Εικόνες σελίδας
PDF
Ηλεκτρ. έκδοση

26 F.(2d) 40

course of business." Bushman v. Bushman, sity of a formal tender is, in fact, obviated 311 Mo. 551, 279 S. W. 122. by the acts of the party sought to be charged as by his expressed refusal in advance to comply with the terms of the contract in that respect, or where it appears that he has placed himself in a position in which performance is impossible. Ziehen v. Smith, 148 N. Y. 558, 42 N. E. 1080. The seller is not compelled to avail himself of an anticipatory breach, but may await until the full period of performance has expired. The rule is thus clearly stated by Judge, now Chief Justice, Taft in Brevard Tannin Co. v. Mosser Co. (C. C. A. 4) 288 F. 725, 729:

The master states that the bankrupt was insolvent in this sense, and that no change took place in its condition between November 13, 1923, and May 1, 1924. This is the sense in which the term "insolvency" is generally used when applied to persons in commercial pursuits. 32 C. J. 806. This is the nature of insolvency which converts a contract to sell personal property on credit into one for cash on delivery at the option of the seller. Crummey v. Raudenbush, 55 Minn. 426, 56 N. W. 1113, and cases above cited. [5] Appellant had no knowledge of the bankrupt's condition at the time the contract was entered into. Solvency was presumed, and the duty of investigation and inquiry was not imposed. Upon discovering that condition, it had a right to demand cash on delivery, but this did not operate to relieve the buyer from its obligation. This option to the seller was a direct result of the breach incidental to insolvency. As said in Central Trust Co. v. Chicago Auditorium, supra: "It must be deemed an implied term of every contract that the promisor will not permit himself, through insolvency or acts of bankruptcy, to be disabled from making performance."

We know of no rule of law which demands a reduction of the sale price in such cases in lieu of the credit terms of the contract.

There is no evidence tending to show at tempted rescission. The attitude of the parties in this respect is reflected in the correspondence. From this it is obvious that the bankrupt treated the contract as in force even by the terms of its letter of April 19th above quoted.

[6,7] It was necessary, of course, that the seller should be in a position to perform and should tender performance. The master finds, as the evidence shows, that ability to perform on the part of appellant was at all times present; and the record shows that such performance was tendered. The neces

"The provision for delivery by monthly installments of four tanks before September 26th had been clearly waived by the parties, and the deliveries of the tanks not delivered had been postponed by their acquiescence. The defendant has no right to insist that plaintiff's damages should be measured by the market prices in the preceding months, when with consent of the plaintiff it delayed deliveries. These principles are clearly established by the authorities."

[8] On the date of sale in April, the periods of deliveries had all expired without performance and with refusal to perform under the terms legitimately demanded by appellant. The latter chose to liquidate its damages by a sale of the property and thus incidentally to recoup its loss so far as the profits of the sale could effect that result. By its claim it seeks to recover, setting up the deficiency resulting from the sale as evidence of its loss; that sale was properly made at the conceded market price prevailing at the place of delivery and the time of the ultimate breach. The master finds that a balance of $33,000 remains in his hands after the payment of all debts except the claim of appellant. We think appellant is entitled to judgment for the net amount of $5,547.13, with interest thereon from date of sale, to wit, April 18, 1924.

The decree below is reversed, and the cause remanded, with direction to enter judgment for appellant pursuant to the views herein expressed.

Before WOOLLEY and DAVIS, Circuit

KALINER v. BLAIR, Commissioner of Inter- Judges, and BODINE, District Judge.

nal Revenue et al.

Circuit Court of Appeals, Third Circuit. April 24, 1928.

No. 3754.

1. Intoxicating liquors 108(10)-On review of decision sustaining revocation of liquor withdrawal permit, court will merely deter mine whether revocation is unsupported by evidence, or arbitrary or capricious (National Prohibition Act, tit. 2, § 9 [27 USCA § 21]). In suit by permittee under National Prohibition Act tit. 2, § 9 (27 USCA § 21), to review action of prohibition commissioner revok

WOOLLEY, Circuit Judge. The complainant held a drug store permit which authorized him to withdraw and sell certain quantities of alcohol and whisky in stated periods under the provisions of the National Prohibition Act (27 USCA) and regulations of the Treasury Department. He was, of course, required by the law to observe its provisions generally and was required by the regulations particularly to keep records of all liquors withdrawn and sold and have them tion officers.

ing permit to withdraw and sell liquor, Circuit available for inspection by federal prohibi

Court of Appeals, in reviewing decision of trial court will do no more than examine evidence and discover whether action of commissioner in revoking permit and action of trial court in sustaining his decision is wholly unsupported by the evidence, or is clearly arbitrary or capri

cious.

2 Intoxicating liquors 108(5)-Facts held to sustain finding that permittee was not fit person to be intrusted with privilege of withdrawing and selling liquor, justifying revocation of permit (National Prohibition Act, tit. 2, 89 [27 USCA § 21]).

In suit by permittee, under National Prohibition Act, tit. 2, § 9 (27 USCA § 21), to review action of prohibition commissioner revoking permit to withdraw and sell liquor, facts held sufficient to sustain finding of commissioner that permittee was not a fit person longer to be intrusted with privilege of withdrawing and

selling liquor.

3. Intoxicating liquors 108 (5)-Prohibition commissioner's finding that permittee violated bookkeeping regulations, justifying revocation of permit, held not arbitrary or capricious (National Prohibition Act, tit. 2, § 9 [27 USCA § 21]).

In suit by permittee under National Prohibition Act, tit. 2, § 9 (27 USCA § 21), to review action of prohibition commissioner revoking permit to withdraw and sell liquor, finding of commissioner of violation of bookkeeping regulations by permittee, and that permittee had not conformed to provisions of National Prohibition Act (27 USCA) and regulations thereunder,

held not clearly arbitrary and capricious under

the evidence.

Appeal from the District Court of the

United States for the Eastern District of

Pennsylvania; William H. Kirkpatrick, Judge.

Suit by Max H. Kaliner, trading as the Aspen Pharmacy, against David H. Blair, Commissioner of Internal Revenue, and an other. From the decree, complainant appeals. Affirmed.

Nochem S. Winnet, of Philadelphia, Pa., for appellant.

Warren C. Graham, of Philadelphia, Pa., for appellees.

On authority of a search warrant, his pharmacy, located on the first floor of a building otherwise used as a dwelling was raided. The prohibition officers found under a back stairway leading from the first to the second floor a quantity of liquor which in amount and character clearly indicated that it was not covered by the permit. They examined the permittee's alcohol and whisky records and found them short one pint of whisky and four gallons of alcohol. At the time of the raid he was absent, the store being in the care of his brother.

The permittee was arrested and a citation issued charging him, first, with unlawful possession of intoxicating liquor, and, next, with failure to account for all liquor withdrawn under the permit. Two hearings were held. At each hearing the permittee produced a record different from what was found at the raid to explain the shortage. The first left a shortage of a half gallon of alcohol still unexplained; the second accounted for the entire amount. These records were of a character and were produced under circumstances that raised valid doubts as to their correctness. Evidence that the permittee's mother and brother occupied the upper floors of the house and sharply controverted evidence that he, though owning and operating the store,

lived elsewhere was introduced to shift re

sponsibility for the hidden liquor from him to

his brother.

The hearer stated in his report that the testimony of the brothers was not worthy of belief and found as a fact that the permittee had failed to account for alcohol and whisky withdrawn under his permit and that he had intoxicating liquor unlawfully in his possession. The Commissioner of Internal Revenue acting on the report of the hearer revoked the permit. The permittee then filed this bill in the District Court under section 9 of title 2 of the National Prohibition Act (27 USCA § 21) for a review of the Commissioner's decision.

26 F.(2d) 47

[1] Although the case was tried before this court's decision in Yudelson v. Andrews, 25 F. (2d) 80, it arose and was tried after the decision by the Supreme Court in Ma-King Co. v. Blair, 271 U. S. 479, 46 S. Ct. 544, 70 L. Ed. 1046; Id. (C. C. A.) 3 F.(2d) The learned trial court, sensing the precise meaning of that decision, did not undertake to retry and decide the questions of fact which had been submitted to and decided by the Commissioner in administering the law, but found in almost the exact words of the decision that the record disclosed evidence which supported the Commissioner's finding and therefore justified his revocation of the permit. And so this court, in reviewing the decision of the trial court on the record showing the grounds for the report of the hearer and the decision of the Commissioner, will follow strictly the law of the Ma-King Case, as it did in the Yudelson Case, and, in the absence of any question of law, will do no more than examine the evidence and discover whether the action of the Commissioner in revoking the permit and the action of the trial court in sustaining his decision "is wholly unsupported by the evidence or [is] clearly arbitrary or capricious." [2] Bearing on these matters there are two groups of facts, the first having to do with liquor manifestly not withdrawn under the permit and concealed not in the store but under a stairway near by and accessible to any one in the store. Whether the permittee at all times lived up stairs with his mother and whether his brother in charge of the store at the time of the raid was so related to him in business as to indicate his knowledge of and control over the hidden liquors was a question which the Commissioner had to decide in order properly to determine whether the permittee was a fit person longer to be intrusted with the privilege of withdrawing and selling liquor. Ma-King Co. v. Blair, 271 U. S. 479, 482, 46 S. Ct. 544, 70 L. Ed. 1046. The facts are, in our opinion, sufficient to sustain his finding that the permittee was not such a person.

[3] The second group has to do with the record of withdrawals and sales which under the Treasury Department the permittee was required to keep and make available to inspection. The inspection made by the prohibition officers disclosed liquor withdrawn and in part not accounted for. An analysis of the records-those first found showing a shortage and those tardily produced to explain the shortage-reveals facts which support the Commissioner's finding of a violation of the bookkeeping regulations and

sustain his conclusion that the permittee had not in good faith conformed to the provisions of the National Prohibition Act and to the regulations promulgated thereunder. Facts of this character being present, we cannot find that the decision of the Commissioner was clearly arbitrary or capricious. Ma-King Co. v. Blair, 271 U. S. 479, 483, 46 S. Ct. 544, 70 L. Ed. 1046; Silberschein v. United States, 266 U. S. 221, 225, 45 S. Ct. 69, 69 L. Ed. 256; Yudelson v. Andrews (C. C. A.) 25 F. (2d) 80.

The decree is affirmed.

[blocks in formation]

2. Judgment 828 (3)-Judgments In state court actions between administrator and decedent's son held res judicata in widow's action in federal court against son, though she was not party to state court actions (Gen. St. Minn. 1923, § 8786).

Judgments in state court actions between administrator and decedent's son, determining that son was owner of certain premises and that administrator had no estate or interest therein or lien thereon under Gen. St. Minn. 1923, § 8786, held res judicata in subsequent action by decedent's widow against his son in federal court involving title to same realty, both in principle and under ruling of state Supreme Court, though widow was not a party to state court actions.

Appeal from the District Court of the United States for the District of Minnesota; John B. Sanborn, Judge.

Action by Genevra D. Lamoreaux against Leigh C. Lamoreaux and others. From a decree of dismissal, plaintiff appeals. Affirmed.

Mortimer H. Boutelle and Eugene N. Best, both of Minneapolis, Minn, for appellant.

James A. Peterson, of Minneapolis, Minn., for appellee Leigh C. Lamoreoux.

Before WALTER H. SANBORN and BOOTH, Circuit Judges, and MUNGER, District Judge.

BOOTH, Circuit Judge. This is an appeal from a decree in equity dismissing the bill upon the ground that the facts set up in

the answer had been found true upon a hearing, and that said facts constituted a bar to the prosecution of the bill.

The suit was one brought by appellant, Genevra D. Lamoreaux, hereafter called plaintiff, against Leigh C. Lamoreaux, often hereafter called defendant, and several others. Jurisdiction was based upon diversity of citizenship, and the requisite amount involved.

The bill alleged substantially as follows: That plaintiff and defendant were tenants in common and the owners, respectively of an undivided one-half interest in and to the following described lands located in Hennepin county, Minn., to wit:

"Lots No. two (2) and three (3) in block thirty-two (32) Groveland addition to Minneapolis according to the recorded plat thereof on file and of record in the office of the register of deeds of the county last aforesaid excepting therefrom the south ten (10) feet front and rear of said lot three (3) and subject to a right of way for park purpose granted to the city of Minneapolis over a strip of land eleven (11) feet wide across the front or Hennepin avenue end of lots two (2) and three (3) as granted in and by those two certain deeds recorded in the office of the aforesaid register of deeds in Book 149 of Deeds at pages 526 and 529.”

That plaintiff and defendant derived their respective titles to the land from a common source, viz. Irving C. MacDonald; that about May 12, 1914, Lowell A. Lamoreaux, father of defendant and who later became husband of plaintiff, purchased the premises from MacDonald, and caused the title to be taken in the name of the defendant; that the defendant furnished no part of the consideration; that the deed from MacDonald to defendant was duly recorded; that two mortgages executed by defendant were placed upon the land, and part of the proceeds of the mortgages, to the extent of approximately $30,000, was used in making improvements on the land; that other moneys, amounting approximately to $8,000, were furnished by Lowell Lamoreaux for the purposes of making further improvements; that about May 1, 1915, defendant executed and delivered a warranty deed of an undivided one-half interest in the premises to Lowell Lamoreaux; that at this time it was agreed and understood between Lowell Lamoreaux and defendant that the undivided one-half interest in the premises still remaining in defendant should be a gift to him upon his reimbursing Lowell Lamoreaux for the advances made by the latter for the improvements; that from about

October 1, 1914, to December 1, 1919, Lowell Lamoreaux had possession of the premises and collected the rents and income therefrom; that on the last-named date Lowell Lamoreaux executed and delivered a power of attorney to defendant to manage the property and collect the income therefrom; that the two mortgages heretofore mentioned on the real estate had been replaced by a single mortgage, and was held by the Northwestern National Life Insurance Company, also a defendant; that about July 1, 1916, the premises were leased to one Paust for the term of 100 years; that this lease was by mesne assignments transferred to William H. Medlar and Alice W. Medlar, two of the defendants; that there was a mortgage of $11,000 on the leasehold, owned by Charles M. Drew, one of the defendants; that no relief was sought against the owners of the leasehold or against the owner of the mortgage on said leasehold; that about February 1, 1922, Lowell Lamoreaux died testate; that his will was duly filed for probate in Hennepin county, Minn., and duly allowed March 18, 1922; that at the date of his death he was still seized of an undivided one-half interest in the said premises; that by the terms of his last will all of the property of which he died seized was devised and bequeathed to plaintiff; that no lien or incumbrance had been placed upon said premises during administration. The prayer of the bill was for a partition, either in kind or by sale, for an accounting by defendant, and for a receiver pendente lite.

To this bill an answer was interposed by defendant. This answer contained specific denials of many of the allegations of the bill; and in addition set up facts relative to two suits theretofore carried on and determined in the state court of Hennepin county, Minn., prior to the commencement of the instant suit, which facts, it was alleged, constituted a bar to the prosecution of the present suit in the federal court.

The First Suit in the State Court.

The answer in the case at bar alleged as to the first suit in the state court substantially as follows: That on May 15, 1923, in the Matter of the Estate of Lowell Lamoreaux, pending in the probate court of Hennepin county, Minn., Arthur M. Higgins was appointed special administrator; that about June 10, 1923, Higgins, as such special administrator, brought suit in the state district court of Hennepin county, Minn., against Leigh Lamoreaux, setting out in the complaint substantially the same facts that are alleged in the bill in the case at bar, claiming

26 F.(2d) 47

that Lowell Lamoreaux was the owner at the time of his death of an undivided one-half interest in the premises above described, and praying for an accounting of rents by Leigh Lamoreaux, an injunction, and a receiver. The answer in the case at bar further alleged that an answer was interposed by Leigh Lamoreaux in the suit in the state district court of Hennepin county, Minn., setting up by way of counterclaim that the deed of May 1, 1915, from Leigh Lamoreaux to Lowell Lamoreaux, was in fact a mortgage given to secure certain advances made by Lowell Lamoreaux to Leigh Lamoreaux to aid in making improvements on the premises. The answer in the case at bar further alleged that the case in the state district court was tried, and Genevra Lamoreaux was a witness on the trial, that the court found that the deed of May 1, 1915, upon which the special administrator relied, was a mortgage, and that there was due and owing thereon from Leigh Lamoreaux $2,115.24, with interest, and that the special administrator was not entitled to an accounting. The answer in the case at bar further alleged that an appeal was taken by the administrator to the state Supreme Court from an order denying a new trial; that the state Supreme Court affirmed the findings of the lower court and held that the title to the premises was in Leigh Lamoreaux, subject to a mortgage of $2,115.24, with interest. Higgins v. Lamoreaux, 163 Minn. 242, 203 N. W. 961. Judgment was entered accordingly in the state district court.

The Second Suit in the State Court. The answer in the case at bar set up further that on March 21, 1924, Higgins, special administrator, was duly appointed administrator de bonis non with the will of Lowell Lamoreaux annexed; that, after judgment was entered in the first suit in the state court, Leigh Lamoreaux tendered to Higgins, as administrator, the sum found due on the mortgage, but that said administrator refused to accept the tender, and that the money was thereupon deposited with the clerk of the court; that thereafter Leigh Lamoreaux commenced an action against Higgins, administrator de bonis non, in the state district court of Hennepin county, Minn., to determine adverse claims to the premises heretofore described; that the administrator answered, setting up, among other things, that the judgment obtained in the first suit was void; that on motion such parts of the answer were stricken out as sham and frivolous, and judgment was ordered for the plaintiff Leigh Lamoreaux; that on appeal to the Supreme

26 F. (2d)-4

Court of the state this order was affirmed (Lamoreaux v. Higgins, 166 Minn. 320, 207 N. W. 639); that judgment was thereafter entered adjudging the title to the premises to be in Leigh Lamoreaux, and that the defendant administrator and the estate of Lowell Lamoreaux had no estate or interest therein or lien thereon.

After the answer containing the foregoing allegations had been interposed in the case at bar, a motion, based upon said answer, was made by defendant Leigh Lamoreaux to dismiss plaintiff's bill; a motion was also made by plaintiff to strike out the portions of the answer containing the allegations touching the two suits in the state court. Both motions were denied; and the court ordered the issues of res adjudicata raised by the answer to be heard separately and in advance of the regular trial. After a hearing and taking of proof upon said issues, the court entered a decrée adjudging that the allegations of the answer touching the two suits in the state court were true, and that the facts so found constituted a bar to a further prosecution of the instant suit; and that the bill be dismissed. The present appeal followed.

Though there are numerous assignments of error, they all center around one main question, viz.: Is the matter which plaintiff, Genevra Lamoreaux, seeks to have determined in the case at bar res adjudicata by reason of the judgments entered in the state district court of Hennepin county, Minn. ?

The answer to this main question depends upon the answers to several other questions which are disclosed by an analysis of the main question: (1) What are the issues in the case at bar? (2) What were the issues in the case brought by the administrator, Higgins, in the state court? (3) What were the issues in the case brought by Leigh Lamoreaux against Higgins, as administrator, in the state court? (4) Are the judgments obtained in the state court binding upon Genevra Lamoreaux, the plaintiff in the case at bar?

Taking these questions up in their order:

1. The pleadings in the case at bar disclose (a) that the vital question involved is whether plaintiff is the owner of an undivided one-half of certain real property; (b) that this is dependent upon whether Lowell Lamoreaux, the testator of plaintiff, acquired any title through the deed of May 1, 1915, recorded November 4, 1920, from Leigh Lamoreaux, or whether that deed was in fact a mortgage.

2. The issues in the suit brought by Higgins, administrator, against Leigh Lamoreaux in the state court, were, as disclosed by the record, whether said administrator was entitl

« ΠροηγούμενηΣυνέχεια »