author: BARD, District Judge.

text:
    FELDMAN v. PENNROAD CORPORATION.
    No. 568.
    District Court, D. Delaware.
    May 11, 1945.

      C. Stewart Lynch, of Wilmington, Del., and Mortimer S. Gordon and Leo Brady, both of New York City, for plaintiff.
    Daniel O. Hastings, of Wilmington, Del., Morris Wolf, of Philadelphia, Pa., and A. D. Vaneish, of Washington, D. C., for defendant Penroad Corporation.
    H. Albert Young, of Wilmington, Del., and Archibald Palmer, of New York City, for Dickheiser and others, stockholders of Pennsylvania R. Co.
    Joseph B. Keenan, of Washington, D. G, amicus curiae.
   BARD, District Judge.

This is a motion to dismiss the complaint under Rule 12(b) of the Federal Rules of Civil Procedure, 28 U.S.GA. following section 723c. Plaintiff, a stockholder of defendant corporation, brought this suit (1) to enjoin respondent from negotiating or consummating a settlement and release of claims with Pennsylvania Railroad Company, and (2) to obtain the appointment of a receiver for respondent • corporation in order to prosecute all claims in its behalf and to supervise the election by the stockholders of a competent and disinterested Board of Directors.

The relevant facts as alleged in the complaint are as follows:

Prior to 1929 Pennsylvania Railroad Company, hereinafter referred to as Pennsylvania, desired to obtain controlling interest in other railroads to eliminate competition. In order to carry out this plan without risk to itself, it conceived the idea of forming the Pennroad Corporation which would be dominated and controlled by Pennsylvania. The stock of Pennroad Corporation would be sold to the public and the proceeds therefrom used to acquire control of the various companies which Pennsylvania needed in order to extend its sphere of influence in accordance with the master plan.

Pursuant to this plan, Pennroad was incorporated in the State of Delaware in 1929 as a holding corporation. About 6,-000,000 shares of stock were sold to the public and this investment by the public of about $140,000,000 became the operating capital of Pennroad. All of the stock sold participated in a voting trust composed of W. W. Atterbury, Jay Cooke and Effing-ham Morris, all important officers of Pennsylvania, as trustees. The Board of Directors consisted entirely of officers or directors of Pennsylvania. Thus, Pennsylvania completely dominated Pennroad and was in a position to use the $140,000,000 capital investment to its own advantage and for its own purposes.

Pennsylvania caused the Pennroad Corporation to purchase stocks of certain enterprises which Pennsylvania was anxious to control at prices and upon conditions which Pennsylvania itself had declined to purchase prior to the incorporation of Pennroad. These investments caused Pennroad to suffer tremendous losses in excess of $100,000,000.

In an effort to secure restitution for the alleged wrongful and collusive acts of Pennsylvania and Pennroad a suit was brought in 1932 in the Court of Chancery of the State of Delaware by Joseph W. Perrine and Julia A. Perrine, stockholders of Pennroad, against Pennroad and Pennsylvania. This suit is presently pending and undetermined. In 1939, lone M. Over-field, another Pennroad stockholder, brought an action against the two corporations in the United States District Court for the Eastern District of Pennsylvania which resulted in judgment against Pennsylvania for $22,104,515.92. Overfield v. Pennroad Corporation, D. C., 42 F.Supp. 586, 48 F.Supp. 1008. This judgment was reversed on appeal by the Circuit Court of Appeals on the ground that the running of the statute of limitations barred the action. Overfield v. Pennroad Corporation et al. 3d Cir., 146 F.2d 889.

In furtherance of the master plan of Pennsylvania to despoil Pennroad for its own benefit, Pennsylvania then negotiated a proposed settlement whereby Pennroad is to accept $15,000,000 in full satisfaction and discharge of any liability which Pennsylvania has to Pennroad. Pennroad has petitioned the Delaware Court of Chancery in the Perrine v. Pennroad action to obtain court approval of the proposed settlement and the matter is now pending before that court.

Petitioner alleges that, to the present date, Pennsylvania completely dominates every act of Pennroad and is using this domination to conclude a fraudulent settlement for the benefit of Pennsylvania and to the detriment of Pennroad and its stockholders. The petition alleges that Pennroad and its stockholders have a meritorious claim against Pennsylvania for an amount far in excess of the $15,000,000 offered and that this claim can be adjudicated in the Perrine stockholder’s bill instituted in 1932 which, unlike the Over-field suit, is not barred by the statute of limitations.

Upon the basis of these facts complainant prays that this court enjoin respondent from consummating the settlement and appoint a receiver to prosecute respondent’s claims in its behalf and to supervise the election of a disinterested Board of Directors.

The motion to dismiss raises the question whether the facts alleged, as recited above, are sufficient in law to permit this court to grant the relief sought.

Section 265 of the Judicial Code provides : “The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy.”

The petition seeking judicial approval by the Chancery Court of Delaware of the proposed settlement is a proceeding within the meaning of this statute. The fact that the injunction herein requested is directed against Pennroad and not formally directed against the Chancery Court of Delaware is immaterial. The injunction, if granted, will discontinue the settlement proceeding now pending and being heard before the Chancery Court. Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 308 U.S. 530, 309 U.S. 4, 60 S.Ct. 215, 84 L.Ed. 447, 537. The injunction which plaintiff seeks is therefore clearly within the scope of the statute.

Section 265 of the Judicial Code enacts a principle of comity which obtains between courts of concurrent jurisdiction forbidding the interference by injunction or otherwise by the federal courts with the process of the courts of the states, Moran v. Sturges, 154 U.S. 256, 14 S.Ct. 1019, 38 L.Ed. 981, and is intended to give the force of positive law to the existing rules of comity between such tribunals. The statute is a limitation upon the equity powers of the federal courts. When application is made to a federal court to enjoin proceedings in a state court, the duty devolves upon the federal court to determine whether the petition has alleged facts for which relief is prohibited by the statute or whether the equities of the case require that an injunction issue despite the statutory limitation. Smith v. Apple, 264 U.S. 274, 44 S.Ct. 311, 68 L.Ed. 678.

Plaintiff’s allegations (1) that the proposed $15,000,000 settlement is wholly inadequate, (2) that the Pennroad officers conducting the settlement negotiations are still dominated by Pennsylvania, and (3) that the officers and directors of Pennroad who are urging acceptance of the compromise have interests adverse to the corporation and its stockholders, form the basis of plaintiff’s prayer for an injunction restraining any settlement of Pennroad’s claims against Pennsylvania until a receiver is appointed or a new disinterested board of directors is elected to prosecute Pennroad’s claims.

Plaintiff has not shown an inadequacy of remedy in the proceedings before the Chancery Court sufficient to justify the exercise of equitable powers in her favor. Equitable Life Assur. Soc. of the United States v. Wert, 8th Cir., 102 F.2d 10. There is nothing to prevent plaintiff from fully presenting the facts herein alleged to the Chancery Court. In fact during the argument counsel for Perrine and counsel for plaintiff said that the State Court has permitted them to present fully their objections to the settlement in the hearings there. This Court must assume that the State Court will do justice to all parties, and, if there is merit in the allegations herein presented, that the State Court will grant whatever relief may be just and proper.

Petitioner has not alleged facts which would present a case within any of the recognized exceptions to Section 265 of the Judicial Code. Toucey v. New York Life Insurance Co., 314 U.S. 118, 62 S.Ct. 139, 86 L.Ed. 100, 137 A.L.R. 967. The facts alleged are not sufficient to support the relief sought and the petition for an injunction must therefore be dismissed.

The remaining question before the Court is whether plaintiff has alleged facts sufficient in law to warrant the appointment of a receiver.

Under its general equity powers a federal court may entertain a bill of a stockholder against the corporation for the appointment of a receiver. Burnrite Coal Briquette Co. v. Riggs, 274 U.S. 208, 47 S.Ct. 578, 71 L.Ed. 1002. The appointment of a receiver is a remedy and not a right and a federal court may appoint a receiver only as ancillary to or in aid of the main relief sought in the action, which relief must be within the jurisdiction of the Court. Orth v. Transit Inv. Corporation, 3d Cir., 132 F.2d 938; Securities and Exchange Commission v. Fiscal Fund, Inc., D.C., 48 F.Supp. 712.

After comprehensive allegations of a continued course of conduct constituting violations of their fiduciary obligation by the Pennroad directors and operation of Pennroad by Pennsylvania for its own use and purposes, plaintiff concludes the complaint with a prayer for the appointment of a receiver to prosecute Pennroad’s claims against Pennsylvania and intervene in the settlement negotiations and to operate Pennroad until a disinterested board of directors can be elected.

It is true that proof of fraudulent and reckless mismanagement of the corporate business by its board of directors such as would convince the Court that further control of the corporation by the same board would result in the destruction of its business or cause unwarranted loss to the stockholders will call into exercise the discretionary power of the Court to appoint a receiver. Carson v. Allegheny Window Glass Co., C.C.Del., 189 F. 791. But the misconduct of the directors must be current and the danger to the corporation must be imminent. Lichens Co. v. Standard Commercial Tobacco Co., Inc., Del.Ch., 40 A.2d 447. Mere apprehension of future misconduct based upon prior mismanagement of Pennroad does not merit the appointment of a receiver.

Plaintiff alleges that Pennroad is in imminent danger of releasing a valuable right of action against Pennsylvania for a comparatively insignificant sum of money because of a collusive settlement. This allegation might be persuasive if such action were contemplated without court approval. But it must be assumed, as pointed out above, that Pennroad and its stockholders will be adequately protected from this alleged imminent danger by the Chancery Court of Delaware where hearings are presently being held to obtain judicial approval of the settlement. There is no need to appoint a receiver merely to represent the Pennroad stockholders before the Chancery Court.

Finally, plaintiff prays that this Court remove the present Board of Directors and appoint a receiver to conserve the assets of Pennroad until a disinterested Board of Directors is elected by the stockholders. In the absence of statute and in the absence of fraud, a court of equity has no inherent power to remove directors of a corporation. Directors are elected by the stockholders and must be removed by the source or power that elected them. To hold otherwise would permit a court, on petition of a minority shareholder, to substitute its discretion for that of the majority of the stockholders. Exception to this general rule has been made in cases where fraud has been alleged. Atkins v. Hughes, 208 Cal. 508, 282 P. 787. Although plaintiff alleges fraud and misconduct of the Pennroad. directors, there is no allegation of imminent danger to the corporation because of their fraudulent misconduct save the proposed settlement. As has been indicated, plaintiff has adequate protection in that regard.

The allegations show no imminent danger to the corporation which might require the appointment of a receiver as an ancillary remedy.

The motion to dismiss is granted.

       Act of March 3, 1911, c. 231, § 265, 36 Stat. 1162, Rev.Stat. § 720, 28 U.S.C.A. § 379.

       See 16 Fletcher, Cyc.Corp., Perm.Ed., §7724.

       16 Fletcher, Cyc.Corp., Perm.Ed., § 358.


source: Caselaw Access Project

author: LINDLEY, District Judge.

license: Public Domain

text:
    UNITED STATES ex rel. DOSS v. LINDSLEY, Sheriff.
    No. 404-D.
    District Court, E. D. Illinois.
    May 13, 1944.
    Parties appeared pro se.
   LINDLEY, District Judge.

Petitioner, convicted of criminal libel in Piatt County Circuit Court, the judgment having been affirmed in 384 Ill. 400, 51 N.E.2d 517, and certiorari having been denied by the Supreme Court of the United States March 27, 1944, 321 U.S. 789, 64 S.Ct. 788, 88 L.Ed. 1079, petitions for 'a writ of habeas corpus, averring that at the time the petition was filed, the Sheriff of Piatt County was about to forfeit his bond and take him into custody in pursuance of said judgment of conviction. He avers that his constitutional rights have been violated in the state proceeding and that his incarceration would work a breach of such rights.

The situation is not greatly different from that involved in a similar petition by the same party seeking relief from another conviction for contempt of court and what I said in disposing of that matter is for the most part directly applicable here. See Doss v. Lindsley, D.C., 53 F.Supp. 427.

I am not at liberty to ignore the rule that the actions of state officials under state statutes are generally not to be interfered with by the United States Courts ; that whether the proceedings of a state tribunal are in accord with the Constitution and laws is primarily a question for the state and that, as a corollary, one convicted in the state court must exhaust his remedies in the tribunals of the commonwealth before resorting to the federal courts. These controlling rules have been lately reaffirmed by the Supreme Court in Ex parte Hawk, 1944, 321 U.S. 114, 64 S.Ct. 448, 88 L.Ed. 572; hence I see no necessity for further comment. Pertinent and of the same character are Kelly v. Dowd, 7 Cir., 1944, 140 F.2d 81, and Potts v. Dowd, 7 Cir., 1944, 141 F.2d 12. These late authorities only confirm the conclusion reached in Doss v. Lindsley, supra.

Accordingly it is ordered that the petition be and the same is hereby denied.

Petitioner shall remain at large upon his present bail bond for a period of thirty days for the purpose of perfecting an appeal from this order, and in case such appeal shall be perfected, until final disposition of the appeal.


author: DUNCAN, District Judge.

text:
    SANTA FE PAC. R. CO. et al. v. ICKES, Secretary of the Interior, et al.
    No. 23477.
    District Court of the United States for the District of Columbia.
    May 21, 1945.
    Lawrence Cake, of Washington, D. C., for plaintiffs.
    Harry M. Edelstein, Asst. Sol., Department of the Interior, of Washington, D. C., for defendants.
   DUNCAN, District Judge.

This suit is brought in the United States District Court for the District of Columbia to enjoin the defendants from rejecting the selection of certain lands described, in the petition under a grant from the Government to the plaintiff, Sante Fe Pacific Railroad Company, and its predecessors pursuant to an act of Congress approved July 27, 1866, c. 278, 14 Stat. 292.

The Sante Fe Pacific Railroad Company is a corporation organized under an act of Congress approved March 3, 1897, c. 374, 29 Stat. 622, and is the lawful successor to the Atlantic and Pacific Railroad Company, a corporation, created and organized under an act of Congress dated July 27, 1866, c. 278, 14 Stat. 292. Plaintiff, Aztec Land and Cattle Company, Limited, is a corporation organized and existing under the laws of the State of New York. Defendant Harold L. Ickes is the Secretary of the Interior; defendant Oscar L. Chapman is the Assistant Secretary of the Interior; defendant Fred W. Johnson is the Commissioner of the General Land Office of the United States. The amount involved is in excess of $3,000.

The matter is before this court on motions by both plaintiffs and defendants for summary judgment, each alleging that there is no genuine issue as to any material fact. No answer was filed by the defendants.

The Santa Fe Pacific Railroad Company is the successor in interest to the Atlantic and Pacific Railroad Company and is fully vested with all the rights of the Atlantic and Pacific Railroad Company under the Act of March 3, 1897, 29 Stat. 622, in and to the lands in controversy.

By the Act of July 27, 1866, the United States provided: for the grant of a right-of-way and necessary appurtenant ground for railroad purposes “for the purpose of aiding in the construction of said railroad and telegraph line”, for a grant of all the odd-numbered sections of public land not mineral and not reserved, sold, granted or otherwise appropriated, and free from preemption or other claims or rights within the limits of forty miles on each side of the line of railroad as definitely located through the territories of the United States.

Said grant also provided that if any of the lands so granted were found at the time of the definite location of the railroad to have been previously granted, sold, reserved, occupied by homestead settlors, or pre-empted, or otherwise disposed of, the grantee should have the right to select other odd-numbered sections, in lieu of the sections lost, not more than 10 miles beyond the first designated limits of the grant.

The limits designated within the forty miles on each side of the railroad are known and described as the “primary” or “place” limits of the grant; and the odd-numbered sections within those limits as “primary” or “place” lands. The area within the ten-mile limits of the grant, adjoining the forty-mile place limit as aforesaid, are known as the “indemnity” limits of the grant, and the odd-numbered sections within those extended limits of the indemnity lands and the selections made within those extended limits in lieu of the loss in the place limits of the grant, are known as “indemnity” selections.

In 1872 the Atlantic and Pacific Railroad Company filed its map of definite location and thereafter the railroad was constructed and approved, and the rights of the railroad company to the lands granted became vested and determined. The grant, as finally fixed, extended along the line of the railroad from a point in what is now the State of New Mexico near Ysleta, through what is now the states of New Mexico and Arizona, to the western boundary of Arizona at the Colorado River.

In February 1886 the Atlantic and Pacific Railroad Company by contract sold to the plaintiff, the Aztec Land and Cattle Company, Limited, for a consideration of fifty cents per ache, approximately 1,058,560 acres of land within the limits of the grant in the territories of Arizona and New Mexico comprising all the odd-numbered sections within described boundaries, the said land being described and designated by section, township and range.

At that time the land was unsurveyed, and part of the land described was within the “place” limits of the grant, and a part within the “indemnity” .limits. The Aztec Land and Cattle Company, Limited, paid to the Railroad Company $500,000 for 1,-000,000 acres. Subsequently, in 1886 and 1894, so much of the lands sold aforesaid as was then surveyed, amounting to 576,-701.91 acres, was conveyed by the Atlantic and Pacific Railroad Company to the plaintiff, the Aztec Land and Cattle Company, by deeds which were duly recorded in the counties where the lands were located.

In 1905 the plaintiff, the Santa Fe Pacific Railroad Company, in which had been confirmed all the interests of the Atlantic and Pacific Railroad Company by the act of March 3, 1897, executed its quitclaim deed to the Aztec Land and Cattle Company, Limited, to 423,270.35 acres, being the remainder of the 1,000,000 acres paid for under the contract of sale executed by its predecessor in 1886. In the quitclaim deed the land — the 423,270.35 acres — was described by section, township and range. The lands described in such quitclaim deed and in controversy in this proceeding amounted to 98,690.83 acres and lie within the indemnity limits of such grant.

In 1887 the Atlantic and Pacific Railroad Company made and filed with the Secretary of the Interior, a selection of the lands in the “indemnity” limits of the grant for the purpose of satisfying losses in the “place” limits of the grant. At that time the lands in the indemnity limits of the grant had not been surveyed and for that reason, the Secretary of the Interior held that the lands were not available for selection, and rejected the selection.

It is recited in the order of the Assistant Secretary of the Interior upholding the action of the Land Office in rejecting the selection of the lands here in controversy that a survey of all of said lands except 480 acres has been made. That such surveys were made in 1896, 1918, 1922, 1936 and 1939 and official plats filed in the Land Office.

On August 17, 1898, all of the lands in the indemnity limits subject to selection were withdrawn by Executive Proclamation as of that date, No. 18, 30 Stat. 1780, for a Forest Reserve, described as the “Black Mesa Reserve,” pursuant to Section 24 of the Act of March 3, 1891, 26 Stat. 1096, and said lands are now included within the exterior bounds of what is known as the Coconino and Sitgreaves national forests.

Plaintiff alleges that at the time of the withdrawal of said lands on August 17, 1898, and for some time prior thereto, and at all times since then, the losses in the “primary” or “place” limits of said grant exceeded the surveyed lands within the “indemnity” limits of the grant available for selection, and that to that extent, there has been a deficiency in the grant in excess of 100,000 acres, since some time prior to August 17, 1898.

On September 18, 1940, pursuant to Section 321 (a) and (b), c. 722, 54 Stat. 954, 49 U.S.C.A. §§ 65, 66, including Section 321, Title III, Part II thereof, the plaintiff Santa Fe Pacific Railroad Company filed with the Secretary of the Interior a release under the rules and regulations issued by the Secretary of the Interior, by which it released to the United States “any and all claims of whatever description to lands, interests therein, compensation or reimbursement therefor on account of lands or interests granted, claimed to have been granted, or claimed should have been granted by any act of the Congress to Santa Fe Pacific Railroad Company or to any predecessor in interest in aid of the construction of any portion of its railr'oad.”

The Company, reserved from the provisions of the release, all lands sold by the company to innocent purchasers for value prior to September 18, 1940, and in compliance with the regulations prescribed by the Secretary under Section 321(b) of the Transportation Act of 1940, filed a list of all innocent purchasers for value to whom said Santa Fe Pacific Railroad Company or its predecessor Atlantic and Pacific Railroad Company had sold any of the unpatented lands within the limits of the grant prior to September 18, 1940 with the description of such lands so sold.

On June 26, 1942, the plaintiff Santa Fe Pacific Railroad Company filed its selection in the form prescribed by the regulations of the Secretary of the Interior for issue of patent to lands sold to the Aztec Land and Cattle Company, Limited, described aforesaid, as an innocent purchaser for value prior to September 18, 1940, and excepted from the release filed by the Santa Fe Pacific Railroad Company aforesaid.

On April 8, 1943 the defendant Fred W. Johnson as Commissioner of the General Land Office rejected the application aforesaid, on the ground that: “the land had not been ascertained and identified so that the railroad acquired any interest in specific land which it could convey prior to the filing of its release and that, therefore, its transferee is not protected upder the saving clause of section 321 (b) of the Transportation Act." (Emphasis supplied.)

Thereafter an appeal was taken to the Secretary of the Interior from the decision of the Commissioner of the Land Office rejecting said application, and on January 8, 1944, the defendant Chapman, as Assistant Secretary of the Interior, acting for the defendant the Secretary of the Interior, affirmed the decision of the Commissioner of the General Land Office.

I(n their complaint plaintiffs aver that such lands are within the “indemnity” limits of the grant and are non-mineral, public lands not reserved, sold, granted or otherwise lawfully appropriated, and free from pre-emption or other claims or rights; that the withdrawal of the said lands so described was void and ineffective because at the time of said withdrawal there was a large deficiency in the grant, and the said lands were then and have ever since been appropriated to satisfy losses in the primary or place limits of the grant; and that the release filed by plaintiff, Santa Fe Pacific Railroad Company is not applicable to the said lands because the said lands were expressly excepted therefrom, having been sold prior to September 18, 1940 to plaintiff, Aztec Land and Cattle Company, Ltd., an innocent purchaser for value.

Plaintiffs further contend that the action in rejecting the selection and application for patents thereto “is based on erroneous construction of the applicable laws and is arbitrary and beyond their authority” and is “in violation of plaintiffs’ vested rights and casts a cloud on plaintiffs’ title and right to the lands in question”.

The sole question for determination is whether or not the Secretary of the Interior had a right under the law to reject the Company’s selection on the ground that the land had not been ascertained and identified and for that reason the Company had acquired no interest in specific land which it could convey prior to the filing of the release. If the Company did have an interest in the specific land which it could convey, then the Secretary was not justified under the law in rejecting-the selection on the ground for which he did reject it. „

There seems to be no controversy as to any substantial fact — and as the defendants did not file any answer to plaintiffs’ complaint, the allegations thereof may be taken as true. Defendants rest their case on such admitted facts and the Department’s findings and records made a part of the record.

The location of the railroad was in compliance with the provisions of the grant and the proposal was converted into a contract, as to which the Company by performing its part became entitled to performance by the Government. Payne v. Central Pacific R. Co., 255 U.S. 228 loc. cit. 236, 41 S.Ct. 314, 65 L.Ed. 598, loc. cit. 602; United States v. Northern Pacific R. Co., 256 U.S. 51 loc. cit. 64, 41 S.Ct. 439, 65 L.Ed. 825 loc. cit. 828; Burke v. Southern P. R. Co., 234 U.S 669, 34 S.Ct. 907, 58 L.Ed. loc. cit. 1527.

Immediately upon the establishment of the railroad and the acceptance thereof in accordance with the Act of July 27, 1866, and the filing of official plats and surveys, the title to the odd-numbered sections on the place limit not otherwise disposed of at the time of the grant, were vested in the company. Id.

It is alleged, and not denied by defendants, that at the time of the withdrawal of such land by Executive Order on August 17, 1898, and placing it in the forest reserve, there was a deficiency of sections in the indemnity limit to compensate for losses in the place limit. For the purpose of this motion, that allegation will be accepted as true. The order, therefore, was void as to those who are entitled to make selections in the indemnity limit. Payne v. Central Pacific R. Co., 255 U.S. 228 loc. cit. 236, 41 S.Ct. 314, 65 L.Ed. 598 loc. cit. 602; United States v. Northern Pacific R. Co., 256 U.S. 51 loc. cit. 64, 41 S.Ct. 439, 65 L.Ed. 825 loc. cit. 828; Burke v. Southern P. R. Co., 234 U.S. 669, 34 S.Ct. 907, 58 L.Ed. loc. cit. 1527.

In view of the ground upon which the Secretary based his rejection, that question is not material to the disposition of this case and defendants do not contend that it is.

Defendants contend that the company had but an inchoate interest in the indemnity limit prior to the time of survey and identification, which was a mere “float” and not susceptible of identification or sale, and that the sale by the Atlantic and Pacific Railroad Company, and later the quitclaim deed executed by its successor the Santa Fe Pacific Railroad Company, conveyed no interest in the specific lands to the plaintiff the Aztec Land and Cattle Company, Ltd.

The proposal, Act of 1866 — was converted into a contract by its acceptance, i. e., by building the railroad. The railroad performed its part and it was entitled to have the Government perform its part— title to the lands in the place limit vested in the Company upon the filing of map showing location — those in indemnity limit upon selection — with respect to each, when the right to such lands has been earned, the obligation of the Government arises.

The provisions of the grant relating to indemnity lands was as much a part of the grant and the contract as the one relating to the land in the place limit. United States v. Northern Pacific R. Co., 256 U.S. 51 loc. cit. 64, 41 S.Ct. 439, 65 L.Ed. 825 loc. cit. 828; Payne v. Central Pacific R. Co., 255 U.S. 228 loc. cit. 256, 41 S.Ct. 314, 65 L.Ed. 598 loc. cit. 602.

I believe there is no dispute that it is the general rule of law that no right attaches to any specific land within the indemnity limits of the grant until it is selected, and there can be no selection until there has been an identification of the lands by survey. That of course, is common sense as well as the law. The grantee could certainly not be entitled to any portion of the indemnity land until all of the sections within the place limit had been exhausted. So long as there was an excess of lands in the indemnity limit to compensate for the losses in the place limit, it would be necessary to make a definite selection.

There is an exception to this general rule, however. The general rule has never been applied as between the Government and the grantee where the lands available for indemnity were not sufficient for the purpose of compensating for the loss sustained in the place limit. Its only application has been where either the rights of the sellers were involved, or the lands available for indemnity exceeded the losses, thereby making it essential that there be a selection and identification of the particular sections sought to- be appropriated to the grant. United States v. Northern Pacific R. Co., 256 U.S. 51, 65, 41 S.Ct. 439, 65 L.Ed. 825, 828; St. Paul & Pacific R. Co. v. Northern Pacific R. Co., 139 U.S. 1, 11 S.Ct. 389, 35 L.Ed. 77.

Admitting' arguendo that the contract executed by the Atlantic and Pacific Railroad Company in 1886, before the land in the indemnity limit was surveyed, and before losses in the place limit exceeded the land available in the indemnity limit was surveyed, did not convey any interest in specific land, and the company at that time had only the right of selection of sections of land in the indemnity limit — when such sections were identifiable as the result of a survey — it did sell for $500,000— and got the money — whatever right it had in 1,000,000 acres of land, including the land in controversy here.

Subsequent to that contract, by authority of the Act of Congress of March 3, 1897, the interest in the lands and the right to select other lands was confirmed in its successor, the plaintiff Santa Fe Pacific Railroad Company. Some time — and that time is not apparent from the record — between the time of the grant and the year 1898, it became a fact that the losses in the place limit exceeded the available indemnity lands. It was after that fact existed that the plaintiff, Santa Fe Pacific Railroad Company, by quitclaim deed, in 1905, conveyed to the Aztec Land and Cattle Company, Ltd., its interest as acquired from the Atlantic and Pacific Railroad Company. At that time there was not sufficient land in the indemnity limit to satisfy the losses in the place limit. After this condition arose, the very purpose of selection had ceased to exist. No longer was there any excess in the indemnity land from which to make a selection. It was entitled not to a part of the indemnity lands unidentified, but to all of the lands then remaining in the indemnity area.

Had the Company filed its selection at any time after this condition arose (before the release in 1940) the only question for determination by the Secretary would have been — did the losses in place (and that is admitted here) exceed the indemnity lands ? If so, the Company was entitled to patents, and the only discretion vested in the Secretary of the Interior would have been as to whether or not the conditions aforesaid existed.

From the record it is indisputable that the Atlantic and Pacific Railroad Company and the Santa Fe Pacific Railroad Company and the Aztec Land and Cattle Company, Ltd., at all times, and now do, consider the transactions between them to have been made in good faith. The Company received compensation for what it had and for what it had a right to have. When, under the Transportation Act, it made an assignment to the Government, it excluded from that assignment that which it felt it had in good faith sold and been paid for. Its reservation or exclusion from the release was within the provisions of Section 321(b) of the Transportation Act aforesaid.

In view of the foregoing, it is my belief that the Company had an interest in specific lands which it had a lawful right to convey, and having reserved such lands from the provisions of the release, the Secretary of the Interior could not lawfully refuse to issue patents to such lands for the reasons assigned by him.

Plaintiffs’ motion for summary judgment is, therefore, sustained, and defendants’ motion for summary judgment is overruled. Orders in accordance herewith will be presented.

       “See. 321. (a) Notwithstanding any other provision of law, but subject to the provisions of sections 1(7) and 22 of the Interstate Commerce Act, as amended, the full applicable commercial rates, fares, or charges shall be paid for transportation by any common carrier subject to such Act of any persons or property for the United States, or on its behalf, except that the foregoing provision shall not apply to the transportation of military or naval property of the United States moving for military or naval and not for civil use or to the transportation of members of the military or naval forces of the United States (or of property of such members) when such members are traveling on official duty; and the rate determined by the Interstate Commerce Commission as reasonable therefor shall be paid for the transportation by railroad of the United States mail: Provided, however, That any carrier by railroad and the United States may enter into contracts for the transportation of the United States mail for less than such rate: Provided further, That Section 3709, Revised Statutes (U.S.C., 1934 edition, title 41, sec. 5), shall not hereafter be construed as requiring advertising for bids in connection with the procurement of transportation services when the services required can be procured from any common carrier lawfully operating in the territory where such services are to be performed.
      “(b) If any carrier by railroad furnishing such transportation, or any predecessor in interest, shall have received a grant of lands from the "United States to aid in the construction of any part of the railroad operated by it, the provisions of law with respect to compensation for such transportation shall continue to apply to such transportation as though subsection (a) of this section had not been enacted until such carrier shall file with the Secretary of the Interior, in the form and manner prescribed by him, a release of any claim it may have against the United States to lands, interests in lands, compensation, or reimbursement on account of lands or interests in lands which have been granted, claimed to have been granted, or which it is claimed should have been granted to such carrier or any such predecessor in interest under any grant to such carrier or such predecessor in interest as aforesaid. Such release must he filed withín one year from the date of the enactment of this Act. Nothing in this section shall be construed as requiring any such carrier to reeonvey to the United States lands which have been heretofore patented or certified to it, or to prevent the issuance of patents confirming the title to such lands as the Secretary of the Interior shall find have been heretofore sold by any such carrier to an innocent purchaser for value or as preventing the issuance of patents to lands listed or selected by such carrier, which listing or selection has heretofore been fully and finally approved by the Secretary of the Interior to the extent that the issuance of such patents may be authorized by law.”

       “Arizona, G. and S. R. M. Area
      T. 13 N„ R, 9 E., secs. 5, 7, 9 .......................... 1,862.08 acres
      T. 14 N., R. 9 E., secs. 1, 3, 5, 7, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33, 35 .............. 10,993.07 ”
      T. 14 N., R. 11 E., secs. 33, Fjy2 ; 35, SW% (unsurveyedl---- 480.00 ”
      T. 13 N.-, R. 12 E., secs. 1. 3. 5, 7, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29. 31, 33, 35 .............. 11,802.56 "
      T. 14 N., R. 12 E„ secs. 3, 5, 7, 9, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33, 35 ........................ 10,134.32 ”
      T. 15 N„ R. 12 E.; secs. 31, 33 ............................ 1,458.08 ”
      T. 13 N., R. 13 E., secs. 1, 3, 5, 7, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33, 35 .............. 11,849.78 ”
      T. 14 N., R. 13 E., secs. 19, 21, 29, 31, 33 .................. 3,439.44 ”
      T. 13 N„ R. 14 E., secs. 19,' 21, 23. 25, 27, 29, 31, 33, 35 ...... 5,736.51 ”
      T. 13 N„ R. 15 E„ secs. 19, 21, 23, 25, 27, 29, 31, 33, 35 ...... 5,717.59 ”
      T. 12 N., R. 16 E., secs. 7. 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33, 35 .................... 9,256.84 ”
      T. 12 N., R. 17 E., secs. 7, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, on q-i oo ok Q 40K on ft

      T. 10 N„ R. 20 E., secs. 1, 3, 5,’7, 9,11, Í3,'Í5,'Í7*Í9,'23 7,469.47 ”
      T. 11 N„ R. 21 E„ secs. 5, 7, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33, 35 .................. 10,025.89 "
      Total 98,690.83 acres.

       “United States Department of the Interior Office of the Secretary Washington
      A. 23630. January 8, 1944
      “F”
      Atlantic and Pacific Railroad Company Santa Fe Pacific Railroad Company, and Aztec Land and Cattle Company, Ltd,
      Phoenix 080632
      Application for patent under Transportation Act of 1940 rejected.
      Affirmed.
      Appeal from the General Land Office
      ****** *******
      “This is an appeal by the Santa Fe Pacific Railroad Company from the decision of the Commissioner of the General Land Office of April 8, 1943 rejecting application for patent, Phoenix 080632, to 98,-690.83 acres of land in Navajo and Coconino Counties, Arizona.
      “The land in question is within the exterior boundaries of the Black Mesa Forest Reserve established by an Executive proclamation, dated August 17, 1898, pursuant to section 24 of the act of March 3, 1891, 26 Stat. 1095, now the Coconino and Sitgreaves National Forests, and was included in the indemnity limits of the grant of land to the Atlantic and Pacific Railroad Company under the act of July 27, 1836, 14 Stat. 292, which was confirmed in its successor in interest,, the Santa Fe Pacific Railroad Company, by the act of March 3,1897, 29 Stat. 522.
      “On June 20, 1887, the Atlantic and Pacific Railroad Company filed an indemnity selection under the act of July 27, 1866, which included all of the land described in the .pending application for patent (Prescott 1), but it was rejected by the General Land Office because the land was unsurveyed and therefore not subject to selection. The Department upheld the Land Office decision (8 L.D. 307), and the selection was finally cancelled on July 18, 1893 (‘F’ Docket 6-5804, November 25, 1912, Miscellaneous File No. 278286). No attempt to select this indemnity land has since been made although official surveys covering all but 480 acres of it were made and the official plats of the surveys were filed with the Land Office in 1896, 1918, 1922, 1936 and 1939.
      “On December 18, 1940, the Santa Fe Pacific Railroad Company and the Atchison, Topeka and Santa Fe Railroad Company, operator of the line of railroad, filed releases of all claims arising from any land grant in aid of the construction of a railroad in accordance with section 321(b), Part II, Title III, of the Transportation Act of 1940, 54 Stat. 954 [49 Ü.S.C. A. § 65]. These releases excepted lands sold to innocent purchasers for value prior to September 18, 1940, lands embraced in selections made and approved by the Secretary of the Interior prior to September 18, 1940, and lands already patented or certified to the grantee. The releases were approved on March 1, 1941. As required by departmental regulations dated October 10, 1940 (43 CFR 273.61-273.67), the Santa Fe Pacific Railroad Company also filed a list of land and persons alleged to have become innocent purchasers of specific portions of the listed land prior to the effectiveness of the Transportation Act on September 18, 1940. This list included the lands in question and named the Aztec Land and Cattle Company as its purchaser.
      “Thereafter, on June 26, 1942, the Santa Fe Pacific Railroad Company filed its application for patent to the land, alleging that this land was sold to the Aztec Land and Cattle Company, Ltd., in 1S8S. The contract offered to support this allegation, dated February 3, 1886, contains the promise of the Atlantic and Pacific Railroad Company to sell the Aztec Land and Cattle Company, Ltd., certain tracts of land located in Apache and Yavapai Counties, Territory of Arizona, estimated to contain approximately 1058 560 acres for a consideration of $529,280, and bound the railroad to obtain patents to the said land from the United States and to convey by warranty deed within a period of two years from the date of the contract. A quitclaim deed dated November 7, 1905, offered as further evidence of the alleged sale, was entered into between the Santa Fe Pacific Railroad Company, as successor in interest to the Atlantic and Pacific Railroad Company, and the Aztec Land and Cattle Company, Ltd. It recites that on May 12, 1886, and May 25, 1894, the Atlantic and Pacific Railroad Company conveyed to the Aztec Land and Cattle Company, Ltd., a portion of the lands described in the contract of February 5, 1886, amounting to 576,701.91 acres and that said Aztec Land and Cattle Company, Ltd., was entitled to receive conveyance of an additional 423,298.00 acres of land; and contains the Santa Fe Pacific Railroad Company’s release and quitclaim to the Aztec Land and Cattle Company, Ltd., for a consideration of $1, of all of its right, title and interest to certain land described by township, range and section, located in the counties of Navajo and Coconino, in the Territory of Arizona, and estimated to contain 423,270.35 acres. The Santa Fe Pacific Railroad Company relies upon the foregoing to establish its contention that the Aztec Land and Cattle Company is an innocent purchaser for value of the land included in the application for patent within the meaning of the second 'provision of the saving clause of section 321(b) of the Transportation Act of 1940 which provides:
      “ ‘ * * * Nothing in this section shall be construed * * * to prevent the issuance of patents confirming the title of such lands as the Secretary of the Interior shall find have been heretofore sold by any such carrier to an innocent purchaser for value * * *.’ ”
      “In his decision of April 8, 1943, the Commissioner rejected the application on the ground that the land had’not been ascertained and identified so that the railroad acquired any interest in specific land which it could convey prior to the filing of its release and that, therefore, its transferee is not protected under the saving clause of section 321(b) of the Transportation Act. The Commissioner also noted the existence of certain forest homestead entries and other adverse claims to the lands covered by the application.
      “On this appeal appellant contends that the Commissioner erred (1) in failing to determine whether or not at the time of the withdrawal there were losses in the place lands granted to the Atlantic and Pacific Railroad Company of such extent that all of the indemnity land was and has since-been required to replace these losses; (2) in failing to determine to what extent there are intervening or superior adverse-claims to any of the land in question; and (3) in determining that appellant is not entitled to a patent under the provisions, of the Transportation Act of 1940.
      “A finding by the Commissioner that all of the indemnity land was required to-replace losses in the place limits of the-grant at the time of the withdrawal would be immaterial for the reason that the right, of the United States to withdraw the land is not in issue. The question to be decided concerns the effect of appellant’s voluntary relinquishment of all claims to the-land, which is in no way affected by the fact that the indemnity land relinquished' did or did not exceed losses in the place lands. Likewise, a determination of the extent and validity of adverse claims in this land is not material unless and until appellant’s claim has otherwise been established.
      At the time of the compromise settlement between the Santa Fe Pacific Railroad Company and the Aztec Land and. Cattle Company the land had not been surveyed. Most of the land has since been surveyed, but the railroad company never-exercised its right to select this land. It follows that the railroad’s right to select the lands was relinquished by the filing of' the release and that neither the railroad nor anyone claiming through the railroad has any right to a patent. Santa Fe Pacific Railroad Company, A. 23646, decided this day.
      “The decision of the commissioner is affirmed.
      “(Sgd) Oscar L. Chapman,
      “Assistant Secretary.”'

       See note 1 on page 723.


author: MILLER, District Judge.

text:
    HARGIS CANNERIES, Inc., v. UNITED STATES.
    Civ. A. No. 435.
    District Court, W. D. Arkansas, Port Smith Division.
    Feb. 1, 1945.
    G. T. Sullins, of Fayetteville, Ark., for plaintiff.
    Clinton R. Barry, U. S. Atty., and Thomas C. Pitts, Asst. U. S. Atty., both of Fort Smith, Ark, for defendant.
   MILLER, District Judge.

The complaint was filed March 31, 1944, and after the disposal of some preliminary motions the defendant filed its answer on • September 14, 1944, and on September 20, 1944, the plaintiff filed its motion for judgment on the pleadings. Rule 12(c), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

The motion for judgment on the pleadings admits all facts well pleaded, but does not admit conclusions of law; facts which the court will take judicial notice are not true; legally impossible facts; facts which would be inadmissible in evidence in the event of a trial nor facts which might appear by a record or document included in the pleadings to be unfounded. Cohen v. United States, 8 Cir., 129 F.2d 733; Rosenhan v. United States, 10 Cir., 131 F.2d 932.

The facts disclosed by the pleadings and exhibits thereto are as follows:

Plaintiff is a corporation, organized and doing business under the laws of the State of Arkansas with its principal place of business at Fayetteville in that State.

On or about the first day of June, 1942, plaintiff entered into a contract with the defendant through the California Quartermaster Depot, E. J. Brugger, Major, Q. M.C., purchasing and contracting officer, for the sale of 10,000 dozen No. 10 cans of blackberries at the price of $6 per dozen. The contract provided that final delivery should be made not later than June 30, 1943. Under the contract plaintiff delivered to the defendant 3600 dozen cans at $6 per dozen and 1590 dozen cans at $5.69 per dozen.

On September 13, 1942, the contracting officer wrote plaintiff terminating plaintiff’s right to make further deliveries and proceeded to purchase enough blackberries from other packers to complete the contract and paid other packers a price in excess of the contract price to be paid the plaintiff in the sum of $8,730.81.

The defendant has withheld the sum of $8,730.81 from plaintiff and has refused to pay the plaintiff said sum, but is withholding said money as damages by reason of condition 2 of the contract entered into between plaintiff and defendant.

Plaintiff alleges that the blackberries were not furnished according to contract by reason of unforeseeable circumstances and causes beyond its control and without fault or negligence on its part; that the weather conditions were such as to make it impossible to pack the amount of blackberries provided for in the contract within the time provided therein or during the year 1942, and that under condition 2 of said contract it is relieved from complying with the contract and is not liable to the defendant for any excess cost on account of its failure to make deliveries because of the circumstances and conditions which prevented it from fulfilling the contract.

Condition 2 of the contract reads as follows: “If the contractor refuses or fails to make deliveries of the materials or supplies within the time specified, or any extension thereof, the Government may by written notice terminate the right of the contractor to proceed with deliveries or such part or parts thereof as to which there has been delay. In such event, the Government may purchase similar materials or supplies in the open market or secure the manufacture and delivery of the materials and supplies by contract or otherwise, and the contractor and his sureties' (if any) shall be liable to the Government for any excess cost occasioned the Government thereby: Provided, that the contractor shall not be charged with any excess cost occasioned the Government by the purchase of materials or supplies in the open market or under other contracts when the delay of the contractor in making deliveries is due to unforeseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts of God or of the public enemy, acts of the Government, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, unsually severe weather, and delays of a subcontractor due to such causes unless the contracting officer shall determine that the materials or supplies to be furnished under the subcontract are procurable in the open market, if the contractor shall notify the contracting officer in writing of the cause of any such delay, within 10 days from the beginning thereof, or within such further period as the contracting officer shall, with the approval of the head of the department of his duly authorized representative, prior to the date of final settlement of the contract, grant for the giving of such notice. The contracting officer shall then ascertain the facts and extent of delay, and his findings of fact therein shall be final and conclusive on the parties hereto, subject only to appeal within 30 days by the contractor to the head of the department concerned or his duly authorized representative, whose decision on such appeal as to the facts of delay shall be final and conclusive, on the parties hereto. As used herein ‘head of department’ means the head or any assistant head of the executive department or independent establishment involved, and ‘his duly authorized representative’ means any person authorized to act for him other than the contracting officer; and the term ‘contracting officer’ shall include his duly appointed successor or his authorized representative.”

After the defendant had terminated the contract, the plaintiff made application to the California Quartermaster Depot for release of liability and for payment to it of the sum of $8,730.81, purchase price of the blackberries delivered by plaintiff and accepted by defendant under the contract. The matter was submitted to the contracting officer who made the following findings of fact:

“Findings of Fact

“December 22, 1942

“1. In response to radio of this office dated May 30, Hargis Canneries, Inc., offered 10,000 doz. cans. @ $6.00 per doz., drained weight 65 ounces. Offer was accepted by radio of June 1, and above contract awarded. Change Order “B” reduced the unit price of 1590 dozen cans to $5.69 to compensate for a lower average drained weight.

“2. On August 14, 1942, contractor notified this office that due to an insufficient supply of blackberries, he would be unable to complete delivery. Further information was furnished that a little over 11,000 cases had been packed, -that 10266 cases were in suitable condition to be applied against the contract, and that in an effort to secure more berries, several canners in the territory had been contacted.

“3. On September 15, 1942, the following shipment was received by the Government, F.O.B. Fayetteville, Arkansas:

2,600 doz. cans @ $6.00 per dozen

1,500 doz. cans @ $5.69 per dozen

“4. By letter of September 13, 1942, this .office terminated contractor’s right to make further delivery, and purchase of 3,751,800 ounces was made from R. D. Bodle Company, Seattle Washington, on contract W 1307 qm-2858, SS-2260, dated September 24, 1942, at the price of $.0100194 per ounce, involving an excess cost of $8,730,811

“5. In reply to request of this office for remittance of above amount, contractor protested charge of excess cost and requested relief from penalty under Article 2 of the contract, claiming that default was due to unusually severe weather. He states that every effort had been made to secure additional berries, and that this depot had received all available berries. In support of his case, contractor submitted letters from Sam B. Schneider, Tulsa Radio Station KVOO Farm Editor; C. A. Border, Manager Agricultural Department, Tulsa Chamber of Commerce and President of N. E. Oklahoma Fruit & Berry Growers Association; W. A. Markham and Verser Hides, blackberry growers,, to the effect that severe rains seriously damaged and curtailed the blackberry crop and interfered with picking.

“6. The U. S. Department of Agriculture, A.M.A., Fayetteville, Arkansas, furnishes the information that the large number of government contractors, many of whom were not regular blackberry packers, competing for a limited crop caused several canners to fall short on their contracts; also, that ‘The month was unusually wet for June, the average rainfall for the State, 6.69 inches, being the greatest since 1932 * * With specific reference to the case of Hargis Canneries, Inc., the A.M.A. representative at Fayetteville states: ‘I know this contractor purchased blackberries from other districts within a 200 mile radius, and also had another contractor pack some for him. I was very favorably impressed with the effort that they were making during the packing seasons and believe that they secured all of the raw stocks available, regardless of price, and continued to operate after most others had closed down.’

“7. I therefore find that failure of Hargis Canneries, Inc., to complete delivery under contract No. W 1307 qm-890, S — 1788, was due to unforeseeable causes beyond the control and without the fault or negligence of the contractor.

“/s/ E. J. Brugger

“Major, Q. M. Corps

“Contracting Officer.”

The General Accounting Office of defendant has failed and refused to recognize the findings of fact as final, conclusive and binding upon the defendant and has refused to pay plaintiff the said sum of money.

Judgment is asked for the sum of $8,-730.81, together with interest from December 22, 1942.

The answer of the defendant admits that the findings of fact by the contracting officer are as set forth in the complaint and that in so far as “they are actually findings of fact and not conclusions of law, are correct and binding upon the defendant herein, that is to say it admits that the findings of fact Numbered 1 through 6 are true and correct and binding upon the defendant, but denies that finding No. 7 is a ‘finding of fact’ and further denies that it is binding upon the defendant.”

The defendant further pleads that it is justified in charging the plaintiff with the excess cost occasioned by its purchase of blackberries on the market under the express provisions of condition 2 of the contract, and “that the plaintiff was not excused for the breach of said contract by the finding of fact of the contracting officer and that said findings of fact are not binding upon the defendant for the following reasons, to-wit: ‘That condition No. 2 of said contract excused the plaintiff herein only for delays in delivery of the canned blackberries mentioned therein under certain conditions but did not purport to excuse the plaintiff from liability for excess costs in the event of an entire failure of delivery, and that the default of the plaintiff amounted to a failure of delivery rather than a delay in delivery, and that the contracting officer, therefore, had no authority under any circumstances under said contract to excuse the plaintiff for its failure to make delivery.”

That the seventh finding of fact is a conclusion of law and is erroneous in that it is not supported by the factual findings upon which ,it is based because the plaintiff’s failure to make delivery was due to excessive rains in the region of the plaintiff’s operations which caused a short crop thus preventing plaintiff from obtaining the requisite quantity of blackberries in the vicinity of its operations; that the possibility of said adverse weather conditions which would prevent the plaintiff from obtaining the requisite quantity of berries in the vicinity of its operations was, as a matter of law, a foreseeable possibility and involved a risk assumed by the plaintiff when it entered into said contract.

That the contracting officer exceeded his authority under the contract by holding that an impossibility of obtaining the requisite amount of blackberries in the immediate vicinity of plaintiff’s operations was an excuse for plaintiff’s failure to furnish the amount called for in the contract.

Respective counsel have filed excellent typewritten briefs and arguments. They have cited authorities to sustain their various contentions, but in view of the admissions of parties and the facts as disclosed by the record it appears unnecessary to separately discuss each contention of counsel.

Under the contract the berries were to be delivered “F.O.B. cars, Fayetteville, Arkansas.” On August 14, 1942, the plaintiff notified the defendant that it was unable to complete delivery due to an insufficient supply of blackberries and on September 13, 1942, the defendant terminated the plaintiff’s right to make further delivery, and proceeded through its contracting officer “to ascertain the facts and extent of delay”.

The defendant in its answer and on its written brief filed herein concedes that findings one to six, inclusive, involve questions of fact and are conclusive. It further contends that finding seven is not a finding of fact but is one of law for the court to determine.

Under the facts which the defendant admits are conclusive, was the failure of plaintiff due to “unforeseeable causes beyond the control and without the fault or negligence of the contractor” (plaintiff) ?

The parties did not stipulate that the contracting officer should determine any question of law that might arise in the performance of the contract but did agree to be bound by the findings of fact and the findings are that the weather in the territory adjacent to the shipping point was unusually severe; that the “severe rains” seriously damaged and curtailed the blackberry crop; that the average rainfall in the State during June was the greatest since 1932, a period of ten years and that the plaintiff secured all of the raw stocks available, regardless of price within a radius of 200 miles.

The fact-finding officer in finding seven summarized the findings “that failure of Hargis Canneries, Inc., to complete delivery under contract No. W 1307 Q. M. 890, S 1788, was due to unforeseeable causes beyond the control and without the fault or negligence of the contractor.”

There is no suggestion of fraud or such gross mistake as would necessarily imply bad faith, or failure to exercise honest judgment on the part of the officer designated to ascertain the facts, and under the admissions of counsel for defendant, such findings of fact are conclusive that the delay and ultimate 'failure to make full delivery of the blackberries was due to unforeseeable causes.

In the case of United States v. Brooks-Callaway Co., 318 U.S. 120, 63 S.Ct. 474, 475, 87 L.Ed. 653, the court had under consideration a contract which provided that the contractor should not be charged with liquidated damages because of any delays in the completion of the work due to “unforeseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts of God, or of the public enemy, acts of the Government, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather or delays of subcontractors due to such causes.”

The court there said: “The purpose of the proviso is to remove uncertainty and needless litigation by defining with some particularity the otherwise hazy area of unforeseeable events which might excuse nonperformance within the contract period. Thus contractors know they are not to be penalized for unexpected impediments to prompt performance, and, since their bids can be based on foreseeable and probable, rather than possible hindrances, the Government secures the benefit of lower bids and an enlarged selection of bidders.”

It is immaterial whether finding seven be termed a conclusion of law or a finding of fact since the fact-finding officer definitely found the failure on the part of the plaintiff to make delivery of the blackberries was due to an unforeseeable cause, he is entitled to judgment against the defendant for the sum sued for exclusive, however, of interest, and a judgment for said sum is being entered against the defendant for the sum of $8,730.31.


author: CAFFEY, District Judge.

text:
    In re MacMASTERS et al.
    No. 31564.
    District Court, S. D. New York.
    March 27, 1945.
    Bernard Cowen, of New York City, for Elizabeth P. Jones, creditor-petitioner.
    Nathaniel L. Goldstein, Atty. Gen., and John F. X. McGohey, U. S. Atty., of New York City (Abe Wagman, Asst. Atty. Gen., and Dolores C. Faconti, Asst. U. S. Atty., of New York City of counsel), for the People.
   CAFFEY, District Judge.

This is a petition by one creditor of the bankrupts above named to reopen the estate and have any funds remaining, therein distributed among the creditors who may be entitled thereto.

I.

The bankrupts were adjudged such in 1922 and the proceeding sent to a referee of this Court. Thereafter a trustee and, later, his successor were appointed. In 1928 a first and final dividend was declared, payable to the approved creditors, and checks, in payment of these dividends, were sent the creditors entitled to them. Over two hundred of the checks were never cashed and the trustee deposited with the Clerk of this Court the sums of $33.71 on October 5, 1928, and $4,014.45 on October 27, 1930. In the succeeding years thirteen creditors presented to the court their checks aggregating $804.33, and these were paid. On January 30, 1934, $33.71 was transferred to the Treasury and on March 28, 1936, the balance of the moneys remaining in the Court, amounting to $3,-210.12, was transferred to the Treasury. Five more checks were then presented and $572.72 was paid out thereon. There is now a balance of $2,671.11 in the Treasury to the credit of this bankruptcy estate. The estate was closed in 1931.

II.

In 1944 the People of the State of New York started proceedings in the Supreme Court, New York County, to declare these funds escheated to the People. An ex parte order was obtained from a Justice of the Supreme Court providing for notice by publication to the owners and claimants of this fund. The only answer filed in response to the publication was by the Clerk of this Court, who raised no material issues. The time to answer in the State proceedings has run and the petitioners have not sought to answer. However, no judgment has been entered therein, because of the pendency of this motion.

III.

The People of the State of New York oppose the pending motion to reopen the estate and distribute the funds remaining on hand. They assign three grounds of opposition. These are as follows:

(1) The moneys on deposit in the Treasury of the United States have escheated to and are now the property of the People of the State of New York.

(2) Since the moneys are now and since 1936 have been on deposit in the Treasury of the United States, this Court has no power to effect the distribution sought by the petitioners. It can only direct payment to those creditors who had originally failed to cash their dividend checks or those claiming under or through the same creditors.

(3) Even if the power be lodged in this Court now to effect the distribution sought by the petitioner, this Court should, in the exercise of its discretion, deny the relief prayed for by the petitioner.

IV.

The first ground is clearly untenable. The People of the State of New York have no title to the abandoned moneys until there has been an adjudication of escheat by the State Court, Klein v. Brodbeck, D.C., E.D.Pa., 15 F.Supp. 473, 474 second column; 28 U.S.C.A. §§ 851 and 852; McKinney’s Consolidated Laws, book 2-%j New York Abandoned Property Law, secs. 1202 and 1210. See United States v. Klein, 303 U.S. 276, 281, 282, 58 S.Ct. 536, 82 L.Ed. 840.

There has been no such judgment entered on the moneys involved. The ex parte order obtained in the State Supreme Court was not a judgment of escheat. The underlined portion of the order submitted in the affidavit by the Assistant Attorney General merely repeats the statutory presumption of abandonment. Abandoned Property Law, sec. 1201. This presumption is rebuttable by competent evidence in accordance with the terms of that section. Therefore, the funds have not yet escheated to the People of the State of New York. The petitioner may be a claimant entitled to some of the funds (Abandoned Property Law, sec. 1204) and this motion may be evidence that she has not abandoned her right in the fund.

V.

The second ground of objection, that this Court has no power to order a distribution of funds on deposit with the Treasury, is equally untenable. The moneys were deposited in the Treasury after having laid with the Clerk of this Court unclaimed for five years in accordance with the provisions of 28 U.S.C.A. § 852. Included in the terms of that section are these: “Any person * * * may, on petition to the court from which the money was received, * * * and upon notice to the United States attorney and full proof of right thereto, obtain an order of court directing the payment of such money to the claimant * * *.”

It follows that this Court has full power to order payment of any of the funds from this bankruptcy estate deposited in the ■Treasury. The only requirements for payment are a petition, notice to the United States Attorney and full proof of right to the money. The petition has been presented. Notice has been given to the United States Attorney. All that is lacking is opportunity for full proof of right to the funds; and this the Court may provide.

Before these funds were sent to the Treasury, and after they were with the Clerk of this Court for one year unclaimed, the petitioner had a right to them under Section 66, sub. b of the Bankruptcy Act, 11 U.S.C.A. § 106, sub. b. Nothing in 28 U.S.C.A. 852 has cut off that right. On the contrary, the statute expressly provides that she may collect some of them on “full proof of right thereto.”

VI.

The third ground of objection asserted by the People of the State of New York, that there is discretion in this Court with regard to the distribution, is also lacking in merit. The distribution which the petitioner seeks, if granted, is to be made under Section 66, sub. b of the Bankruptcy Act, 11 U.S.C.A. § 106, sub. b. This section includes a clause as follows: “Dividends remaining unclaimed for one year shall, under the direction of the court, be distributed to the creditors whose claims have been allowed but not paid in full, and after such claims have been paid in full the balance shall be paid to the bankrupt ‡ * * »

The statute quoted is mandatory in requiring the distribution therein described. This results from use of the word “shall” and leaves no discretion in the Court. It is under the provisions of this section that this Court is to determine whether the petitioner has a right to the moneys from the estate now being held. ’ See Louisville & N. R. Co. v. Robin, 5 Cir., 135 F.2d 704, 706. The present procedure for the distribution of the unclaimed moneys is one which is apparently approved by the Circuit Court of Appeals for this Circuit. In re Gubelman, 2 Cir., 79 F.2d 976, 977.

Motion granted. Settle order on notice.


author: RIDGE, District Judge.

text:
    MAY DEPARTMENT STORES CO. v. BROWN et al.
    Civ. A. No. 3232.
    District Court, W. D. Missouri, W. D.
    June 5, 1945.

      Lewis, Rice, Tucker, Allen & Chubb and Robert T. Burch, all of St. Louis, John G. Madden and Ralph M. Russell, both of Kansas City, Mo., for plaintiff.
    Francis M. Shea, Asst. Atty. Gen., Maurice M. Milligan, U. S. Atty., and Thomas A. Costolow, Asst. U. S. Atty., both of Kansas City, Mo., Arnold Levy, Sp. Asst, to the Atty. Gen., and Harry I. Rand, Atty., Department of Justice, of Washington, D.C., for defendants.
   RIDGE, District Judge.

Plaintiff, a New York corporation, operating a department store in St. Louis, Missouri, seeks to enjoin defendants, who are the Chairman, two Vice-Chairmen, and the Director of the Disputes Division of Regional War Labor Board VII, and the three members of a tripartite panel established and appointed by said Board, from taking any further action in a certain labor dispute matter now pending before said Regional Board.

On May 8, 1945 a temporary restraining order was issued ex parte upon the verified complaint of plaintiff, returnable on May 10, 1945 at 9:30 o’clock a. m. On the return date, defendants requested the hearing be continued until May 24, 1945. In the meantime, defendants filed a motion to dismiss the complaint or in the alternative for summary judgment, on seven separate grounds. Said motion is now before the Court for disposition. The first ground contained in the motion to dismiss challenges the jurisdiction of the Court over the subject matter of this action. If this contention be sound, it will not be necessary to consider the other grounds contained in said motion.

The complaint and affidavit, filed in support of the motion to dismiss, discloses the following state of facts: a labor dispute exists between plaintiff and Local No. 372, United Retail, Wholesale and Department Store Employees of America (CIO), hereinafter called the Union, concerning certain busheling-room employees of plaintiff. The dispute was first referred to the National War Labor Board on September 10, 1943, pursuant to Executive Order 9017, and Section 7(a) (1) of the War Labor Disputes Act, by the Acting Director of the United States Conciliation Service, and the Acting Secretary of Labor, for refusal of plaintiff to recognize or to bargain collectively with the Union, in respect to said busheling-room employees, and for the reason that said dispute (in the words of the certification), “might interrupt work which contributes to the effective prosecution of the war and may lead to substantial interference with the war effort and which cannot be settled by collective bargaining or conciliation.” Thereafter the National War Labor Board referred said dispute to Regional War Labor Board VII, and the hearing thereof was set, by said Regional Board, before a tripartite panel. This hearing was later cancelled to await clarification of National War Labor Board policy affecting disposition of dispute cases involving issues of union representation and collective bargaining. In July 1944, the dispute remaining unsettled, the Conciliation Service re-entered the controversy and having failed to resolve said dispute the matter was again, on August 31, 1944, certified to the National War Labor Board. The issue then involved was stated to be “the terms and conditions of employment” affecting the busheling-room employees of plaintiff. This dispute was also referred to Regional War Labor Board VII, and a hearing thereon was held before a tripartite panel on October 16, 1944, at which plaintiff and the Union participated. On November 25, 1944, the panel filed its report with the Regional Board. Thereafter, on January 19, 1945, the Regional Board substantially, in accordance with the panel’s recommendation, issued an interim directive order recommending that the parties endeavor, immediately, to settle by negotiation all outstanding issues regarding the “terms and conditions of employment,” and providing that failing such an agreement by February 1, 1945, a public hearing be held in St. Louis, before a tripartite panel of the Regional Board. The plaintiff filed a petition for review of this Regional Board Interim Order.

On July 12, 1943 (prior to the first submission to the National War Labor Board), in a representative proceeding under Section 9(c) of the National Labor Relations Act, the National Labor Relations Board certified the Union in question as the exclusive bargaining representative of plaintiff’s busheling-room employees. On December 17, 1943, the National Labor Relations Board issued a decision and order, finding that plaintiff had refused to bargain with said Union and, pursuant to the provisions of the National Labor Relations Act, petitioned the Eighth Circuit Court of Appeals to enforce its order. On January 11, 1945, the Eighth Circuit Court of Appeals entered its decree, enforcing the National Labor Relations Board’s order with a slight modification. On January 23, 1945, compliance with said decree was stayed by the Eighth Circuit Court of Appeals until the final disposition of certiorari proceedings to be instituted in the Supreme Court of the United States. On April 9, 1945, the Supreme Court of the United States granted certiorari in said National Labor Relations Board case. Because of the stay order issued by the Eighth Circuit Court of Appeals, and the certiorari proceedings pending in the Supreme Court of the United States, plaintiff petitioned Regional War Labor Board VII, to take no further action in the Labor Dispute matter then pending before it, until the final adjudication of the issues of representation involved in the National Labor Relations Board proceedings by the Supreme Court. On March 31, 1945 the Regional Board vacated its Interim Directive Order of January 19, 1945. On April 17, 1945 the Regional Board denied the plaintiff’s request that all action in said labor dispute case be stayed, pending decision by the Supreme Court and on April 25, 1945, the Regional Board advised the parties that “a further hearing involving terms and conditions of employment in the subject case” would be held in St. Louis, Missouri, on May 10, 1945. It was the holding of this hearing that was restrained by order of this Court on May 8, 1945.

The specific challenge made to the Court’s jurisdiction over the subject-matter of this action is: that the complaint states no justiciable controversy; that the Court has no jurisdiction to inquire into or review War Labor Board action; that defendants have no power to act in impairment of any of plaintiff’s legal interests, hence plaintiff has no controversy with defendants ; that neither statutory enactment nor general equitable principles authorize judicial intervention in National War Labor Board’s actions. I am of the opinion that this contention must be sustained and the complaint must be dismissed.

The Court of Appeals for the District of Columbia, in three recent cases has decided, that no statute authorizes review of National War Labor Board directive orders, and that the directives issued by said Board are “not reviewable” by the Courts under general equitable principles. The opinions in said cases make it clear that directive orders issued by the National War Labor Board are unenforceable; that “no money, property or opportunity” is taken or withheld by a directive of the National War Labor Board and that any action taken by said Board in a- labor dispute matter is “at most advisory” and “informative.” Hence, the correctness thereof cannot be controlled by the Courts. In Oil Workers, Intern. Union, etc., v. Texoma Natural Gas Co., 146 F.2d 62, 65, the Fifth Circuit Court of Appeals held that “the National War Labor Board is not, under the law, vested with judicial functions, nor does it have the power to enforce its determinations, called ‘directives,’ upon the parties to a controversy before it. It is not a substitute for the courts, and the pendency of a controversy before it is not a bar to a suit in the courts.”

The power usually delegated to administrative agencies is of three (3) general patterns: (1) quasi judicial power, to determine controversies; (2) legislative power, such as rate and rule making; or (3) the power to act merely in an advisory capacity to the Legislative or Executive branch of the Government. It is generally understood that as to agencies coming within the first two classifications, there is an underlying power in the Courts to scrutinize the acts of such agencies on questions of law and questions of jurisdiction, even though no right of review is given by statute.' As to administrative tribunals falling within the third classification, it is settled law that the Courts have no inherent power to interfere with, or review, the acts of such an agency and unless the right of review is specially given by statute Courts are without jurisdiction to control the action taken by said agency. The National War Labor Board is an administrative tribunal within this last classification. The correctiveness of the advice that might be given by the National War Labor Board, through its derivatives, to the Congress or the Executive branch of the Government, cannot be controlled by the Courts. The final “directives” of the National War Labor Board, being immune to interference or control by the judiciary, then it logically follows that the Courts have no jurisdiction to enjoin the interim proceedings of said Board that will only lead up to “a directive.” To hold otherwise would permit to be done by indirection that which cannot be done directly.

Plaintiff attempts to distinguish the jurisdiction of the Court, in the case at bar, from the jurisdictional question decided in the Oil Workers, Employer’s Group, Montgomery-Ward and Gypsum cases, supra. In doing so, plaintiff contends that the Court, in those cases, had before it final directive orders of the National War Labor Board in which there were proper adversary parties, while in the matter now pending before Regional War Labor Board VII, its adversary is an Union that cannot be certified as an appropriate bargaining agent for the busheling-room employees of defendant until a decision is rendered by the Supreme Court of the United States, in the proceedings there pending, as aforestated. In other words, plaintiff contends that the proceedings before the National War Labor Board are adversary proceedings; that without a properly designated adversary no labor dispute can exist within the meaning of the War Labor Disputes Act, hence the Regional War Labor Board has no jurisdiction to compel a hearing, involving terms and conditions of employment with the Union in question, because it has not been properly certified as an appropriate bargaining agent by the National Labor Relations Board.

The jurisdiction of the National War Labor Board over a “labor dispute” is not dependent upon the identity of the parties to such dispute, nor their legal relationship. Section 2(d) of the War Labor Dispute Act, declares that a “labor dispute” within the meaning of said Act “shall have the same meaning as in section 2 of the National Labor Relations Act.” Section 2 (9) of the National Labor Relations Act, is as follows: “The term ‘labor dispute’ includes any controversy concerning terms, tenure or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.” Section 7 (a) (1) of the War Labor Disputes Act is as follows: “(1) Whenever the United States Conciliation Service (hereinafter called the ‘Conciliation Service’) certifies that a labor dispute exists which may lead to substantial interference with the war effort, and cannot be settled by collective bargaining or conciliation, to summon both parties to such dispute before it and conduct a public hearing on the merits of the dispute. If in the opinion of the Board a labor dispute has become so serious that it may lead to substantial interference with the war effort, the Board may take such action on its own motion. At such hearing both parties shall be given full notice and opportunity to be heard, but the failure of either party to appear shall not deprive the Board of jurisdiction to proceed to a hearing and order.”

The language used in the latter section of the War Labor Disputes Act, supra, is broad enough to give the National War Labor Board jurisdiction over any labor dispute which “in the opinion of the Board * * * may lead to substantial interference with the war effort.” “It is not for any court to sit in review of the wisdom of their action or substitute its judgment,” on the question as to what constitutes such a labor dispute. The National War Labor Board obtains jurisdiction over a labor dispute either upon certification from the Secretary of Labor and the United States Conciliation Service, or upon its own motion. After it assumes jurisdiction it is authorized to hold a hearing regarding said labor dispute. Such disputes are generally referred by the National Board to one of its Regional Boards. If the Regional Board deems the matter ready for hearing, it may summon the parties before it, but notice, that under the Act “The failure of the party to appear shall not deprive the Board of jurisdiction to proceed to a hearing and order.” There is no penalty provided in the Act for failure of a party to appear at such a hearing, nor is there any power given to the Board to compel the attendance of a party, as such, in obedience to its summons. Section 7(a) (3) and (4) gives the Board the power of “subpoena” and outlines a mode whereby the attendance of witnesses may be compelled. Under this provision of the Act a party may be subpoenaed as a witness but he cannot be compelled to participate in the hearing as a party.

What is the purpose of holding such hearing? It is not “to determine the legal rights and obligations of employer and employe, or to protect and enforce such rights, but merely to decide how such rights, in the Board’s opinion, are to be exercised in the public interest in view of the state of war. * * * The function of the Board is to give expression of .its views of the moral obligation of each side to the controversy, as members of society, to agree upon a basis for cooperation m the public interest. * * * There is no constraint upon the parties to do what the Board may decide they should do, except moral constraint.”

In Pennsylvania Railroad v. Labor Board, supra, 261 U.S. 72, 43 S.Ct. 278, 282, 67 L.Ed. 536, the contention was made that no hearing could be held by the Labor Board created pursuant to the Transportation Act of 1920, until the question “who may represent the employees as to the grievances, rules and working conditions” was first determined. The Labor Board, set up under the Transportation Act of 1920, was given powers analogous to those given to the National War Labor Board under the War Labor Disputes Act. In disposing of the above contention Mr. Chief Justice Taft said: “Such a construction would give either side an easy opportunity to defeat the operation of the act and to prevent the Labor Board from considering any dispute. It would tend to make the act unworkable. If the Board has jurisdiction to hear representatives of the employees, it must of necessity have the power to determine who are proper representatives of the employees. That is a condition precedent to its effective exercise of jurisdiction at all.” As pointed out above, the National War Labor Board is given the power to hold hearings involving labor disputes in which “any controversy concerning terms, tenure or conditions of employment, or concerning the association or representation of persons * * * seeking to arrange terms or conditions of employment,” is involved. The jurisdiction so given the Board contains the power to determine who are proper representatives of employees involved in a labor dispute which has been certified to the Board or of which the Board takes jurisdiction of its own motion. The limitation upon its power to determine, or adjudicate, by a binding order, the appropriate bargaining agent for employees engaged in a labor dispute is recognized by the Board. The policy of the National War Labor Board, concerning such matters, is stated by Mr. Jesse Freidin, public member and the General Counsel of the National War Labor Board, in the affidavit attached to the motion to dismiss, as follows: “In accordance with the principles governing War Labor Board action in cases involving the jurisdiction and rulings of the National Labor Relations Board, it is the established practice of the National War Labor Board and its agents to accept certifications of the National Labor Relations Board as determining the representative selected by the majority of the employees involved so long as such certifications remain in effect. Where the National Labor Relations Board has ordered a company to bargain with a labor union and the company resists that order with the object of litigating the propriety of the Labor Relations Board’s certification, and a labor dispute develops which is certified to the National War Labor Board, the War Labor Board, if it deems it necessary to do so, will' issue an order prescribing the terms and conditions of employment, without prejudice, however, to any judicial determination of the propriety of the certification. The company’s refusal to bargain with the union, however, remains an issue determinable only by the National Labor Relations Board and the appropriate courts. In such a case, the National War Labor Board will merely provide the terms and conditions of employment which shall govern the relationships between the parties, and in fixing such terms and conditions, the War Labor Board does not undertake to order the company to bargain collectively. (See Sec. I, Principles Governing Action of War Labor Board on Cases Involving Jurisdiction and Rulings of National Labor Relations Board, C. C. H. Labor Law Service, Vol. 1A, par. 11,215.01.) That practice and those principles would govern the two dispute cases here involved.”

It appears from the foregoing that labor dispute proceedings before the National War Labor Board are not “adversary proceedings” in the usual sense of that legal terminology. An adversary proceeding, as commonly understood, presupposes a compulsory attendance of parties at a judicial or quasi judicial proceeding and the forfeiture of some right for the failure to attend. Proceedings before the National War Labor Board are not of that character, they are, in effect, legislative inquisitions, and the parties thereto are only nominal. The failure of the plaintiff to attend as a party the hearing scheduled by Regional War Labor Board VII, in the dispute matter in question, will work no forfeiture of any kind against plaintiff. Nothing that defendants have the power to do or allegedly have threatened to do can impair the legally-protected interests of plaintiff. Plaintiff will not suffer any legal injury or damage thereby.

The jurisdiction of the National War Labor Board is not inter-related nor dependent upon the action of any other agency of the Government first determining who are the proper parties to a labor dispute pending before it. Such fact may be determined by the War Labor Board apriori from the nature of the dispute.

Plaintiff has no cause of action at law or in equity against defendants or either of them.

For the reasons stated, this Court does not have jurisdiction of the subject matter of this action. The temporary restraining order, heretofore issued herein, was improvidently granted. Said restraining order is hereby vacated and this cause is dismissed with prejudice.

Submit order in accordance with local practice.

       50 U.S.C.A-Appendix, § 1507 note, 7 Fod.Reg. 237.

       C. 144, 57 Stat. 163, 166, 50 U.S.O.A. Appendix, § 1507(a) (1).

       29 U.S.C.A. § 159(c).

       53 N.D.R.B. 1366.

       N. L. R. B. v. May Department Stores Co., 8 Cir., 146 F.2d 66.

       65 S.Ct. 1014.

       Employers Group of Motor Freight Carriers, Inc. v. National War Labor Board, 79 U.S.App.D.C. 105, 143 F.2d 145, certiorari denied 65 S.Ct. 72; National War Labor Board v. Montgomery Ward & Co., Inc., 79 U.S.App.D.C. 200, 144 F.2d 528, certiorari denied 65 S.Ct. 134; National War Labor Board v. United States Gypsum Company, 79 U.S.App.D.C. 239, 145 F.2d 97.

       Pennsylvania R. R. Co. v. United States Railroad Labor Board, 261 U.S. 72, 43 S.Ct. 278, 67 L.Ed. 536; United States v. Los Angeles & S. L. R. R. Co., 273 U.S. 299, 47 S.Ct. 413, 71 L.Ed. 651.

       Employers Group of Motor Freight Carriers, Inc. et al. v. National War Labor Board, supra.

       Tit. 50 U.S.C.A.Appendix, § 1502 (d).

       29 U.S.C. § 152(9), 29 U.S.C.A. § 152(9).

       Kiyoshi Hirabayashi v. United States, 320 U.S. 81, 93, 63 S.Ct. 1375, 1382, 87 L.Ed. 1774.

       Tit. 50 U.S.O.A.Appendix, § 1507 (a) (1).

       Baltimore Transit Co. v. Flynn, D.C., 50 F.Supp. 382, 387. Oil Workers Internat'l Union, etc., v. Texoma Natural Gas Co., 5 Cir., 146 F.2d 62.

       45 U.S.C.A. § 146.

       National Labor Relations Board v. National Mineral Co., 7 Cir., 134 F.2d 424-426.

       Fitts v. McGhee, 172 U.S. 516, 529, 530, 19 S.Ct. 269, 43 L.Ed. 535; Champlin Refining Co. v. Corporation Commission, 52 S.Ct. 559, 286 U.S. 210, 237, 238, 76 L.Ed. 1062, 86 A.L.R. 403; Federal Trade Commission v. Claire Furnace Co., 274 U.S. 160, 47 S.Ct. 553, 71 L.Ed. 978.

       Myers v. Bethlehem Shipbuilding Corporation, 303 U.S. 41, 50-52, 58 S.Ct. 459, 82 L.Ed. 638.