon complainants’ patent rights through use of the infringing tables. Undoubtedly the complainants are entitled to recover the profits shown to have resulted from the infringement by manufacture and sale, and, in addition thereto, profits shown to have resulted from infringement by use. The right to the use of the patented process is as much the- exclusive property of complainants as is the right to manufacture and sell. But, if the complainants should receive and accept a recovery by way of general damages for the sale of a specific table, such acceptance would operate to adopt the sale of that table as a sale by complainants themselves, and therefore preclude any recovery for its use. Only one user of the infringing tables is a party to this suit. It appears that Roberts & Schaefer Company in selling these tables to the various users agreed to protect them in respect to patent rights, but it does not appear that Roberts So, Schaefer Company participated to any extent in such profits or advantages as may have resulted to their vendees from the use of these tables. For this reason there can be no recovery in this suit from Roberts So Schaefer Company of gains or profits resulting to the various coal companies to whom they sold these tables, notwithstanding their use was an infringement of the complainants’ rights. Such a recovery could not be regarded as damages to be had from a contributory infringer as from a joint tort-feasor. There being no evidence that their tables were let upon a royalty basis by the complainants, it could hardly be said that their use by purchasers from Roberts & Schaefer Company damaged the complainants beyond such profits as the sale of those tables would have yielded.

The defendant Gulf Smokeless Coal Company purchased from Roberts So Schaefer Company and used 6 tables, which have been held to infringe the complainants’ patents. With these tables coal to the amount of 386,-194 tons was treated, and, if you would take the statement of the defendant, at a loss of more than $175,000. But, notwithstanding such loss, and with notice that the complainants claimed the tables infringed their patent rights, they were continued in use down to the time of the accounting, and that notwithstanding the injunction order. It is inconceivable that such use would have continued, and especially after the injunction of this court had issued, if it were not profitable and advantageous. The witness Tams sets up a conceded advantage or profit amounting to 20 cents a ton, which, however, he more than offsets by operating costs, depreciation, interest, etc.

An accountant representing the complainants examined the books and records of that defendant, and reports a net profit attributable to the use of these tables amounting. to $160,292.21. This finding appears to reflect a record profit, but it seems to have been produced by the cleaning and grading of the coal, with the result that it is impossible to allocate any definite part of such profit to the use of the infringing tables. The special master reported that there was no possible way by which the benefits accruing from the treatment of this coal could be accurately calculated, but, because it would appear that there were gains and advantages resulting to this defendant from its use of the infringing tables, the special master allowed to the complainants for a reasonable sum as profits 1% cents per ton; that being the amount he had arrived at as a reasonable royalty recoverable by complainants for the infringing use of tables in- violation of their patent rights if recovery should be allowed on that basis. The master appears, however, to have based that allowance upon the selling price and life of the tables rather than upon the advantages accruing to the coal from use of the tables. So I do not think that a proper unit of calculation to be used in determining a reasonable recovery from Gulf Smokeless Coal Company for advantages resulting from its infringing use of these tables.

In considering generally the advantages resulting from the use of the tables in question, the special master found a gross advantage of 32% cents per ton to be a fair average result. To obtain this advantage there was, of course, the expense of operation, and this does not appear to have been shown with certainty. Having in mind the advantages which undoubtedly accrued to this defendant from the use of these tables, I am of opinion, from the evidence before me, to allow the complainants a recovery from Gulf Smokeless Coal Company of $12,551.30. And I would allow interest upon this sum, just as in the master’s report, from January 1, 1930.

From what has been said, it follows that, if the complainants would take this recovery from Gulf Smokeless Coal Company, then they must forego the recovery in the amount of $1,000 each by way of general damages for the sale of the tables sold to this defendant.

The cost of the accounting should be paid by the defendants.

Let a decree be prepared passing upon the several exceptions in accordance with the holding here indicated.