26 F.(2d) 317 [6] It is further contended that there was a failure of proof as to the prior conviction of one of the plaintiffs in error. A judgment showing such conviction, and reciting that the plaintiff in error in question appeared in court in person and entered a plea of guilty, was offered in evidence; but, in opposition to the judgment and the recitals therein contained, the party against whom the judgment was rendered testified that "to his recollection" he did not appear in court or enter the plea of guilty as claimed. The instructions of the court have not been brought up, so that we are not advised as to the issues submitted to the jury. If the question of the presence of the party and the plea of guilty was in fact submitted to them, the jury may have found against the complaining party, and, if so, it is quite apparent that the uncertain testimony of an interested party, to which we have referred, did not as a matter of law overcome or disprove the recitals contained in the record of conviction. For this reason we need not inquire whether testimony thus tending to impeach the judgment was competent or admissible for any purpose. The judgment is affirmed. KANSAS CITY SOUTHERN RY. CO. v. NECTAUX. Circuit Court of Appeals, Fifth Circuit. May 21, 1928. No. 4990. 1. Master and servant 101102(9), 129(7) -Railroad must must use reasonable care to furnish employees clear track over which to run; where breach of obligation to furnish clear track is concurring cause, negligence of another cannot defeat recovery (Employers' Liability Act [45 USCA §§ 51-59]). Under Employers' Liability Act (45 USCA §§ 51-59; Comp. St. §§ 8657-8665), a railroad is charged with absolute and continuing duty of using reasonable care to furnish its employees clear track over which to run, and, if breach of such obligation is concurring cause, negligence of another will not defeat recovery. 2. Master and servant86-Rule of local law imposing liability may be enforced in suits under federal statute (Employers' Liability Act [45 USCA §§ 51-59]). A rule of local law imposing liability may be enforced in suits under Employers' Liability Act (45 USCA §§ 51-59; Comp. St. §§ 8657-8665). 3. Railroads 260-Railroad owning tracks and permitting another to use them, was liable to employee for negligence of other's employees (Employers' Liability Act [45 USCA §§51-59]). Where defendant was real owner of railroad held in name of K. Company, and had power to vest legal title in itself at any time, and K. Company under contract gave G. Company joint trackage rights with defendant over line, G. Railroad Company occupied position of defendant's licensee, and defendant held liable in suit under Employers' Liability Act (45 USCA §§ 51-59; Comp. St. §§ 8657-8665), to employee for injuries caused by negligence of employees of G. Company. 4. Railroads 260-Licensee's agent, having leave to do so, ordering train on defendant's track causing collision injuring defendant's employee, was defendant's agent for that purpose. Where defendant, in complete control of road over which licensee's trains also ran, left it to licensee's agent to order his train on de fendant's track at junction, and he did so, and collision with defendant's train resulted, causing injury to defendant's employee, licensee's agent was defendant's agent for that purpose. In Error to the District Court of the United States for the Western District of Louisiana; Benjamin C. Dawkins, Judge. Action by J. L. Nectaux against the Kansas City Southern Railway Company. Judgment for plaintiff (18 F. [2d] 681), and defendant brings error. Affirmed. George Janvier, of New Orleans, La., and J. D. Wilkinson, of Shreveport, La. (Wilkinson, Lewis & Wilkinson, of Shreveport, La., and Pujo, Bell & Hardin, of Lake Charles, La., on the brief), for appellant. Jas. D. Barksdale, Otis W. Bullock, and Howard B. Warren, all of Shreveport, La., and S. P. Jones, of Marshall, Tex. (Franklin Jones, of Marshall, Tex., and Barksdale, Bullock, Warren, Clark & Van Hook, of Shreveport, La., on the brief), for appellee. Before WALKER, BRYAN, and FOSTER, Circuit Judges. FOSTER, Circuit Judge. Appellee brought suit under the Federal Employers' Liability Act (45 USCA §§ 51-59; Comp. St. §§ 8657-8665) to recover damages for personal injuries resulting from a collision alleged in general terms to have been caused by the failure of appellant, his employer, to furnish him with a safe place to work. At the close of the evidence both parties moved for a directed verdict. The motion of appellant was denied, and that of appellee was granted, to the extent of fixing liability, and it was left to the jury to find the amount of damages. A verdict for $50,000 was returned, but, on consideration of a motion for a new trial, appellee was required to enter a remittitur for $20,000, which he did, a new trial was refused, and judgment was entered for $30,000. Error is assigned to the action of the court above indicated. No other errors are assigned. The record supports the following conclusions as to the material facts: The Kansas City, Shreveport & Gulf Railway Company probably owns the track on which the collision occurred, and in 1895 granted the right to the Kansas City, Pittsburg & Gulf Railroad Company to operate its property for 50 years. Appellant, the Kansas City Southern Railway Company, owns all the stock in the first-named company, except qualifying shares of directors, both companies having the same president and other officers, and it acquired all the rights of the second named company in 1900. By contracts executed in 1905 and 1910, ostensibly between the Kansas City, Shreveport & Gulf Railway Company and the Beaumont, Sour Lake & Gulf Railway Company, the Gulf Coast Lines was given joint trackage rights with appellant over the line. Both roads are extensive interstate systems. All trains moving over the track from De Quincey, La., to Beaumont, Tex., whether belonging to appellant or the Gulf Coast Lines, move under orders of appellant's train dispatcher at Shreveport, to whom all telegraph operators on the line report the movement of all trains passing their stations. Appel lant also issues all time-cards and makes the rules governing the movement of all trains. The employees of the Gulf Coast Lines are furnished with switch keys by appellant, are subject to discipline by appellant's trainmas ters and dispatchers, may be excluded from the joint trackage by appellant, if they are incompetent, and may be discharged by the Gulf Coast Lines for disobedience of rules or orders issued by appellant. Appellee was a locomotive engineer employed by appellant. On November 24, 1924, he left Port Arthur, Tex., for Leesville, La., a point beyond De Quincey, La., in charge of the engine of a freight train designated as extra No. 491. When it reached Beaumont it was made the second section of train No. 56, which was a regular train and on the timecards. Second No. 56 left Beaumont an hour late. When it reached Starks, La., about 16 miles from De Quincey, it was stopped by the board and received orders from appellant's dispatcher to take the siding to let two passenger trains proceeding in the same direction go by. After they had passed, second 56 continued on its way at 1:05 a. m., still late, but how much is not shown. The delay at Starks was about 40 or 50 minutes. At C. S. Junction, about a mile from De Quincey, where the track of the Gulf Coast Lines joins that of appellant, there was a small building without a door, called a shack, where a train register was kept. There was no telegraph operator at C. S. Junction, and no one in charge of the register. A wild freight train of the Gulf Coast Lines, designated as extra No. 105, made up at De Quincey, moving on orders issued by appellant's dispatcher at Shreveport at 12:50 a. m., arrived at C. S. Junction at 1:20. Hales, its conductor, entered his train on the register and handed his engineer a slip, indicating he had checked it, showing the number of trains that passed, including No. 56, and that they carried no signals. It appears, however, that there was an entry on the register showing that No. 1/56 had arrived at 11:59 p. m., carrying green signals. This would indicate to a railroad man that the first section of train No. 56 had passed and that a second section was following. There is nothing in the record, however, to show how closely the second section should have followed, or what was the schedule of No. 56. Hales could not be found and did not testify, and the record does not show that he had knowledge of the rules or time-cards. No mention of either train was made in the orders issued to the other by appellant's dispatcher. Extra No. 105 was not on the time cards. Extra No. 105 left C. S. Junction at 1:22, and about 4 miles from there had a head-on collision with second No. 56, at 1:40 a. m. The night was dark and foggy, and neither of the engineers saw the headlight of the other train until it was too late to avoid the collision. Appellee was seriously and permanently injured, without any fault on his part. The District Court found, as indicated by brief opinions in the record, that appellant occupied the position of lessor of the track, and under the law of Louisiana was bound for any negligence of the agents and employees of the Gulf Coast Lines, the lessee, and, further, that appellant had violated its duty as employer to furnish appellee a safe place to work. It is contended by appellant that there was no breach of duty on its part, and that the accident was caused solely by the negligence of Hales, who was not its employee, in not acting on the information shown on the train register as to No. 56 carrying green signals; that it was not the lessor of the road, as both it and the Gulf Coast Lines were lessees of the Kansas City, Shreveport & Gulf, a separate corporation, and it is not responsible for the negligence of the employees of the Gulf Coast Lines. 26 F.(2d) 819 [1] A railroad is charged with the absolute and continuing duty of using reasonable care to furnish its employees a clear track over which to run. If the breach of this obligation is a concurring cause, the negligence of another will not defeat a recovery. Santa Fé Pacific R. R. Co. v. Holmes, 202 U. S. 438, 26 S. Ct. 676, 50 L. Ed. 1094; Gila Valley, etc., R. R. Co. v. Lyon, 203 U. S. 465, 27 S. Ct. 145, 51 L. Ed. 276. [2] It is settled that a railroad is responsible to a passenger for damages occasioned by the negligence of a licensee using its tracks. Illinois Central R. R. v. Barron, 5 Wall. 90, 18 L. Ed. 591. The decisions are not harmonious in applying this rule to an employee, but in Louisiana an employee of a railroad permitting another to use its tracks jointly may recover from his employer for injuries caused by the negligence of the agents of the licensee, though the rule is different as applied to the employees of the licensee. It is not necessary that the technical relation of lessor and lessee, in the sense that the entire operation of the road is turned over to the lessee, should exist. The rule is the same if there is contemporaneous joint usage of the road. Ingram v. La. & N. W. R. Co., 128 La. 933, 55 So. 580; Taylor v. La. & N. W. R. Co., 129 La. 113, 55 So. 732; Bailey v. La. & N. W. R. Co., 129 La. 1029, 57 So. 325. A rule of local law imposing liability may be enforced in suits under the Federal Employers' Liability Act. North Carolina R. R. Co. v. Zachary, 232 U. S. 248, 34 S. Ct. 305, 58 L. Ed. 591, Ann. Cas. 1914C, 159. [3] It is reasonably certain that appellant is the real owner of the road and has the power to vest the legal title in itself at any time it sees fit; and there could be no doubt that the Gulf Coast Lines occupied the position of its licensee, so as to bring the employees of appellant within the rule adopted in Louisiana. [4] Furthermore, it hardly can be said appellant was without fault. It was in complete control of the road, issued all timecards, and made the rules for the running of all trains over its line. Appellant's dispatcher knew second 56 was at Starks, and its probable time of departure, before he issued orders to extra 105. If each of these trains had been notified of the other, and given specific orders as to passing, the accident could have been prevented. It is doubtful that merely having a train register at a point such as C. S. Junction is a proper way of running an extensive railway system. It cer tainly did not prove to be a safe way on the night of the accident. Had there been a telegraph operator, or even a station master, at C. S. Junction, there would have been no collision. Hales, the conductor of extra 105 was bound to know that No. 56, a regular train, was on the track; but he was not charged with knowledge of the second section. When he noted that train 56 had passed 20 minutes before he arrived, it is not greatly surprising that he failed to also note it carried green signals. It was appellant's duty to use reasonable care to furnish appellee a clear track. It was in full control of the movement of extra 105, which did not become a menace to second 56 until it passed the junction. It was left to Hales to order his train upon appellant's track, and he was appellant's agent for that purpose. We think the verdict is sustainable on either ground adopted by the District Court, and find no reversible error in the record. Affirmed. ANARGYROS v. EDWARDS, Collector of Internal Revenue. Circuit Court of Appeals, Second Circuit. May 14, 1928. No. 276. 1. Internal revenue 2 (12)-Taxation for privilege of conducting particular business, with penalties for nonpayment of taxes, is lawful (Revenue Act 1918, § 1005 [Comp. St. $ 5980s]). Method of taxation by imposing taxes on persons or groups of persons for the privilege of conducting a particular business, as well as penalties for nonpayment of taxes as done by Revenue Act 1918, § 1005 (Comp. St. § 5980s), is lawful. 2. Internal revenue 9(2)-Manufacturer of cigarettes held not entitled to reduction of special excişe tax on ground part of product was exported (Revenue Act 1918, § 1002, Comp. St. § 5980p; Act of Aug. 4, 1886, с. 896, § 1, 26 USCA §§ 785, 849; Internal Revenue Act, § 700 (a), Comp. St. § 6204c(a). Under Revenue Act 1918, § 1002, Comp. St. § 5980p, imposing special tax on manufacturers of cigarettes measured by number of cigarettes sold in preceding year constituting an excise tax on the specific occupation, manufacturer is not entitled, under Act of Aug. 4, 1886, c. 896, § 1 (26 USCA §§ 785, 849; Comp. St. § 6194), to reduction of tax because some of product was exported, in that such tax constitutes a tax on the occupation measured by the product, irrespective of whether sales were for domestic consumption or for export as opposed to ordinary internal revenue tax imposed by Internal Revenue Act, $ 700 (a), Comp. St. § 6204c(a). In Error to the District Court of the United States for the Southern District of New York. Suit by S. Anargyros against William H. Edwards, Collector of Internal Revenue for the Second District of New York, to recover taxes paid under protest. Judgment for defendant (22 F. [2d] 707), and plaintiff brings error. Affirmed. Lord, Day & Lord, of New York City (Franklin Grady and Richard S. Holmes, both of New York City, of counsel), for plaintiff in error. Charles H. Tuttle, U. S. Atty., of New York City (Samuel C. Coleman, Asst. U. S. Atty., of New York City, of counsel), for de fendant in error. pounds per thousand shall each pay at the rate of 6 cents for every ten thousand cigarettes, or fraction thereof. "In arriving at the amount of special tax to be paid under this section, and in the levy and collection of such tax, each person engaged in the manufacture of more than one of the classes of articles specified in this sec tion shall be considered and deemed a manufacturer of each class separately." Comp. St. § 5980p. Act of Aug. 4, 1886, § 1, 24 Stat. 218 (26 USCA §§ 785, 849; Comp. St. § 6194), provides that manufactured tobacco, snuff, and cigars may be removed for export to a foreign country without payment of tax, under such regulations, and the making of such entries, and the filing of such bonds and bills of lad Before MANTON, L. HAND, and ing as the Commissioner of Internal Revenue, SWAN, Circuit Judges. MANTON, Circuit Judge. The complaint, seeking to recover for a tax paid by the plaintiff in error, a manufacturer of cigarettes, for the privilege of engaging in that occupation, was dismissed below on motion, where it was held not to state a cause of action. For the year ending June 30, 1921, in accordance with the provisions of title 10, § 1002, of the Revenue Act of 1918 (Comp. St. § 5980p), the tax in question was imposed on manufacturers of cigarettes. It was measured by the number of cigarettes sold by it in the preceding year ending June 30, 1920. In computing this tax, the commissioner included in the number of cigarettes sold by the plaintiff in error cigarettes which it sold for export. The claim is that such imposition of tax is contrary to section 1 of Act Aug. 4, 1886, c. 896, 24 Stat. 218 (26 USCA §§ 785, 849; Comp. St. § 6194), which provides that tobacco products may be exported without payment of a tax. Below it was held that the tax in question was an excise tax upon a specific occupation, measured by the amount of sales in the preceding year, and that the statute exempting tobacco exported related only to the tax imposed upon the sales of cigarettes by other taxing statutes. Section 1002 reads: "Sec. 1002. That on or after January 1, 1919, there shall be levied, collected, and paid annually, in lieu of the taxes imposed by section 408 of the Revenue Act of 1916, the following special taxes, the amount of such taxes to be computed on the basis of the sales for the preceding year ending June 30: "Manufacturers of cigarettes, including small cigars weighing not more than three with the approval of the Secretary of the Treasury, shall prescribe. [1,2] The argument for reversal of the judgment below rests upon the claim that, because certain tobacco products may be exported to a foreign country without payment of the tax under conditions specified in section 1 of Act Aug. 4, 1886, с. 896, a different tax may not be imposed under section 1002. Irrespective of the destination of cigars and tobaccos or the amount of sales in the tax year, a tax is imposed upon a manufacturer measured by the amount of sales in the previous year. The two taxes are different in their nature. A capital stock tax is imposed on corporations under title 10, section 1000 (Comp. St. §-5980n), and by section 1002 a special tax is imposed upon persons engaged in occupations as there enumerated. By section 1005 (Comp. St. § 5980s) taxes are imposed upon persons or groups of persons for the privilege of conducting a particular business, as well as penalties for nonpayment of said taxes. This method of taxation is lawful. Flint v. Stone Tracy Co., 220 U. S. 107, 31 S. Ct. 342, 55 L. Ed. 389, Ann. Cas. 1912B, 1312. Section 1002 imposes a tax upon the sale of cigarettes as opposed to a tax upon the manufacture, and the tax imposed by section 700 (a) of the Internal Revenue Act (Comp. St. § 6204c [a]) is an ordinary internal revenue tax. Cigarettes manufactured by the plaintiff in error used for domestic consumption pay the tax provided by section 700 (a), and section 1 of Act Aug. 4, 1886, с. 896, exempts from the ordinary internal revenue tax the sales of tobacco cigarettes which are sold for export. The two statutes are not in conflict. One imposes a tax upon the manufacturer of cigarettes for engagement in that business; the sec 26 F.(2d) 319 ond exempts the manufacturer from payment of additional tax, if the goods are destined for export. The tax is based upon the sales of the previous year, irrespective of whether those sales were for domestic consumption or for export. If they be for export, he does not pay the tax imposed by section 700 (a). If a mistake be made, and a manufacturer pays a sales tax upon cigarettes exported, he may recover it back. Section 1310 (c) of the Act of 1918 (26 USCA § 1263 (c); Comp. St. § 637112k (c). In the Flint Case, supra, an excise upon the privilege of doing business in the particular form was imposed, while here it is an excise upon the privilege of doing business of a particular kind. There it was said: "In levying excise taxes, the most ample authority has been recognized from the beginning to select some and omit other possible subjects of taxation, to select one calling and omit another. ." In Cornell v. Coyne, 192 U. S. 418, 24 S. Ct. 383, 48 L. Ed. 504, a tax was imposed upon filled cheese, and was held not to be a tax upon exports within the meaning of the constitutional prohibition, merely because some of the filled cheese eventually was exported. In Spreckels Sugar Refining Co. v. McClain, 192 U. S. 397, 24 S. Ct. 376, 48 L. Ed. 496, the act provided that: "Every person, firm, corporation, or company carrying on or doing the business of refining petroleum, or refining sugar, shall be subject to pay annually a special excise tax equivalent to one-quarter of one per centum on the gross amount of all receipts." 30 Stat. 464. In sustaining the validity of the tax the court held that it was not imposed upon the gross annual receipts as property, but only in respect of the carrying on or doing the business of refining sugar. The tax included persons as well as corporations. Plaintiff in error's argument, drawing a distinction between attempted excise on the kind of, as distinct from the form of, business, is without force. The Flint Case did not decide that the tax in question was an excise tax, because it taxed the privilege of doing that kind of business, but that it was a tax on the privilege of doing a certain kind of business and was an excise tax. The tax here is not a tax upon the goods which may here. after become the subject of exportation; it is the tax upon the privilege of manufacturing cigarettes, and its measurement merely is by the manufactured cigarettes, in which are 26 F.(2d)-21 included those which are subject to export. A tax imposed under section 700 (a) may be supported as a tax on the sale of goods. Section 700 (a) reads that "upon cigars and cigarettes manufactured in or imported into the United States, and hereafter sold * * . the following taxes [are] to be paid." Comp. St. § 6204c (a). This contemplates a sale, and the tax is on the manufacture and sale, or the importation and sale. While it may be true that there can be no tax without manufacture or importation, it is equally true there can be none without a sale. In U. S. Glue Co. v. Town of Oak Creek, 247 U. S. 321, 38 S. Ct. 499, 62 L. Ed. 1135, Ann. Cas. 1918E, 748, there was involved an income tax of Wisconsin passed pursuant to the state Constitution. It taxed the net income including the income from goods sold to customers outside of the state, and delivered from its factory to such customers, the sales having been made and the goods shipped from plaintiff's branches in other states. The court sustained. the validity of the act holding that it did not place a burden upon interstate commerce. It involved a state and not a federal statute, and concerned only the interstate commerce clause of the federal Constitution. In Brown v. Maryland, 12 Wheat. 419, 6 L. Ed. 678, the state statute provided that all importers of foreign goods shall take out a license for which they shall pay $50. The court held the act unconstitutional, because it conflicted with the constitutional provision that no state shall, without the consent of Congress, lay any imports or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws, and because it also conflicted with the power of the federal government to regulate interstate commerce. In Western Union Tel. Co. v. Texas, 105 U. S. 460, 26 L. Ed. 1067, the state statute imposed a tax on messages sent, and the court declared the act invalid on the ground that, where the burden of the taxation falls upon the thing which is subject to taxation, the tax is to be considered as laid on the thing, rather than on the person who is charged with the duty of paying it into the treasury, and on this ground concluded that it imposed a burden upon interstate commerce. Here again the state statute was involved, and the question was whether it violated the interstate commerce clause. These cases presented entirely different problems than the tax in the instant case. We think the tax in question was properly laid and properly collected. Judgment affirmed. |