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389 U.S. 815

Sup. Ct. Tenn. Certiorari granted and case set for oral argument immediately following No. 92 (386 U. S. 1003).

383 U.S. 918

Ct. App. N. Y. Certiorari denied.

412 U.S. 941

C. A. 10th Cir. Certiorari denied.

47 B.T.A. 381

OPINION. Turner: But for the lack of coordination on the part of certain of respondent's employees in their efforts to determine and collect the income and excess profits taxes owing by Central, the existence of friction between the stockholders or persons responsible for Central's affairs and the lack of candor on the part of these same individuals in their dealings with each other and with their Government in the matter of Central's tax liability, these proceedings should have been entirely unnecessary. The question in issue is the liability of the petitioners as transferees of Central for the income and excess profits taxes reported by Central on its return for the fiscal year ended June 30, 1938. That Central was liable for and owed the tax is not disputed and so far as the record shows has never been disputed. The taxes in question resulted in the main from gain realized through the collection of the fire insurance on Central's principal asset, the hotel at Burns. Without making any provision for payment of income and excess profits taxes on the profits so realized, the insurance proceeds were distributed to or for the benefit of the stockholders, leaving Central with no assets except the real estate at Burns, against which stood local taxes far in excess of its value. The petitioners make a number of contentions: (1) that they never became the owners of the Central stock and furthermore that the stock was sold by Jacob to Barnes and the money received was not' received as a distribution by Central but in payment by Barnes for the Jacob stock; (2) that by reason of the prior determination that Jacob, not these petitioners, was the owner of the Central stock, -andi the subsequent settlement of the transferee proceeding brought by Jacob resulting in entry of decision by the Board to the effect that Jacob was liable as transferee of Central, the respondent made am irrevocable election to treat Jacob as the owner of the Central stock and is now estopped from claiming that the petitioners were the? owners thereof and transferees of Central; (3) that if it be held that there was no sale of the stock and the amounts received in respect of such stock were received in liquidation, then Jacob, not the petitioners, was the transferee, since the amounts received in liquidation were not and have not been physically turned over by Jacob to them j (4) that respondent has failed- to show that petitioners are transferees of a transferee of Central; and (5) that he has also failed to show that either Central or Jacob was insolvent at the time of the-transfer of the assets as claimed by respondent. We find no merit in the claim that the stock involved in these proceedings was sold to Barnes and that the money received in connection therewith was not received in liquidation of Central. The facts are that Jacob, whether acting for himself or for the petitioners,with Conley decided not to continue in the hotel business with Central or otherwise. They could see a most attractive cash profit as the result of the fire and decided to take it out. From the insurance-proceeds they paid the debt to Farrell and certain other obligations-, of Central and then distributed the balance in three parts to the-stockholders, leaving Central in an insolvent condition. Barnes had; no intention or thought of buying either the Conley or Jacob stock.. There was simply a division of the available assets, which in this; case happened to be cash. Barnes had some idea that if he might control the corporate shell it might be of some use to him in financing the acquisition of another hotel through the use of a portion or all of the money he had received from Central, but it is perfectly plain that he had no intention that Central should own or conduct any hotel business subsequently acquired by him. It is true that Barnes did thereafter convey certain properties at Hines, Oregon, to Central and that when the hotel at Arlington was acquired title to that property was taken in the name of Central, but at the time of acquisition Conley was instructed to have title transferred to Barnes within the fifteen days following. It seems that at some point J acob had advised Barnes and Conley that Central and indirectly its stockholders would be saved some tax on the insurance proceeds through the application of section 112 (f) of Revenue Act 1936, if Barnes should take title, even though temporary, to subsequently acquired properties in the name of Central, and the petitioners apparently take the view that the above acts of Barnes were prompted by the advice of Jacob and constitute evidence that Barnes purchased the Jacob and Conley stock with a portion of the insurance proceeds in some manner withdrawn by him from the corporation, that Barnes' share of the insurance proceeds was not withdrawn but continued as assets of Central, and that the sums received by Jacob and Conley did not therefore constitute distributions by Central to its stockholders. There is some confusion between J acob, Barnes, and Conley as to the exact character of the advice originally given by Jacob with respect to the Federal income tax liability of Central and as to the exact time when a letter by Jacob quoting section 112 (f), supra, was written and mailed to Barnes. Whatever the facts in that regard, it is apparent that neither Barnes nor Conley understood the advice as Jacob says it was given and, even though we should accept the Jacob version as to the advice actually given, the understanding of Conley and Barnes clearly negatives the interpretation sought to be placed upon Barnes' acts by the petitioners. Barnes took down a pro rata part of the net insurance proceeds just as Conley and Jacob did. On the evidence we think it perfectly clear that the net insurance proceeds were distributed to or for the Central stockholders and no part thereof may be regarded as having been paid for the Jacob or Conley stock by Barnes. There are numerous claims in the brief of the petitioners that Jacob, and not the petitioners, was the owner of the Central stock and that the respondent has failed to sustain his burden of proving that the petitioners did own the said stock. Even though it be said that the respondent did have the burden of proving that the petitioners were the owners of the Central stock, and regardless of any evidence that respondent may have offered, it appears that J acob, the petitioners' witness, has carried that burden for him. Obviously, Jacob knew more than any other person concerning the ownership of the Central shares originally issued in his name, and at no place in his testimony did Jacob ever state that he and not the petitioners were the owners of the stock. To the contrary, he testified in response to questions by counsel for the respondent that he at all times regarded the petitioners as the beneficial owners thereof. He testified that about the time the Welcome Hotel was acquired he advised the petitioners that he was going to give each of them a portion of the stock and that his only reason for not having the stock issued in their names when the corporation was organized was his agreement with Farrell to hold control of Central until the indebtedness to Farrell should be paid. The name Central Holding Co. did not impress itself upon the minds of the petitioners but they were familiar with the subject matter of the gift in that they knew it represented the interest Jacob was acquiring in the Welcome Hotel at Burns. These petitioners had confidence in and trusted Jacob and believed that he would look after their interests. They had had no business experience and anything affecting their business affairs was left entirely to J acob, the husband and father. As soon as sufficient of the insurance proceeds had been collected the indebtedness to Farrell was paid and immediately Jacob, even though it had already been decided to liquidate Central by the distribution of the insurance proceeds, had 99 of the 100 Central shares standing in his name transferred, 25 shares to each of his daughters and 24 shares to his wife. Such action on the part of Jacob is certainly in harmony with the claim of the respondent that the petitioners were the owners of the stock and with the testimony of Jacob that at all times he regarded them as the beneficial owners thereof. Mrs. Jacob, when she received the certificates at the beach accompanied by Jacob's request that they be endorsed and returned to him, recognized the said certificates as representing the shares of stock which Jacob had promised to give to her and the three daughters. If the issuance of the shares in the names of these petitioners was not intended to evidence actual ownership, then Jacob needlessly put himself and petitioners to much unnecessary trouble and his action in having the sto.ck so issued was without purpose and without meaning. Furthermore, the act of the petitioners in endorsing the certificates and returning them to Jacob as requested is not out of harmony with the conclusion that the stock did belong to the petitioners. They looked to and expected Jacob to handle their business transactions. Accordingly, we find no occasion to repudiate for the petitioners the testimony of a witness which they themselves have called. On the record before us we conclude that the petitioners were the owners of 99 shares of Central stock at the time the fire insurance proceeds were distributed, 24 shares belonging to Agnes C. Jacob, and 25 shares each to the daughters. In the contention that the respondent made an irrevocable election to treat Jacob as the owner of the Central shares and is accordingly estopped to assert transferee liability against these petitioners as the owners of such shares, we likewise find no merit. It is true that the respondent, upon examination of the income tax returns of the petitioners for the year 1937, did conclude that they were not the owners of the Central shares and did not therefore realize gain upon the distribution by Central of the net insurance proceeds. These proceedings, however, are transferee proceedings calling for determination, not of the individual income tax liability of the petitioners, but of their liability as transferees for income tax owing by Central. We find no basis in fact or law for application of the doctrine of estoppel and certainly there can be no proper claim of res judicata. Not only must estoppel be pleaded, but the party invoking estoppel must prove the facts to siipport it. Helvering v. Brooklyn City Railroad Co., 72 Fed. (2d) 274; Commissioner v. Tates, 86 Fed. (2d) 748. In the instant case the petitioners have not shown that they have in any way been damaged or misled to their detriment by the respondent and the claim of estoppel falls. To support a finding of res judicata the action in which the finding is sought must involve the same parties, the same facts, the same law. Here the petitioners rely for what they term estoppel by judgment upon the settlement of the transferee proceeding brought by Jacob to determine his liability as transferee for a deficiency in the income tax of Central for the fiscal year 1938 and upon the entry of decision by the Board giving effect to the settlement agreed to by the parties. In the instant case the tax involved is also income tax of Central for 1938, to be exact, the tax reported by Central on its income tax return for the fiscal year 1938, but there the similarity ends. Here the petitioners are Agnes C. Jacob, Shirley May Jacob, Beverly Jean Jacob, and Gwendolyn E. Jacob, not Robert T. Jacob, as in the prior case, and the liability to be determined is their liability, not that of Jacob. Tait v. Western Maryland Railway Co., 289 U. S. 620, relied on by the petitioners is clearly distinguishable. There the parties, namely, the United States and the Western Maryland Railway Co., as well as the facts and the law, were the same in the current case as in the prior case, while the petitioners here have never before been parties to any litigation involving their liability as transferees of Central for 1938 or any year and their claim, whether it be termed estoppel by judgment or res judicata, is without the necessary factual and legal support. There is the further contention that the petitioners may not be held liable as transferees of Central because Jacob personally received the money distributed and at no time physically delivered any part of it to them. As to his reason for not delivering the money received to his wife and daughters, Jacob testified that in making the gifts of the shares of stock he did not have in mind gifts of cash or "turning over to them the cash which was realized unexpectedly" and felt that "it would be unwise, as a matter of fact, to turn over to them the cash." It is to be noted, however, that he did not testify that the money did not belong to his wife and daughters or that he did not receive it for them. We have already pointed out that Jacob, on cross-examination, testified that he at all times considered that his wife and daughters were the beneficial owners of the Central stock issued to him, and we have found as a fact that they were the owners of 99 shares of the said stock at the time the fire insurance proceeds were distributed. There is nothing in Jacob's failure physically to turn over the money to the petitioners that is necessarily inconsistent with their ownership of the stock or the money. The testimony of Jacob and the petitioners plainly shows that in all matters business and financial in which these petitioners were interested Jacob acted for them and, not only were they agreeable to his doing this, but they expected it of him. Furthérmore, in the signing of the receipt of August 12, 1937, Jacob definitely established his relationship to the money. The money received by Jacob from Central was received for these petitioners and not for himself. The facts here are alto- . gether different from the facts in W. R. Ross, 43 B. T. A. 1155, where Boss received the assets of the transferor corporation as his own and not for other individuals "considered" as owning said shares of stock. It is our opinion and we conclude that the petitioners are liable as transferees of Central to the extent of their respective shares of the amounts received by Jacob for them. Sec. 311, Revenue Act of 1936. The liability having attached under the statute, any subsequent appropriation by Jacob to his own use of the funds so received by him for the petitioners can not affect their liability herein. That the distribution of the insurance proceeds by Central left it insolvent has been found as a fact, and the conclusion that the petitioners were transferees of Central within the meaning of the statute eliminates any necessity for considering their claim that the respondent has failed to prove that they were the transferees of a transferee. Decisions will be entered under Rule 50.

519 U.S. 1043

Sup. Ct. Tex. Certiorari denied.

310 U.S. 652

Petition for writ of certiorari to the Court of Appeals for the District of Columbia denied.

365 U.S. 887

Court of Appeals of Maryland. Certiorari denied.

36 B.T.A. 610

OPINION. Hill: The issue for decision here is whether the decedent made a valid gift to his wife in 1922 of the shares of Commonwealth Realty Trust and in 1923 of the shares of stock in the Brooklyn Ash Removal Co., under the facts and circumstances set out in our findings of fact above. The courts of the State of New York, where the transactions involved herein occurred, have stated' the requisite elements of a gift in the following language: In order to constitute a gift, there must be, on the part of the donor, an intent to give, and a delivery of the thing given, to or for the donee, in pursuance of such intent, and, on the part of the donee, acceptance. Delivery may be either actual, symbolical, or constructive, but must be such as to divest the donor of the possession, control, and dominion over the thing given. In re Babcock's Estate, 147 N. Y. S. 168, affirmed 153 N. Y. S. 1105. The Board has repeatedly recognized substantially the same elements as essential to the making of a valid gift inter vivos. See Adolph Weil, 31 B. T. A. 899; Theodore C. Jackson et al., Administrators, 32 B. T. A. 470, and decisions cited. While respondent concedes that the decedent formally transferred to his wife title to the shares of stock in controversy, he contends that there was a lack of donative intent on the part of decedent; that petitioner has not shown a clear and unmistakable intention on the part of the decedent absolutely and irrevocably to divest himself of title, dominion, and control of the subject matter of the gift in praesenti, nor the irrevocable transfer of the present legal title and of the dominion and control of the entire gifts to petitioner, so that decedent could exercise no further act of dominion or control over them. Respondent argues that the facts show that decedent never intended to make a gift of the securities to his wife, but merely effected a formal transfer of title to remove his assets from the reach of creditors, retaining for himself all beneficial interest and dominion and control. In support of his contention, respondent points to the following facts: (1) The stock certificates were kept in the decedent's safe deposit box at the bank, to which Essie I. Gaffney did not have the right of access from the dates of the transfers in 1922 and 1923 until April 7, 1931; (2) in 1925 petitioner endorsed the certificates in blank and put them up as collateral with the Manufacturers Trust Co. for personal loans to the decedent, where the certificates remained until the decedent's death; (3) after the transfers, decedent continued to participate in the direction of both the Commonwealth Realty Trust and the Brooklyn Ash Removal Co.; (4) from December 1930 to the date of his death, decedent held a power of attorney to draw checks on petitioner's bank account; and (5) a large portion of the income from the transferred assets was consumed in the payment of household expenses, and in loans to the decedent and to a corporation which he owned. The matters referred to by respondent, we think, are of little importance in deciding the issue presented in this case, except only as they may bear upon the question of donative intent. A gift is none the less valid and complete because the donee does not retain possession of the property after delivery. "The donor may retain possession if he does so as agent of the donee for safekeeping." Brady's Estate, 239 N. Y. S. 5. "After a gift is once complete and the title has passed to the donee, the fact that the donor subsequently has possession of the property given does not affect' the validity of the gift." Edson v. Lucas, 40 Fed. (2d) 398. Transfer of stock on the books of the corporation in itself constitutes a delivery, in the absence of evidence establishing lack of donative intent. Marshall v. Commissioner, 57 Fed. (2d) 633, citing Robert's Appeal, 85 Pa. 84. It is only where it is affirmatively shown that the donor did not intend thereby to make a gift that transfer of stock on the books of the corporation is held to be insufficient. Theodore C. Jackson et al., Administrators, supra; McCann v. Commissioner, 87 Fed. (2d) 275. Cf. Oscar C. Joseph, 32 B. T. A. 1192. If a valid gift inter vivos has been made, it is of no importance what the donee thereafter does with the income from the property. In the case of a bona fide gift by a husband to his wife, the wife may thereafter dispose of the income as she chooses. She may lend it to her husband, or may indeed make a gift of it to him, without invalidating the gift to her of the res. To recognize any less right in the donee would be to restrict her ownership of the property. In Marshall v. Commissioner, supra, in referring to stock transferred by the petitioner to his wife on the books of the corporation, the court said: What she did with those [dividend] cheeks after receipt is a matter of complete indifference. The stock was not endorsed and redelivered to her husband, and could not thereafter be transferred, or the dominion and ownership of ilie petitioner be regained, except through the independent and voluntary act of his wife. If the wife returns the income from the property to the husband as a gift, or as an alleged loan not thereafter repaid, such act might properly raise a question whether the husband in the first place had the requisite intention to make a bona fide gift of the property to Ms wife, and such question then must be resolved in the light of the facts of each particular case. "It is true that where property is transferred by a husband to his wife without consideration, there is a presumption that it is a gift, but it is also true that such presumption is one of fact and may be rebutted by a showing of the real intention of the parties. Smithsonian Institution v. Meech, 169 U. S. 398." McCann v. Commissioner, supra. What then were the real intentions of the parties in the instant case as disclosed by the record ? The uncontroverted evidence shows (1) that prior to the transfers, decedent told his wife that he was "going to give" the securities in question to her; (2) that at the time of the transfers there was no understanding or agreement between decedent and his wife that he should retain any right or interest of any kind in the transferred property, and decedent never thereafter in fact claimed any such right or interest; (3) that the shares were formally transferred on the books of the trust and of the corporation from decedent to his wife, and thereafter all dividend checks, with the single exception, were either made payable to the wife and delivered to her, or were deposited to the credit of her personal bank account; (4) that after the transfers decedent repeatedly made statements to third parties that he had given the securities to his wife; (5) that in 1921 prior to the transfers decedent had made a will containing a testamentary disposition of the securities in question, and after the transfers decedent and his wife executed new wills contemporaneously by which the wife exercised such power of appointment and no mention was made thereof by decedent in his will; (6) that after the transfers decedent and his wife prepared statements of their respective assets and liabilities which they submitted to a bank for the purpose of obtaining loans, and in such statements the securities involved were consistently listed over a number of years as being the property of decedent's wife; and (7) that the private books of account of decedent, containing a statement of his assets, made no reference to the securities in controversy. In our opinion, the actions of the parties, when viewed in their entirety, before, at the time, and subsequent to the transfers assailed by respondent, extending over a period of approximately 10 years prior to decedent's death, fairly establish that the decedent intended to and did make a bona fide gift of the securities to his wife. And we think the matters urged by respondent do not compel a contrary conclusion. In support of his position, respondent cites our decisions in Theodore C. Jackson et al., Administrators, supra; Oscar G. Joseph, supra, and the decision of the United States Circuit Court of Appeals for the Sixth Circuit in McCann v. Commissioner, supra. All of these cases, we think, are clearly distinguishable on the facts. The circumstances of each case indicate that the transferor therein had no intention of making a bona gift inter vivos. In the McCann case, the husband incorporated his business and issued the majority of the stock of the corporation to his wife, who paid nothing for the stock. Another corporation was later organized, and its stock was issued to the stockholders of the first corporation, the wife receiving her share. None of the stock certificates was ever delivered to the wife. They were placed in the office of the corporation under the control of her husband. The dividends on the stocks standing in the wife's name, when declared, were credited to her account on the books of the company and then transferred to her husband's account. Later, the husband sold the stock of the corporation without consulting his wife, and the purchaser issued a check for more than $1,000,000 in part payment of the stock held in her name. The check was delivered to the husband, and by his direction it was endorsed by his wife and redelivered to him. He deposited it in the bank to his own credit and invested the proceeds in Government bonds which he held at the time of his wife's death. The court in its opinion said: The facts found by the Board clearly rebut the presumption of a gift of the stock to the decedent. They show that it was contemplated by the parties that the stock should be held by the wife for the husband, and that both thereafter regarded it, with the dividends thereon and proceeds from its sale, as his property and as not belonging to her. The facts of the other cases cited by respondent as readily distinguished themselves from the present proceeding as those in the McCann case. Respondent urges a further point which requires brief discussion. He argues in substance that when Essie I. Gaffney endorsed the stock certificates in blank in 1925 and put them up as collateral security for loans to the decedent, she thereby restored the property to decedent, and since the certificates so remained with the bank until decedent's death, they constituted a part of his gross estate. In support of this contention respondent cites McCann v. Commissioner, supra. The analogy, we think, does not hold. In the cited case, the wife endorsed the check given in payment for the stock and delivered the check to her husband, who appropriated the proceeds to his own use. The wife thus divested herself of all incidence of ownership, and restored the property, or proceeds of sale, to her husband prior to her death. The property, therefore, constituted no part of her gross estate when she died. Here there is no evidence that the wife intended to or did restore to her husband the ownership of the securities formerly given to her by him. She merely loaned the stock certificates to him for the specific purpose of using them as collateral security for loans. It is of no significance that the husband happened to die before the loans were repaid and the certificates returned to the wife. Decedent was under the legal obligation to return them to his wife upon demand, or in accordance with the agreement under which they were loaned, or to account to her for their value. Clearly they were not his property, nor were they intended to be or so treated. Respondent urges the alternative contention that if the transfers under consideration constituted gifts, they were intended to take effect in possession or enjoyment at or after decedent's death, and therefore should be included in his gross estate. The conclusions reached by us above obviously are a sufficient answer to this contention. Since the transfers were valid and completed gifts inter vivos, they took effect in enjoyment as well as possession at the respective dates of the transfers. It is not contended that the transfers were made in contemplation of death, nor do the facts so indicate. On the issue presented, respondent's action is reversed. The conclusions reached render it unnecessary to hold a further hearing for the introduction of evidence respecting the value of the securities mentioned. Also, we assume that the third issue respecting deductions is now eliminated, since petitioner assigned error in that connection only if it should be held that respondent did not err in including the value of the securities in decedent's gross estate. Reviewed by the Board. Judgment will be entered under Rule 50.

362 U.S. 924

C. A. 7th Cir. Certiorari denied.

215 U.S. App. D.C. 339

Opinion for the Court filed by Circuit Judge WILKEY. WILKEY, Circuit Judge: Appellees have filed a petition requesting this court to modify its opinion to correct an alleged error in setting forth the standard of review in the district court. The issue raised by appellees is whether in reverseFOIA cases the district court may conduct a de novo hearing or whether it may consider only the adequacy of the agency record. This court held that the APA provides the sole basis for review of EPA's decision to disclose appellants' production verification reports, but ruled that the district court's grant of summary judgment was erroneous. We remanded to the district court for further proceedings, leaving it free to decide whether to remand to EPA or to resolve the disputed factual issues itself. Appellees contend that this was erroneous because the district court may consider only the evidence in the agency record; on this view we should have remanded directly to EPA. In requesting modification of our opinion, appellees seek either an opportunity to brief the issue fully or a postponement of our consideration of the issue until a decision is reached in National Organization for Women v. Social Security Administration, a case pending in this court. which directly presents the scope of review issue. We do not believe it is necessary for this court to decide the issue, and we therefore deny the petition. Initially, we note that we did not hold that the district court must or even should hold a de novo hearing, but rather simply left the district court with discretion to act as it saw fit. Our holding was a narrow one. We found that the district court had applied an erroneous standard of "confidentiality," and that under the proper standard there remained material factual issues that were not resolved. Accordingly, we found that summary judgment was not appropriate. Our remand to the district court specified that these factual issues needed to be resolved, but did not tell the court that it had to resolve them itself. The district court may remand to the agency for fact-finding if it decides that de novo review is unwise or improper. Although we did not instruct the district court to hold a de novo hearing, we did not foreclose that possibility. We reject appellees' contention that this constituted error. The prevailing law in this circuit is stated in Charles River Park "A", Inc. v. Department of HUD, which held that de novo review is appropriate in reverse-FOIA cases for the purpose of making the "threshold determination" whether the material in question "would have been exempt just as it would if a suit had been brought under the FOIA to compel disclosure." Charles River Park "A" seems especially pertinent to this case. In the normal reverse-FOIA case the ultimate issue is whether an agency violates the APA when it seeks to disclose submitted information which is exempt under FOIA. In that case the agency has some discretion to act, and the issue properly is limited to whether the record indicates that it has done so reasonably. In this case, however, EPA has made a policy decision to give up that discretion and allow its decision to disclose to be determined by whether Exemptions 3 and 4 apply or not. The issue whether a FOIA exemption applies to appellants' production verification reports, unlike the issue whether to disclose when it is settled that an exemption does apply, is not one EPA has discretion in deciding. It rather is a legal question properly decided by the district court. Thus, what Charles River Park "A" identified as a threshold question in the normal case is in this particular instance the only question that must be resolved. We recognize that there is an open question whether this holding remains valid after the Supreme Court's decision in Chrysler Corp. v. Brown, but we reject appellees' contention that Chrylser Corp. held that de novo hearings are impermissible in reverse-FOIA cases. Appellees rely on the Court's statement that "De novo review by the District Court is ordinarily not necessary to decide whether a contemplated disclosure runs afoul of § 1905," asserting that this forecloses the possibility of de novo review. This ignores the facts that the statement was qualified by the word "ordinarily" and that it spoke in terms of necessity rather than permissibility. More important, the Court remanded the case to the court of appeals for resolution of the § 1905 issue and stated: "Since the decision regarding this substantive issue — the scope of § 1905 —will necessarily have some effect on the proper form of judicial review pursuant to § 706(2), we think it unnecessary, and therefore unwise, at the present stage of this case for us to express any additional views on that issue." We are in the same position as the Court in Chrysler Corp. We have not determined whether the disclosure here is exempt under Exemption 3, by virtue of § 1905 or § 4912(b)(1) of the Noise Control Act, or under Exemption 4. We therefore decline to decide the scope of review issue, and we do not prohibit the district court from determining that de novo review is appropriate. The petition is denied. . We note that appellees have raised this issue belatedly, even though there were several reasons for them to have raised it from the start. First, the district court reached its decision not by evaluating the agency record, but by considering opposing affidavits filed with the court and by finding that summary judgment was proper because plaintiffs' factual contentions were wrong or irrelevant. Of course appellees would not be expected to challenge this approach directly since they prevailed in the district court, but they could have emphasized in their brief to this court their view that the district court's review was limited to the facts in the agency record. Instead, they merely joined issue with appellants on whether summary judgment was appropriate on the basis of the evidence presented to the district court. Second, appellants stated in their brief that "remand to the district court is required for a hearing to resolve the disputed factual issues." Brief for Appellants at 22. Despite this direct request for what appellees now claim is an erroneous disposition, appellees' brief did not challenge it or even suggest what action would be appropriate in case this court reversed. Finally, appellees should have been aware that the Government had taken a firm position on the de novo review question in National Organization for Women v. Social Security Administration, Nos. 76-2119, 76-2128, 76-2129, 76-2163, 77-1161, 77-1269, 77-1270 (D.C.Cir., argued 1 May 1980), a case briefed and argued in this court prior to the date on which they filed their brief in this case. They therefore should have given this court notice that if it reversed the judgment it might need to consider the issue of the scope of review in the district court. The Government is in an awkward position, to say the least, when it fails to raise an issue with this court and then seeks to have an opinion modified on the ground that the court erred by not ruling in a certain way on that issue. . Nos. 76-2119, 76-2128, 76-2129, 76-2163, 77-1161, 77-1269, 77-1270 (D.C. Cir., argued 1 May 1980). . "In light of our opinion, which casts doubt on EPA's finding that the reports were clearly not entitled to confidential treatment, the district court may determine that EPA abused its discretion in invoking the summary procedure in this case, . and [may] remand to the agency for a redetermination of the confidentiality claims under § 2.204(d)(1)." Slip opinion at 18. We note that appellants stated that they would prefer a remand to EPA. See Brief for Appellants at 22. Since appellees now agree, such a disposition may well appeal to the district court. . 519 F.2d 935 (D.C.Cir.1975). . Id. at 940 n.4. . See slip opinion at 10-11. . 441 U.S. 281, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979). . Id. at 318, 99 S.Ct. at 1726. . Id. at 319, 99 S.Ct. at 1726. . Appellees argue that our citation of Sears, Roebuck & Co. v. GSA, 553 F.2d 1378 (D.C. Cir.), cert. denied, 434 U.S. 826, 98 S.Ct. 74, 54 L.Ed.2d 84 (1977), was erroneous because Sears found that reverse-FOIA actions were based on FOIA, a position repudiated in Chrysler Corp. We think our reliance on Sears was justified even though we based our review on the APA. The issue addressed in Sears was not whether the agency could disclose material exempt under a FOIA exemption, but whether Exemptions 3 or 4 applied. See id. at 1381. This puts Sears squarely within the rule of Charles River Park "A", which held that the threshold issue whether any FOIA exemptions apply to the information in question is one the district court may determine on the basis of de novo evidence. 519 F.2d 940 n.4; see p. 1373 & note 5 supra. We leave for the district court, and for the court in National Organization for Women, the question of the continuing validity of Charles River Park "A" in light of Chrysler Corp. v. Brown. We note, however, that Sears fit precisely the posture of this case. The district court's decision was based on finding no material facts in dispute; we reversed under Sears because the competitive injury issues addressed in the district court's opinion could not be resolved without resolution of certain factual issues. Appellees never objected to the district court's approach to the case nor did they raise or preserve in this court the issue whether de novo review is permissible. See note 1 supra. We therefore have no reason to reconsider our adherence to Sears, which was based on well-established principles governing review of a district court grant of summary judgment.

498 U.S. 859

C. A. 6th Cir. Certiorari denied.

958 F.2d 1226

OPINION OF THE COURT COWEN, Circuit Judge. In this bankruptcy case the bankruptcy court entered an order discharging the debtors even though they maintained few if any records of their financial dealings. The district court reversed. We will affirm the district court, based on a conclusion that the debtors did not meet their burden of justifying failure to keep adequate records under 11 U.S.C. § 727(a)(3) (1988). I. Eugene Alten and Marlene Alten (collectively "the Altens" or "the debtors") personally guaranteed a loan from Meridian Bank (Meridian) for a development project which failed. Meridian thereafter obtained a judgment against the Altens for $3,836,-181. At that point the Altens stopped using bank or other financial accounts for their financial transactions and began dealing only in cash and money orders. The Altens candidly acknowledged their reason for doing so was to avoid having bank or other financial accounts upon which their creditors could levy liens or effect collections. They maintained scant or no records of their business, professional or personal transactions, again to avoid having to pay the Meridian judgment or other debts. Mr. Alten is an attorney licensed to practice law in Pennsylvania since 1958, and is also a member of the bar of the United States Tax Court. He has been self-employed as an international investment and real estate consultant since 1982. Prior to 1977 he engaged in the private practice of law specializing in real estate. Between 1977 and 1980, following entry of the Meridian judgment, Alten was a consultant and chief operating officer for several Atlantic City enterprises all of which dissolved by 1980. The Altens filed for bankruptcy under Chapter 7 on May 22, 1985, seeking to discharge the Meridian debt. Meridian opposed the discharge, alleging that the Al-tens concealed their assets, failed to keep records as required by the Bankruptcy Code, and made fraudulent oaths regarding their financial affairs. The evidence submitted to the bankruptcy court was scant. Mr. Alten's financial records for the period from 1982 through 1986, both business and personal, were virtually non-existent. The sole written records presented to the bankruptcy court of income received during that period were three handwritten sheets of paper, purporting to show income from his international consulting business and reflecting gross revenues of approximately $380,000. Mr. Alten kept no time records for his consulting practice, produced no written agreements or correspondence with clients concerning payment of fees or work performed, and had no evidence of payment of fees or expenses by clients. He produced no copies of checks or money orders reflecting payment or reimbursement of expenses. Other evidence presented to the bankruptcy court included a handwritten ledger showing dates and travel destinations, as well as income tax returns which lacked supporting documentation for $120,-000 in business expense deductions Mr. Al-ten claimed on those returns. Following trial the bankruptcy court found no merit in the objections of Meridian and granted the Altens a discharge in bankruptcy. The court held that the Al-tens' fear of levy of execution on bank and financial accounts by creditors and the nature of Mr. Alten's business justified failure to keep records. The bankruptcy court found that Mr. Alten worked at home, had sixteen clients between 1982 and 1986, and earned a net annual income of less than $50,000 during those years. It acknowledged Mr. Alten's sophistication as an attorney and experienced businessman. Nevertheless, the bankruptcy court con- eluded that failure to keep records was justified and discharged the Altens' debt to Meridian. On appeal, the district court held that the bankruptcy court misapplied the record keeping provisions of the Bankruptcy Code, 11 U.S.C. § 727(a)(3), and vacated the discharge of the Meridian judgment. The Al-tens and their trustee appeal to this court asserting that the decision of the bankruptcy court, finding justification in failure to keep records, was a finding of fact, and that the district court applied the wrong standard of proof in reviewing that decision. II. The central issue is whether the Al-tens were justified in failing to keep records of financial transactions. In reviewing the bankruptcy court's decision, this court, like the district court, "applies a clearly erroneous standard to findings of fact, conducts plenary review of conclusions of law, and must break down mixed questions of law and fact, applying the appropriate standard to each component." In re Sharon Steel Corp., 871 F.2d 1217, 1222 (3d Cir.1989). See also Universal Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 98, 102-03 (3d Cir.1981). The Altens argue that the bankruptcy court's finding of justification was a finding of fact subject to a clearly erroneous standard of review. The Altens further argue that Rule 52(a) of the Federal Rules of Civil Procedure limits the ability of an appellate court to set aside findings of fact to instances where such findings are determined to be clearly erroneous. Similarly, Bankruptcy Rule 8013 provides in part that "[findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of witnesses." Meridian contends that the district court properly found that the question of whether the Altens' failure to keep or preserve records was "justified" was a mixed question of law and fact within the meaning of 11 U.S.C. § 727(a)(3), and that the district court correctly held that the bankruptcy court misapplied section 727(a)(3) to the facts of this case. A mixed question of law and fact is found whenever a legal precept is applied to the sum of the facts of a case. See, e.g., In re Ruti-Sweetwater, Inc., 836 F.2d 1263, 1266 (10th Cir.1988); In re Abbotts Dairies of Pennsylvania, Inc., 788 F.2d 143, 147 (3d Cir.1986); In re Hammons, 614 F.2d 399, 403 (5th Cir.1980). This court has distinguished three different kinds of facts as fundamental to the anatomy of fact finding in the judicial process, i.e., basic, inferred and ultimate facts. Basic facts are the historical and narrative events elicited from the evidence presented at trial, admitted by stipulation, or not denied, where required, in responsive pleadings. Inferred factual conclusions are drawn from basic facts and are permitted only when, and to the extent that, logic and human experience indicate a probability that certain consequences can and do follow from the basic facts. No legal precept is implicated in drawing permissible factual inferences. But an inferred fact must be distinguished from a concept described in a term of art as an "ultimate fact." So conceived, an ultimate fact is a mixture of fact and legal precept- "The ultimate finding is a conclusion of law or at least a determination of a mixed question of law and fact." Universal Minerals, 669 F.2d at 102 (citations omitted). The bankruptcy court's determination that all the factual circumstances of the case amounted to justification for inadequate record keeping by the Aliens is an ultimate fact. Our review of a bankruptcy court's application of section 727(a)(3) to basic and inferred facts necessitates plenary review of the legal standards applied by the court in its analysis. Thus, we undertake plenary review of the concept of "justification" actually applied by the bankruptcy court in this case, and also of the bankruptcy court's allocation of the burden of persuasion on this issue. See In re Cox, 904 F.2d 1399, 1401 (9th Cir.1990). III. It is undisputed that the Aliens failed to keep or preserve records of their financial dealings. The question before this court is whether their failure was justified under all the circumstances of the case. A. The purpose of section 727(a)(3) is to give creditors and the bankruptcy court complete and accurate information concerning the status of the debtor's affairs and to test the completeness of the disclosure requisite to a discharge. See 4 Collier on Bankruptcy ¶ 727.-03[1] (15th ed. 1979). The statute also ensures that the trustee and creditors are supplied with dependable information on which they can rely in tracing a debtor's financial history. Creditors are not required to risk having the debtor withhold or conceal assets "under cover of a chaotic or incomplete set of books or records." Cox, 904 F.2d at 1401 (quoting Burchett v. Myers, 202 F.2d 920, 926 (9th Cir.1953)). The standard for disclosure by a debtor under the Act was announced by the Second Circuit in In re Underhill, 82 F.2d 258 (2d Cir.), cert. denied, 299 U.S. 546, 57 S.Ct. 9, 81 L.Ed. 402 (1936). In that case, the court emphasized that what constituted sufficient record keeping varied with the facts of each case, but in all cases complete disclosure was required. The law is not unqualified in imposing a requirement to keep books or records, and it does not require that if they are kept they shall be kept in any special form of accounts. It is a question in each instance of reasonableness in the particular circumstances. Complete disclosure is in every case a condition precedent to the granting of the discharge, and if such a disclosure is not possible without the keeping of books or records, then the absence of such amounts to that failure to which the act applies. Id. at 259-260. While the debtor may justify his failure to keep records in some cases, a discharge may be granted only if the debtor presents an accurate and complete account of his financial affairs. The Bankruptcy Code does not require a debtor seeking a discharge specifically to maintain a bank account, nor does it require an impeccable system of bookkeeping. Nevertheless, the records must " 'sufficiently identify the transactions [so] that intelligent inquiry can be made of them.' The test is whether 'there [is] available written evidence made and preserved from which the present financial condition of the bankrupt, and his business transactions for a reasonable period in the past may be ascertained.' " In re Decker, 595 F.2d 185, 187 (3d Cir.1979) (citations omitted). Thus, in order to invoke the protection of the bankruptcy court, the debtor must maintain and preserve adequate records. If the debtor fails to do so, there must be some justification. It was never intended that a bankrupt, after failure, should be excused from his indebtedness without showing an honest effort to reflect his entire business and not a part merely. To be sure, there may be records which are not books; but it is intended that there be available written evidence made and preserved from which the present financial condition of the bankrupt, and his business transactions for a reasonable period in the past may be ascertained. Underhill, 82 F.2d at 260. See also White v. Schoenfeld, 117 F.2d 181, 132 (2d Cir.1941) (the law demands as the condition of discharge that the bankrupt produce records or provide adequate reasons for not keeping records); Office of the Comptroller General of Bolivia v. Tractman, 107 B.R. 24 (S.D.N.Y.1989) (debtor must disclose information for discharge to be granted); Broad Nat'l Bank v. Kadison, 26 B.R. 1015, 1018 (D.N.J.1983) (adequate record keeping is a condition precedent to grant of discharge); In re Rusnak, 110 B.R. 771, 776 (Bankr.W.D.Pa.1990) (complete disclosure is a condition precedent to the granting of a discharge); In re Escobar, 53 B.R. 382, 388 (Bankr.S.D.Fla.1985) (debtors are duty bound to explain satisfactorily the loss of their assets); In re Reagan, 13 B.R. 588, 591 (Bankr.E.D.Tenn.1981) (creditors are entitled to the disclosure of all facts surrounding the transfer of property by debtor). The Bankruptcy Code does not specify what constitutes justification for maintaining inadequate records; instead it requires the trier of fact to make a determination based on all the circumstances of the case. The issue of justification depends largely on what a normal, reasonable person would do under similar circumstances. The inquiry should include the education, experience, and sophistication of the debtor; the volume of the debtor's business; the complexity of the debtor's business; the amount of credit extended to debtor in his business; and any other circumstances that should be considered in the interest of justice. In re Wilson, 33 B.R. 689, 692 (Bankr.M.D.Ga.1983). See also In re Oesterle, 651 F.2d 401, 404 (5th Cir. Unit B July 1981), cert. denied, 456 U.S. 989, 102 S.Ct. 2268, 73 L.Ed.2d 1283 (1982) (one form of justification is to show that the bankrupt's business was not of such size and complexity that the keeping of books and records was necessary); Bartolotta v. Lutz, 485 F.2d 227, 229 (5th Cir.1973) (Christmas tree business not so complex as to require records of financial condition and business transactions); In re Redfearn, 29 B.R. 739, 741 (E.D.Tex.1983) (small farmer with limited education not required to keep books). Depending upon the sophistication of the debtor and the extent of his activities, different record keeping practices are necessary. See, e.g., Goff v. Russell Co., 495 F.2d 199, 201-02 (5th Cir.1974) ("Obviously an unsophisticated wage earner dealing primarily in cash should not be denied a discharge because he failed to keep books of account. A higher standard of care is required, however, for a merchant actively engaged in credit transactions."). As an experienced attorney Mr. Alten is not an unsophisticated wage earner. He is a knowledgeable business and professional person who knew the value of maintaining adequate records. He generated substantial revenue and traveled extensively throughout the world, and was in the international investment and real estate consulting business for many years preceding this bankruptcy. Sophisticated business persons are generally held to a high level of accountability in record keeping. As the court stated in In re Manasse, 125 F.2d 647, 649 (7th Cir.1942): "Here we have the case of a lawyer who was well aware of the requirement that he keep books which would truly reflect his financial condition, and fully competent to do so." See also In re Gordon, 83 B.R. 78, 80 (Bankr.S.D.Fla.1988) (even though debtor did not operate business of her own, she displayed a level of sophistication that made her failure to keep records unjustified); In re Hofmann, 81 B.R. 699, 702 (Bankr.S.D.Fla.1987) (attorney with admitted annual income of $50,000 had sophistication such that failure to keep records constituted deliberate evasive tactic); In re Russo, 3 B.R. 28, 35 (Bankr.E.D.N.Y.1980) (attorney with forty years experience not justified in failing to keep or preserve records of financial condition). Attorneys and other professionals may be held to the standard of care ordinarily exercised by members of their profession. What will justify failure depends largely upon how extensive and complicated the bankruptcy business is.... Honesty is not enough; the law demands as the condition of a discharge either that the bankrupt shall produce such records as are customarily kept by a person doing the same kind of business, or that he shall satisfy the bankruptcy court with adequate reasons why he was not in duty bound to keep them. Schoenfeld, 117 F.2d at 132. Mr. Alten's argument that he had only sixteen clients during the relevant period provides no justification for his complete lack of record keeping. The fact that a business or law practice is small does not by itself justify the failure to keep records. Baker v. Trachman, 244 F.2d 18, 20 (2d Cir.1957); In re Hirsch, 14 B.R. 59, 62 (Bankr.S.D.Fla.1981). Certainly insolvency cannot be used as an excuse to avoid the obligation to provide records to illuminate that condition. The obligation imposed upon Alten under section 727(a)(3) to make and preserve adequate records is not imposed upon him because he is an attorney, but rather because he seeks the protection of the Bankruptcy Code's discharge provision. The Code protects creditors of a bankrupt by requiring the debtor to maintain adequate records of his affairs. This is a prerequisite to a discharge under section 727. In order to obtain the benefits of the Code's "fresh start," Alten had a legal duty to maintain adequate records of his income and expenses. B. When a party objects to the discharge of a debtor, that party bears the initial burden of proving that the case falls within one of the statutory exceptions to discharge. Bankr.Rule 4005, 11 U.S.C.; Oesterle, 651 F.2d at 404. The creditor must prove facts essential to the objection to discharge. In re Martin, 698 F.2d 883, 886-87 (7th Cir.1983); In re Somerville, 73 B.R. 826, 833 (Bankr.E.D.Pa.1987). Thus, in order to state a prima facie case under section 727(a)(3), a creditor objecting to the discharge must show (1) that the debtor failed to maintain and preserve adequate records, and (2) that such failure makes it impossible to ascertain the debtor's financial condition and material business transactions. See Decker, 595 F.2d at 187. When this court interpreted the record keeping provisions of the Bankruptcy Act in Decker, we held that the creditor had the burden of proving that the debtor was not justified in failing to maintain records. Id. at 190. At the time of that decision, both the Act and the Rules of Bankruptcy Procedure required the court to place the burden of persuasion upon the party objecting to the discharge. This put the objector in the "difficult and anomalous position of trying to prove a negative by showing the absence of any justification." Oesterle, 651 F.2d at 403. "Were we responsible for writing the law and rules of bankruptcy, we might well agree that the bankrupt should continue to bear the burden of persuasion since he usually possesses the evidence of any justification for his failure to maintain records." Id. In Decker we found that former Bankruptcy Rule 407 placed the burden of proof on the objecting party. 595 F.2d at 189. We held that the burden of persuasion rested with the objecting party and did not shift; although once a prima facie case of inadequate records was made out, the burden of moving forward with evidence to show justification fell upon the debtor. Id. at 190. Nevertheless, the ultimate burden of persuasion remained at all times with the objecting creditor. Id. The record keeping provisions of the Bankruptcy Code have changed since Decker was decided. Under section 727(a)(3) the party objecting to the discharge is no longer required to show reasonable grounds for believing that the bankrupt has committed acts which would prevent his discharge in bankruptcy. The Code now only requires that the creditor make an initial showing that the debtor's records are inadequate; thereafter the burden is on the debtor to prove justification. At trial, the party objecting to a discharge has the burden of proving the objection. But once that party meets the initial burden by producing evidence establishing the basis for his objection, the burden shifts to the debtor to explain satisfactorily the loss.... Vague and indefinite explanations of losses that are based upon estimates uncorroborated by documentation are unsatisfactory. In re Chalik, 748 F.2d 616, 619 (11th Cir.1984) (citations omitted). See also In re MacPherson, 101 B.R. 324, 326 (Bankr.M.D.Fla.1989), aff'd, 129 B.R. 259 (M.D.Fla.1991); Hofmann, 81 B.R. at 703. Likewise, Bankruptcy Rule 4005, which superseded former Rule 407, places the burden of persuasion on the debtor, since the information necessary to establish an excuse for inadequate or non-existent records is generally in the possession of the debtor. Though the text of the new rule is the same as the old, the Advisory Committee Note accompanying the new rule states that the rule leaves to the courts the formulation of rules governing the shift of the burden of going forward with the evidence in the light of considerations such as the difficulty of proving the nonexistence of a fact and of establishing a fact as to which the evidence is likely to be more accessible to the debtor than to the objector. Bankr.Rule 4005 note, 11 U.S.C. (1983). The burden was clearly on the Al-tens to prove they were entitled to have their debt discharged. The plain language of section 727(a)(3) places the burden on the debtor to justify the lack of adequate record keeping. Fear of liens by creditors can never by itself constitute adequate justification for failing to candidly disclose the financial status of a debtor. C. The Altens openly acknowledged their intent to transact business solely in cash in order to avoid creditors levying on their assets. In order to deny discharge for failure to keep records the court need not find that the debtor intended to conceal his financial condition. See Koufman v. Sheinwald, 83 F.2d 977, 979 (1st Cir.1936); In re Shapiro, 59 B.R. 844, 848 (Bankr.E.D.N.Y.1986); In re Esposito, 44 B.R. 817, 827 (Bankr.S.D.N.Y.1984). The only showing required under section 727(a)(3) is that the debtor has unjustifiably failed to keep records of his financial condition. Although the bankruptcy court found no evidence that the Altens concealed, destroyed, mutilated or falsified records, it did find that they failed to maintain complete records and information. There is ample evidence to support these findings of fact. The bankruptcy court's interpretation and application of section 727(a)(3), however, was erroneous as a matter of law. It reasoned that the cases interpreting section 727(a)(3) were inapposite to the Altens' situation because they involved commingling of funds, In re Harron, 31 B.R. 466, 469-470 (Bankr.D.Conn.1983), failure to file income tax returns, Somerville, 73 B.R. at 831-32, and transfers of assets and undisclosed property in trust or business transactions. Broad Nat'l Bank, 26 B.R. at 1016-17. The bankruptcy court concluded that Meridian had the burden of proving the Altens were not entitled to have the debt discharged. The plain language of section 727(a)(3) now places that burden squarely on the debtor. IV. The purpose of section 727(a)(3) is to make full financial disclosure a condition precedent to the grant of discharge in bankruptcy. The Altens failed to maintain adequate financial records, making candid disclosure difficult if not impossible. Nor were the Altens able to prove any facts which were legally sufficient to justify failure to keep records within the meaning of section 727(a)(3). We will affirm the order of the district court vacating the order of the bankruptcy court discharging the debtors. . Section 727(a)(3) provides that (a) The court shall grant the debtor a discharge, unless— (3) the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor's financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case[.] . We do not mean to say that, assuming a bankruptcy court has applied the correct legal standards of "justification," the court acts wholly without discretion when making its justification determination. A bankruptcy court may properly exercise discretion when determining, on findings of particular basic and inferred facts, whether a debtor has successfully demonstrated that its failure to keep adequate records was ultimately "justified." Assuming a bankruptcy court correctly applied proper legal precepts when making its 727(a)(3) determination, and that the court's basic and inferred factual findings were not clearly erroneous, the bankruptcy court's ultimate determination should be affirmed absent an abuse of discretion. Thus, appellate review of a bankruptcy court's section 727(a)(3) determination may include review for abuse. . The only specific obligation placed upon Mr. Alten in his capacity as an attorney was Disciplinary Rule 9-102(B)(3) of the Pennsylvania Code of Professional Responsibility, which was in effect at the time of the relevant conduct in this case. This rule provided that a lawyer shall maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to his client regarding them. Mr. Alten argues that he did not practice law and held no funds for his clients during the five years prior to filing his petition, so that this rule did not apply to him. Since he kept no records, it is impossible for his creditors or the court to determine what funds Alten received from his clients, what income he received, and what records were required of him. Although his status as an experienced attorney is not determinative of his failure to provide adequate justification for the purposes of section 727(a)(3), we note that Alten's word alone is not sufficient to show that Disciplinary Rule 9-102 was not applicable. "Records of substantial completeness and accuracy are required so that they may be checked against the mere oral statements or explanations made by the bankrupt." Underhill, 82 F.2d at 260. . Section 14c of the old Bankruptcy Act provided that The court shall grant the discharge unless satisfied that the bankrupt has . (2) de stroyed, mutilated, falsified, concealed, or failed to keep or preserve books of account or records, from which his financial condition and business transactions might be ascertained, unless the court deems such acts or failure to have been justified under all the circumstances of the case; . Provided, That if, upon the hearing of an objection to a discharge, the objector shall show to the satisfaction of the court that there are reasonable grounds for believing that the bankrupt has committed any of the acts which, under this subdivision, would prevent his discharge in bankruptcy, then the burden of proving that he has not committed any of such acts shall be upon the bankrupt. 11 U.S.C. § 32(c) (1976). . Former Bankruptcy Rule 407 provided that "[a]t the trial on a complaint objecting to a discharge, the plaintiff has the burden of proving his objection." Title I Bankr.Rule 407 (1973) superseded by Bankr.Rule 4005, 11 U.S.C. (1988). . One treatise has summarized the debtor's burden thus: Just what constitutes a satisfactory explanation has not been expressly defined, but it probably means that the debtor must explain his losses or deficiencies in such manner as to convince the court of good faith and businesslike conduct.... An explanation which is based mostly upon an estimate of the debtor founded upon nothing by way of verification or affirmation by means of books, records or otherwise has been held unsatisfactory. Even though the underlying facts referred to by a debtor may suggest a plausible explanation, the testimony may be so general as to be insufficient. More is required of the debtor in the way of explanation than mere generalities. 4 Collier on Bankruptcy ¶ 727.08 (15th ed. 1979).

58 Cust. Ct. 228

Rao, Chief Judge: These two protests have been consolidated for the purpose of trial. Protest 64/1665 relates to certain "Conveyor Chain Parts," namely, chain links, more specifically identified at the time of trial as consisting of the items of merchandise identified on the various entries as follows: Entry 05 3834 H-82 links 05 4531 H-78 link 05 5327 H-78-S links 05 5364 H-82 LP chain links 05 5464 H-104 chain links Protest 64/1691 is concerned with certain "rivets" designated as "H 78 Rivets" on the invoice accompanying entry 05 7321 and as "C 132S Rivets" on the invoice accompanying entry 05 7944. Both the chain links and the rivets were classified by the collector of customs as articles or wares, composed wholly or in chief value of iron or steel, not specially provided for, in paragraph 397 of the Tariff Act of 1930, as modified by the Sixth Protocol of Supplementary Concessions to the General Agreement on Tariffs and Trade, 91 Treas. Dec. 150, T.D. 54108, and subjected to duty at the rate of 19 per centum ad valorem. The gist of plaintiffs' protests is as follows: Protest 64/1665, re the chain links: Should be classified as follows: 1) Para. 372 TA @ 10% % 2) Par. 329 @ 12%% Protest 64/1691, re the rivets: Should be classified as follows: 1) Under Par. 329 TA @ 12% % 2) Under Par. 332 TA @ %$ per lb. 3) Under Par. 372 TA @ 11%$ per lb. 4) Under Par. 353 TA @ 12,%% The principal claim relied upon by plaintiffs is that the chain links and the rivets are parts of chains used for the transmission of power in paragraph 329 of the Tariff Act of 1930, as modified by the Japanese Protocol to the General Agreement on Tariffs and Trade, 90 Treas. Dec. 234, T.D. 53865, supplemented by Presidential notification, 90 Treas. Dec. 280, T.D. 53877, for which duty at the rate of 12% per centum ad valorem is provided, or that the chain links should be so classified and the rivets classified within the eo nomine provision therefor in paragraph 332 of said tariff act, as modified by the General Agreement on Tariffs and Trade, 82 Treas. Dec. 305, T.D. 51802, and assessed with duty at the rate of % cent per pound. As to the alternative claim for classification of the merchandise as parts of machines, not specially provided for, in paragraph 372 of the Tariff Act of 1930, as modified, protest 64/1665 erroneously claims a rate of 70% per centum ad valorem, and protest 64/1691 erroneously claims a rate of 11% cents per poimd. When these cases were called for hearing, plaintiffs' counsel moved to amend protest 64/1665 to include a claim for classification of the chain links as parts of articles having as an essential feature an electrical element or device in paragraph 353 of the tariff act, as modified, and the assessment of duty at the rate of 13% per centum ad valorem. The trial judge agreed to the amendment of the protests to correct the erroneous references to the rates of duty in paragraph 372 and to expand the scope of the paragraph 353 claim to include the chain links "with the understanding that the amendment in writing would be made a part of the record" and with the direction to plaintiffs' counsel to "File your written motion for amendment for the record." It does not appear from the respective case records that the amendments called for were ever filed. Whereas such inadvertence is not condoned, the failure to amend the protests in the manner as directed will not preclude the court from consideration of the valid protest claims invoked in paragraphs 329 and 332 of the tariff act, as modified. The provisions of the latter paragraphs relied upon by plaintiffs read as follows: Paragraph 329 of the Tariff Act of 1930, as modified by the Japanese protocol, supra: All other chains used for the transmission of power, and parts thereof_12%% ad val. Paragraph 332 of said act, as modified by the General Agreement on Tariffs and Trade, supra: Bivets of iron or steel, not specially provided for-%$i per lb. The record upon which the court is called upon to determine the instant controversy consists of the testimony of two witnesses, one for the plaintiffs and the other for the defendant, and various exhibits which will be referred to during the course of this opinion. Thomas I'Anson, associated with I'Anson Industries, Inc., the actual importer of the merchandise at bar, appeared on behalf of plaintiffs. I'Anson had been president of I'Anson Industries for the past 6 years and prior thereto was general manager and vice president of the A-l Steel and Foundry in Vancouver, Canada, which was engaged in the same type of business as I'Anson Industries, namely, the manufacture of products of their own design including chain used in the sawmill industry, pulpmills, and construction industry. Said chain, according to the witness, is made in many different sizes and types and is used for conveying refuse and so forth in sawmills. The witness testified to his familiarity with the five different items of chain links and the two items of rivets, set forth above. As representative thereof, plaintiffs' exhibits 1, 2, and 3 were received in evidence, exhibit 1 representing the H-78 and IT-78-S links, exhibit 2 the H-82 LP and H-82 links, and exhibit 3 the H-104 chain links. Plaintiffs' exhibit 4, received in evidence, is representative of the PI-78 rivets. And as plaintiffs' exhibit 5, there was received a combination article consisting of links and rivet which was described as being representative of the C 132 rivet in issue and the use to which such rivets would be put for chain purposes. Pages 12, 13, 14, 15, 20, and 21 of an I'Anson Industries catalog were received in evidence as plaintiffs' illustrative exhibit 6, pages 12 and 13 of which depicted chain link items H-78 and H-82, and page 14 illustrating the H-104 chain links. Pages 20 and 21 depicted sprockets which drive the chain. I'Anson stated that he had observed the manufacture of both the rivets and chain links in Canada and that he has supervised their manufacture and had handled their sale both in Canada and in the United States. He added that he had sold such merchandise to the sawmill industry, the pulpmill industry, and to construction industries throughout the United States. He also testified that he had supervised the design of loghaul machinery, refuse conveyor machines, sawdust conveyor machinery, chipper infeed machines, and similar machines in which chains would be used. When witness I'Anson was called upon to describe the process of assembling chain, he stated that the link of the chain is placed in position with its male or female component end and the chain and the holes aligned so that a rivet can be inserted. The rivet is fastened in place thereby providing a continuous chain. A schematic drawing of a loghaul and bundling installation using such chain was received in evidence as plaintiffs' collective exhibit 8. In the particlular installation, electric motors were used as the motivating power but steam could be substituted. The witness stated that the conveyor chain under discussion is not limited in use to such a device as is depicted in plaintiffs' collective exhibit 8 but that the various sizes of chain are adaptable to any type of conveyor apparatus and they are so used. I'Anson defined a conveyor as a machine which performs the function of taking a mass or an article from one place to another. The object can rest on the chain, be in front of the chain, or underneath the chain. He added that sometimes a distinction is made between a drive chain and a conveyor chain. He stated that the speed of operation of a drive chain and a conveyor chain would depend on the particular application of the machine with which it is used and that usually a drive chain will approximate the same speed as a conveyor chain. I'Anson was asked what said chains would drive or power when the H-78, H-82, and H-104 chain links were assembled into chains and used in a conveyor system. The witness replied that they transmit power from the drive motor to the other end of the conveyor, which power can be transmitted to other machines. They may be connected in series from one to the other from the same individual motor much like a belt drive. He drew an analogy to belt drives in machine shops in the old days when they would transmit power from one machine to the other from the same motor. The witness stated that this can happen on a conveyor. In some applications, the conveyor chain drives something else with it and carries power into other machines such as a barker application, with the use of one motor. In such event, you would have a multiple conveyor setup for economical use of power. He stated it is quite common in the sawmill industry to use a chain for multipurposes, that is, to transmit the initial power of the machine to other devices in series as well as to convey material or refuse. An instance of this would be a loghaul chain driving a barker which takes bark off logs and then driving a rear conveyor chain through a cut-off saw. On behalf of defendant, Harvey V. Eastling was called to testify. Eastling, who holds a bachelor of science degree in mechanical engineering and is a registered engineer in the State of California, worked for 37 years with the Link-Belt Co. and for 5 years previous thereto as San Francisco representative of the Jeffrey Co. of Columbus, Ohio, in the same line of business, to wit, the manufacture of various types of chains. The witness is presently retired but does engage in some consulting work. While with the Link-Belt Co., he served as chief engineer, vice president, and manager for the west coast. During his employment, he gained a familiarity with various types of power transmission and conveyor chains. He is familiar with the types of chains designated as H-78, H-82, and H-104. He referred to H-78 chains as a chain of about 214-inch pitch which is commonly used and is made by a number of manu facturers on the west coast. The H-82 chain, he explained, is a larger chain with a 3-inch pitch, and he referred to the H-104 chain as a "refuse" chain used exclusively in sawmills and pulpmills. When shown plaintiffs' exhibit 2, Eastling stated that it is a cast link with a 6-inch pitch and, although it has H-82 S 4 cast into it, the article is not representative of the H-82 chains in the United States. It is twice as long as the standard H-82 size and, in his opinion, it would be strictly a conveyor chain. He testified that anyone designing a power transmission chain in the United States would not use anything like exhibit 2, explaining that a good drive chain is made with shorter pitch links. Eastling stated that exhibits 1 and 3 are similar, if not identical, with the H-78 and H-104 chain links made in the United States. When asked if the chain industry draws a distinction between power transmission chain and conveyor chain, the witness replied in the affirmative. Power transmission chain would be one used to connect two shafts using chain and sprockets for the purpose of transmitting power from a drive source to the second shaft, whereas a conveyor chain would be one used to convey or push material along either on a flat surface or in a trough. When asked if he would call a chain which does nothing except convey material which rests upon the top of the chain or on the chain in some fashion as a chain which is transmitting power, Eastling replied in the negative, stating that the designation in the industry for such an article would be "conveyor chain." In determining the proper classification for customs duty purposes of the chain links and rivets at bar, which are used in conjunction with one another, it is deemed a more orderly procedure to consider their classification individually. To succeed in its claim that the chain links in issue are parts of chains used for the transmission of power, plaintiffs must prove that the chains of which the links are part are used chiefly for the transmission of power. It is chief use that controls the classification of merchandise for customs purposes. Bob Stone Cordage Co. et al. v. United States, 51 CCPA 60, C.A.D. 838. And "the question of whether 'chief use' has been properly established depends upon the issue and the evidence in each case." United States v. F. W. Woolworth Co., 23 CCPA 98, T.D. 47765. From the testimony of record in the present case, it appears that the chains formed from the chain links in controversy were designed for use and were used in the sawmill industry, the pulpmill industry, and construction industry to convey logs or other material from one point to another — in other words, principally for purposes of conveying material. It was pointed out, however, that, simultaneously with the function of conveying, the chain at times could be used to transmit power from the original drive motor to other machines connected in series witli the conveyor. The extent of the respective uses is not set forth in the record before us, but the substance of plaintiffs' testimony is to the effect that the chains would be chiefly used for conveying purposes. Plaintiffs cite the case of General Chain & Belt Co. v. United States, 42 Cust. Ct. 115, C.D. 2074, contending in its brief that "Conveyor chain almost identical in use to that involved herein was held dutiable under this provision." In the General Ohaim, case, supra, certain steel roller chains, having a 4-inch pitch, used in various industrial plants to transmit power from an electric motor and convey articles that may be attached to them were held to be chains used for the transmission of power in paragraph 329 of the Tariff Act of 1930, as modified. As in the present instance, the merchandise in that case had been classified within the provisions of paragraph 397 of said act, as modified, as articles not specially provided for, in chief value of base metal. In the course of its decision in the General Chain case, supra, the court stated: There does not appear to be any judicial precedent directly in point which would be decisive of the present issue. Reference is made, however, to the case of United States v. Henry Greenberg & Bros. Export (& Import Go., Inc., 44 C.C.P.A. (Customs) 48, C.A.D. 636, wherein, in reversing the court below, it was held that roller chain in 100-foot rolls, designed for use on bicycles, constituted chains used for the transmission of power. In the absence of judicial precedent, it is interesting to note that, in the Summary of Tariff Information (1929), prepared for use by the House Committee on Ways and Means in connection with the preparation of the Tariff Act of 1930, with regard to paragraph 329, under the caption "ChaiNs" — "Description and uses," the following appears: The chains included under this paragraph are usually composed of wrought iron, steel, or malleable iron. Structurally, chains are of two types: (1) Block or sprocket chains, each link of which consists of several pieces of metal, joined together by cylindrical pins. These chains are mostly used for transmitting power. (2) Coil chains, made of interlocking oval links, each link consisting of a single piece of metal. The links may be studded by a crosspiece in the center which makes them stronger. In making coil chains of over 2-inch links, power presses are used to form the links and steam hammers to weld them. The eo nomine provision for chains used for the transmission of power first appeared in the Tariff Act of 1930. In the prior acts of 1922 and 1913, in addition to the provision for chain and chains of all kinds, made of iron or steel, sprocket and machine chains were provided for. (The 1922 act also provided for anchor or stud link chain.) In the Summary of Tariff Information (1920), with relation to the chain provision, the following appears under the caption "General Information" — "Description and uses": Structurally, chains made of iron or steel may be divided, into those (1) whose separate links are of a single piece of metal and those (2) with links of several pieces of metal. The first are used generally for fastening objects together or supporting or lifting weights. Such chains, if small, are chiefly made by machinery, but larger sizes are usually handmade. Chains for cranes, ships' cables, dredges, etc., have each link welded by hand, often both formed and welded from the rolled bar iron. Those of the second class are known as sprocket or machine chains and are used for transmitting power. In certain of these each link is made of several pieces of metal connected by rivets, bolts, or steel screws, and so formed as to engage with the teeth of a sprocket wheel. The bicycle chain is a familiar example. [Italics quoted.] From the evidence of record in this case, it seems clear that the merchandise invoiced as "Conveyor Chain," by virtue of its construction and use, comes within the purview of the eo nomine provision for chains used for the transmission of power, in paragraph 329, as modified, supra. Although defendant in the present case has offered some testimony to the effect that in the chain industry a distinction is drawn between conveyor chains and chains used for the transmission of power or drive chains, the court is constrained in the light of the record before it and following the principle of stare decisis to adhere to its position that conveyor chains are chains used for the transmission of power. In the case of United States v. Mercantil Distribuidora, S. A., Empacadora Trevino, S. A., The Tupman Thurlow Co., Inc., 45 CCPA 20, 23, C.A.D. 667, it was aptly stated: The rule of stare decisis, sometimes known by another Latin phrase meaning "not to disturb what is settled," is applicable here too. The public policy of putting an end to litigation and of not reopening questions which have been decided is a sound one, subject only to the qualification that clear error should not be perpetuated. Courts should maintain an open mind and give thoughtful consideration to sincere arguments that they should reverse themselves. But it must be remembered that when they do this they unsettle the law and add to the turmoil of this world, which already has enough. Hence sound policy dictates that prior decisions shall stand until the court is convinced they are wrong. [Italics quoted.] In the circumstances of the instant case, the record as presented does not warrant a departure from the holding of this court in the General Chain case, supra. Accordingly, we hold that the chain links in controversy should properly have been classified by the collector of customs as parts of chains used for the transmission of power of the kind provided for in paragraph 329 of the Tariff Act of 1930, as modified by the Japanese protocol, supra, which provides for duty at the rate of 121/2 per centum ad valorem. There remains for the court's consideration the proper classification of the H-78 and C 132S rivets covered by protest 64/1691. On this phase of the case, plaintiffs' witness I'Anson testified that he had observed the manufacture and processing of rivets such as plaintiffs' exhibits 4 and 5. He stated the rivets are made from a rolled bar which has been cut to desired length. A head is formed by pressing into a die. The rivet is then cleaned or deburred as may be required. The heads of the instant rivets are specially shaped with a slight indentation in the heads to prevent them from turning in the holes hi which they are placed. Such rivets are sold separately or with chains and are bought and sold by size. In addition to being used to connect links to chain, the rivets are also used to join attachments used on chain and in sawmill machinery. As representing the latter use, plaintiffs' illustrative exhibit 7 was received in evidence and referred to as a "4-F attachment" wherein a rivet similar to an H-82 rivet was used. Another chain attachment referred to is depicted in the upper portion of page 12 of plaintiffs' exhibit 6 illustrating the use of C 132 and C 132S rivets, similar to those in issue. Witness I'Anson stated that the rivets in controversy represented by exhibits 4 and 5 are composed either of iron or steel. In the use of the rivet contained in plaintiffs' exhibit 5, it was I'Anson's testimony that the end opposite the head, after being inserted in place, was "bent over" "By heating and swaging or hammering to fold or swell the metal up into a form of what is commonly known as a riveted end." Plaintiffs' claim that the rivets at bar by their use with the chain links in controversy are likewise parts of chains used for the transmission of power must fall. The record before us is lacking in proof that the rivets at bar are chiefly used for the manufacture of H-78 and PI-132 chain links. In fact, at the time of briefing, plaintiffs in so many words concede that said rivets are not dedicated to use as parts of chain and rely on their claim that said articles are classifiable pursuant to the eo nomine provision for rivets of iron or steel, not specially provided for, in paragraph 332 of the Tariff Act of 1930, as modified, sufra. In support of its position, plaintiffs cite the case of Remington Rand, Inc. v. United States, 20 Cust. Ct. 1, C. D. 1075, wherein certain "Stator Rivets" and "Rotor Rivets" measuring 0.598 of one inch in length and 0.093 of one inch in diameter and 0.529 of one inch in length and 0.093 of one inch in diameter, respectively, designed for use exclusively in the manufacture of electric shavers which had been classified by the collector of customs as articles, not specially provided for, composed wholly or in chief value of iron, in paragraph 397 of the Tariff Act of 1930 were held to be within the provision for rivets of iron, not specially provided for, in paragraph 332 of said act. In the course of the decision in the Remington case, supra, the court, in the absence of any evidence or contention to the contrary, proceeded on the assumption that the common and commercial meanings of the term "rivet" were the same and set forth various lexicographic definitions of the word, some of which definitions are here quoted. Webster's New International Dictionary, second edition, 1935: rivet — A headed pin or bolt of some malleable material, as wrought iron, soft steel, or copper, used for uniting two or more pieces by passing the shank through a hole in each piece and then beating or pressing down the plain end so as to make a second head. Small rivets are usually closed cold, but larger rivets are closed at a forging heat. Bivets are distinguished by the shape of their heads, as panhead, cone-head, buttonhead, flathead, steeple-head, flush-head, and countersunk-head rivets, and by their use as structural, tinner's belt, etc. Funk & Wagnalls New Standard Dictionary, 1932 edition: rivet — a short soft metal pin having usually a head on one end, used to connect two plates of metal or other substance together by passing it through holes and spreading its headless end by hammering or pressing until a second head is formed. Knight's American Mechanical Dictionary, volume III, at page 1947: Bivet. (Machinery) A short bolt with a flat or rose head, employed for uniting two plates or thin pieces of material together. The stub end is swaged to prevent its withdrawal. When used for joining pieces of leather, as in making belting, an annular disk, termed a burr, is placed over this end previous to swaging, in order to give a greater bearing. Rivets are cut from round metal rods, and formed by special machinery. New Century Dictionary of the English Language (1946 edition) : rivet . A metal pin or bolt for passing through holes in two or more plates or pieces to hold them together, usually made with a head at one end, the other end being hammered into a head after insertion. And for the purposes of the present case we are updating certain of the foregoing definitions of the word "rivet" to reflect current editions of the lexicographic authorities. By so doing, however, we do not detract an iota from the import of the Remington decision inasmuch as the variation in language of the definitions over the years is minimal and the cogency of the decision remains undiminished. Webster's Third New International Dictionary of the English Language, 1966: rivet, n. A headed pin or bolt of some malleable material (as wrought iron, mild steel, or copper) used for uniting two or more pieces by passing the shank through a hole in each piece and then beating or pressing down the plain end so as to make a second head. Funk & Wagnalls Standard Dictionary of the English Language, International Edition, 1963: rivet, n. A short, soft metal bolt, having a head on one end, used to join objects, as metal plates, by passing the shank through holes and forming a new head by flattening out the headless end. The foregoing definitions appear to describe very aptly and clearly the physical appearance and use of the rivets at bar as represented by exhibits 4, 5, and 7 and page 12 of exhibit 6 offered in evidence by the plaintiffs herein. Counsel for defendant in its brief argues that the instant rivets do not come within the common understanding of the term for several reasons. In the first place, the rivets in issue "are not used in the sense of attaching one flat smooth piece of metal to another" (defendant's brief, page 22). Secondly, the ultimate shaping of the end originally headless is done by heating and not be hammering. And lastly, in defendant's exhibit A, a catalog published by the Canadian company who manufactured the instant rivets, such items are referred to as "pins." Considering the objections in reverse order, we are of the opinion that the fact an article may be designated by a different name in a foreign country, even though that country shares our language, does not lessen the applicability of the claimed provision to the imported articles when the fact of the difference in terminology has been attested to and explained by plaintiffs' witness I'Anson and when some of the dictionary definitions of the word "rivet" above set forth define a "rivet" as a "pin." As to the ultimate shaping of the headless end, the record before the court contains the unrebutted testimony of plaintiffs' witness I'Anson that, after a rivet is inserted in place, the end opposite the head is "bent over" "By heating and swaging or hammering to fold or swell the metal up into a form of what is commonly known as a riveted end." The fact that, in the process of forming the riveted end, heating and swaging (a pressing operation) may be employed in place of or in addition to hammering does not, in our opinion, make what otherwise conforms to the common understanding of a rivet any the less such an article. This position is supported by a visual examination of plaintiffs' exhibits 5 and 7 wherein the head formed after insertion in place bears every appearance of a typical riveted end. By its first objection, to wit, that the rivets in issue "are not used in the sense of attaching one flat smooth piece of metal to another," defendant is limiting the definition of "rivet" to an article of particular characteristics used to connect two "plates" of metal together. We do not believe from a reading of the dictionary definitions above set forth that the term "rivet" should be so restricted as to exclude from its scope an article possessing all the ' other features of a rivet but which, as here, instead of connecting- two plates of metal is used to connect the two side bars of a chain link. In support of such a position, we quote from the Remington case, supra, as follows: As pointed out above, some lexicographic authorities describe a "rivet" as "a short soft metal pin having usually a head on one end, used to connect two plates of metal or other substances together ." [Italics supplied.] Other definitions indicate that a rivet may be used to connect two or more plates; still other definitions omit the word "usually" in defining a "rivet." However, it is the opinion of the court, which seems to be borne out by thoughtful consideration of various definitions of the word "rivet," that rivets may be made with or without a head on one end, and may be used to connect two plates of metal or other substances, or more than two such plates. We conclude, therefore, that the provision in paragraph 832, supra, for "rivets of iron or steel, not specially provided for" embraces rivets of all kinds when of the materials specified and when used in the manner above described. In Cabell v. Markham, Alien Property Custodian et al., 148 Fed. 2d 737, where defendants were contending that the courts were not free to depart from the literal meaning of certain words of a statute "however transparent may be the resulting stultification of the scheme or plan as a whole," Learned Hand, Circuit Judge, writing the opinion for the Circuit Court of Appeals, Second Circuit, said— Courts have not stood helpless in such situations; the decisions are legion in which they have refused to be bound by the letter, when it frustrates the patent purpose of the whole statute. We need cite no others than the more recent of those in the Supreme Court which have followed Rector, etc., of Holy Trinity Church v. United States, 143 U.S. 457, 12 S. Ct. 511, 36 L. Ed. 226; [Citing numerous cases.] Further, Judge Hand observed— _ Of course it is true that the words used, even in their literal sense, are the' primary,- and ordinarily the'most reliable, sources of interpreting the meaning of any writing, be it a statute, a contract, or anything else! But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress, out of the dictionary; but to remember, that statutes always have some, purpose or object to accomplish, whose-sympathetic and imaginative discovery is the surest guide to their meaning. Also to be considered is the general rule applicable to customs law that where a dutiable provision names an article without terms of limitation all forms of the article are thereby included unless a contrary legislative intent otherwise appears (Smillie & Co. v. United States, 11 Ct. Cust. Appls. 199, T.D. 38966). Defendant cites the case of John S. Connor v. United States, 41 Cust. Ct. 26, C.D. 2016, wherein certain so-called steel pins, or wire pins,, having a diameter of 0.294 to 0.296 of an inch and 1% inches or % inch long, usually driven into the wooden side rails of beds for the purpose •of holding in place a metal bed-rail hook, were held on the record there ¡presented not to be within the provisions for nails, spikes, or rivets in ¡the Tariff Act of 1930, as modified. In view of the factual differences in the Connor case and those at bar, we believe the Connor case to be olearly distinguishable. In disposing of the claim of plaintiff pertaining to the rivets in issue, we adopt as particularly appropriate to the facts and issue of the instant case the following language from the Remington case, mpra: Noting the variations in the definitions of "rivet," to which reference has been made above, and bearing in mind that dictionaries may be referred to not as evidence of the meaning of language but merely as "aids to the memory and understanding of the court," and considering the character, nature, form, shape, material of which made, and exclusive use of the imported commodity, we are of the opinion that the articles clearly respond to the popular conception of what are commonly known as rivets, and we so hold. In the circumstances of the present case and predicated on the foregoing considerations, the claim of plaintiffs that the H-78 rivets covered by entry 05 7321 and the C-132S rivets covered by entry 05 7944, the subject of protest 64/1691, should properly have been classified as rivets of iron or steel, not specially provided for, in paragraph 332 of the Tariff Act of 1930, as modified by the General Agreement on Tariffs and Trade, supra, and assessed with duty at the rate of % cent per pound, is sustained. Judgment will issue in conformity with the views above expressed.

371 U.S. 895

Court of Claims. Certiorari denied.

381 U.S. 954

Sup. Ct. Kan. Certiorari denied.

313 U.S. 579

Petition for writ of certiorari to the Circuit Court of Appeals for the Third Circuit denied.

26 Ct. Cl. 323

Davis, J., delivered the opinion of the court: A motion is made for the entry of a compromise judgment herein in favor of plaintiffs, in favor of their counsel for a sum fixed by way of expenses incurred by him, in favor of counsel for the defendant Indian tribes for a stipulated sum as his fee, and in favor of plaintiff's counsel for his fee for services, the amount to be fixed by the court. This last item is left to our determination, but the other items are agreed to by all the parties and this agreement has great weight, but is it conclusive upon the court or have we not an independent duty imposed upon us by law ? The Indian appropriation act (approved March 3, 1891) provides that the Secretary .of the Interior pay to the confederated tribes (defendants herein) per capita "all moneys now held in trust for them by the United States " with interest, provided, first, that this suit be settled out of said fund in accordance with final judgment or decree or "compromise judgment or decree that may be rendered in said suit." The action pending here was authorized by the Act of March 2, 1889 (§ 4, 25 Stat. L., 1013 et seq.), wherein it was provided that out of the funds found due to the plaintiffs the court "may allow a reasonable compensation to the counsel or attorneys of said Indians, to be ratably apportioned upon and paid out of the sums due them respectively." Counsel now ask us to fix this compensation, producing the record showing the amount of his labor and the contract with his clients, in which they agree to pay him for " services " in this matter " an amount equal to twenty-five percent, of the money" collected or found due. The court would be able now to fix what the statute calls a reasonable compensation" for counsel, were it not that the compromise agreed upon requires the entry of jndgment of another sum in counsel's favor for what are called " expenses." The "expenses" may or may not have a bearing upon the amount of the fee to be fixed by us. As to their nature we are, quite uninformed. The judgment for this sum, as " expenses," is to be against the defendant tribes; they consent to it and the arrangement meets the approval of the Government officers; we therefore do not intend to disturb that agreement in this respect. The duty, however, still remains with us to fix the " reasonable compensation." We can not do that until we know whether counsel have received any compensation under the. head of " expenses." These "expenses " may all have been in the nature of costs which it was incumbent upon plaintiffs to pay and which do not affect the amount of fee for services; but we do not know this, and before fixing the "reasonable compensation" of plaintiffs' counsel we must be informed as to the nature of these " expenses." As to the counsel of defendant Indian tribes, the statute (supra) provides: " And the court may ascertain the reasonable value of the service of counsel employed by said confederated tribes to represent the tribes on such examination, not to exceed ten per centum of the aggregate sum actually in controversy, and the Secretary of the Interior shall cause to be paid to said counsel so much of the sum so ascertained as in equity and justice he may consider to be due them for such services." It will be noticed that we are to " ascertain the reasonable value" of counsel's services, provided it do not exceed ten per centum of the " aggregate sum actually in controversy." The parties, with the approval of Government officers, have agreed upon $5,200 in addition to $1,000 already paid (that is, $6,200 in all) as the proper fee, and this is in accordance with counsel's contract with his clients. We must first decide whether that fee exceeds 10 per centum of the aggregate sum actually in controversy. A petition and several amended petitions have been filed herein. Plaintiffs began by claiming the round sum of $100,000, but the substituted petition filed October 23, 1890, gives an itemized account, which shows an aggregate principal sum of $54,519.17, upon which interest at 5 per cent. from October 1, 1870, is claimed, which would bring the claim much above $100,000. The amount claimed in a declaration or petition is not necessarily an indication of the sum actually in controversy. .Is it so in this case ? As to the principal sum there can be no doubt that it is; the allegations of the petition are sufficiently definite and detailed to show, as to this amount, substantial ground for litigation. As to the claim for interest, however, we do not hold that it makes part of the " aggregate amount actually in controversy." As a general rule the United States is not liable for interest; the claim, however, is founded upon treaty, that of 1867 (article 24, concluded 23 February, 1867, proclaimed October 14, 1868), but that treaty provided for a permanent fund upon which 5 per centum interest was to be paid to the tribe, either per. capita or as a permanent school' fund. This action is not founded upon a claim for withheld interest upon the permanent fund, but upon allegations that upon the distribution of that fund in 1870 there was a mistaken or improper division thereof by the Government officers; thus the case falls within the general rule as to interest. That the judgment in favor of plaintiffs is to be paid out of a trust fund held for the Indians does not, it seems to us, change the principle. The action is founded upon alleged wrongdoing or mistake upon tbe part of agents of the United States, and the interest claimed is not the interest upon the fund still in the Treasury, bpt interest upon moneys heretofore paid out to> the defendant tribes. The charge is thus made, "That the United States neglected, violated, and failed of its duty as such trustee, and that also through and because of such failure of duty and neglect of your petitioners' rights and interests your petitioners sustained the injuries and losses set forth herein." Judgment is prayed against the United States alone, and the fact that it is to be paid out of a specified fund does not change the responsibility. The judgment, therefore, can not include interest. This appears so clearly upon the face of the substituted petition that there can not be said to be an " actual controversy " about it. When judgment is entered herein, we shall allow counsel for defendant Indian tribes, as in our opinion " the reasonable value" of his service, 10 per centum of $54,519.17, which in our opinion is the amount actually in controversy, upon which will be credited the sum of $1,000 already received upon account, giving as the amount now due said counsel $4,451.92. Judgment will be entered when we shall have determined the reaconable compensation of plaintiff's counsel after submission of bill of particulars as hereinabove indicated.

390 U.S. 1044

Sup. Ct. Cal. Certiorari denied.

21 T.C. 991

OPINION. Black, Judge: We have but one issue in this case and that is whether petitioner Frank N. Smith is entitled to deduct from his gross income in determining his adjusted gross income, $370 automobile expenses which he incurred in 1949 under the circumstances which are narrated in the stipulation. The applicable provision of the Internal Kevenue Code is printed in the margin. It is clear from the facts which have been stipulated that paragraphs (1) and (3) of section 22 (n) do not apply. Kenneth Waters, 12 T. C. 414. In fact, both parties are agreed that section 22 (n) (2) is the provision of the statute which is applicable to the facts of the instant case. The petitioners rely heavily upon our decision in Kenneth Waters, supra. We think the Waters case is distinguishable. In that case the taxpayer was the manager of a grocery store in Independence, Kansas, which was part of a chain operation. As manager, the taxpayer was required to report to his supervisor every Sunday in Parsons, Kansas, 36 miles away. Under such facts, we held that in arriving at his adjusted gross income for 1944, the taxpayer was entitled to the deduction of expenses incurred in the operation of his automobile under the provisions of section 22 (n) (2) of the Code. Even if we should assume that such part of his automobile expenses as was incurred by petitioner in traveling outside the boundaries of the city of Corning, New York, but within the confines of the county of Steuben, New York, is deductible under the holding of the Waters case, supra, we would be unable to allow the deduction here because we cannot determine from the facts which have been stipulated how much of the $370 was so incurred. Paragraph 6 of the stipulation reads: 6. Petitioner's operation of his personal automobile, as required by bis employment, was partly within the boundaries of the city of Corning, New York, and partly outside the boundaries of the city of Corning, New York, but within the confines of the county of Steuben, New York, within which the city of Corning is located. At no time did petitioner's duties require him to be away over night. We do not attach any importance to that part of the above stipulation which says: "At no time did petitioner's duties require him to be away over night." See Kenneth Waters, supra. But we do attach vital importance to the remainder of the facts embodied in paragraph 6 of the stipulation. The courts have uniformly held that a taxpayer's home means his place of business, employment, or post or station at which he is employed. Commissioner v. Flowers, 326 U. S. 466; Raymond E. Kershner, 14 T. C. 168; Moses Mitnick, 13 T. C. 1. Petitioner lived in Chemung County, New York. He was employed by the Corning Building Company in Corning, Steuben County, New York. Peti tioner's duties required him to sell construction materials, make estimates, and supervise some construction. All of petitioner's duties were carried on within Steuben County. A portion of his duties was carried on within the city limits of Corning; however, the stipulation does not indicate how much of the $370 of automobile expenses was incurred for traveling within the city limits of Corning. It seems clear to us that whatever part of the $370 in question which was incurred by petitioner in the operation of his automobile within the city limits of Corning would not be deductible. In Chester C. Hand, Sr., 16 T. C. 1410, the taxpayer was not permitted a deduction for his automobile expense as all of his traveling was performed within the city of Chicago. The taxpayer in Raymond E. Kershner, supra, was principally employed in the city of Martins-burg, West Virginia, and the use of his automobile was necessary. However, he was not allowed a deduction under section 22 (n) (2) as our Court found the city of Martinsburg to be his "home." No deduction was permitted for the expenses of his trips into the surrounding county as no evidence was adduced to indicate that he made any such trips during the taxable year. As we have already stated, somewhat the same sort of situation exists here. It has been stipulated that "During the year 1949 petitioner expended $370 for the use of his automobile in connection with his employment," but it has not been stipulated how much of this was incurred while traveling in the city of Corning and how much was incurred while traveling within the boundaries of Steuben County, but outside the boundaries of the city of Corning. In Summerour v. Allen (M. D. Ga., 1951), 99 F. Supp. 318, the taxpayer was an insurance agent who served 3 counties. He resided in Washington, Wilkes County, Georgia, and had no office. To perform his duties he had to travel in all 3 counties. The court held that since it was unable to determine from the evidence which expenses were incurred in or about taxpayer's home and which were incurred while away from home, the taxpayer did not carry his burden and, therefore, no portion of the expenses was deductible under section 22 (n) (2). For the reasons stated above petitioners' assignment of error cannot be sustained. Decision will he entered for the respondent. SEC. 22. GROSS INCOME. (n) Definition of "Adjusted Geoss Income." — As used In this chapter the term "adjusted gross income" means the gross income minus— (1) Tbade and business deductions. — The deductions allowed by section 23 which are attributable to a trade or business carried on by the taxpayer, if such trade or business does not consist of the performance of services by the taxpayer as an employee; (2) Expenses of travel and lodging in connection with employment. — The deductions allowed by section 23 which consist of expenses of travel, meals and lodging while away from home, paid or incurred by the taxpayer in connection with the performance by him of service» as an employee; (3) Reimbursed expenses in connection with employment. — The deductions allowed by section 23 (other than expenses of travel, meals, and lodging while away from home), which consist of expenses paid or Incurred by the taxpayer, in connection with the performance by him of services as an employee, under a reimbursement or other expense allowance arrangement with his employer;

389 U.S. 86

Per Curiam. Certiorari was granted in this case on October 9, 1967. The judgment of the Court of Appeals for the Third Circuit is vacated and the case is remanded to the District Court of New Jersey for further proceedings consistent with this opinion. Petitioner sought federal habeas corpus on the ground, among others, that prior to his state trial, the assistant prosecutor who handled the prosecution concealed the existence of a promise or agreement to recommend a specific sentence or leniency for an accomplice who testified as a State's witness against petitioner. The District Court rejected the claim without a hearing and upon its examination of the trial record, the record upon a motion for new trial, and the decision of the Supreme Court of New Jersey at 43 N. J. 209, 203 A. 2d 177. However, subsequent to the entry of the judgment of the Court of Appeals on April 7, 1967, the Supreme Court of New Jersey, on July 5, 1967, in a state post-conviction pro ceeding brought by petitioner's co-defendant Taylor, under N. J. Rev. R. 3:10A, granted Taylor a new trial after a trial court hearing on similar allegations. State v. Taylor, 49 N. J. 440, 231 A. 2d 212. In that circumstance the judgment of the Court of Appeals is vacated and the case is remanded to the District Court for reconsideration of petitioner's claim in light of the action of the Supreme Court of New Jersey in State v. Taylor. The District Court's reconsideration may include whether petitioner should be required first to exhaust any remedy which may be available in the state courts. It is so ordered.

531 U.S. 817

C. A. 6th Cir. Certiorari denied.

563 U.S. 948

C. A. 6th Cir. Certiorari denied.

464 U.S. 979

C. A. D. C. Cir. [Certiorari granted, ante, p. 812.] Judgment vacated and case remanded to the Court of Appeals with directions that it instruct the United States District Court for the District of Columbia to dismiss the complaint as moot.

302 U.S. 759

Petition for writ of certiorari to the Circuit Court of Appeals for the Fifth Circuit, and motion for leave to proceed further in forma pauperis, denied.

351 U.S. 934

350 U. S. 497; 350 U. S. 473; 350 U. S. 987; 350 U. S. 1005; 350 U. S. 1015; and 350 U. S. 1008. Petitions for rehearing denied.

176 L. Ed. 2d 1256

Petition for writ of certio-rari to the United States Court of Appeals for the Eighth Circuit denied. Same case below, 331 Fed. Appx. 427.

293 U.S. 151

Mr. Justice Roberts delivered the opinion of the Court. Since 1911 the State of Washington has had a workmen's compensation act applicable to extrahazardous employments. Until March 15, 1927, the statute contained a section providing; " If aggravation, diminution, or termination of disability takes place or be discovered after the rate of compensation shall have been established or compensation terminated in any case the department may, upon the application of the beneficiary or upon its own motion, readjust for further application the rate of compensation in accordance with the rules in this section provided for the same, or in a proper case terminate the. payments." On February 7, 1927, while the quoted section was in force, the appellant injured his arm while doing extra-hazardous work. March 15, 1927 the law was amended and the section in question was altered to provide: " If aggravation, diminution, or termination of disability takes place or be discovered after the rate of compensation shall have been established or compensation terminated, in any case the director of labor and industries, through and by means of the division of industrial insurance, may, upon the application of the beneficiary, made within three years after the establishment or termination of such compensation, or upon his own motion, readjust for further application the rate of compensation in accordance with the rules in this section provided for the same, or in a proper case terminate the payment; Provided, Any such applicant whose compensation has heretofore been established or terminated shall have three years from the taking effect of this act within which to apply for such readjustment." (Italics supplied.) Pursuant to a claim duly presented to the appellee, the appellant was paid from the State workmen's insurance fund on January 17, 1928, the sum of $240 in final settlement for permanent partial disability and the case was closed. May 10,1933 he filed with the appellee a petition for reopening of his claim on the ground that his condition had become aggravated due to the injury. The appellee dismissed the petition for the reason that the three year statute of limitations barred the claim. An appeal to the Supreme Court of Thurston County was dismissed, and the Supreme Court of the State affirmed the judgment. The case is here on appeal. The appellant insists that at the date of his injury the statute conferred upon him not only a right to make his original claim and receive compensation, but a further right to file an additional claim, without limit as to time, and to receive readjusted compensation for aggravation of his condition due to his injury. This, he says, is a vested right, is property, and its enforcement may not be abolished or limited, consistently with the due process clause of the Fourteenth Amendment of the Federal Constitution. The claim cannot be sustained. The Washington Workmen's Compensation Act is compulsory. In the exercise of the State's police power it abolishes common law actions for negligence, imposes upon industry a levy calculated in accordance with the risk of injury to workmen, places the money collected in a state-administered fund, and substitutes for the employee's common law right of action a purely statutory right to payment from the fund of a sum adjusted to the character and extent of the injury. That the State may impose reasonable conditions upon the assertion of the claim does not admit of argument. Considerations justifying a reasonable limitation of time within which further increase of compensation due to aggravation of condition- may be claimed are so obvious as hardly to require statement. Appellant does not urge that the prescription of a period of three years for presenting such a claim is unreasonable, but that it is beyond the State's power. The section under attack merely limits the time for the assertion of the right, affects the remedy only, and that in a manner not unreasonable, arbitrary or oppressive. Such a limitation of time within which appellant's remedy must be pursued does not deprive him of due process. The judgment is Affirmed. Session Laws, 1911, c. 74, § 5 (h), p. 360; Session Laws, 1923, c. 136, § 2 (h), p. 397. The only change made in the quoted paragraph by the Act of 1923 was the substitution of the word " further " for the word " future." Session Laws, 1927, e. 310, § 4 (h), p. 844; Rem. Rev. Stat. § 7679 (h). Below and in his assignments of error here the appellant asserted the section offends Article I, § 10, but, at the bar, he abandoned this contention, and we need not consider it. See State ex rel. Davis-Smith Co. v. Clausen, 65 Wash. 156; 117 Pac. 1101; Mountain Timber Co, v. Washington, 243 U, S. 219.

472 U.S. 1018

C. A. 5th Cir. Certiorari denied.

429 U.S. 1063

App. Div., Sup. Ct. N. Y., 2d Jud. Dept. Certiorari denied.

563 U.S. 921

C. A. 10th Cir. Certiorari denied.

543 U.S. 850

C. A. 2d Cir. Cer-tiorari denied.

330 U.S. 833

Petition for writ of certiorari to the County Court of Kings County, New York, denied.

543 U.S. 1170

C. A. 1st Cir. Certiorari denied.

16 Cust. Ct. 104

MollisoN, Judge: These suits were filed by the plaintiff seeking to recover certain sums of money alleged to have been illegally exacted as customs duties upon two importations of merchandise which were classified by the collector of customs under the following provision in paragraph 60 of the Tariff Act of 1930 as modified by the French Trade Agreement, T. D. 48316: Perfume materials: All mixtures or combinations containing essential or distilled oils, or natural or synthetic odoriferous or aromatic substances, not containing more than 10 per centum of alcohol. with consequent assessment of duty at the compound rate of 40 cents per pound and 30 per centum ad valorem. The contention of the plaintiff is that the shipments consist of essential or distilled oil of cassia in one case and of lavender in the other; and that they are entitled to free entry under the eo nomine provision therefor in paragraph 1731 of the free list of the said act, which reads as follows: Pae. 1731. Oils, distilled or essential: Anise, bergamot, bitter almond, camphor, caraway, cassia, cinnamon, citronella, geranium, lavender, lemon-grass, lime, lignaloe or bois de rose, neroli or orange flower, origanum, palmarosa, pettigrain, rose or otto of roses, rosemary, spike lavender, thyme, and ylang ylang or cananga: Provided, That no article mixed or compounded with or containing alcohol shall be exempted from duty under this paragraph. Other claims were made by timely amendment of the protests, and while none was specifically waived or abandoned, they were not pressed and do not seem to be applicable in the light of the record as made. They are therefore overruled. It was agreed by and between counsel at the trial that the merchandise was not mixed or compounded with, and did not contain alcohol. In view of the fact that the evidentiary situation with respect to the alleged oil of cassia differs from that with respect to the alleged oil of lavender, we will consider them separately, taking the oil of cassia first. The evidence offered on behalf of the plaintiff consists of the testimony of John Leslie Hindel, its vice president. Mr. Hindel had had some 21 years' experience in the distillation, buying, and selling of essential oils, and bad had training and experience as a chemist. He defined the term "essential oil" as' — an oil derived from a plant or an herb or a fruit either by distillation or by pressure. It is used as a flavor or a perfume. Generally speaking, he said, "essential oils" and "distilled oils" mean the same thing, although " an essential oil can be obtained from a plant or a fruit without distillation, but usually it is obtained by distillation." He stated that in the purchase of essential or distilled oil he relied upon four factors, viz, odor, flavor, pedigree, and independent chemical analysis, to determine whether it was a pure essential or distilled oil. The so-called oil of cassia was purchased by him in London in the original lead containers in which it came from China. He personally tested it by the odor test and was satisfied as to its pedigree by his knowledge of the shipper as being reputable, but finding that it contained small traces of impurity, such as lead and heavy metals (presumably from the containers in which it was shipped), he redistilled it to purify it. He then sent a sample of the rectified oil to a public analyst in London, and concluded from the report submitted and from his own examination based upon his experience that it was pure essential oil of cassia. It was then shipped to the United States and sold to a firm of confectioners in Chicago as cassia oil. Harold B. Mead, a Government chemist, in charge of the organic laboratory of the United States Customs Service, who had some 38 years' experience in the examination of essential oils, testified for the defendant that he received a sample of the alleged oil of cassia here involved and made an analysis and report thereon. Mr. Mead stated that cassia oil is composed chiefly of and derives its character from cinnamic aldehyde, and since this aldehyde is made artificially, synthetically, from coal tar in such pure state that it cannot be distinguished from the natural cinnamic aldehyde in cassia oil, no deduction can be made by examination of the aldehyde portion of a compound containing it as to whether the said compound was natural, synthetic, or a mixture of the two. The cinnamic aldehyde was therefore removed from the sample and the nonaldehyde portion examined. He found that this had a saponification value of 50 as compared with a saponification of 150 to 180 found in analysis of "hundreds of samples of cassia oil from China," and that it had an odor strongly suggestive of eugenol, a constituent "we have never found in cassia through our experience nor in the literature stated to be a constituent of cassia." Other tests were performed by removing the phenols, forming á solution, and testing with ferric chloride, resulting in a "beautiful bluish green" color, such as is obtained with eugenol. A similar test with ferric chloride upon the original sample gave a yellowish-green color, whereas the color is brown in the case of oil of cassia. The significance of the presence of eugenol in a substance such as that at bar is explained by Mr. Mead's testimony at page 33 of the stenographic transcript as follows: When artificial cinnamic aldehyde is used to synthesize a cassia oil it must be adjusted by other-chemicals in order to conform to the ordinary standards, the ordinary tests given in the pharmacopoeia and other authorities. Various things are used to make this adjustment. In this case something apparently was used containing eugenol to make it appear like cassia oil. A test involving the formation of crystals in fractions of distillation showed no crystals formed in the fractions obtained from the sample, while they were always formed in the fractions of the pure oil. Mr. Mead also related experience with oils which had been found to be mixtures, "and every time we examined one of those oils and distilled them we got no crystals." In its brief filed herein counsel for the plaintiff contends that the record shows that the involved merchandise was commercially known and bought and sold as essential or distilled cassia oil and that the case is therefore controlled by the decision of this court in Fritzsche Bros. v. United States, 7 Treas. Dec. 49, T. D. 24905 (G. A. 5535), wherein it was held that the provision for oil of cassia in the Tariff Act of 1897 covered all merchandise commercially known by that name, whether natural or artificial. We have carefully examined the record and do not think that it supports the plaintiff's contention. As we view it, the record establishes that the particular shipment of merchandise in question parsed into and through commerce in this country as oil of cassia. It is clear that Mr. Hindel, for the plaintiff, at least, and quite probably the person from whom he bought it and the person to whom he sold it, believed that it was natural oil of cassia. This is so, for Mr. Hindel was emphatic in pointing out that he satisfied himself as to the pedigree of the oil before he purchased it, and there would be no point in such inquiry were it not for the purpose of securing the natural oil. The effect of the evidence offered by the defendant as to the presence of eugenol and as to the dissimilarity in results of tests performed upon a sample of the importation and those performed on known standards is to refute the testimony of Mr. Hindel that the substance before us is a natural oil, and to establish that it is an artificial or synthetic oil or a mixture of natural and artificial or synthetic oils. Whether Mr. Hindel would have rejected the merchandise had his investigations disclosed that it was artificial or synthetic oil of cassia or a mixture of natural and artificial or synthetic oils, or what would have been the reaction of his purchaser, is not disclosed by the record. This record differs from that in the Fritzsche Bros, case, sufra, in that there is no evidence that the trade regarded artificial or synthetic oil of cassia, or mixtures of natural and artificial or synthetic oils, as cassia oil. The common meaning of the term as gathered from Funic & Wagnalls New Standard Dictionary (1942), Webster's New International Dictionary (1945), and such standard authorities as The-Condensed Chemical Dictionary and Haclch's Chemical Dictionary (3d ed.), refers only to the natural product, and, indeed, Mr. Hindel's. own definition of essential oils, hereinbefore quoted, refers only to oils derived from natural sources. The holding of the court in the Fritzsche Bros, case that the commercial meaning of the term "oil of cassia" as found in paragraph 626 of the Tariff Act of 1897 included such oil produced artificially as well as that obtained from natural sources does not aid the plaintiff here. That case arose under the act of 1897, while the present casé-is governed by the provisions of the Tariff Act of 1930, and although cassia oil is specifically provided for in each act, it is well settled that commercial meaning of a tariff term is a fact to be proved in each case and must be that which is in existence prior to and at the-date of the passage of the tariff act in question. Wanamaker v. United States, 13 Ct. Cust. Appls. 93, T. D. 40939. Therefore, if it were the plaintiff's purpose to claim that oil of cassia, whether produced by synthesis or artificially, as well as the product of natural sources, or mixtures thereof, was entitled to free entry under the provision for cassia oil in paragraph 1731, proof should have been adduced of a commercial meaning of the term as found in the Tariff Act of 1930 including such artificial or synthetic oil or mixtures thereof with natural oil. The record contains no such proof. The issues and the record as to the so-called oil of cassia herein are closely parallel to those found in the case of United States v. P. B. Dreyer, Inc., 28 C. C. P. A. 325, C. A. D. 162. In that case-certain so-called Spanish origanum oil was assessed with duty under the identical provisions of paragraph 60 as the merchandise at bar,, and free entry was claimed as essential oil of origanum under paragraph 1731, supra. There was strong evidence offered by the plaintiff that the importation met the commercial requirements for a good delivery of origanum oil, but, as in this case, there was evidence offered on behalf of the defendant that the merchandise contained, in smalL degree, a coal-tar substance not naturally present in origanum oil which suggested the inclusion of artificial ingredients in substantial amounts. The court held that it followed that the merchandise must be a mixture of some kind containing the artificial ingredient, or a straight synthetic origanum oil made from a coal-tar product. So in the case at bar. The presence oh the eugenol indicates that the so-called oil of cassia is either a mixture or a combination containing a synthetic aromatic substance, to wit, artificial cinnamic aldehyde or was wholly an artificial or synthetic oil. In the Dreyer case, sufra, the court held that since the record showed that the oil was either such •a mixture as is covered by paragraph 60 or a straight synthetic article possibly not covered by the said paragraph, the importer had not met the burden of establishing that it was not a mixture covered by paragraph 60, and we think a like holding is warranted in the case of the :so-called oil of cassia here involved. With reference to the so-called lavender oil, Mr. Hindel testified that he purchased it from what he considered to be a very reputable house in Paris after personally examining what was said to be a one-ounce sample furnished by the seller. It was shipped, after purchase, from Paris to London and thence to the United States without the •airtight containers having been opened, and it was later sold and reexported to a perfume house in Cuba. As in the case of the so-called cassia oil, it was purchased and sold by Mr. Hindel as pure essential oil, and it was his opinion, based upon his examination of the sample and his experience, that it was oil of lavender. We think it is a fair characterization of Mr. Hindel's testimony with respect to the so-called lavender oil to say that he knew nothing :about the composition of the imported merchandise except what the exporter in France told him. As he put it, " I just have the word of the seller. I have to trust a reputable dealer for that." Testifying on behalf of the defendant, Mr. Mead said that three samples of the so-called lavender oil were supplied him. Samples 1 and 2 were subjected to specific gravity and optical rotation tests and the results were different from "the normal curves," presumably those obtained from known standards. The extent of the difference and its materiality were not revealed except by inference from Mr. Mead's conclusion that the samples did not represent lavender oil. Sample 3 was subjected to vacuum distillation and separation of the fractions, and the refractive indices of the fractions were taken. The last two fractions had "an ionone-like odor never encountered in lavender" and the entire sample had "chemical consonants more like .lavandin and not lavender, which is a cross between lavender and •spike lavender." From these tests it was his opinion that the merchandise was not lavender oil. Whatever may be said as to the persuasiveness of the evidence offered on behalf of the defendant, we are satisfied that the plaintiff failed to make out a prima jaeie case in favor of its contention with respect to the lavender oil. For the foregoing reasons the claims in each of the protests are overruled, and judgment will issue accordingly.

379 U.S. App. D.C. 262

Opinion for the Court filed by Circuit Judge RANDOLPH. RANDOLPH, Circuit Judge: Two fatal accidents at West Virginia coal mines in January 2006 prompted the Mine Safety and Health Administration— MSHA — to adopt emergency safety measures. See 71 Fed.Reg. 12,252 (Mar. 9, 2006). MSHA, an agency within the Department of Labor, concluded that the West Virginia miners might have survived if there had been portable oxygen devices in the escapeways to protect them from toxic fumes for at least an hour. Acting quickly, MSHA issued an emergency temporary standard requiring mine operators to place such rescue devices, one for each miner, in the primary and emergency escapeways of the mine. This petition for judicial review, brought by the National Mining Association, seeks to set aside the final rule that replaced the temporary standard. The Mine Act authorizes MSHA to issue the temporary rules without notice and comment in response to emergencies. 30 U.S.C. § 811(b)(1). In this case, in order to make its temporary standard permanent, MSHA engaged in notice-and-comment rulemaking, with the published temporary standard serving as the proposed rule. 30 U.S.C. § 811(b)(3). The resulting product — the final emergency mine evacuation rule, 71 Fed.Reg. 71,430 (Dec. 8, 2006) — altered the temporary standard with respect to rescue devices. See 30 C.F.R. § 75.1714-4 (2006). The final rule required either that one additional device be provided for each miner in each emergency escapeway or that one additional device be provided in a "hardened room" cache located between two adjacent emergency escapeways and accessible from both. Id § 75.1714-4(d). A "hardened room" is a reinforced room built to the "same explosion force criteria as seals" and serviced by an independent, positive pressure source of ventilation from the surface. Id § 75.1714 — 4(d)(1). I. The National Mining Association urges us to set the final rule aside. One of its objections is that MSHA failed to give adequate notice of the hardened room op- tion. The objection rests on § 101(a)(2) of the Mine Act. 30 U.S.C. § 811(a)(2). This section requires MSHA, in putting out proposed rules for notice and comment, to publish "the text of such rules proposed in their entirety" in the Federal Register. Id. Because MSHA never published the hardened room option in the Federal Register before issuing the final rule, National Mining concludes that this aspect of the final rule is invalid. That the final rule differed from the one MSHA proposed is hardly unusual. An agency's final rules are frequently different from the ones it published as proposals. The reason is obvious. Agencies often "adjust or abandon their proposals in light of public comments or internal agency reconsideration." Kooritzky v. Reich, 17 F.3d 1509, 1513 (D.C.Cir.1994). Whether in such instances the agency should have issued additional notice and received additional comment on the revised proposal "depends, according to our precedent, on whether the final rule is a 'logical outgrowth' of the proposed rule." Id.; see United Mine Workers of Am. v. MSHA, 407 F.3d 1250, 1259-60 (D.C.Cir.2005). While we often apply the doctrine simply by comparing the final rule to the one proposed, we have also taken into account the comments, statements and proposals made during the notice-and-comment period. See Natural Res. Def. Council v. Thomas, 838 F.2d 1224, 1243 (D.C.Cir.1988); Edison Elec. Inst. v. OSHA, 849 F.2d 611, 621 (D.C.Cir.1988); United Steelworkers of Am. v. Marshall, 647 F.2d 1189, 1221 (D.C.Cir.1980); District of Columbia v. Train, 521 F.2d 971, 997 (D.C.Cir.1975). In South Terminal Corp. v. EPA, the case that gave birth to the "logical outgrowth" formulation, the court did the same. 504 F.2d 646, 659 (1st Cir. 1974). The court held that the final rule was "a logical outgrowth" — not simply of the proposed rule — but "of the hearing and related procedures" during the notice and comment period. Id. Here MSHA's proposed rule — the emergency temporary standard — required that a rescue device be provided for each miner in both the primary and the alternative escapeways. That proposal left open several questions. Where in the escape-ways should the devices be stored? How should they be made available to the miners? When the two escapeways are close together, will it suffice to have one common cache of devices rather than two separate caches? Given these considerations, interested persons must have been alerted to the possibility of a hardened room option. And the record shows that they were so alerted. Mine operators inquired about the potential of using a common cache of rescue devices located between adjacent emergency escapeways. They submitted questions to MSHA about whether such a common cache would suffice. Four public meetings were held as part of the rulemaking. At each, the MSHA official's opening statement addressed the possibility of a hardened room alternative directly and sought comments from interested parties. A representative of the National Mining Association attended the Washington, D.C., meeting and indicated that his organization would respond to the opening statement by the end of the comment period. The Mining Association never submitted comments, but several interested parties did — including several of the Mining Association's members. MSHA later extended the comment period by thirty days so that "interested parties could adequately address issues contained in MSHA's opening statements." 71 Fed.Reg. 29,785 (May 24, 2006). The hardened room option was thus a logical outgrowth of the proposed rule, or put differently, the Mining Association had adequate notice. Even if we were less than certain about this conclusion, the actual notice the Mining Association received would have cured any inadequacy. See 5 U.S.C. § 553(b); Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 549 (D.C.Cir.1983); Sierra Club v. Costle, 657 F.2d 298, 355, 360, 398-99 (D.C.Cir.1981); Owensboro on the Air, Inc. v. United States, 262 F.2d 702, 707-08 (D.C.Cir.1958); Phillip M. Kannan, The Logical Outgrowth Doctrine in Rulemaking, 48 Admin. L. Rev. 213, 221 (1996). II. Between the time MSHA issued its temporary standard and the time it promulgated its final rule, the Mine Improvement and New Emergency Response Act of 2006, Pub. L. No. 109-236, 120 Stat. 493 (2006) (MINER Act), became law. The Mining Association claims that the MINER Act precluded MSHA from promulgating the hardened room option. It is unnecessary to recite in detail the Association's arguments. It raised none of them before MSHA, although it had ample opportunity to do so between the time Congress passed the MINER Act in June 2006 and December 2006 when MSHA issued the final rule. In common with many regulatory statutes, the Mine Act states that "no objection that has not been urged before the Secretary shall be considered by the court, unless the failure or neglect to urge such an objection shall be excused for good cause shown." 30 U.S.C. § 811(d). The Mining Association contends that the comments of several other parties mentioning the MINER Act preserved its objections. We think not. None of those comments came close to setting forth with any specificity the objections the Mining Association now makes regarding the MINER Act. See Nat'l Mining Ass'n. v. MSHA, 116 F.3d 520, 532 (D.C.Cir.1997). We therefore will not consider the Mining Association's arguments about the impact of the MINER Act on MSHA's final rule. III. The Mining Association alleges that the hardened room option — as opposed to an option allowing a common cache with less stringent safeguards — is arbitrary and capricious because MSHA did not sufficiently explain its decision. The Mine Act incorporates the rulemaking requirements of the APA. 30 U.S.C. § 811(a); United Mine Workers of Am. v. Dole, 870 F.2d 662, 666 (D.C.Cir.1989). Under the APA, an agency must "incorporate in the rules adopted a concise general statement of their basis and purpose." 5 U.S.C. § 553(c). This requirement is not meant to be particularly onerous. See Public Citizen, Inc. v. FAA, 988 F.2d 186, 197 (D.C.Cir.1993). It is enough if the agency's statement identifies the major policy issues raised in the rulemaking and coherently explains why the agency resolved the issues as it did. See U.S. Telecom Ass'n v. FCC, 227 F.3d 450, 460 (D.C.Cir.2000); United Mine Workers of Am. v. Dole, 870 F.2d at 666; Indep. U.S. Tanker Owners Comm. v. Dole, 809 F.2d 847, 852 (D.C.Cir.1987). MSHA's statement did just that. As to the hardened room option, the main controversy was about whether less stringent common storage measures could be used instead. The claim was that these less stringent requirements would provide incremental safety benefits over placing the rescue devices in the escapeways and that the options would be cheaper than the hardened room alternative, making common caches feasible'for more mines. MSHA referred to those comments in the preamble to its final rule. 71 Fed.Reg. 71,7430, 71,444 (Dec. 8, 2006). It explained that its primary concern with approving a common cache of devices was that the cache needed to be "secured against damage from explosions in either escapeway." Id. Underlying MSHA's analysis is the apparent belief that the redundancy provided by having separate sets of devices results in an increased likelihood that at least one set would survive an explosion. Thus, in order to justify collapsing the two sets into one, additional steps are required to ensure that an explosion would not destroy the devices in a common cache. Hardened rooms achieve this end because they are built to more rigorous specifications. Id. While other options might be cheaper, the hardened room meets the primary concern MSHA identified. Though MSHA's explanation of its decision is short, it adequately addresses the major policy concerns raised and demonstrates a course of reasoned decisionmaking. The final rale, including the hardened room option, is not arbitrary and capricious. IV. The Mining Association argues that MSHA failed to comply with the Regulatory Flexibility Act, 5 U.S.C. § 601-12, because it did not analyze the economic impact of the hardened room option. When promulgating a rule, an agency must perform an analysis of the impact of the rule on small businesses, or certify, with support, that the regulation will not have a significant economic impact on them. 5 U.S.C. § 603(a), 604(a), 605(b). When it published the temporary standard, MSHA certified that the primary method of compliance-placing a separate set of rescue devices in each emergency escapeway— would not have a significant economic impact on small businesses. 71 Fed.Reg. 12,252, 12,266-67 (Mar. 9, 2006). The Mining Association does not challenge the sufficiency of that certification. Since the primary method of compliance did not create a significant economic burden on small businesses, there was no reason for MSHA to undertake an economic analysis of the alternative. If the hardened room option is considerably more expensive, small businesses can simply refuse to choose it. Compare Envtl. Def. Ctr., Inc. v. EPA, 344 F.3d 832, 879 (9th Cir.2003) (noting that the creation of cheaper alternative methods of compliance is one way to minimize the impact on small businesses). For the foregoing reasons, the petition for review is denied. So ordered. . These devices, known as self-contained self-rescuers, are "closed-circuit breathing apparatuses]." 64 Fed.Reg. 36,632 (Jul. 7, 1999). They operate by feeding fresh oxygen from a reserve tank on the miner's back into á breathing bag which is attached to an inhalation tube and mouthpiece allowing the miner to inhale clean oxygen. Instruction Manual for OCENCO, Inc. EBA 6.5 60 Minute Self-Contained Self-Rescuer 4 (Sept. 7, 2001), http://www.msha.gov/interact ivelraining/scsr/ocencoéba65Aesson05/ocencoéba65manual.pdf. The miner exhales through the mouthpiece. The exhaled air is scrubbed to remove C02 and then returned to the breathing bag to be mixed with more fresh oxygen. Id. The closed-circuit nature of these devices prevents toxins present in the mine from being inhaled by the miner. . This requirement kicked in only if the rescue devices located in the working areas of the mine would be insufficient to permit the average miner to escape from the mine within thirty minutes. That limitation, still present in the final rule, 30 C.F.R. § 75.1714-4(c) (2006), is not important to our analysis. . In this respect § 101(a)(2) is more confining than the Administrative Procedure Act, which allows agencies to give notice of "either the terms or substance of the proposed rule or a description of the subjects and issues involved." 5 U.S.C. § 553(b)(3). Even so, today "most agencies publish the text of the proposed rule when commencing rulemaking." Jeffrey S. Lubbers, A Guide to Federal Agency Rulemaking 183 (3d ed.1998). . Its statutory interpretation relies on a Senate Committee Report published six months after the passage of the MINER Act. S.Rep. No. 109-365 (2006). . Several other options were suggested, including a requirement that non-combustible stoppings be used at each end of the common cache, a requirement that steel boxes be placed in the wall accessible from both escapeways, a requirement that the cross-cut rooms be made out of concrete and use heavy steel doors, and a requirement that airlocks between the escapeways be utilized to house the rescue devices.

42 B.T.A. 93

OPINION. Him: The question presented is whether under the facts the income of the trust was devoted to the discharge of a legal obligation of petitioner and therefore taxable to him. Consideration of petitioner's contentions involves the questions: (1) The validity of that part of the decree of divorce providing for payment of alimony; (2) assuming such validity, whether the obligation thus created was fully extinguished by executed agreements inter partes; and (3) whether such agreements in themselves constituted a continuing obligation of petitioner to contribute to his former wife's support or constituted a complete discharge of such obligation. Under the law of California, as elsewhere, the obligation of a husband to support his wife ceases when the marital relation is terminated by absolute divorce, unless otherwise provided in the decree of divorce or by agreement of the spouses. On the basis of the stipulated facts that there was no service of summons on petitioner in the divorce action and no appearance by him or authorized appearance for him therein, petitioner contends that that part of the decree of divorce which provided for the payment of alimony was absolutely void for lack of jurisdiction and subject to collateral attack in this proceeding. He maintains that in all other respects the decree is valid. In other words, petitioner's contention is that the decree in question terminated the marriage relation but did not create an obligation of petitioner to contribute to the support of his former wife and that hence there existed no such obligation from and after the date of such decree. The respondent, on the other hand, says that if such decree was valid in part it was valid as to all of its terms and provisions and that the obligation imposed thereby on petitioner was being discharged by creation of the trust and the payment of the income thereof to petitioner's former wife. Respondent contends in the alternative that if such decree was void as to the provisions for the payment of alimony it was void in tobo/ that Katherine D. Innes, therefore, never ceased to be petitioner's wife and that under the law of California there was a continuing legal obligation on him to support her which was being discharged by the payment of the trust income to her. The Superior Court of California is a court of general jurisdiction. Jurisdictional infirmity of a judgment of a court of general jurisdiction can not be exposed in a collateral proceeding by evidence exclusively outside of the judgment roll. If the judgment or the judgment roll did not disclose such infirmity, the judgment is binding until vacated in a proceeding for that purpose. "Where a court of general jurisdiction is required to exercise its powers upon facts proved before it, the proof is presumed to have been made, and such facts can not be collaterally attacked." 21 L. R. A. 854, Note (see cases cited). No part of the judgment roll in the divorce action is in evidence herein, but, in view of the stipulated fact that an attorney appeared for petitioner in the divorce action, although without authority so to do, it is fair to assume in the absence of a showing to the contrary that the divorce decree or the judgment record contained recitals or entries of facts necessary for jurisdiction of the person of petitioner in that action, or at least that the judgment roll therein did not disclose absence of such jurisdictional facts. "The general doctrine as established by the cases is that the attorney appearing in any action or suit is presumed to have full authority to do so until the contrary is proved." Williams v. Johnson, 112 N. C. 424; L. R. A. 848, Note. "And such presumption exists in all collateral proceedings." Osburn v. Bank of United States, 22 U. S. 737, 828. Cases cited in the above "note" support the text "That in the case of a decree judgment ren dered against a party wbo has no notice of the action, never appeared therein nor submitted to the jurisdiction of the court, the courts hold the judgment to be conclusive and free from collateral attack inter -partes upon all matters mentioned in the record, until reversed or set aside on a writ of error." Also "Where there is want of jurisdiction in a decree judgment, the attack may be either by direct application to the court itself or by way of appeal." "Note", supra. McCahill v. Equitable Life Assurance Society of the United States, 26 N. J. Eq. 531. "The decision of a court will not be incidentally impeached by extrinsic evidence showing that the record was false in regard to a material fact positively asserted, necessarily implied by it." "Note", supra, at page 854. We have found nothing to indicate that the rule in California is different from that above stated. Chaplin v. Superior Court, 81 Cal. App. 367; 253 Pac. 954, is cited by petitioner to the point that a judgment in personam, without jurisdiction of the person of the judgment debtor is void and subject to collateral attack in another proceeding. In that case the Supreme Court of California issued a writ of prohibition directed to the Superior Court enjoining the latter from enforcing a judgment for the payment of alimony, on the ground of the lack of jurisdiction of the person petitioning for the writ. Apparently the judgment record in that case either showed affirmatively lack of jurisdictional facts or that the judgment record failed to disclose facts upon which jurisdiction of the person of the defendant therein was based. As summarized in syllabus, the court held in that case that: Defendant, who was not served and did not appear in divorce suit, may bring prohibition to obtain relief from order for payment of counsel fees and alimony, pending outcome, without making objection in court issuing order, since no preliminary objection is necessary where want of jurisdiction is apparent on the face of proceeding. Under the state of the record and the facts in the instant proceeding we hold that petitioner can not in this proceeding impeach the validity in whole or in part of the judgment of the Superior Court of California in the divorce action and that for the purposes of this proceeding the judgment in question is in all respects valid and that the provision therein for the payment of alimony was an enforceable legal obligation of petitioner. We have next for determination the question of whether the petitioner is taxable on the income during 1935 of the trust established in that year which was paid over to his wife for her support and maintenance. It results from our holding above that during the taxable year the divorce decree providing for the payment of $300 per month was valid and outstanding, representing a continuing obligation of the petitioner to pay out that amount. The effect on that obligation of tbe agreement entered into by petitioner and his divorced wife in that year must be determined first under the applicable state law. The following is provided in the California Civil Code: Sec. 139. Support of children and wife on divorce for husband's offense: Modification of orders: Remarriage of wife, effect. Where a divorce is granted for an offense of the husband, the court may compel him to provide for the maintenance of the children of the marriage, and to make such suitable allowance to the wife for her support, during her life or for a shorter period as the court may deem just, having regard to the circumstances of the parties respectively; and the court may from time to time modify its orders in these respects. Remarriage. Upon the remarriage of the wife, the husband shall no longer be obligated to' provide for her support but such remarriage shall not affect his duty to provide for the maintenance of the children of his marriage. The courts of California construing this statute have held that they are not bound in their allowance of alimony or any modification thereof by an agreement entered into by the parties fixing their obligations in this respect. In Moog v. Moog, 203 Cal. 406; 264 Pac. 490, the taxpayer and his wife had entered into an agreement in contemplation of divorce by which the wife had consented to accept alimony in a specified amount. The divorce court rejected the provisions of the contract and set the allowance for alimony at a greater sum than that agreed. On appeal from a judgment for the wife based on the amount allowed in the divorce decree the Appellate Court affirmed the judgment, even though the amount recovered in accordance with the decree exceeded that which the wife by contract had agreed to accept. The case of Smith v. Superior Court, 89 Cal. App. 322; 264 Pac. 573, is particularly in point. There the husband and wife on the day of the granting of their decree of divorce, which fixed alimony at $100 per month, entered into an agreement by which the husband abandoned his plans for an appeal in return for his wife's relinquishment of her claims to alimony and support as provided in the decree. Approximately one year later, on October 21,1927, the wife applied to the court for and received an increase to $175 per month of the alimony allowance. The wife instituted proceedings to enforce the increased alimony decree. The lower court adjudged the husband in contempt for his failure to make the payments required by the decree of October 21, 1927, notwithstanding the agreement reached on the day of the divorce. This judgment was affirmed by the Appellate Court, which said: Agreements between tbe spouses relative to alimony or fixing by and between themselves tbe amount which the Court may allow are subject to the power of the Court, under sec. 139 of the Civil Code, to modify or wholly reject, as provided in said section [omitting citations]. See also Roberts v. Roberts, 83 Cal. App. 345; 256 Pac. 826; Ex Parte Weiler, 106 Cal. App. 485; 289 Pac. 645; Ettlinger v. Ettlinger, 3 Cal. (2d) 172; 44 Pac. (2d) 540. From the holdings of these cases we draw the conclusion that the petitioner in the instant case could not by the agreement entered into with his wife in 1935 discharge in any final way his obligation to pay alimony, and this is so even though the wife agreed to consent to the entry of an order striking from the decree the provisions relative thereto. It yet remained within the power of the court to reject the agreement of the parties if it considered the arrangement unfair and to make any alterations in the decree which the changed conditions of the parties required. This power of the court in the instant case remained in force during 1935 and at least down to the entry of the order in 1937. Cf. Ettlinger v. Ettlinger, supra. In this guise the situation before us is controlled by Helvering v. Fitch, 309 U. S. 149, and Helvering v. Leonard, 310 U. S. 80. In each of those cases, under the applicable state law, it appeared that the court granting the divorce retained sufficient power to make later modifications in the decree and thereby to alter the obligation which the taxpayer sought to discharge by the establishment of a trust. The taxpayer did not meet his burden of proof to show otherwise. The taxation of the income of the trusts to the settlor-taxpayer was sustained in both cases on the ground that the establishment of the trust was not shown to discharge absolutely and irrevocably the obligation of the taxpayer to support his divorced wife and that the trust income therefore was applied to his¡ continuing obligation. Cf. Helvering v. Fuller, 310 U. S. 69. We think that is the situation in the present case. It appearing that under the law of California the Superior Court has the power to enforce the existing provisions of its decree in respect to alimony, Moog v. Moog, supra, or to modify such provisions notwithstanding the agreement of the parties, Smith v. Superior Court, supra, it must be held that the provisions of the trust agreement did not operate to discharge petitioner's obligation to pay alimony, but that such obligation continued until its termination by the modification of the decree in the year 1937. The trust, therefore, operated in the taxable year as an instrumentality in the performance of petitioner's continuing obligation to pay alimony, thus rendering the income thereof taxable to petitioner under the authorities hereinabove cited. In Helvering v. Leonard, supra, the Supreme Court said: In Helvering v. Fitch, supra, we stated that where the divorced husband desires to avoid the general rule expressed in Douglas v. Willcuts, supra, he carries a distinct burden of establishing not by mere inference and conjecture but by "clear and convincing proof" that local law and the alimony trust have given him a full discharge. We do not think that respondent has sustained that burden. We, therefore, hold that petitioner is taxable on the 1935 income of the trust in question. Decision will be entered for the respondent.

348 U.S. 877

C. A. 9th Cir. Certiorari denied.

176 L. Ed. 2d 365

Petition for writ of certiorari to the United States Court of Appeals for the Fifth Circuit denied. Same case below, 571 F.3d 442.

45 Cust. Ct. 534

OliveR, Chief Judge: The appeals for reappraisement enumerated in schedule "A," hereto attached and made a part hereof, have been submitted for decision on a written stipulation, reading as follows: IT IS HEREBY STIPULATED AND AGREED, subject to the approval of the Court, that the issues in the appeals for reappraisement listed in the Schedule hereto annexed and made a part hereof are the same in all material respects as the issues in Paramount Import Co., Inc., et al. v. United States, Reap. Dec. 9697 and that the record in said case may be incorporated herein. IT IS FURTHER STIPULATED AND AGREED that the appraised values of the merchandise involved in the cases listed in the Schedule hereto annexed less additions made by the importer on entry because of advances made by the Appraiser in similar eases is equal to the market value or the price at the time of exportation of such merchandise to the United States, at which such or similar merchandise was freely offered for sale to all purchasers in the principal markets of Czechoslovakia in the usual wholesale quantities and in the ordinary course of trade for exportation to the United States, packed ready for delivery, and that the foreign values of such or similar merchandise were no higher. In the incorporated case, it was held that the amount paid a foreign commissionaire for services rendered in connection with the purchase of merchandise in the foreign market, and which amount did not inure to the benefit of the seller, was a buying commission and, therefore, was not part of the dutiable value of the merchandise. On the agreed facts and following my cited decision on the law, I find that the proper basis for appraisement of the merchandise in question is export value, as defined in section 402(d) of the Tariff Act of 1930, and hold that such statutory value therefor is the appraised values, less additions made by the importers on entry because of advances made by the appraiser in similar cases. Judgment will be rendered accordingly.

21 T.C. 374

OPINION. Tietjens, Judge: Although the petitioner deducted the amount of rental allowance from his total wages on his returns for each of the years in question, his argument and evidence were directed toward showing that his rental was excludible rather than deductible from gross income. Section 22 (a) of the Internal Revenue Code includes in the definition of gross income "compensation for personal service of whatever kind and in whatever form paid, ." Ordinarily, living quarters provided for an employee in connection with his work are considered a part of the compensation for his services and their value is includible in his gross income. Where, however, quarters are furnished not as a part of the employee's compensation but for the convenience of the employer, their value is not includible in the employee's gross income. Herman Martin, 44 B. T. A. 185 (1941); Regs. 111, sec. 29.22 (a)-3. The respondent contends that under the law of South Carolina the value of the living quarters furnished to the petitioner is considered a part of his compensation and is, therefore, includible in- his gross income. In support of his assertion the respondent cites the following from the Appropriations Act for 1949-1950 for the State of South Carolina: Section 79. That salaries paid to officers and employees of the State,' including its several boards, commissions and institutions, shall be in full for all services rendered, and no perquisites of office or of employment shall be allowed in addition thereto, but such perquisites, commodities, services or other benefits shall be charged for at the prevailing local value and without the purpose or effect of increasing the compensation of said officer or employee; [Acts 1949, No. 339, 46 Stat. at Large, p. 741.] The South Carolina appropriations acts for the other years involved here contain the same language. While the law of South Carolina has no binding force in our determination of whether the value of the petitioner's living quarters is compensation for his services within the meaning of section 22 (a) of the Internal Revenue Code, it is helpful in understanding what the terms of employment were between the petitioner and the Citadel, a state institution. The meaning of the above statutory language is that the base pay and rental allowance which make up the petitioner's salary are to be the full compensation for his services. He is required to pay for his living quarters in order that their receipt will not have the effect of increasing his compensation above the total of his base pay plus rental allowance. Accordingly, we find that the value of the petitioner's living quarters was a part of the compensation for his services. The petitioner argues that since his living at the Citadel is for the convenience of his employer, the value of his quarters is not compensation. It is undoubtedly true that the petitioner lives at his place of employment for his employer's convenience, but it does not necessarily follow from this that the value of his living quarters is not compensation. The weakness of the petitioner's argument is that he considers "compensation" and "convenience of the employer" as necessarily alternative propositions. This is not so. The convenience of the employer rule is merely one test used to determine whether the value of living quarters furnished to an employee is compensation. In the absence of other criteria it has often been controlling. Arthur Benaglia, 36 B. T. A. 838 (1937). Here, however, it is apparent from the South Carolina statute that the value of the petitioner's quarters is considered a part of the compensation for his services to the Citadel, and the Internal Revenue Code requires the inclusion in gross income of all compensation received in return for personal services. Consequently, there is no necessity to apply the convenience of the employer test. Diamond v. Sturr, 116 F. Supp. 28 (1953). Decision will he entered for the respondent.

498 U.S. 820

C. A. 6th Cir. Certiorari denied.

315 U.S. 568

Mr. Justice Murphy delivered the opinion of the Court. Appellant, a member of the sect known as Jehovah's Witnesses, was convicted in the municipal court of Rochester, New Hampshire, for violation of Chapter 378, § 2, of the Public Laws of New Hampshire: "No person shall address any offensive, derisive or annoying word to any other person who is lawfully in any street or other public place, nor call him by any offensive or derisive name, nor make any noise or exclamation in his presence and hearing with intent to deride, offend or annoy him, or to prevent him from pursuing his lawful business or occupation." The complaint charged that appellant, "with force and arms, in a certain public place in said city of Rochester, to wit, on the public sidewalk on the easterly side of Wake-field Street, near unto the entrance of the City Hall, did unlawfully repeat, the words following, addressed to the complainant, that is to say, 'You are a God damned racketeer' and 'a damned Fascist and the whole government of Rochester are Fascists or agents of Fascists,' the same being offensive, derisive and annoying words and names." Upon appeal there was a trial de novo of appellant before a jury in the Superior Court. He was found guilty and the judgment of conviction was affirmed by the Supreme Court of the State. 91 N. H. 310, 18 A. 2d 754. By motions and exceptions, appellant raised the questions that the statute was invalid under the Fourteenth Amendment of the Constitution of the United States, in that it placed an unreasonable restraint on freedom of speech, freedom of the press, and freedom of worship, and because it was vague and indefinite. These contentions were overruled and the case comes here on appeal. There is no substantial dispute over the facts. Chaplin-sky was distributing the literature of his sect on the streets of Rochester on a busy Saturday afternoon. Members of the local citizenry complained to the City Marshal, Bowering, that Chaplinsky was denouncing all religion as a "racket." Bowering told them that Chaplinsky was lawfully engaged, and then warned Chaplinsky that the crowd was getting restless. Some time later, a disturbance occurred and the traffic officer on duty at the busy intersection started with Chaplinsky for the police station, but did not inform him that he was under arrest or that he was going to be arrested. On the way, they encountered Marshal Bowering, who had been advised that a riot was under way and was therefore hurrying to the scene. Bowering repeated his earlier warning to Chaplinsky, who then addressed to Bowering the words set forth in the complaint. Chaplinsky's version of the affair was slightly different. He testified that, when he met Bowering, he asked him to arrest the ones responsible for the disturbance. In reply, Bowering cursed him and told him to come along. Appellant admitted that he said the words charged in the complaint, with the exception of the name of the Deity. Over appellant's objection the trial court excluded, as immaterial, testimony relating to appellant's mission "to preach the true facts of the Bible," his treatment at the hands of the crowd, and the alleged neglect of duty on the part of the police. This action was approved by the court below, which held that neither provocation nor the truth of the utterance would constitute a defense to the charge. It is now clear that "Freedom of speech and freedom of the press, which are protected by the First Amendment from infringement by Congress, are among the fundamental personal rights and liberties which are protected by the Fourteenth Amendment from invasion by state action." Lovell v. Griffin, 303 U. S. 444, 450. Freedom of worship is similarly sheltered. Cantwell v. Connecticut, 310 U. S. 296, 303. Appellant assails the statute as a violation of all three freedoms, speech, press and worship, but only an attack on the basis of free speech is warranted. The spoken, not the written, word is involved. And we cannot conceive that cursing a public officer is the exercise of religion in any sense of the term. But even if the activities of the appellant which preceded the incident could be viewed as religious in character, and therefore entitled to the protection of the Fourteenth Amendment, they would not cloak him with immunity from the legal consequences for concomitant acts committed in violation of a valid criminal statute. We turn, therefore, to an examination of the statute itself. Allowing the broadest scope to the language and purpose of the Fourteenth Amendment, it is well understood that the right of free speech is not absolute at all times and under all circumstances. There are certain well-defined and narrowly limited classes of speech, the prevention and punishment of which have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane, the libelous, and the insulting or "fighting" words — those which by their very utterance inflict injury or tend to incite an immediate breach of the peace. It has been well observed that such utterances are no essential part of any exposition of ideas, and are of such slight social value as a step to truth that any benefit that may be derived from them is clearly outweighed by the social interest in order and morality. "Resort to epithets or personal abuse is not in any proper sense communication of information or opinion safeguarded by the Constitution, and its punishment as a criminal act would raise no question under that instrument." Cantwell v. Connecticut, 310 U. S. 296, 309-310. The state statute here challenged comes to us authoritatively construed by the highest court of New Hampshire. It has two provisions — the first relates to words or names addressed to another in a public place; the second refers to noises and exclamations. The court said: "The two provisions are distinct. One may stand separately from the other. Assuming, without holding, that the second were unconstitutional, the first could stand if constitutional." We accept that construction of severability and limit our consideration to the first provision of the statute. On the authority of its earlier decisions, the state court declared that the statute's purpose was to preserve the public peace, no words being "forbidden except such as have a direct tendency to cause acts of violence by the persons to whom, individually, the remark is addressed." It was further said: "The word 'offensive' is not to be defined in terms of what a particular addressee thinks. . . . The test is what men of common intelligence would understand would be words likely to cause an average addressee to fight. . . . The English language has a number of words and expressions which by general consent are 'fighting words' when said without a disarming smile. . . . Such words, as ordinary men know, are likely to cause a fight. So are threatening, profane or obscene revilings. Derisive and annoying words can be taken as coming within the purview of the statute as heretofore interpreted only when they have this characteristic of plainly tending to excite the addressee to a breach of the peace. . . . The statute, as construed, does no more than prohibit the face-to-face words plainly likely to cause a breach of the peace by the addressee, words whose speaking constitutes a breach of the peace by the speaker— including 'classical fighting words', words in current use less 'classical' but equally likely to cause violence, and other disorderly words, including profanity, obscenity and threats." We are unable to say that the limited scope of the statute as thus construed contravenes the Constitutional right of free expression. It is a statute narrowly drawn and limited to define and punish specific conduct lying within the domain of state power, the use in a public place of words likely to cause a breach of the peace. Cf. Cantwell v. Connecticut, 310 U. S. 296, 311; Thornhill v. Alabama, 310 U. S. 88, 105. This conclusion necessarily disposes of appellant's contention that the statute is so vague and indefinite as to render a conviction thereunder a violation of due process. A statute punishing verbal acts, carefully drawn so as not unduly to impair liberty of expression,'is not too vague for a criminal law. Cf. Fox v. Washington, 236 U. S. 273, 277. Nor can we say that the application of the statute to the facts disclosed by the record substantially or unreasonably impinges upon the privilege of free speech. Argument is unnecessary to demonstrate that the appellations "damned racketeer" and "damned Fascist" are epithets likely to provoke the average person to retaliation, and thereby cause a breach of the peace. The refusal of the state court to admit evidence of provocation and evidence bearing on the truth or falsity of the utterances, is open to no Constitutional objection. Whether the facts sought to be proved by such evidence constitute a defense to the charge, or may be shown in mitigation, are questions for the state court to determine. Our function is fulfilled by a determination that the challenged statute, on its face and as applied, does not contravene the Fourteenth Amendment. Affirmed. See also Bridges v. California, 314 U. S. 252; Cantwell v. Connecticut, 310 U. S. 296, 303; Thornhill v. Alabama, 310 U. S. 88, 95; Schneider v. State, 308 U. S. 147, 160; De Jonge v. Oregon, 299 U. S. 353, 364; Grosjean v. American Press Co., 297 U. S. 233, 243; Near v. Minnesota, 283 U. S. 697, 707; Stromberg v. California, 283 U. S. 359, 368; Whitney v. California, 274 U. S. 357, 362, 371, 373; Gitlow v. New York, 268 U. S. 652, 666. Appellant here pitches his argument on the due process clause of the Fourteenth Amendment. Schenck v. United States, 249 U. S. 47; Whitney v. California, 274 U. S. 357, 373 (Brandeis, J., concurring); Stromberg v. California, 283 U. S. 359; Near v. Minnesota, 283 U. S. 697; De Jonge v. Oregon, 299 U. S. 353; Herndon v. Lowry, 301 U. S. 242; Cantwell v. Connecticut, 310 U. S. 296. The protection of the First Amendment, mirrored in the Fourteenth, is not limited to the Blackstonian idea that freedom of the press means only freedom from restraint prior to publication. Near v. Minnesota, 283 U. S. 697, 714-715. Chafee, Free Speech in the United States (1941), 149. Chafee, op. cit., 150. Since the complaint charged appellant only with violating the first provision of the statute, the problem of Stromberg v. California, 283 U. S. 359, is not present. State v. Brown, 68 N. H. 200, 38 A. 731; State v. McConnell, 70 N. H. 294, 47 A. 267. We do not have here the problem of Lanzetta v. New Jersey, 306 U. S. 451. Even if the interpretative gloss placed on the statute by the court below be disregarded, the statute had been previously construed as intended to preserve the public peace by punishing conduct, the direct tendency of which was to provoke the person against whom it was directed to acts of violence. State v. Brown, 68 N. H. 200, 38 A. 731 (1894). Appellant need not therefore have been a prophet to understand what the statute condemned. Cf. Herndon v. Lowry, 301 U. S. 242. See Nash v. United States, 229 U. S. 373, 377.

282 U.S. 792

Pee Curiam. The first question certified is answered: No. The second question is answered: Yes. Poe v. Seaborn, ante, p. 101; Goodell v. Koch, ante, p. 118; Hopkins v. Bacon, ante, p. 122.

47 Ct. Cl. 141

Peeltjs, Ch. J., delivered the opinion of the court. The question here arises on the defendants' demurrer to the amended petition, first, for the want of jurisdiction, and, second, that the facts alleged are not sufficient to constitute a cause of action. The controlling facts averred are that the claimant, by mesne purchases for a valuable consideration, acquired certain public lands in Louisiana theretofore entered by others and erected thereon sundry improvements and paid taxes thereon. Thereafter while in possession of the lands so purchased and improved he was indicted, tried, and convicted in the United States Circuit Court for the Eastern District of Louisiana for conspiracy to defraud the Government out of public lands in violation of Revised Statutes, section 5440, and was sentenced in one case, known as the " Scrip case," to imprisonment for one year in the parish prison of New Orleans and to pay a fine of $3,000; and on the same day in the other case known as the'" Homestead case " to imprisonment for one year in the same prison and to pay a fine of $2,500, which judgment on appeal was affirmed by the Court of Appeals for the Fifth Judicial Circuit. Subsequently an application to the Supreme Court of the United States for a writ of certiorari was denied, and the defendant was committed to the parish prison June 20,1907. Thereafter, on the 5th day of September, 1907, the sentence so imposed was commuted by the President of the United States "to the payment of the fines and costs imposed in each case and a term of imprisonment to expire October 20, 1907, upon condition that he shall have previous^ made full restitution, to the satisfaction of the United States district attorney for the eastern district of Louisiana, in respect to all lands, land titles, or claims to lands." On October 16, 1907, the claimant executed releases to the United States to all his " right, title, and claim in and to " the lands described in paragraph 2 of the petition and embraced within the terms of the President's conditional pardon aforesaid, therein "reserving, under the laws of Louisiana, the right to all improvements, or the value thereof, with all taxes heretofore paid, and to proceed against the United States for the same." (Articles 508 and 2314, Civil Code of Louisiana.) Under and by virtue of the reservation recited the claimant contends that an express contract thereby arose under the Constitution and laws of the United States to reimburse bim for the money so expended for improvements and for taxes paid on the lands so released. The United States district attorney, in his capacity as the law officer of the Government (to whom the matter had been committed), was to be satisfied that " full restitution " was made by the claimant, and as a means to that end the releases referred to were executed and the lands, as averred, thereby reverted to the public domain subject to entry for homestead purposes under the public-land laws of the United States. Beyond seeing that " full restitution " was made to the satisfaction of the district attorney, i. e., that the title to the lands was by the act of the claimant to be revested in the United States free from any and all encumbrances, the district attorney was not authorized to go, as the claimant was bound to know. Nor was he authorized either by virtue of his office or the direction of the President to do any act which would obligate the United States to reimburse the claimant for money expended in the improvement of the lands or for the taxes paid thereon, whether held by him in good faith or otherwise. No such question was before the President. All that he had in mind in granting the pardon was that the claimant, as a condition thereof, should make " full restitution " to the Government. The Government was in no way responsible for the money he had expended on the lands, nor can it be held responsible in damages for the wrongdoing for which the claimant was pardoned. As a matter of law, the claimant, if he was, as averred, the bona fide holder of the legal title to said lands, could, prior to the execution of the releases referred to, have removed therefrom any building or structure he may have placed thereon, while improvements inseparable from the soil did not inure to the benefit of the United States, as the price of the lands theretofore fixed by law, was pot enhanced. Nor can the claimant look to the United States for reimbursement under the laws of Louisiana, under which laws the reservation was made. In the case of Jackson v. Ludeling (99 U. S., 513, 525), where a dilapidated railroad had been sold under a mortgage and the purchaser had made improvements thereon, fraud was charged in the purchase and the court was asked to set aside the order of sale, the court, while holding that under the Louisiana laws the purchaser was entitled to reimbursement for improvements made other than for inseparable improvements,«said: " There is a series of cases, however, in which it is held by the supreme court of Louisiana that a person without title, going into possession of the public lands of the United States, can not set np a claim for improvements against the Government or its grantees. This was decided in Jenkins v. Gibson (3 La. Ann., 203), in Hollon v. Sapp (4 id., 519), and in Jones v.Wheelis (4 id., 541). In Hollon v. Sapp the court say, expressly, ' We are of opinion that this article, of the code is not applicable to materials used and labor expended in making settlements upon the national domain. No right can be acquired' in relation to the public lands except under authority of Congress.' " No contract can be implied under the Constitution or laws of the United States to reimburse the claimant for his improvements on the lands, as there was no taking of private property by authority of law. All that the Government took or claimed was "full restitution" of the lands, and to that the claimant consented by the execution of the releases. That the claimant saw fit to insert in the releases the reservation not contemplated by the President in his conditional pardon or sanctioned by any officer of the Government having authority so to do, can not affect the title to the lands so released. . By the releases the Government got what was contemplated by the President, i. e., " full restitution " of the lands, and beyond that no officer of the Government was, in the absence of statutory authority therefor, authorized to accept such reservation as binding on the Government to reimburse the claimant for the improvements so made. As "no right can be acquired in relation to the public lands except under authority of Congress," it follows that the decisions of the supreme court of Louisiana cited and relied upon by the claimant have no application here. These eases have reference to lands, other than public lands, held, possessed, or claimed to be held.by individuals either in good or bad faith, and that as between such individuals the one possessed even in bad faith is entitled to be compensated by the other for improvements made thereon, other than for "improvements inseparable from the soil." The theory of the laws of Louisiana as expressed in Jackson v. Ludeling (p. 520), is "that no one should be made richer at the expense of another, even though the latter has acted in bad faith." And referring to the case of Gibson v. Hutchins (12 La. Ann., 545), the court said: " But the fact that the title to the land in the case of Gibson v. Hutchins was in the Government when the improvements were made is sufficient, of itself, to place it in a different category from the present. The court, indeed, say: 'He (the defendant) had no claim against the United States for improvements. He was rather indebted to the United States for the privilege of living so long undisturbed upon the public land.' " The averments of the petition, and pardon made a part thereof, taken as a whole, negative the claimant's holding in good faith; but whether he did or not, the Government, in the absence of statutory authority therefor, can not be held responsible for improvements made on the public lands of the United States. For the reasons we have given, the demurrer to the amended petition must be sustained, which is accordingly ordered, and the petition is therefore dismissed.

10 C.M.A. 111

Opinion of the Court GEORGE W. LatimER, Judge: The accused and a companion were convicted of unlawfully entering a Class VI store and stealing several eases of potable spirits. The building was located on an air base, Bucking-hamshire, England. Each of the two accused was sentenced to be dishonor ably discharged from the service, to forfeit all pay and allowances, and to be confined at hard labor for one year. The convening authority affirmed the findings and sentence but, because of an instructional error, a board of review in the office of The Judge Advocate General of the Air Force disapproved the finding of housebreaking and limited its affirmance to the larceny specification. It reduced the period of confinement to nine months but otherwise approved the sentence. We granted review of two issues relating to instructions given by the law officer. After the petition for review was granted, the co-accused withdrew his appeal. He, therefore, is no longer a party to this action. The first assignment of error questions the correctness of an instruction by the law officer to the effect that proof that a person was in possession of recently stolen property permits an inference that he stole it. We granted this issue prior to the time we published our opinion in United States v Hairston, 9 USCMA 554, 26 CMR 334, where substantially the same instruction was involved. Our holding there is adverse to the contention now advanced by this accused, and hence this assignment of error is overruled. The second assignment of error requires determination of whether the substantial rights of the accused were prejudiced when the law officer informed the court that certain matters mentioned in paragraph 76, Manual for Courts-Martial, United States, 1951, might be considered in assessing sentence. This is the identical error raised in United States v Mamaluy, 10 USCMA 102, 27 CMR 176, this day decided. Under the holding of the last cited case, it was error for the law officer to mention all the factors in-eluded in his instruction and it becomes necessary, therefore, to determine whether the error materially prejudiced the substantial rights of the accused. The two offenses of which he stood convicted at the time the instructions were given would permit the court-martial to impose dishonorable discharge, total forfeitures, and confinement for ten years. The sentence actually imposed was dishonorable discharge, total forfeitures, and confinement for one year. The leniency of the sentence denotes that the court-martial was not affected adversely toward the accused. However, we do not believe it necessary to rely on that indication. The board of review reversed one finding and independently reassessed an appropriate sentence based only on the conviction of larceny. Since the property had a value of $272, the maximum permissible confinement for that offense would be five years together with dishonorable discharge and total forfeitures. While the board affirmed the dishonorable discharge and total forfeitures, it reduced the period of confinement at hard labor to nine months. It is apparent, therefore, that any prejudice emanating from the law officer's instructions has been " effectively removed by the sentence affirmed by the board of review. Accordingly, we affirm its decision. Chief Judge Quinn concurs.

471 U.S. 1098

C. A. 11th Cir. Motion of respondent for leave to proceed in forma pauperis and certiorari granted.

531 U.S. 1048

Sup. Ct. Fla. [Cer-tiorari granted, ante, p. 1046.] Motion of Katherine Harris et al. for divided argument granted.

383 U.S. 970

C. A. 7th Cir. Certiorari denied.

534 U.S. 1169

C. A. 4th Cir. Cer-tiorari denied.

61 T.C. 763

Scott, Judge: Respondent determined deficiencies in petitioners' Federal income tax of $10,750.36 and $14,242.09 for the calendar years 1966 and 1967, respectively. One of the issues raised by the pleading has been disposed of by agreement of the parties. The only remaining issue is whether petitioners' income from a subchapter S corporation of which Robert B. White was the sole stockholder should be increased in each of the years here in issue by an increased corporate income resulting from disallowance of a claimed corporate deduction of "Officer's Salary" accrued in each of the years 1966 and 1967 on the books of the corporation, but in each instance not actually paid to the corporation's sole officer-stockholder during the year or within 2½ months following the close of the corporation's taxable year. FINDINGS OF FACT Some of .the facts have been stipulated and are found accordingly. Petitioners Eobert B. and Dorothy D. White, husband and wife, who resided at Scarsdale, N. Y., at the time of the filing of the petition in this case, filed joint Federal income tax returns for the calendar years. 1966 and 1967 with the district director of internal revenue in Manhattan, New York. Petitioner is and has been since its incorporation in New York in 1949 the sole stockholder of Grardner's Village, Inc. (hereinafter corporation). The corporation's principal business activity is the sale at retail of gardening and pet supplies. In January 1963, the corporation filed a proper election to qualify as a subchapter S corporation. At the time of this election, the corporation had earned surplus which it reported on its Form 1120-S income tax returns as "Betained Earnings — Unappropriated." The closing balances in this account as of December 31, 1966, and December 31, 1967, were $69,943.43 and $67,-368.25, respectively. The corporation has consistently since 1964 filed U.S. Small Business Corporation Income Tax Keturns, Form 1120-S. The corporation has at all times kept its records on an accrual method of accounting and used the calendar year. Petitioner has kept his records at all times on the cash receipts and disbursements method of accounting and filed his income tax returns for the calendar year. In 1964 the corporation adopted a policy with respect to compensation to be paid to its president, who is also its sole stockholder, whereby he was paid a weekly salary of $400 with the accrual at the end of each taxable year of a bonus of $20,800. Payment of the bonus was to be made or deferred at the sole option of petitioner for whatever reason he decided. For the taxable year 1964, and each succeeding taxable year, the corporation's accountants made closing entries to the books of the corporation, debiting "Salaries" for the $20,800 bonus and crediting that amount to an account payable to petitioner. This closing entry was actually entered on the books in January of the following year, but the additional charge to "Salaries" of each year's bonus was used to reduce the taxable income of the corporation reported on its Form 1120-S for the year for which it was accrued. Petitioner, as sole stockholder of the subchapter S corporation, included the corporation's taxable income as reported on its Form 1120-S on Schedule B of his Federal income tax return for the same calendar year as small business corporation income for that year. The compensation awarded to petitioner from the corporation for each of the calendar years 1966 and 1967 and deducted in that year • by the corporation in computing the corporate income was as follows: 1966 1967 Weekly salary. $21, 200 $20, 800 Bonus accrued 20, 800 20, 800 Total. 42, 000 41, 600 The bonus accrued in 1966 was transferred on the corporate books to an account payable in January 1967 but was actually paid to petitioner in September 1967. The bonus accrued in 1967 was transferred to an account payable on the corporate books in January 1968 but was actually paid to petitioner on May 21, 1968. Petitioner reported the bonuses in his income in the year he actually received payment, which in each instance was the taxable year subsequent to the year for which the concomitant salary deduction was taken by the corporation. The bonus deducted by the corporation for the taxable year 1965 was actually paid to petitioner within 2½ months after the close of the corporation's taxable year 1965 and respondent did not contest the salary deduction claimed by the corporation for the bonus payment for the year 1965. The corporation on its returns for the taxable years 1966 and 1967 deducted no interest expense, claimed no depreciation on buildings owned, but deducted rental expenses paid in the respective amounts of $53,244.61 and $51,514.97. The corporation had cash on hand in the following amounts on the following dates: Dec. 31, 1965. $106, 879. 70 Mar. 31, 1966. $26, 501. 00 Dec. 31, 1966. 61, 854. 31 Mar. 31, 1967. 21, 999. 00 Dee. 31, 1967. 60, 956.16 Mar. 31, 1968. 20, 996. 00 The cash balance as of March 31 of each of these years was the lowest cash on hand of the corporation at any time during the year. Petitioner, as sole officer of the corporation, had full control of the business operations during the years in issue. Petitioner was authorized to sign checks on behalf of the corporation and had the power to authorize payment of the bonuses. Petitioner had unrestricted power to withdraw the bonuses payable to him at any time after the closing of the corporate books in January of each year. In addition to cash on hand, the corporation showed on its balance sheets at December 31, 1966, and December 31, 1967,."Other investments" of $24,463.98 and $22,581.39, respectively. The corporation during each of the years here in issue could have borrowed at least $100,000 had petitioner deemed such borrowing to be advisable. Respondent in his notice of deficiency to petitioner for the years 1966 and 1967 increased the small business corporation income includ able in petitioner's income each year by $20,800. Respondent gave the following explanation of the increase in the corporate income: Since the amounts accrued on the books of Gardner's Village, Inc. as additional salary for Robert B. White in the amounts of $20,800.00 for each of the years 1966 and 1967 were not paid within two and one-half months after the close of each taxable year and were not included in his gross income in the year accrued, it is determined that the deductions are not allowable under the provisions of section 267 of the Internal Revenue Code. OPINION Respondent's position is that the deductions for accrued bonus salaries in 1966 and 1967 must be disallowed under the provisions of section 267(a)(2). This section provides that expenses otherwise deductible by a taxpayer which are not paid within the taxable year of the taxpayer and the period of 2½ months thereafter are not deductible if the payor and payee are persons with the specified relationship and the amount is not includable in the payee's income and if the payee's method of accounting is such that the amount is not includable in his income unless paid. In the instant case it is clear that petitioner and the corporation are related within the meaning of section 267(b) (2). It is likewise clear that while the corporation uses an accrual method of accounting, petitioner uses the cash method so that amounts are not includable in his income until paid or constructively received. (Sec. 267(a) (2) (A) and (B).) The issue here is solely whether the bonuses accrued on the books of the corporation were constructively received by petitioner in the years 1966 and 1967 or within 2½ months after the close of those years so that the amount of the bonuses is "includible" in the gross income of petitioner within 2½ months after the close of each of the corporation's taxable years. Although the doctrine of constructive receipt is not defined by any Code section, it is explained in section 1.451-2(a), Income Tax Regs., which states in part that income is constructively received by a taxpayer when "it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time, or so that he could have drawn upon it if notice of intention to withdraw had been given." This Court and other courts have held that constructive receipt of salary or other amounts by the payee satisfies the provisions of section 267. F. D. Bissett & Son, Inc., 56 T.C. 453, 461 (1971), and cases there cited; Fetzer Refrigerator Co. v. United States, 437 F. 2d 577 (C.A. 6, 1971); C. D. Fountain, 59 T.C. 696, 704-705 (1973). In fact section 1.267(a)-1(b) (1) (iii), Income Tax Regs., recognizes that constructive receipt satisfies the requirements of section 267 by providing as follows: (iii) If, within the taxpayer's taxable year within which such items are accrued by the taxpayer and 2½ months after the close thereof, the amount of such items is not paid and the amount of such items is not otherwise (under the rules of constructive receipt) includible in the gross income of the payee. Whether a taxpayer has constructively received payment of an amount is a factual determination to be made from the circumstances present in each case. R. E. Hughes, Jr., 42 T.C. 1005, 1012 (1964). On brief respondent concedes that the corporation "credited petitioner's account" with and "set apart" on its books the bonuses within the meaning of section 1.451-2(a), Income Tax Regs. Respondent also conceded on brief that petitioner had unrestricted power to draw checks on the corporation's accounts hut made some argument that the corporation did not have available cash for petitioner to have actually taken the bonuses in cash within 2½ months after the close of each of the years here in issue. The record contains ample evidence to show that the corporation at all times during the years here in issue had sufficient cash for petitioner to have drawn a check for the full amount of his bonuses. The lowest cash balance of the corporation at any time during each of the years was in excess of the total amount of petitioner's bonuses and the record shows that the corporation had other liquid assets available and ample ability to borrow. In his reply brief respondent tacitly recognizes that petitioner was in constructive receipt of his bonuses within 2½ months after the close of the taxable year for which the corporation claimed the deduction and relies primarily on the argument which he had also made in his original brief that for a subchapter S corporation constructive receipt should not be sufficient to meet the payment requirements of section 267 but actual receipt should be required. Respondent analogizes the provisions of section 267 to those of section 1375(f) which provides a 2½-month period after the close of the taxable year during which time a subchapter S corporation may dispose of the prior year's undistributed taxable income. Respondent cites Attebury v. United States, 430 F. 2d 1162 (C.A. 5, 1970), and MeKelvy v. United States, 478 F. 2d 1217 (Ct. Cl. 1973), for the proposition that "constructive receipt" does not apply to a subchapter S corporation. We do not agree with respondent's contention that section 267 prohibits a deduction of an expense accrued by a subchapter S corpora tion as due its sole stockholder where the payment is constructively received by the stockholder in the year it is accrued by the corporation or within 2½ months after the close of the corporation's taxable year. Constructive receipt means such a receipt as to require that the stockholder include the amount in his income when it is constructively received. All that section 267 requires for an expense to be deductible is that the amount be includable in the income of the payee in the year deducted by the payor or within 2½ months thereafter. Section 267 is designed to prohibit specified related persons from arranging expense deductions for an accrual basis taxpayer without a related cash basis taxpayer being required to include the payment in his income. There is no reason that any different rule should exist for a subchapter S corporation and its stockholder than that which exists for any other corporation and its stockholder. Normally, sub-chapter ¡S corporations are subject to the same provisions as other corporations but in certain areas are subject to provisions only applicable to them. Section 1375(f) is one of the provisions applicable only to subchapter S corporations. Section 1375(f) on which respondent relies deals with distributions of income by a subchapter S corporation. Section 1373 provides for the inclusion in the income of a stockholder .of a subchapter S corporation of the "undistributed" corporate income at the end of the corporation's taxable year. Distributed income is taxable to the stockholders as dividends to the extent of corporate current earnings and profits. Section 1375 (f) allows a "distribution" made by the corporation within 2½ months after the close of the corporation's taxable year to be treated in effect as a distribution prior to the close of the corporation's taxable year. The underlying basis of the decisions of the courts in the Attebury and MeKelvy cases on which respondent relies is that the statute with respect to distributions by subchapter S corporations and the regulations thereunder have reference to "actual" distributions and receipts as distinguished from the reference to "constructive" receipt in section 1.451-2(a), Income Tax Kegs. In this respect the court stated in the Attebury case (430 F. 2d at 1168) : Section 1373(c) defines "undistributed taxable income" as "taxable income minus tbe amount of money distributed as dividends during the taxable year " (Emphasis added.) Taxpayers argue that "when sections 1373(b) and (c) define the corporate income to be taxed to the shareholders as being the amounts distributed to shareholders during the year, plus the undistributed taxable income for the year, the constructive receipt doctrine steps in and defines the amounts which were distributed during the year." We cannot agree with taxpayers' argument. In our opinion, the phrase "amount of money distributed during the taxable year" means actual cash distributions to shareholders 'before the end of the corporate year. The regulations to section 1373 elaborate upon the meaning of this phrase. Regulation sec. 1.1373-1 (f) provides: "(f) When distributions are considered made. Except as otherwise provided in sec. 1.1375-5, an actual distribution by an electing small business corporation will be considered to be made only at the time it is received by the shareholder, and earnings and profits of such corporation shall not be reduced with respect to such distribution before such time." Taxpayers contend that the wording of the regulation — "received by the shareholder" — means actual receipt of cash or cash unqualifiedly available to stockholders (thus constructively received by stockholders as per the constructive receipt doctrine). Taxpayers seem to overlook the phrase "actual distribution" in the above-quoted regulation. After viewing the entire regulation, we find no merit in taxpayers' attempt to assimilate the word "received" to the definition of that word in section 451(a), as contained in the constructive receipt rule of Regulation see. 1.451-2(a), . The import of Regulation sec. 1.1373-l(f), when read in context with section 1373(c), the regulations, and the legislative history discussed below, is that a distribution is deemed to occur only when it is actually paid by the corporation. [Ens. omitted.] There is nothing in the holding of the Attebury case or the McKelmj case to suggest that the doctrine of constructive receipt is not applicable to the stockholder of a subchapter S corporation except when there is a provision such as those in sections 1373 and 1375(f) and the regulations issued pursuant thereto which requires that there be an "actual" payment. We conclude that the corporation properly deducted in each of the years 1966 and 1967 the $20,800 bonus credited to petitioner and that respondent improperly increased the income reportable by petitioner in this amount. Because of the issues disposed of by agreement of the parties, Decision will be entered wnder Rule 155. $20,800. All statutory references are to the Internal Revenue Code of 1954. SEC. 267(a). Deductions Disallowed. — No deduction shall be allowed— * (2) unpaid expenses and interest.- — In respect of expenses, otherwise deductible under section 162 or 212, (A) If within the period consisting of the taxable year of the taxpayer and 2⅝ months after the close thereof (1) such expenses or Interest are not paid, and (ii) the amount thereof is not includible in the gross income of the person to whom the payment is to be made; and (B) If, by reason of the method of accounting of the person to whom the payment is to be made, the amount thereof is not, unless paid, includible in the gross income of such person for the taxable year in which or with which the taxable year of the taxpayer ends; and (C) If, at the close of the taxable year of the taxpayer or at any time within 2¾ months thereafter, both the taxpayer and the person to whom the payment is to be made are persons specified within any one of the paragraphs of subsection (b). Respondent in his original brief argued that petitioner had not shown a proper setting apart of the bonuses, but in his reply brief, citing his Rev. Rui. 72-317, 1372-1 C.R. 128, conceded that this requirement of the regulation had been met. In McKelvy v. United States, 478 F. 2d 1217, 1225-1226 (Ct. Cl. 1973), the purpose of sec. 1375(f) is explained as follows : "Section 1375(d), as we have said, was designed to permit the tax-free distribution of amounts previously taxed to the Subchapter S shareholder as constructive dividends from undistributed taxable income. However, there were substantial limitations on the shareholder's right freely to distribute from his PTI account. First, a distribution to qualify as coming from PTI, had to be in money. Treas. Reg. Sec. 1.1375-4(b), DeTreville v. United States, supra. Second, the PTI account is subject to reduction by the amounts allowable as deductions under section 1375(b) (pass-through of net operating losses). Third, a tax-free distribution in a later year, even if in cash and even if there are sufficient amounts in PTI to cover the distribution, cannot be made until after the corporation's current earnings and profits have been distributed. Treas. Reg. sec. 1.1375-4 (ib). "Finally, there existed the problem of a termination of the Subchapter S status. During Subchapter S status, cash distributions would be applied in the following order: First, to current earnings and profits; second, to previously taxed undistributed taxable income (PTI) ; third, to accumulated earnings and profits (if any) ; and finally, as in regular corporations, to a reduction of basis to zero with any distribution in excess of basis governed by the rules of section 301(c) (3). However, once the Subchapter S election was terminated, the shareholder no longer had the privilege of a tax-free distribution out of PTI if accumulated earnings and profits were present. Of course, if there were no accumulated earnings and profits, then, after current earnings and profits were exhausted, the tax-free distribution could be made out of capital. "The cumulative effect of all these factors gave rise to a situation in which the taxpayer possessed a potentially advantageous PTI account, but was often unable, for the above-stated reasons, to derive any tax benefit from it. Thus, Congress, in 1966, addressed itself to the problem of these so-called "locked-in" earnings. "In order to prevent a lock-in of earnings, shareholders had been under pressure accurately to forecast the earnings by the year's end in order to prevent any amount from being taxed as a constructive dividend under section 1373(b). Congress' solution was to enact section 1375(f). Generally speaking, under this remedial provision, all money distributions made within 2⅜ months of the close of the corporation's previous fiscal year are treated as distributions of the corporation's undistributed taxable income for the previous year. In other words, Congress provided, with respect to money distributions, a limited relation-back provision. The money distribution was deemed to have been received in the prior fiscal year. If the standards of section 1375(f) were met, the shareholder was no longer faced with the problem of first having to exhaust his current earnings and profits. The shareholder simply reduced his undistributed taxable income for the previous year. The plaintiffs, in effect are telling us that they did not need section 1375 (f) to provide them' with a justification for relating back subsequent distributions to the previous year. Plaintiffs assert that the judicial doctrine of constructive receipt already existed with respect to Subchapter S to the same extent that the doctrine exists with respect to regular corporations. It is our view that the plaintiffs are completely in error in this assertion. While we are mindful of the general proposition that Subchapter S corporations are subject to the general corporate provisions, we must also realize that the Subchapter S provisions in certain areas displace the general corporate rules. This principle is most clearly evident with respect to the highly technical rules of Subchapter S, which allow, in very prescribed situations, non-dividend treatment." [Fns. omitted.]

470 F.2d 585

ON PLAINTIFFS' MOTION FOR AMENDMENT OF OPINION AND JUDGMENT SKELTON, Judge: This suit was originally filed for the recovery of $477,587.66 representing a portion of an equitable adjustment on a contract entered into between Lieb Bros., Inc. (Lieb) and Economy Plumbing and Heating Co., Inc. (Economy) as joint venturers, and the United States for the construction of dormitories, mess halls, and other facilities at Scott Air Force Base near Belleville, Illinois, for the sum of $13,484,275.50. The work was reduced by a partial termination order, and was completed and accepted. In the meantime, Lieb was adjudged a bankrupt and is now insolvent. Its re ceiver did not participate in the appeal of this case and is not before the court. However, Transamerica Insurance Company (Transamerica), a surety and third-party plaintiff, intervened, because it acted as the surety on the performance and payment bonds of the contract. In May 1960, the Corps of Engineers awarded the sum of $544,848.33 to the joint venture on its termination claim. The joint venture appealed to the Armed Services Board of Contract Appeals (ASBCA). In the meantime, the Internal Revenue Service (IRS) had asserted tax liens against Lieb. On November 18, 1960, without any notice to Economy or Transamerica, the General Accounting Office (GAO) paid $477,587.66 of the award to the IRS to satisfy the tax liens against Lieb. Of this amount, the sum of $4,576.80 was applied to unpaid payroll taxes, together with interest and penalty, owed by the joint venture in the performance of the contract. The remaining $473,010.86 was applied by the IRS to payroll and income taxes and interest and penalties owed by Lieb on other construction jobs it had performed which had no connection with the contract of the joint venture. Economy and Transamerica (plaintiffs) filed timely income tax refund claims with the IRS for the $477,587.66. More than six months elapsed after the filing of such claims without any action having been taken by the IRS, so the plaintiff Economy filed this suit on July 8, 1965, and Transamerica intervened on May 2, 1966. After a trial in this court, our Trial Commissioner Mastín G. White, handed down a memorandum opinion on November 15, 1971, in which he recommended that plaintiffs be awarded judgment against the United States for the sum of $473,010.86. Nothing was said about interest. Thereafter, on February 3, 1972, the parties filed a joint motion for judgment under Rule 141(b) in which they asked that the opinion of the trial commissioner be adopted in which he had found that the plaintiffs were entitled to judgment against the United States for $473,010.86, "together with interest as provided by law." Pursuant to this joint motion, the court entered a per curiam opinion on March 17, 1972, approving and adopting the memorandum opinion of the trial commissioner and awarded plaintiffs a judgment against the United States for said sum of $473,010.86. The judgment did not provide for interest. See Economy Plumbing & Heating Co. v. United States, 456 F.2d 713, 197 Ct.Cl. 839 (1972). On April 13, 1972, plaintiffs filed a motion requesting that the opinion and judgment of the court be amended by awarding plaintiffs interest at the rate of six percent per annum from November 18, 1960, on the principal sum of $473,010.86. The defendant has contested this motion. The case is before us on such motion. The sole question before us is whether or not plaintiffs are entitled to interest on their judgment from the time the amount thereof was paid by GAO to the IRS to satisfy Lieb's tax lien. It is important to note that when plaintiffs filed this suit they sought recovery of funds due them as an equitable adjustment on the contract which they alleged had been wrongfully withheld by the government. The suit was clearly one to recover funds due under a contract. In our per curiam opinion in this case mentioned above, we adopted the statement of our trial commissioner as follows: This is an action for the recovery of $473,010.86, representing a portion of an equitable adjustment under contract No. DA-11-032-ENG-1232 ("the contract") that was — according to allegations in the petition — -wrongfully withheld by the defendant. [Footnote omitted.] [Id. 456 F.2d at 714, 197 Ct.Cl. at 841.] The suit as filed was a contract action and not a suit for a refund of overpaid taxes. As stated above, we entered judgment in favor of the plaintiffs for the amount due them under the contra-ct as an equitable adjustment. Now the plaintiffs seek to change the whole theory of the case by claiming the suit was by taxpayers seeking a refund of overpaid taxes. The reason for this change in theory and tactics is clear. The plaintiffs want to collect interest on their judgment for the past 11 years and they well know that interest cannot be allowed on a contract claim against the United States unless the contract provides for interest, which is not the case here. See 28 U.S.C. § 2516(a) (1964). The plaintiffs seek to bridge this obstacle by now contending that even though they were not originally taxpayers entitled to a refund of overpaid taxes, they became taxpayers when the government wrongfully applied their funds to the payment of Lieb's taxes. They contend further than when the government took this action, the funds so applied became overpayments of taxes by the plaintiffs, for which they filed claims for refunds, and that our judgment in their favor constituted a refund of their overpaid taxes. Consequently, they argue that they are entitled to interest on such amount. The plaintiffs say that the provisions of 28 U.S.C. § 2411(a) and Section 6611 of the Internal Revenue Code entitle them to interest, especially since these laws provide for six percent interest on "any overpayment in respect of any internal revenue tax." They urge the proposition that this language fits their situation because the application of their funds to Lieb's taxes was an "overpayment in respect of [an] internal revenue tax." The defendant contended in its answer and still argues that this suit was not one brought by a taxpayer suing for a refund of its taxes, and denies that this suit arose under revenue laws requiring the filing of a claim for refund. It says that the plaintiffs are not taxpayers in this ease, but that Lieb was the taxpayer. Defendant says further that plaintiffs never overpaid their taxes and their recovery of contract funds in this case was not a refund of overpaid taxes. Consequently, defendant contends that plaintiffs cannot recover interest on their judgment, because no statute authorizes it and the contract contains no provision for interest, citing Rosenman v. United States, 323 U.S. 658, 65 S.Ct. 536, 89 L.Ed. 535 (1945). We agree with the defendant that the plaintiffs are not taxpayers in this case with respect to these funds within the meaning of the revenue laws. Lieb was the taxpayer and it is not a party to this action. While it is true that there was a misapplication of plaintiffs' funds to the payment of Lieb's taxes, this wrongful act did not result in plaintiffs becoming taxpayers to the extent of the misapplied funds. Neither was there any overpayment of plaintiffs' taxes. In fact, the only taxes of the plaintiffs that were paid out of the contract award was the $4,576.80 applied on the payroll taxes of the joint venture which was not contested by the plaintiffs and is not involved in this case. The filing of the claims for refund by the plaintiffs did not help them, because the claims were unnecessary and of no consequence since plaintiffs were not taxpayers who had overpaid their taxes. In support of the foregoing conclusions, we wish to point out and emphasize that Congress has established a well-defined and comprehensive administrative system for the recovery of overpaid taxes by taxpayers. All taxpayers who have overpaid their taxes are within this system and must follow the appropriate procedures and regulations, including the timely filing of claims for refunds for overpayment of taxes, if they are to have the benefits of the system. On the other hand, persons who are not taxpayers are not within the system and can obtain no benefit by following the procedures prescribed for taxpayers, such as the filing of claims for refunds. For example, there have been many cases where parties have sued to enjoin the assessment or collection of their moneys to pay the taxes of another, notwithstanding Section 263 of the Internal Revenue Code of 1939 (26 U.S.C. § 3653 (1952 ed.)) that provided that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court." The courts have allowed these suits because the parties filing the suits were not taxpayers and were outside the revenue system of which the above statute is a part. See Long v. Rasmussen, 281 F. 236 (D.Mont.1922); Rothensies v. Ullman, 110 F.2d 590 (3d Cir. 1940); Raffaele v. Granger, 196 F.2d 620 (3d Cir. 1952); and Bullock v. Latham, 306 F.2d 45 (2d Cir. 1962). In Long v. Rasmussen, the court said: They [the revenue laws] relate to taxpayers, and not to nontax-payers. The latter are without their scope. No procedure is prescribed for nontaxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. [Id. 281 F. at 238.] In other cases suits have been filed by nontaxpayers whose property has already been taken to pay the taxes of others, without filing claims for refund, and such suits have been allowed against the Collector or District Director of Internal Revenue in actions similar to the old action in assumpsit for money had and received, even though lacking in statutory authority. See Stuart v. Chinese Chamber of Commerce, 168 F.2d 709 (9th Cir. 1948); Rutledge v. Riddell, 186 F.Supp. 552 (S.D.Cal.1960); Oil City Nat'l Bank v. Dudley, 198 F.Supp. 849 (W.D.Pa.1961). In Stuart v. Chinese Chamber of Commerce, supra, the court said: Under the circumstances here recited it is obvious the appellees [whose property had been seized by the IRS to pay the taxes of another] are not taxpayers in the strict sense of the word, and therefore they do not come within the orbit of the income tax laws here invoked. x- The appellees could not have maintained a suit for refund as could a taxpayer from whom a tax had been illegally collected; their only recourse was to bring suit to recover possession of the property of which they claimed to be owners. [Id. 168 F.2d at 712.] The above quotation fits our case like a glove. Our plaintiffs are not taxpayers and could not sue for a tax refund as a taxpayer could. All they could do was to sue to recover their property, which was the funds due them as an equitable adjustment under the contract, and this is exactly what they have done. The above cases are illustrative of the proposition that a nontaxpayer is outside the administrative system set up for the collection of a refund of overpaid taxes, and is not required to file a claim for refund to recover money taken from him to pay the taxes of another. The case of Kirkendall v. United States, 31 F.Supp. 766, 90 Ct.Cl. 606 (1940) is squarely in point. There a third party (Kirkendall) sued to recover money that had been taken from him to pay the taxes of another. We held that there was an implied contract on the part of the government to make restitution of the money, and that no claim for refund was necessary because the plaintiff was not a taxpayer. Of particular importance in the case before us is the fact that in Kirkendall the court did not allow interest on the judgment of restitution. The only difference between that case and the case before us is that in our case the plaintiffs filed claims for alleged refund, whereas, in Kirkendall no claim was filed. In both cases the plaintiffs were nontaxpayers. We do not think the filing of claims for refunds in the present case makes any difference. The plaintiffs here were outside the administrative system established for the filing of claims for refunds of overpaid taxes and were not required to file them. The fact that they did file such claims did not entitle them to any of the rights or benefits of the tax refund administrative system. It follows logically that a nontaxpayer cannot overpay taxes and consequently there is no overpayment for him to claim by way of refund. We think the Kirkendall case was properly decided and is dispositive of the present case. The payment of Lieb's taxes with the money due plaintiffs under the contract did not convert such contract funds into an overpayment of their taxes nor make taxpayers of the plaintiffs. Neither did the mere filing of claims for refunds make plaintiffs taxpayers when none of the requisites of the status of taxpayers were present. The fact that plaintiffs filed such claims did not convert them into claims for overpayment of taxes. We so held in the case of Ray v. United States, 453 F.2d 754, 197 Ct.Cl. 1 (1972), when we said: The mere fact that plaintiff submitted claims for refunds with the Internal Revenue Service does not convert his claim into one for overpayment of taxes, [Id. 453 F.2d at 758, 197 Ct.Cl. at 9.] In the Ray case, the plaintiff was retired by the Air Force on a longevity basis and during his period of retirement based on length of service the Air Force withheld a portion of his retirement payments and paid them to the IRS who applied them to plaintiff's income taxes. After a time the plaintiff applied to the Air Force Board for the Correction of Military Records to change his retirement from a longevity basis to one based on disability. This was done and the Air Force paid him the difference between active duty pay and retirement pay, but did not pay him the amounts withheld and paid on his income tax. The Finance Center advised him to inquire of the IRS for possible tax refund. The plaintiff then filed claims for refund of income taxes with the IRS, who refunded such funds for three years but denied a refund for five other years on the ground they were time barred. The plaintiff then filed suit in this court for the five year payments that had been withheld by the Air Force. Although plaintiff had filed claims for refund with the IRS, and although he was a taxpayer, we held that his suit was not a suit for refund of taxes, but one against the Air Force for unpaid retirement benefits. We said: It is the Air Force which erroneously withheld from his retirement pay amounts approximately equal to his supposed tax liability, not the IRS. It is the Air Force, then, which is liable to plain tiff for the monies it erroneously exposed to taxation. [Id. 453 F.2d at 757, 197 Ct.Cl. at 8.] * it is simply a matter of correcting the pay account between the serviceman and the United States. [Id. 453 F.2d at 758, 197 Ct.Cl. at 9.] In that case, we entered judgment for the plaintiff on the theory that his suit was not one for the recovery of a tax refund but one to recover retirement pay from the Air Force. In that connection, the court held further: Since this is not a claim for refund of taxes paid, but for "pecuniary benefits" wrongfully denied, cases cited by defendant are not in point. Here, since plaintiff is not claiming under the Code, he need not preserve his claim according to its provisions. * Here the Board involved his changed plaintiff's retirement status and plaintiff can therefore say, that his right is independent of the tax laws. [Id. 453 F.2d at 758, 197 Ct.Cl. at 9-10.] In that case we held that proof of status is required to recover an overpayment of taxes under the Internal Revenue Code, saying: proof of status is the admitted condition precedent for recovery of overpayment of taxes under the Internal Revenue Code § 6511, . [Id. 453 F.2d at 757, 197 Ct.Cl. at 8.] We have considered the Ray case in detail (although it is distinguishable as to some of the facts in our case), because it is a recent decision of our court and many of the questions there decided strongly support the conclusions reached in the present case. We refer to the following : 1. In that case we held that proof of status (i. e., that of a taxpayer who had overpaid his income taxes), was a condition precedent to recovery under the Internal Revenue Code. Here the plaintiffs fail that test because they were not taxpayers and had not overpaid their income taxes. 2. The mere fact that a claimant files a claim for refund does not convert his claim into one for overpayment of income tax. That is the situation here. 3. There, although plaintiff's retirement payments were delivered to the IRS, his claim for such payments in this court was not a claim for refund of taxes, but a claim against the Air Force. Here, in like manner, the claim of plaintiffs was not one for a refund of overpayment of income tax, but a claim for contract funds delivered by the Corps of Engineers and the GAO to the IRS. 4. There, the Air Force owed plaintiff the money, not the IRS. Here the Corps of Engineers owed the plaintiffs the contract money, not the IRS. 5. There, the plaintiff was not claiming under the Internal Revenue Code. Here, the plaintiffs were not suing under the Code when they filed suit, but were seeking the funds due them under the contract. 6. There, the plaintiff was a taxpayer and the withheld payments had been applied to his income tax. He had filed a claim for refund and conceivably could have argued that he was seeking a refund of overpaid'taxes under the Code. We held that was not the case. Here, the case is much stronger for the government because the plaintiffs were not taxpayers and had not overpaid their taxes and were not seeking recovery under the Code. This is the most important distinction between the two cases. In the Ray case, the plaintiff waived any claim for interest. This is understandable because there is no authority for awarding him interest on a recovery of retirement payments from the Air Force. Nevertheless, our decision in that case on other questions show beyond doubt that plaintiffs are not entitled to interest in the present case. We do not think that the provisions of 28 U.S.C. § 2411(a) and Section 6611 of the Internal Revenue Code providing for interest at the rate of six percent per annum upon "any overpayment in respect of any internal-revenue tax" quoted above, which is relied upon by the plaintiffs, has any application to this case. We interpret those statutes as applying only to taxpayers who have overpaid their taxes, have filed a timely claim for refund, and are within the administrative system providing for the recovery of overpaid taxes and are entitled to its benefits. The plaintiffs have none of these prerequisites, except they did file claims for alleged refunds. The plaintiffs cite and rely heavily upon the case of Stuart v. Willis, 244 F.2d 925 (9th Cir. 1957). In that case the government levied upon, seized, and applied the funds of a joint venture, composed of two parties, due under a completed government contract, to the tax liability of one of the joint venturers that had accrued on other jobs not related to the joint venture contract. Both joint venturers filed claims for refund and later sued the District Collector of the Internal Revenue Service. The trial court held the levy to be void and awarded the joint venturers judgment for the misapplied funds, plus interest at six percent from the date of the misapplication of the funds by the government. The judgment was affirmed by the Ninth Circuit Court of Appeals. A careful reading of the decisions of the trial and appellate courts in that case reveals that there was no discussion or treatment of the interest issue nor any showing whatsoever that justified the awarding of interest from the date of payment to those plaintiffs under the Internal Revenue Code or other laws of the United States. The only mention of interest by the circuit court in its opinion was its comment that "it is claimed also that the trial court erred in allowing interest on the judgment." Since nothing more was said about interest in the court's opinion, it would appear that the court either (1) allowed interest from the date of the misapplication of the funds, as the trial court had done, on the theory that the suit of plaintiffs was one for the refund of their overpaid taxes, in which case the action of the court was contrary to the above-cited authorities, or (2) the court allowed interest on the judgment of the trial court only from the date of the judgment, under 28 U.S.C. § 2411(b) (1964), which authorizes interest at the rate of 4 percent per annum on a judgment in a district court against the United States on a claim under 28 U.S.C. § 1346, which is not under the internal revenue laws. The granting of interest prior to judgment under Section 1346 is improper. See Eastern Serv. Management Co. v. United States, 363 F.2d 729 (4th Cir. 1966). There the court held: The granting of interest prior to the judgment is incorrect. 28 U.S.C. A. § 2411(b) and 31 U.S.C.A. § 724a. lid. at 733.] Title 31 U.S.C. § 724a provides that a judgment of a district court against the United States for less than $100,000 to which provisions of Section 2411(b) apply, shall bear interest only when the judgment is final after appeal and then only from the date of the filing of the transcript with the GAO to the date of the mandate of affirmance. When such a judgment is rendered by the Court of Claims, interest thereon shall be payable in accordance with Title 28 U.S.C. § 2516(b) from the date of the filing of the transcript with the GAO. These authorities appear to be conclusive that interest cannot be allowed prior to judgment on a claim against the United States, except on overpayment of income tax claims as authorized by Title 28 U.S.C. § 2411(a) or unless provided for in a statute or contract as provided in Title 28 U.S.C. § 2516(a). None of these excepted situations exist in the present case.. At any rate, it appears that the court in Stuart v. Willis, supra, did not consider the interest question in depth as we have done, and we decline to follow its decision with regard to interest. The plaintiffs also contend that we should allow interest in this case because of the enactment of the Federal Tax Lien Act of 1966 which provides in Sections 7426(b)(2)(B) and 7426(g)(1) of the Internal Revenue Code that interest shall be allowed where property is wrongfully levied upon and taken by the IRS. The plaintiffs then cite 28 U.S.C. § 2516(a) to show that this court has jurisdiction to award interest where an Act of Congress expressly provides for its payment. The defendant counters this argument by saying that Section 7426 only authorizes suits to be brought in the district courts, citing the following language of technical explanation of 1966-2 Cum. Bull. 869: Section 7426. Civil actions by persons other than taxpayers. (a) Actions permitted. Section 202 of the bill grants U.S. district courts original jurisdiction over actions brought under section 7426 \ Defendant also cites H.R.Rep. No. 1884, 89th Cong., 2d Sess. 28 (1966-2 Cum. Bull. 815, 834), which states: The bill makes provisions for three new types of actions all of which may be brought only in Federal district courts. We do not have to decide this jurisdictional issue, as we do not believe Section 7426 applies to this case because it was not enacted until 1966, whereas the government misapplied plaintiffs' money on November 18, 1960. Consequently, the statute was not in effect at the time the events in this case occurred. However, the fact that the plaintiffs seek to recover under Section 7426 has an important bearing on another aspect of this case. The heading or caption of the section is as follows: § 7426. Civil actions by person other than taxpayers. [Emphasis supplied.] The action of the plaintiffs in saying this section applies to them is a clear indication that they are not "taxpayers" and that they do not regard themselves as taxpayers within the meaning of the Internal Revenue Code. This lends support to our interpretation of the meaning of the term "taxpayer" in this case as expressed in footnote 3, supra. Section 7426 is further significant in the instant case, because it shows that at the time it was enacted in 1966, Congress considered that persons in the position of the plaintiffs were not taxpayers within the meaning of the IRS. This is shown not only by the caption of the section, but also by its provisions wherein persons who are not taxpayers are described as any person "other than the person against whom is assessed the tax out of which such [wrongful] levy arose." That is precisely the situation of the plaintiffs, as no tax has been assessed against them, but was assessed against Lieb. Therefore, Congress has, in effect, described plaintiffs as nontax-payers, and apparently plaintiffs have agreed that this description is correct. We also agree. Plaintiffs argue that interest should be awarded to them because defendant signed a joint motion with them to the court requesting the adoption of the trial commissioner's opinion which provided for a judgment in favor of the plaintiffs for $473,010.86, "together with interest as provided by law." The defendant says that it has contended from the beginning that this is not a tax refund suit, but a suit to recover contract funds due plaintiffs as an equitable adjustment and that there is no law that allows interest on a recovery of that kind. Consequently, argues defendant, the phrase "interest as provided by law" in the joint motion was not an agreement to pay interest and did not confer any right upon the plaintiffs to receive interest. We agree with the defendant. Finally, the plaintiffs say that since the government had their money for over 11 years, it is right and just for the government to have to pay interest. We agree that equity and justice is on the side of the plaintiffs, but unfortunately interest cannot be collected from the government on that basis. The Supreme Court said in United States v. N. Y. Rayon Importing Co., 329 U.S. 654, 67 S.Ct. 601, 91 L.Ed. 577 (1947): Had Congress desired to permit the recovery of interest in situations where the Court of Claims felt it just or equitable, it could have so provided. The absence of such a provision is conclusive evidence that the court lacks any power of that nature. [Id. at 660, 67 S.Ct. at 604.] See also, United States v. Thayer-West Point Hotel Co., 329 U.S. 585, 67 S.Ct. 398, 91 L.Ed. 521 (1947). We hold that the plaintiffs are not entitled to interest on their claim from the date of the misapplication of their funds (November 18, 1960), until paid. Accordingly, the motion of plaintiffs to amend the opinion and judgment of the court so as to provide for interest is denied. . § 2411. Interest. (a) In any judgment of any court rendered (whether against the United States, a collector or deputy collector of internal revenue, a former collector or deputy collector, or the personal representative in case of death) for any overpayment in respect of any internal-revenue tax, interest shall be allowed at the rate of 6 per centum per annum upon the amount of the overpayment, from the date of the payment or collection thereof to a date preceding the date of the refund check by not more than thirty days, . § 6611. Interest on overpayments. (a) Rate. Interest shall be allowed and paid upon any overpayment in respect of any internal revenue tax at the rate of 6 percent per annum. (b) Period. Such interest shall be allowed and paid as follows: :¡: # :j: ;¡; (2) Refunds. In the case of a refund, from the date of the overpayment to a date (to be determined by the Secretary or his delegate) preceding the date of the refund check by not more than 30 days, . . Amended November 2, 1966, by. Pub.L. 89-719, Title J, § 110(c), 80 Stat. 1144. See 26 U.S. O.A. 7421 and footnotes. . The term "taxpayer" in this opinion is nsed in the strict or narrow sense contemplated by the Internal Revenue Code and means a person who pays, overpays, or is subject to pay his own personal income tax. (See Section 7701(a) (14) of the Internal Revenue Code of 1954.) A "nontaxpayer" is a person who does not possess the foregoing requisites of a taxpayer. . 28 U.S.C. § 2516(b) provides in part as follows: (b) Interest on judgments against the United States affirmed by the Supreme Court after review on petition of the United States shall be paid at the rate of four percent per annum from the date of the filing of the transcript of the judgment in the Treasury Department to the date of the mandate of affirmance. * ! « (.Tune 25, 1948, cli. 646, 62 Stat. 978; Sept. 3, 1954, ch. 1263, § 57, 68 Stat. 1248.) . Section 110(a) Federal Tax Lien Act of 1966, Pub.L. 89-719, 80 Stat. 1125.

517 U.S. 1240

C. A. 2d Cir. Motions of National Music Publishers' Association, Inc., and Karen Adams et al. for leave to file briefs as amici curiae granted. Certiorari denied.

425 U.S. 908

424 U. S. 914; 424 U. S. 935; and 424 U. S. 925. Petitions for rehearing denied.

353 U.S. 976

C. A. 3d Cir. Certiorari denied.

181 L. Ed. 2d 71

Petition for writ of certiorari to the Supreme Court of Guam denied. Same case below, 2010 Guam 17.

181 L. Ed. 2d 486

Petition for writ of certiorari to the United States Court of Appeals for the Ninth Circuit denied. Same case below, 433 Fed. Appx. 563.

523 U.S. 1053

C. A. 9th Cir. Certiorari denied.

525 U.S. 1085

C. A. D. C. Cir. Certiorari denied.

3 Vet. App. 94

MEMORANDUM DECISION STEINBERG, Associate Judge: The pro se appellant, veteran Wayne A. Guetti, appeals from an August 10, 1989, Board of Veterans' Appeals (BVA or Board) decision denying service-connected disability compensation for scoliosis. The Secretary of Veterans Affairs (Secretary) has moved for summary affirmance. Summary disposition is appropriate because the case is one "of relative simplicity" and the outcome is controlled by the Court's precedents and is "not reasonably debatable". Frankel v. Derwinski, 1 Vet.App. 23, 25-26 (1990). Because the Court finds that the Board failed to provide an adequate statement of the reasons or bases for its findings and conclusions, the Secretary's motion will be denied, and the Board's decision will be vacated and the record remanded. The veteran served on active duty in the United States Marine Corps from July 1959 to August 1963. R. at 1. No back disorders were noted on his entrance examination. R. at 4-5. However, at an examination conducted two weeks later the veteran was diagnosed with scoliosis—a lateral curvature of the spine (Webster's Medical Desk Dictionary 642 (1986)). R. at 6. No back disorders were noted on his separation physical examination. R. at 31-33. The veteran seeks service-connected disability compensation for aggravation of his scoliosis in service. R. at 41. Service-connected disability compensation may be granted for personal injuries suffered or diseases contracted in the line of duty, or for aggravation of a preexisting injury suffered or disease contracted in the line of duty. 38 U.S.C. § 1131 (formerly § 331); 38 C.F.R. § 3.303(a) (1991). "Congenital or developmental defects . are not diseases or injuries within the meaning of applicable legislation." 38 C.F.R. § 3.303(c) (1991); see also 38 C.F.R. § 4.9 (1991). In its August 10, 1989, decision, the Board concluded that the veteran's scoliosis was a developmental defect, and, thus, in applying section 3.303(c), the Board implicitly concluded that he was not accorded the presumption of aggravation given to veterans by 38 U.S.C. § 1153 (formerly § 353) and 38 C.F.R. § 3.306(b) (1991). However, in its "Discussion and Evaluation", the Board did not provide support for its finding that the veteran's scoliosis was a developmental defect. Instead, it simply stated: "In this case, the scoliosis, noted right after entry into service, is a developmental defect. As such, it pre-ex-isted entry into service and is not a disease for which compensation benefits may be paid." Wayne A. Guetti, BVA 89-_, at 3 (Aug. 10, 1989). The Board did not point to any evidence in the record to support its "Conclusion" that the veteran's scoliosis "is a developmental defect". Ibid. This lack of analysis in the Board's decision makes it impossible for the Court to carry out meaningful review of the Board's decision or for the appellant to understand its rationale, and, thus, its statement of the reasons or bases for its decision is inadequate. 38 U.S.C. § 7104(d)(1) (formerly § 4004); see Sammarco v. Derwinski, 1 Vet.App. 111, 113 (1991) ("BVA's decision must express findings with sufficient detail and clarity to achieve two critical purposes: to inform the claimant and to make meaningful review by this Court possible"); see also Hanson v. Derwinski, 1 Vet.App. 512, 518 (1991); Hatlestad v. Derwinski, 1 Vet.App. 164, 168 (1991); Gilbert v. Derwinski, 1 Vet.App. 49, 57 (1990) ("bare conclusory statement, without both supporting analysis and explanation, is neither helpful to the veteran, nor 'clear enough to permit effective judicial review', nor in compliance with statutory requirements"). Findings of the Board which rest only "upon 'generally accepted medical principles' [do] not accord with Colvin's prescription [Colvin v. Derwinski, 1 Vet.App. 171, 175 (1991)] for an adequate statement of reasons or bases." Sussex v. Derwinski, 1 Vet.App. 526, 529 (1991). The onset of scoliosis may be caused by different factors. See Robie v. Derwinski, 1 Vet.App. 612, 613 (1991) (affirming "10% [disability] rating . granted for scoliosis of the spine found to be caused by [veteran's] service-connected fractures of the spinal vertebrae"). Although the veteran seems willing to concede that his scoliosis was a congenital or developmental defect, that does not eliminate the Board's obligation to support its conclusions with independent medical evidence when the record does not provide adequate support for its conclusions. "BVA panels may consider only independent medical evidence to support their findings. If the medical evidence of record is insufficient, or, in the opinion of the BVA, of doubtful weight or credibility, the BVA is always free to supplement the record by seeking an advisory opinion, ordering a medical examination or [quoting] recognized medical treatises in its decisions that clearly support its ultimate conclusions." Colvin, 1 Vet.App. at 175; see Hatlestad v. Derwinski, 3 Vet.App. 213, 217 (1992) (amplifies Colvin by requiring that medical treatises be quoted rather than merely cited). With respect to the question of aggravation of a preexisting injury, particularly as it involves application of 38 C.F.R. § 3.306(b), the Board's consideration, on remand, may be affected by the decision in another case currently pending before the Court, Guerrieri v. Derwinski, U.S.Vet.App. No. 90-679 (Notice of Appeal filed July 20, 1990). In Guerrieri, a panel of this Court ordered the parties to brief the issue of whether section 3.306(b) is a valid regulatory exercise of the Secretary's statutory authority in light of the provisions of 38 U.S.C. § 1111 (formerly § 311). Guerrieri (order of Mar. 17, 1992). To the extent that the Guerrieri decision, if made prior to the completion of readjudication by the Board in this case, resolves issues as to the validity, meaning, and application of section 3.306(b), it would likely govern any application of that regulatory provision by the BVA on remand in the present case. See Tobler v. Derwinski, 2 Vet.App. 8 (1991). Upon consideration of the record, the Secretary's motion for summary affir-mance, and the appellant's informal brief, the Court holds that the BVA has failed to state adequately, pursuant to 38 U.S.C. § 7104(d)(1) and the analysis in Gilbert, the reasons or bases for its decision. On remand, the Board shall reexamine the evidence of record, seek additional evidence as necessary, and issue a well-supported decision. Fletcher v. Derwinski, 1 Vet.App. 394, 397 (1991). Accordingly, the August 10, 1989, BVA decision is vacated, the Court retains jurisdiction, and the record is remanded to the Board for prompt readju-dication and disposition in accordance with this decision. The Secretary shall file with the Clerk (as well as serve upon the appellant) a copy of any Board decision on remand. Within 14 days after filing of a final such decision, the appellant shall notify the Clerk whether he desires to seek further review by the Court. VACATED AND REMANDED.

3 C.M.A. 469

Opinion of the Court Paul W. BROSMAN, Judge: On the basis of facts hereafter recited, a general court-martial, convened at Camp Chitóse Number 1, Chitóse, Japan, convicted the petitioner, Weems, of involuntary manslaughter, the offense defined by Article 119(h)(2), Uniform Code of Military Justice, 50 USC § 713. The sentence adjudged by the court was dishonorable discharge, total forfeitures, and confinement at hard labor for one year. The convening authority approved the conviction and the sentence, but suspended the latter for one year, at which time, unless sooner vacated, it is to be remitted without further action. A board of review in the office of The Judge Advocate General, United States Army, has affirmed. Further review was granted by this Court for. consideration of the following two questions: "1. Whether the evidence is sufficient to sustain the finding of guilty. "2. Whether the instructions of the law officer were sufficient." II The evidence adduced at the trial— most of which necessarily came from petitioner — amounted in substance to this. Prior to the events with which we are concerned here, Weems knew the deceased, a Sergeant Gannon, by sight but not by name. On the evening of April 6, 1952, he and Gannon, at the suggestion of the latter, left the Non-commissioned Officers' Club at Camp Chitóse Number 2 en route to their barracks. As they reached an open area along their path, the deceased made homosexual advances toward petitioner. The latter demanded of the Sergeant his name, and stated that he proposed to report him to the proper authorities. Gannon thereupon struck Weems on the nose with his fist. The battery was partially blocked by the petitioner, who retaliated with three blows of his own in quick succession to Gannon's face. After the first, Gannon staggered back; at the second, he began to fall; and the third was struck as he was nearing the ground. The petitioner then proceeded on his way, and it was not until sometime later that he learned that he had killed Gannon. A medical expert witness testified that the cause of death was "asphyxiation due to- aspiration of blood which had hemorrhaged due to the fractures of the jaw." This same witness gave it as his opinion that a blow to the jaw would not normally cause such severe harm. He also stated that the injury inflicted in this case would not ordinarily cause death, and that the fatality here was due to "surrounding circumstances" — that is, to the position in which the accused fell, and the impairment of reflexes through alcoholic intoxication. Ill Clearly the facts here offer no indication of an intent to kill or to inflict great bodily harm. Consequently, the most serious degree of homicide in which petitioner conceivably may be guilty is that in which he was charged and of which he stands convicted: involuntary manslaughter committed in the perpetration of a battery, as denounced by Article 119(6) (2) of the Code, supra. Since it is uncontradicted that the acts of petitioner produced the death of the deceased, and since it is also undisputed that he did not intend such a result, our first and principal question from the standpoint of legal sufficiency must be one of whether Weems, in striking his victim, was engaged in the commission of a criminal battery. To put the inquiry otherwise, if Gannon had not met his death as a result of the encounter, would petitioner have been amenable to punishment for crime ? Not every striking of another constitutes a criminal battery. Of course, the striking must have been unlawful. "It must be done without legal justification or excuse . . . and without the lawful consent of the person affected. With respect to the excuse of self-defense, a person may meet force with a like degree of force, except that he may use force likely to result in grievous bodily harm only when retreat is not reasonably possible or would apparently endanger his safety, or when he is in his own home or at a place of duty where he is required to remain." Manual for Courts-Martial, United States, 1951, paragraph 207a. See also Clark and Marshall, Crimes (4th ed, Kearney) § 206; 1 Wharton's Criminal Law (12th ed, Ruppenthal) § 826. The evidence here shows that the deceased struck the initial blow, and was himself guilty of a battery committed on the person of petitioner. The latter was, therefore, justified in repelling force with force— but was bound in law to respond "with a like .degree of force." Manual, supra, paragraph 207a. In this respect, the evidence indicates that petitioner struck deceased in the face with his right fist three times, the third blow being struck as his adversary was falling to the ground. In seeking to evaluate the extent of the force utilized by the accused, a comparison in physical size of the two men is not without probative value, and doubtless was not without effect on the court-martial. The deceased was a small man, some 5 feet 6 inches tall and weighing approximately 125 pounds. Accused, on the other hand, stands 5 feet 11 inches in height and weighs 165 pounds. Moreover, it is to be noted that the latter was experienced as an amateur tournament boxer. There was no evidence that deceased had previously exhibited proficiency in this area. On the basis of the facts recounted earlier, it may be said with reasonable certainty that the delivery of the first blow by the deceased — -following his indecent proposal — warranted in law retaliation by petitioner for his own protection. Therefore, Weems' initial battery, at least, was in all probability either justifiable or excusable.. However, as petitioner himself related from the witness stand, the de- ceased stepped — or staggered — back after having been struck once by the former. Petitioner then struck a further blow, and, as the victim was in the act 'of falling, battered him yet a third time. Taking into account (1) the circumstances of each successive blow, (2) .the relative size and weight of the participants, (3) petitioner's knowledge of his own fistic versatility, and (4) the fact that the deceased at no time sought to pursue either the initial physical attack or his homosexual design, the court-martial could permissibly have concluded that Weems had utilized demonstrably more force than was necessary under the circumstances. It follows — unless his conduct was excusable or justified— that he was guilty of involuntary manslaughter. That is to say, that he had "unlawfully kill[ed] a human being . . . (2) while perpetrating . an offense, other than those specified in paragraph (4) of article 118, directly affecting the person." Uniform Code, supra, Article 119(b)(2). Assuming the presence of adequate instructions, we cannot at all say that the evidence did not justify such a conclusion, nor that it was in any way insufficient to support the court's findings. IV The instructions of the law officer were entirely adequate save in two possible particulars. At the conclusion of the evidence, he charged appropriately on the elements of the crime alleged, as well as on those of the lesser included offenses of negligent homicide and assault and battery. He then proceeded to instruct, on excusable homicide. Here, however, he confined himself solely to the possibility of a killing to save one.'s own life, or to prevent great bodily harm to oneself. Quite apparently, this approach to excusable homicide was unwarranted here in that the evidence before the court in no way suggested danger in that degree of gravity to the petitioner from Gannon, and because neither the evidence, nor the Government's case, pointed in the direction of an intentional killing. Indeed, both negated such a possibility. In substantial effect, therefore, there was no instruction on excusable homicide as it may have been related to the facts of this case. Moreover, there was no instruction dealing with the. possibility of a justifiable homicide. The unquestioned testimony of the accused indicates that he delivered three blows to the head and face of his victim, each with his right fist. We have earlier indicated our belief in the excusable character of the first of these, and as well our view that the totality of them may have involved the use of excessive force and resulted in a criminal battery. Within the framework of the evidence, however, we cannot rule out the possibility that the first blow, of itself, may have been sufficient to cause death,, and that as a consequence the two subsequent thrusts wholly lacked lethal effect. Captain Cyrus, the medical officer who performed the autopsy on the body of Gannon, expressed the opinion that a single forceful impact might have produced the jaw fracture involved, although he thought it more probable that additional contact had been required to bring about this result. He also indicated that the blow which produced the fracture at the same time rendered the victim unconscious and incapable of self assistance — so that, under the highly unusual circumstances presented, the deceased was asphyxiated through the inhalation of hemorrhaged blood. Since it is possible — factually speaking — that the deceased may have been slain by the initial blow, and since that first thrust may have been a "lawful act" done "in a lawful manner," we are confronted by the words of paragraph 197c of the Manual, supra, providing that a "homicide which is the result of an accident or misadventure in doing a lawful act in a lawful manner" is excusable. Thus — the argument would run — the fatal result, extraordinary in nature as it was, and wholly unintended and unanticipated by petitioner, would constitute "accident or misadventure," within the meaning of the mentioned Manual language. It appears, therefore, that one construction of the recorded evidence would lead to the conclusion that the death of Gannon may have been caused by conduct which was within the cloak of immunity provided by the theory of excusable homicide and the right "to meet force with a like degree of force." Manual, supra, paragraph 207a. The words of Article 119 of the Code, supra, proscribe, and those of the specification have reference to, the offense of involuntary manslaughter in a situation where the accused "unlawfully kills a human being . . . while perpetrating . . . an offense . . . directly affecting the person." Under this view, of course, the victim would not have been killed "unlawfully." Moreover, if not connected causally with the two latter blows — those which would constitute any oifense of battery possibly charge.able against the accused — in no wise was the fatality produced by the "perpetration" of an oifense directly affecting the person. Yet under another interpretation of the evidence, the killing may have been so connected with the two latter blows. Consequently, under this interpretation, the death of Gan-non did result from the perpetration of •a battery — that is, it was produced by the later, and not by the earlier, portion of petitioner's pugilistic action. A possible barrier to analysis of this nature, of course, consists in the fact that temporally the three blows were •connected closely and were, in a real •sense, parts of a single transaction. Nonetheless, it cannot be denied that, nnder one entirely permissible interpretation of the circumstances established through petitioner's unchallenged testimony, he should have been acquitted. 'Therefore, as in the case of other affirmative defenses, the accused, Weems, was doubtless entitled to demand that the court-martial be instructed concerning the excusable quality of the consequences of a proper meeting of force with force, and related matters. In this manner — and only so, it would seem —could the court have before it every alternative for assessment of petitioner's criminal responsibility. Although we regard the present case as one of borderline status in this respect, due •consideration for the rights of an accused person requires that we resolve doubts in Weems''favor here, and conclude that an appropriate instruction •on excusable homicide, and the propriety of meeting "force with a like degree of force" was demanded. No such charge was furnished the members of the court-martial. Instead the law officer instructed as follows: "With reference to the issue of self-defense which has been raised by the defense with respect to the offense of manslaughter, the court is advised that the accused is excused for killing in self-defense if he believed on reasonable grounds that killing was necessary to save his own life or to prevent great bodily harm to himself. To be excused for killing in self-defense a person must have believed on reasonable grounds that the danger of being killed himself or of receiving great bodily harm was imminent and no necessity will exist until the person, if he is not in his own house or at a place where he has a duty to remain has retreated as far as he safely can." This language, of course, compounded the error. It is clear that it requires consideration of two elements which have no relevance whatever to the facts of the instant case. One of these is a belief by the accused, based on reasonable grounds, that the killing was necessary to save his own life, or to prevent great bodily harm to himself. The other demands the finding of a retreat by him in so far as it might be accomplished in safety. By predicating the defense of excusable homicide on these two factors, the law officer failed to discriminate between the law of homicide governing intentional killing in . self-defense, on the one hand, and on the other, the principles controlling the right to repel force with equal force in cases of assault and battery. It is conceded that the petitioner did not at all intend to kill, nor did he make any sort of attempt to retreat. Here, therefore, the law officer furnished the court-martial with an erroneous formula, which assumed that the accused was defending on a theory, which was not relied on, and was wholly unsupported by evidence. Moreover, it tended to force court members to find against the accused because of the want of such evidence. While the impact of the inappropriate instruction cannot be measured with exactness, it is inescapable that it operated to produce more than a fair risk of prejudice to petitioner. V We perceive no error in the omission of the law officer to instruct that the accused might justifiably have used force "to prevent the commission of an offense attempted by force or surprise." There was simply no basis in evidence for the notion that he acted to prevent the commission of such a crime, and no likelihood that one was about to be committed. After Gannon's original homosexual advance, no further step in this direction was taken by him, and Weems recognized that there was no possibility of felonious activity of this nature. At page 70 of the record, the latter stated explicitly that he did not know when he struck him whether Gan-non was attempting to force him to commit sodomy, but that he did not believe that the Sergeant could compel him to engage in such an act. The only reasonable construction of the evidence seems to be that the deceased, upon receiving petitioner's rebuff, became annoyed and struck him. Thereafter, the latter, being provoked by the earlier revolting proposal, and disturbed by the blow to his nose, retaliated in kind. Accordingly, we conclude that the possible existence of justification on this theory was not reasonably raised by the evidence, and that no burden to instruct thereon rested on the law officer. For the reasons developed in Part IV of this opinion, the decision of the board of review is reversed and a rehearing is ordered. Chief Judge Quinn and Judge LATI-MER concur.

1 Ark. Terr. Rep. 12

Opinion of tiie Court. — The only question we deem important is the variance between the verdict of the jury and the judgment of the court. The verdict is for " eighty-nine dollars in damages," and the judgment is for damages assessed by the jury, and also for interest thereon from the rendition of the judgment before the justice of the peace. We are of opinion that the court erred in adding interest to the damages found by the jury. It was the province of the jury to decide upon the question of interest, and it must be presumed, if any ought to have been awarded, that it was included in their assessment of damages. , ' Reversed.

537 U.S. 1024

C. A. 9th Cir. Cer-tiorari denied. Justice Breyer took no part in the consider ation or decision of this petition.

522 U.S. 1080

Ct. App. Cal., 6th App. Dist. Certiorari denied.

287 U.S. 651

See same case, ante, p. 572.

568 U.S. 1164

C. A. 5th Cir. Cer-tiorari denied.

532 U.S. 986

C. A. 9th Cir. Certiorari denied.

568 U.S. 943

C. A. 6th Cir. Certiorari denied.

565 U.S. 882

Ct. App. Minn. Certiorari denied.

535 U.S. 1100

C. A. 11th Cir. Certiorari denied.

506 U.S. 815

Ct. App. Ore. Certiorari denied.

359 U.S. 938

Supreme Court of Pennsylvania, Eastern District. Certiorari denied.

409 U.S. 853

C. A. 5th Cir. Certiorari denied.

562 U.S. 1065

C. A. 9th Cir. Certiorari denied.

395 U.S. 940

Super. Ct. Del., New Castle County. Certiorari denied.

32 B.T.A. 1192

OPINION. MttRdock : The first question is, Did the petitioner realize a gain from the liquidation or partial liquidation of Doric in 1924, and, if so, how much was his gain? He reported no gain of that kind. The Commissioner added $44,331.25 to his income as a gain from the liquidation of Doric. He computed this gain by assigning to the Matz notes a value of 85 per cent of their face value and by holding that the petitioner was the owner of 500% shares of the Doric stock at the time of the distributions. The value of the Matz notes at that time was only 60 percent of their face value. Doric Apartment Co., 32 B. T. A. 1187, a case heard with the present case and others. The petitioner owned only 50% shares of the Doric stock at the time of the distributions in question. This finding is required not only by the uncontradicted testimony of several witnesses, but by the respondent's Exhibit D. That exhibit was offered and admitted in evidence without qualification. It shows that the petitioner " owned " 50% shares and the remaining shares were all " owned " by others. The petitioner received as his own Matz notes of the face value of $7,812.50. He claims that he purchased them and therefore the Commissioner erred in treating the receipt of them by him as a liquidating dividend from Doric. However, the evidence does not support this contention of the petitioner. The record contains many contradictions on this point. It clearly shows that none of the Doric stockholders bought, or paid anything for, the notes which they received and that they received all of the Matz notes in exact proportion to their respective stockholdings in Doric. Doric did not transfer the notes directly to its stockholders. It transferred series 1 and 2 to Joseph & Joseph, series 3 to Stitzel Distilling Co. and series 4 to H. H. Newmark Co. These transferees held the notes in trust for the Doric stockholders and almost immediately transferred the notes to the Doric stockholders without receiving any consideration directly from those persons. Joseph & Joseph, the Stitzel Distilling Co., and the H. II. Newmark Co. gave certain checks to Doric at the time they received the Matz notes from Doric. However, the cash distributions from Doric apparently were used to repay to Joseph & Joseph, the Stitzel Distilling Co., and the H. H. Newmark Co. the amount each had advanced to Doric in the checks referred to above. But even if the circumstance of these checks is not entirely consistent with the theory upon which the Commissioner has determined the deficiency, it is not sufficient, when taken with all of the other evidence, to entitle the petitioner to judgment upon this point, The amount of the checks was only one half of the fair market value of the notes. The Commissioner has deducted the amount of the checks from the liquidating distributions. He concedes that that amount should be deducted in computing the amount of the liquidating distributions so that the stockholders will only be taxed on the excess of the sum of the cash and value of the notes over the sum of the basis and the amount put back into Doric through the checks. The stockholders of Doric did not acquire the notes in proportion to or because of their interests in the makers of the checks. They did not acquire the notes as gifts. They did acquire them as stockholders of Doric indirectly from Doric. The net amount received exceeded the basis. Therefore the Commissioner did not err in taxing the petitioner with gain from the partial liquidation of Doric. Sec. 201 (c) and (g), Revenue Act of 1924. He did err in computing the amount of that gain. The basis of the Doric stock for gain or loss to the petitioner is not in dispute and therefore the parties can compute the correct gain in accordance with this opinion. The Commissioner erred in taxing the petitioner in 1924, 1925, 1926, and 1928 upon interest and gains on the Matz notes which belonged to his wife and the Fuhrmans. Another question is whether the petitioner continued to own the Matz notes of the face value of $7,812.50 which he received as his own. He claims that in 1924 he gave these notes to his wife. He likewise claims that in 1924, 1925, and 1926 he gave other securities, consisting of stocks, bonds, and notes, to his wife and the Commissioner erred in taxing him upon the interest and dividends from those securities. There is no dispute about the amounts involved. The only question is whether the petitioner has shown that he made the alleged gifts. A number of the essential elements of a bona fide gift have been established. Cf. Adolph Weil, 31 B. T. A. 899. Yet two of the essential elements of a completed gift are not satisfactorily established. The evidence does not show (1) a clear and unmistakable intention on the part of the donor to absolutely and irrevocably divest himself of the title, dominion, and control of the subject matter of the gift, in praesenti, and (2) an irrevocable transfer of the present legal title and of the dominion and control of the entire gift to the donee, so that the donor could exercise no further act of dominion or control over it. Cf. Jackson v. Commissioner, 64 Fed. (2d) 359. The Board said in Theodore C. Jackson et al., Administrators, 32 B. T. A. 470: The transfer and delivery, of property, including corporate stock, are not conclusive upon the question of intent where change of title is involved from the standpoint of taxation; and surrounding circumstances, including subsequent acts of the taxpayer, often establish intent more clearly than parole evidence. In the case of the stock certificates formal assignments were made on separate pieces of paper. Apparently this was done for the purpose of enabling the petitioner to detach the separate assignments and destroy them whenever he desired to sell any of the stock or place it as collateral for his own borrowings. He thus was able to use the stock as his own after the dates of the alleged gifts. He actually did use the certificates for his own purposes without consulting his wife. Cf. P. B. Fouke, 2 B. T. A. 219. She said that she knew nothing about the actual transactions hut left all of such affairs to her husband. She could remember no details but expressed confidence in her husband and said he had her permission to use the securities as he saw fit. The fact that he had access to the box in which they were kept might not be particularly important were it not for the added fact that he removed them at will. Cf. Jackson v. Commissioner, supra; Marshall v. Commissioner, 57 Fed. (2d) 633; certiorari denied, 282 U. S. 61; Richard Tuffli, 13 B. T. A. 1255. He also sold some of the securities and reported the gain or loss in his own return. He likewise reported the dividends on the stock for 1926 while he had it up as collateral on his borrowings. The stock was never transferred to his wife's name on the books of the various corporations until after the Commissioner had raised a question about the alleged gifts. Cf. Marshall v. Commissioner, supra. The notes were never endorsed by the petitioner. Some of them could be negotiated only by his endorsement. See sec. 3720 b-30, Carroll's Kentucky Statutes 1930. The dividends were paid to and received by the petitioner. He also received the interest and all proceeds from sales. He claims that he did not receive such funds for his own benefit, but the evidence is far from convincing on that point. His wife had a separate bank account, but none of the money was deposited in that account. Some of the money was deposited in the petitioner's account. The wife had power to draw on that account, but she never exercised her power. He said he purchased additional securities for his wife from the income and proceeds which he received. But he kept no records and could show no specific instances of such use of the funds. Although the securities were worth many thousands of dollars, yet the record does not show one instance where she received income or proceeds from them. The implication from all of the evidence is that the petitioner used the income and proceeds for his own purposes. Although the forms executed and the acts done by the petitioner at the dates of the alleged gifts would ordinarily show that gifts had been made, nevertheless subsequent acts of the petitioner indicate that he did not actually divest himself of title, dominion, and control so as to relieve himself from tax on the securities. The parties make no point of the difference between the facts relating to the stock and the facts relating to the notes and bonds. The Commissioner has held that the petitioner did not make present gifts of any of the securities in 1924, 1925, and 1926 and the income and profits were his during those years and during 1928. The evidence fails to show a valid gift of any of the securities. The interest and dividends for the four years were properly included in the income of the petitioner. The petitioner is taxable in 1928 on interest and gains upon any of the original $7,812.50 face value of the Matz notes which drew interest or were paid in that year. His profit was the excess of the amount received on a note, exclusive of interest, over 60 percent of its face value. The petitioner was not entitled to a deduction for 1928 representing accrued interest on the amount which he owed the Fuhrmans. He kept no complete books. He was not entitled to use an accrual method in reporting his income. He paid no interest to the Fuhr-mans in 1928 on the balance which he then owed them. The Commissioner correctly disallowed that deduction on the ground that the petitioner was on a cash basis. The remaining issue is whether any part of the deficiency for one or more of the years 1924, 1925, 1926, and 1928 was due to fraud with intent to evade tax. Sec. 275 (b), Revenue Acts of 1924 and 1926; sec. 293 (b), Revenue Act of 1928. The burden of proof upon this issue is by statute placed upon the Commissioner. Sec. 601, Revenue Act of 1928, amending sec. 907 (a), Revenue Act of 1924, as amended by sec. 1000, Revenue Act of 1926. The Commissioner in his brief urges that the petitioner's failure to report his full share of the income of the partnership of Joseph & Joseph for each year indicates fraud. The Commissioner introduced no evidence in respect to those items. The notices of deficiencies show that the Commissioner increased the petitioner's share of the partnership income for each year, but they completely fail to show that the failure of the petitioner to return the proper amount was done with fraudulent intent, or even knowingly. Cf. American Ideal Cleaning Co., 30 B. T. A. 529; Henry S. Kerbaugh, 29 B. T. A. 1014. The petitioner did not contest the adjustments. of partnership income, but he certainly did not admit fraud thereby. Failure to contest an adjustment made in determining the deficiency is not proof of fraud. The Commissioner can not sustain his burden of proof on a fraud issue by statements made in his notice of deficiency. James Nicholson, 32 B. T. A. 977. Those items must be disregarded in so far as the fraud issue is concerned. The above items and also the Fuhrman interest item for 1928 ($1,698.85 claimed as a deduction) were not properly pleaded by the Commissioner as facts upon which he relied to support the fraud issue. The only reference to them in the answers is in the references therein to the notices of deficiencies. This did not properly notify the petitioner and the Board that the Commissioner relied upon those items to show fraud. Furthermore, the answer for 1928 affirmatively indicates that the Commissioner relies upon the failure of the petitioner to report certain income, rather than upon any unwarranted deduction taken. The facts showing fraud should not only be proven, but they should be clearly pleaded. The items mentioned in this paragraph will be disregarded in so far as the fraud issue is concerned. See Bules 14 and 15; L. Schepp Co., 25 B. T. A. 419, 438; American Ideal Cleaning Co., supra. The petitioner's failure to report interest and gain on the Matz notes and Doric stock which actually belonged to his wife and the Fuhrmans is, of course, no evidence of fraud. The fact that the Matz notes were valued at only 3i0 percent of their face value instead of being valued higher does not evidence fraud under the circumstances. Doric Apartment Co., supra. There remain for consideration the circumstances surrounding the failure of the petitioner to report for 1924, 1925, and 1926 the interest and dividends upon the securities which he alleges he gave to his wife (including $7,812.50 face value of the Matz notes), his inconsistency in reporting gains and loss from the sale of some of those securities, his failure to report any profit in 1928 on his share of the Matz notes, and his failure to report a profit of $2,971 on the sale of Kansas City Southern stock in 1928. The latter item was reported on his wife's return. The petitioner made up that return. He testified that he had made a mistake in reporting that profit in the way he did and that he could not account for the mistake. This omission indicates negligence, but, standing alone, is not a sufficient basis for imposing the fraud penalty. His failure to report a profit for 1928 on the Matz notes is like his failure to report the interest and dividends on the whole lot of securities involved in the alleged gifts and need not be discussed separately. The respondent contends that the alleged gifts were mere shams, planned to mislead the Commissioner as to the ownership of the securities and thus to evade tax lawfully due from the petitioner on the income from those securities. We have already held that the petitioner has failed to establish the fact that actual gifts were made. But the question now is, Does the evidence affirmatively show that the alleged gifts were shams designed to evade tax? Doubts and omissions are now to be held against the Commissioner, upon whom rests the burden of proof. The evidence is not clear and convincing on this point and the petitioner must receive the benefit of the doubt. It is not clear that the petitioner used the income and proceeds from the securities for his own benefit after the dates of the alleged gifts. The obvious errors which he committed in his returns may have been due to carelessness rather than to a deliberate intent to evade tax. While at times his errors tended to reduce his tax, at others he included in his return items which, had he been consistent, he would have omitted. His very inconsistency and indifference to the result indicate negligence and carelessness rather than fraudulent intent. The proof is not clear and convincing that a part of any deficiency was due to fraud with intent to evade tax. The respondent contends in the alternative that a part of the defi.ciency for 1928 was due to negligence or intentional disregard of rules and regulations but without intent to defraud, and, therefore, the penalty provided in section 298 (a) of the Eevenue Act of 1928 should be imposed. He made no such claim in the proceeding relating to the other years. The petitioner was negligent in failing to include in his return the profit upon the sale of the Kansas City Southern stock. Decision will be entered umder Bule 50.

361 U.S. App. D.C. 330

Opinion for the Court filed by Circuit Judge TATEL. TATEL, Circuit Judge: Responding to a congressional mandate, the Federal Deposit Insurance Corporation imposed a one-time assessment on certain financial institutions in order to boost the amount of money in the fund that insures savings-and-loan deposits. Several dozen financial institutions now challenge the method the FDIC used to calculate how much money it needed to raise—a calculation that in turn determined the assessment the FDIC imposed. The district court disagreed with the institutions' assertion that the relevant statute unambiguously precludes the FDIC's method, and therefore dismissed their complaint. For the same reason, we affirm. I. Reacting to the failure of hundreds of savings and loan associations in the 1980s, Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub. L. No. 101-73, 103 Stat. 183 (1989) (codified as amended in scattered sections of 12 U.S.C.). Known as FIR-REA and designed to protect depositors against similar failures in the future, the law amended the Federal Deposit Insurance Act by, among other things, creating a Bank Insurance Fund to cover deposits of commercial banks and a Savings Association Insurance Fund to cover deposits of savings and loan associations. The two funds, administered by appellee Federal Deposit Insurance Corporation (FDIC), and known as BIF and SAIF, respectively, are financed by assessments levied on the financial institutions whose deposits they insure. Since its inception, SAIF has had a higher assessment rate than BIF, largely because the savings and loan associations it insures tend to be somewhat shakier than the banks insured by BIF. Congress recognized that this rate disparity could impel healthy savings associations to transfer their deposits to banks or even convert themselves into banks. Because such transfers and conversions would risk leaving SAIF with inadequate funds to insure members' deposits, FIRREA not only imposed fees on "conversion transactions" that transfer deposits between BIF members and SAIF members, but also temporarily prohibited such transactions. See 12 U.S.C. § 1815(d)(2) (2000). Neither the moratorium nor the fees, however, applied to so-called "Oakar transactions," under which a member of one fund acquires deposits from a member of the other and continues to pay proportional assessments into both funds. See id. § 1815(d)(3)(A)-(B). For example, a BIF member that acquired deposits from a SAIF member as part of an Oakar transaction would pay SAIF assessments on the acquired deposits and BIF assessments on its other deposits. See generally Wells Fargo, N.A. v. FDIC, 310 F.3d 202, 204-05 (D.C.Cir. 2002). Acquired deposits, known as adjusted attributable deposit amounts, or AADA, are adjusted over time according to a mathematical formula that accounts for subsequent growth. See 12 U.S.C. § 1815(d)(3)(C). Concerned that SAIF was undercapitalized, Congress passed the Deposit Insurance Funds Act of 1996, Pub.L. No. 104-208, § 2701-11, 110 Stat. 3009 (1996) ("Funds Act"), the statute at issue in this case. The Funds Act required the FDIC to impose a one-time assessment on certain deposits, and to do so at a rate that would immediately bring the level of SAIF assets up to the "designated reserve ratio." See Funds Act § 2702(a) (codified at 12 U.S.C. § 1817 note (2000)). FIRREA defines the designated reserve ratio as "1.25 percent of estimated insured deposits," see 12 U.S.C. § 1817(b)(2)(A)(iv)(I), and the Funds Act incorporates that definition, see Funds Act § 2710(6) (codified at 12 U.S.C. § 1821 note (2000)). In a final rule, the FDIC described how it calculated the rate for the one-time assessment. See 61 Fed. Reg. 53,834 (Oct. 16, 1996) (codified at 12 C.F.R. pt. 327 (2004)). The agency first determined the total amount of SAIF-insured deposits— including, of importance to this case, AADA—to be $688.1 billion. (In its calculations, the FDIC made other adjustments not at issue in this appeal.) Next, the agency calculated the balance SAIF would need in order to attain the designated reserve ratio, that is, 1.25 percent of estimated insured deposits. That balance was $8.6 billion, or $4.5 billion more than SAIF's balance at the time. Finally, the FDIC calculated what assessment rate, when levied on the funds that Congress designated for assessment (a designation not challenged in this case), would produce the required $4.5 billion. That rate was 65.7 cents per one hundred dollars of insured deposits. After the FDIC imposed this ' assessment in late 1996, several dozen financial institutions (which we will refer to collectively as the Banks even though the group included some savings and loan associations) complained to the agency about its calculation of the assessment rate. They contended that the Funds Act prohibited the FDIC from including AADA, i.e., funds that BIF members had acquired from SAIF members, in its calculation of the total amount of SAIF-insured deposits. The reason, the Banks asserted, is that in FIRREA Congress defined "SAIF reserve ratio"—a ratio that the Banks say lay at the heart of the calculations the FDIC made in preparing for the assessment— using a narrower phrase than what appears in the statutory definition of designated reserve ratio. Specifically, whereas in FIRREA Congress defined designated reserve ratio simply as "1.25 percent of estimated insured deposits," it defined SAIF reserve ratio as "the ratio of the net worth of the [SAIF] to the value of the aggregate estimated insured deposits held in all [SAIF] members." 12 U.S.C. § 1817(0(7) (emphasis added). Since AADA are held by BIF members, the Banks argued, they do not qualify as "insured deposits held in all [SAIF] members." According to the Banks, had the FDIC excluded AADA, they would have paid over $800 million less as part of the one-time assessment. The Banks asked FDIC to refund that money. The FDIC's Board of Directors issued a decision denying the Banks' refund request, largely on the ground that AADA can constitute "insured deposits held in all [SAIF] members" because under FIRREA financial institutions can be members of both BIF and SAIF. Challenging this decision, the Banks filed two separate suits in the United States District Court for the District of Columbia, charging that the Funds Act unambiguously required the FDIC to exclude AADA from its calculation of SAIF-insured deposits. In two separate opinions, the district court rejected their argument and granted the FDIC's motion to dismiss, holding that the Funds Act unambiguously required the FDIC to include AADA. The court went on to hold that even were the statute ambiguous, the FDIC's approach was reasonable. Most of the Banks, appellants herein, now appeal, and because the two cases present the same issue, we consolidated them and now resolve them together. II. We review de novo the district court's dismissal of the complaint, see, e.g., Taylor v. FDIC, 132 F.3d 753, 761 (D.C.Cir.1997), and "therefore, in effect, review directly the decision of the [agency]," Lozowski v. Mineta, 292 F.3d 840, 845 (D.C.Cir.2002). Because the Banks challenge the FDIC's interpretation of a statute the agency is charged with implementing, we proceed under the well-known framework set forth in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). We thus begin by asking "whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-43, 104 S.Ct. 2778. Normally, were we to find the statute ambiguous, we would next ask "whether the agency's answer [to the precise question at issue] is based on a permissible construction of the statute." Id. at 843, 104 S.Ct. 2778. In this case, however, the Banks make a Chevron step-one argument only, asserting that the Funds Act unambiguously resolves the question of whether the FDIC was to include AADA for purposes of calculating the proper assessment rate. They never argue that even if the Funds Act is ambiguous, they should still prevail because the FDIC's interpretation of the statute is unreasonable. See Appellants' Br. at 26 ("[T]he Funds Act is not ambiguous.... Accordingly, there is no basis for reaching Chevron step two in this case."). We thus begin and end our analysis at Chevron step one. The Banks assert that the Funds Act clearly required the FDIC to exclude AADA in calculating the SAIF reserve ratio because a key phrase in that ratio's definition is "estimated insured deposits held in all [SAIF] members." 12 U.S.C. § 1817(0(7) (emphasis added). "On its face," the Banks insist, "this phrase does not include any deposits held by BIF members." Appellants' Br. at 18. The FDIC responds that the Banks' focus on the term "SAIF reserve ratio" is misplaced because the Funds Act does not use that term. Instead, it refers to the designated reserve ratio, which—because it applies to BIF as well as SAIF—omits the words "held in all [SAIF] members" and simply uses the phrase "estimated insured deposits." See Funds Act § 2710(6). According to the FDIC, "Hocusing on the real statutory language quickly demolishes the Banks' 'plain language' argument." Appellee's Br. at 19. The Banks reply that even though the Funds Act mentions only the designated reserve ratio, that ratio "is not an independent concept," but "must be interpreted in tandem with the SAIF reserve ratio." Appellants' Reply Br. at 2. We need not resolve this dispute, for even assuming that the Banks are correct, their argument suffers from a simple but fatal flaw: it depends entirely on the erroneous assumption that the Funds Act unambiguously precludes financial institutions from membership in both BIF and SAIF. The argument depends entirely on this assumption because if financial institutions could be members of both funds, then the phrase "insured deposits held in all [SAIF] members" would encompass AADA even though AADA are held by BIF members, as those BIF members could also be SAIF members. The assumption is flawed, and hence the argument's dependence on it fatal, because just last term we squarely rejected the assumption, ruling in the identically named case of Wells Fargo, N.A. v. FDIC that nothing in FIRREA clearly precludes institutions from membership in both funds. See 310 F.3d at 206. "[Section 1817(i)'s definitions" of BIF and SAIF, we held, "do not prohibit institutions from being members of both funds simultaneously." Id. The Banks may prevail, therefore, only if we find statutory language that we deemed ambiguous last term to be unambiguous now. Rather than urging us to overrule Wells Fargo, something this panel obviously lacks authority to do, see LaShawn A. v. Barry, 87 F.3d 1389, 1395 (D.C.Cir.1996) (en banc), the Banks argue that Wells Fargo is inapplicable to this case. Their reasons for so thinking, however, are unpersuasive. First, the Banks insist that this case involves a different question than did Wells Fargo. But while the ultimate question in that case was indeed different— hardly surprising, as one would hope parties wouldn't re-litigate the exact issue they lost on eighteen months ago—the intermediate question, on which the ultimate question depended in that case and also depends here, was identical: does the statute clearly bar financial institutions from membership in both BIF and SAIF? Our answer to that question in Wells Fargo must also be our answer here, and that answer dooms the Banks' Chevron step-one argument, the only argument they make. Next, the Banks point out that in Wells Fargo we interpreted the language of FIRREA, while here we interpret the language of the Funds Act. That makes no difference, however, because the Funds Act draws its definitions of the key terms—"SAIF member" and "BIF member"—from FIRREA: "[t]he terms 'Bank Insurance Fund member' and 'Savings Association Insurance Fund member' have the same meanings as in" FIRREA. Funds Act § 2710(2). As we held in Wells Fargo, those definitions do not unambiguously bar financial institutions from belonging to both funds, meaning that AADA can be "insured deposits held in all [SAIF] members." Finally, the Banks point out that in the Funds Act, Congress used a newly created term, "SAIF-assessable deposit," to describe funds subject to the one-time assessment. See Funds Act § 2710(8). Because the new term specifically includes AADA, the Banks argue that the phrase "deposits held in all [SAIF] members"— which the Banks say the FDIC used in determining the size of the assessment— must not include AADA. Otherwise, "it would not have been necessary for Congress to create the new term." Appellants' Br. at 19. Indeed, the Banks add, "Congress's decision to create a new term demonstrates its recognition that BIF-member AADA was not a deposit held in a SAIF member for purposes of the Funds Act." Id. Like the Banks' basic argument, this contention rests on a false premise. Although it is certainly true that "[w]hen Congress uses different language in different places in the same statute, a court must presume that Congress intended the language to have different meanings," id. at 19 (citing Barnhart v. Sigmon Coal Co., 534 U.S. 438, 452, 122 S.Ct. 941, 951, 151 L.Ed.2d 908 (2002)), that rule has no applicability to this case. As noted above, the Funds Act nowhere uses the term SAIF reserve ratio, which contains the phrase "deposits held in all [SAIF] members." The Act mentions only the designated reserve ratio, which omits that phrase. Hence, the Banks' assertion that we should interpret the phrase as excluding AADA because it appears in the same statute as the term "SAIF-assessable deposits," which explicitly includes AADA, fails, for in fact the two do not appear in the same statute. In any event, we disagree with the Banks' argument that Congress must have created the new term because it knew that the phrase "deposits held in all [SAIF] members" unambiguously excluded AADA. Congress may instead have reached the same conclusion we did in Wells Fargo, i.e., that the phrase is ambiguous because FIRREA's (and hence the Funds Act's) definitions of BIF member and SAIF member do not preclude dual membership. Rather than use an ambiguous phrase, Congress may have decided to create and use an unambiguous one. To be sure, we cannot know whether Congress made such a decision, but given the possibility that it did—a possibility we think no less plausible than the Banks' explanation for Congress's action—we decline the Banks' invitation to declare unambiguous the language that we deemed ambiguous just last term. The district court's judgments are affirmed. So ordered.

41 Cust. Ct. 336

Opinion by Mollison, J. In accordance with stipulation of counsel that the merchandise consists of chairs similar in all material respects to those the subject of Davies Turner & Co. v. United States (45 C. C. P. A. 39, C. A. D. 669), the claim of the plaintiff was sustained.

516 U.S. 1177

C. A. 9th Cir. Cer-tiorari denied.

537 U.S. 1079

Sup. Ct. Ohio. Certiorari denied.

464 U.S. 1032

C. A. 7th Cir. Certiorari dismissed under this Court's Rule 53.

508 U.S. 938

Petitions for writs of habeas corpus denied.

217 U.S. 71

Mr. Chief Justice Fuller delivered the opinion of the court, after reading the following memorandum: This .opinion, including the preliminary statement, was prepared by our Brother Brewer, and had been approved before his lamented death. It was recirculated and again agreed to, and is adopted as the opinion of the court. Petitioners contend that by their tender they made a contract with the State for a conveyance of the lands in controversy; that this contract was broken, and that they were deprived of their rights thereunder by the legislation of the State and the action of its officers in pursuance thereof; that thus a Federal question arises under Art. I, § 10, of the Constitution of the United States,' which forbids a State to pass a "law impairing the obligation of contracts." Their argument is briefly this: The lands were not obtained by McEnery under his contract with the State; the statute authorizing that contract provided that his payment should be solely out of the lands obtained by him from the United States. Notwithstanding this limitation, certificates were issued to him authorizing location upon any lands included within the grant of Congress by the act of 1849, and they were in fact located upon the lands in controversy — lands which were not obtained by McEnery; that this location, even when followed .by patent, did not segregate these lands from the public domain of the State, and they remained therefore open to purchase by any one complying with the statutes; that petitioners were the first and only parties who tendered to the State the prescribed price; that thereby they acquired a vested right to a conveyance by the State of the legal'title-. But it is not contended that the patents were not sighed by the proper officers and in due form to convey the title of the State to the patentees. It is not suggested that McEnery received any greater amount of lands than he was entitled to receive under his contract, and it does not appear from the record that the patents, on their face, disclosed any invalidity in the title conveyed. While an examination of the records would, if the facts stated in the petition are true, show that they were improperly issued yet this could be- ascertained only by looking beyond the face of the patent. Now, whether the patents were wrongfully issued or could be set aside was a matter to be settled between the State and the patentee. . The State undoubtedly received something, for the acceptance of every McEnery certificate released the State pro tanto from its obligation under the contract to McEnery.- • Whether it should remain satisfied with that payment or not was for the State to determiné. If it were' not satisfied it could take proper proceedings to set aside the patent, but no individual was authorized to act for the State. The rule in respect to the administration of the public domain of the United States is well settled. In Doolan v. Carr, 125 U. S. 618, 624, Mr. Justice Miller.said: "There is no question as to the principle that where the officers of the Government have issued a patent in due form of law, which on its face is sufficient to convey the title to the land described in it, such patent is to be treated as valid in actions at law, as distinguished from suits in equity, subject, however, at all times to the inquiry whether such officers had the lawful authority to make a conveyance of the title. But if those officers acted without authority; if. the land which they purported to convey had never been within their control, or had been withdrawn from that control at the time they undertook to exercise such authority, then their act was void — void for want of power in them to act on the subject-matter of ther patent, not merely voidable; in which latter case, .if'the circumstances justified such a decree, a direct proceeding, with proper averments and evidence, would .be required to establish that it was voidable, and should therefore be avoided.". In Hastings &c. Railroad Company v. Whitney, 132 U. S. 357, 363, Mr. Justice Lamar, who had been Secretary of the Interior, discussed the question of a homestead entry, and, after referring to Kansas Pacific Railway Co. v. Dunmeyer, 113 U. S. 629, added: "Counsel for plaintiff in error contends that the case just cited has no application to the one we are now considering, the difference being that in that case the entry existing at the time of the location of the road was an entry valid in all' respects, while the entry in this case was invalid on its face, and in its inception; and that this entry having been made by an agent of the applicant, and based upon an affidavit, which failed to show the settlement and improvement required' by law1, was, -on its face, not such a proceeding in the proper land office, as could attach even an inchoate right to the land. ' "We do not think- this contention can be maintained. Under the homestead law three things are needed to be done in order to constitute an entry on public lands. . If either one of these integral parts of an entry is defective, that is, if the affidavit be insufficient in' its showing, or if the application itself is informal, or if the payment is not made in actual cash, the register and receiver are justified in rejecting the application. But'if, notwithstanding these defects, tiae application is allowed by the land officers, and a certificate of entry is delivered to the applicant, and the entry is made of record, such entry may be afterwards canceled on account of these defects by the Commissioner, or on appeal by the Secretary of the Interior; or, as is often the practice, the entry may be suspended, a hearing ordered, and the party notified to show by supplemental proof a full compliance with the requirements of the department; and on failure to do so the entry may then be canceled. But these defects, whether they be of form or substance, by no means render the entry absolutely a nullity. So long as it remains a subsisting entry of record, whose legality has been passed upon by the Jand authorities, and their action remains unreversed, it is such an appropriation of the tract as segregates it from the public domain, and therefore precludes it from subsequent grants." In In re Emblen, 161 U. S. 52, 56, Mr. Justice Gray thus stated the law: "After the patent has once been issued, the original contest is no longer within the jurisdiction of the land department. The patent conveys the legal title to the patentee; and cannot be revoked or set aside, except upon judicial proceedings instituted in behalf of the United States. The only remedy of Emblen is by bill in equity to charge Weed with a trust in his favor. All this is clearly settled by previous decisions of, this court, including some of those on which the petitioner most relies. Johnson v. Towsley, 13 Wall. 72; Moore v. Robbins, 96 U. S. 530; Marquez v. Frisbie, 101 U. S. 473; Smelting Company v. Kemp, 104 U. S. 636; Steel v. Smelting Company, 106 U. S. 447; Monroe Cattle Company v. Becker. 147 U. S. 47; Turner v. Sawyer, 150 U. S. 578, 586." See also McMichael v. Murphy, 197 U. S. 304, 311. Obviously, in this case the Supreme Court of Louisiana followed the, practice obtaining in respect to the public lands of the United States. But if it had not and had declared simply the law of the State' of Louisiana its decision would, doubtless, be' controlling on this court, for, in the matter of the sale and conveyance of lands belonging to the public no one State is obliged to follow the legislation or decisions of another State, or even those of the United States, but may administer its public lands in any way that it sees'fit, so long as it does not conflict with rights guaranteed by the Constitution of the United States. Counsel criticize the. opinion of the Supreme Court' of Louisiana, in that it speaks of all the lands as having gone to patent while it is said in the petition that some of the assignees "stood upon the certificates." Whether the language of the petition technically justifies the construction placed upon it by the Supreme Court of the State, is immaterial. Certainly, .there is no naming of any single tract as covered by certificate alone and not patented, and if any tract was held under a certificate of location it was, within the scope of the rul ing of the Supreme Court, not subject to other entry or purchase. We see no error in the ruling of the Supreme Court, and its judgment is Affirmed.

240 U.S. 605

Mr. Justice Pitney delivered the opinion of the court. This is a writ of error under the Criminal Appeals Act of March 2, 1907 (ch. 2564; -34 Stat. 1246), to review a judgment of the District Court for the Southern District of Florida sustaining a demurrer to an indictment for fraudulently misrepresenting the weights of certain shipments of lumber, in violation :of the third paragraph of § 10 of the Act to Regulate Commerce, as amended June 18,1910 (ch. 309; 36 Stat. 539, 549). The demurrer was sustained upon the ground that the statute, as construed by the Circuit Court of Appeals for the Sixth Circuit in Davis v. United States, 104 Fed. Rep. 136, requires the prosecution to take place in the District where the goods are billed by the shipper and the delivery for transportation takes place, which in this instance was not in the Southern District of Florida, but in Georgia. The indictment contains ten counts, charging as many different offenses. They are alike in form, and a summary of the first will suffice. It recites that the South Georgia Railway Company was a common carrier by rail engaged in the interstate transportation of yellow pine lumber for hire from Baden, in the State of Georgia, to Greenville, in the Southern District of Florida, and had filed and published schedules and tariffs showing the rate and charge for transportation of such lumber under six inches in thickness in carload lots between those points to be $7 for each carload lot of the weight of 24,000 pounds, excess in proportion; that the' schedules and tariffs further provided that when the actual weight of a shipment was not ascertained at point of shipment or at destination or in transit, the freight charges should be based upon an estimated weight of 5,000 pounds for each 1,000 feet; that the. Union Manufacturing Company was and is a corporation engaged in shipping said property from Baden to Greenville, and J. T. Prince was its agent, having general charge and control of the shipments and the payment of freight, charges therefor; that on a date specified, and while said schedules and tariffs were in effect, said Railway Company transported from Baden to Greenville for the Manufacturing Company a specified carload of yellow pine lumber under six inches in thickness, and delivered it at Greenville to the Manufacturing Company; that the actual weight of said carload.lot was not ascertained at Baden, or at Greenville, or in transit; that the Manufacturing Company thereafter unloaded the lumber from the car and ascertained the number of feet thereof; and that the said Company, and Prince acting as its agent, well knowing the number of feet to be 9,074, then and there falsely and fraudulently represented to the Railway Company that the number of feet was 7,200, in consequence of which the Railway Company charged and the Union Lumber Company paid for the transportation of said lumber less than the lawful charge provided, in the schedules and tariffs and at a less rate than the lawfully established rate. In our opinion, the court below misapplied the decision in Davis v. United States, 104 Fed. Rep. 136. In that case, which arose under the Act as it stood before the amendment of 1910 (March 2, 1889, c. 382, 25 Stat. 855; 1 Supp. Rev. Stat. 687), the circumstances were very different from those now presented. The acts charged were misrepresentations by false billing and classification of certain property delivered by defendants to the railway company at Cincinnati, Ohio, for transportation thence to Dallas, Texas. The contract of carriage was made at Cincinnati, where defendants resided and carried on business, and the bill of exceptions showed that everything connected with the shipment of the goods except, the carriage and delivery took place in Cincinnati. The court said (p. 139): "We think that false billing or other misrepresentation of the goods as stated in the Act, which results in their being received by the carrier under a contract of carriage thus fraudulently obtained, is the' obtaining of transportation within the meaning of the statute. Then the fraudulent conduct of .the shipper has borne its fruit, and every act and intent which constitutes • the offense is complete." It was accordingly held that the offense was indictable in the Southern District of Ohio, and not in the Northern-District of Texas, within which was the destination of the goods. We are not called upon to either concede or question the propriety of this decision upon the facts that were there presented. General expressions contained in the opinion are of course to be interpreted in the light of those facts. Another case of the same kind is In re Belknap, 96 Fed. Rep. 614. These cases are not in point with the present. In each of them the fraud was that of the consignor. Here it is the consignee and its agent against whom fraud is charged. The fact that the consignee was also the consignor is of no significance, since the fraud alleged was in what it did as consignee.) There the .fraud inhered in the making of the contract of carriage; here it had to do with the liquidation of the amount payable for freight at destination. The Act, by its very terms, applies to consignees as well as to consignors. But as it applies only to interstate transportation, the consignee is normally a resident of a different State, arid therefore of a different District, from that where the goods are billed by the shipper and the. delivery for transportation takes place. To say, therefore, that the Act contemplates an indictment only in the District where the goods are billed by the shipper is in effect to say that in most cases the consignee either may not be indicted at all Qr else must be indicted in a District of which he is not a resident, and which in many instances he may never have visited. We hold that the offenses charged in this indictment were "wholly or .in part committed" in the Southern District of Florida. See United States v. Freeman, 239 U. S. 117. It is insisted in behalf of defendants in error that since the indictment shows that the transportation had been completed and the lumber delivered to the consignee before the alleged fraudulent representations were made, it cannot be said that the fraud charged amounted to either obtaining or attempting to obtain transportation for the property at less than the established rates. If the statute on which the indictment is based were analogous to the familiar acts rendering criminal the obtaining of money or other property by false pretenses, the argument would be cogent. Under such statutes, it is commonly if not universally held to be essential to criminality that the false pretense shall precede the obtaining of the property. People v. Haynes, 14 Wend. 547, 563, 564; reversing 11 Wend. 557; State v. Church, 43 Connecticut, 471, 479; State v. Moore, 111 N. Car. 667, 674; State v. Willard, 109 Missouri, 242, 247; Watson v. People, 27 Ill. App. 493,496. The statutory provision with which we are dealing has a very different purpose. It is not designed especially to protect the property rights of the carrier, for the offense is made equally punishable whether committed with or without the consent or connivance of the carrier. It originated in the 1889 amendment to the Act to Regulate Commerce (March 2,1889, c. 382; 25 Stat. 855, 858; 1 Supp. Rev. Stat. 684, 687), and is but one of many provisions enacted by Congress with the object of preventing discriminations and favoritism as between shippers by requiring the publication of tariffs and prohibiting any departure from them. The prohibitions of the original act of February 4, 1887 (c. 104, § 2, 3, 6, 10; 24 Stat. 379; 1 Supp. Rev. Stat. 529), were addressed to the carrier alone. The 1889 amendment brought shipper and consignee within the scope of the law, both by enacting that false billing, etc., should be punishable criminally, and by providing similar punishment for inducing discriminations by the. payment of money or other thing of value, solicitation, or otherwise. The June 28, 1910, amendment (c. 309, § 10; 36 Stat. 539, 549), extended the range of the prohibition to certain other fraudulent practices by consignors and consignees committed for like purposes. In denouncing as criminal "false billing, false classification, false weighing, false representation of the contents of the package or the substance of the property, false report of weight, false statement, or other device or means" employed in order to "obtain or attempt to obtain transportation for such property at less than the regular rates then established," the lawmaker regarded not merely the physical transportation of the property, but the entire transaction through which consignor or consignee might seek to evade the policy of the Act to subject all interstate shipments to uniform rates of charge prescribed in published tariffs. In a case where for- any reason, the payment of the freight is not made prior to the delivery of the gpods to the. consignee but remains to be afterwards adjusted, the effort to obtain an advantage not permitted by the schedules may still be. exerted through fraudulent representations influencing the adjustment of the freight, with precisely the same effect as if the representations had preceded delivery of the. goods.- When this is accomplished, there is a fraudulent obtaining of transportation at less than the established rate, within the meaning of the prohibition. Thus it needs only that we interpret the statute according- to the plain meaning of the terms employed, in the.light of subject-matter and context, in order to conclude, as we do, that the acts set forth in this indictment are punishable criminally under the Act. The judgment of the District Court loill he reversed, and the cause remanded for further proceedings in conformity with this opinion. "Any person, corporation, or company, or any agent or officer thereof, who shall deliver property for transportation'to any common carrier subject to the provisions of this Act, or for whom, as consignor or consignee, any such carrier shall transport property,' who shall knowingly and willfully, directly or indirectly, himself or by employee, agent, officer, or otherwise, by false billing, false classification, false weighing, false representation of the contents of the package or the substance of the property, false report of weight, false statement, or by any other device or means, whether with or without the consent or connivance of the carrier, its agent, or officer, obtain or attempt to obtain transportation for such property at less than the regular rates then established and in force on the line of transportation; . . . shall be deemed guilty of fraud, which is hereby declared to be a misdemeanor, and shall, upon conviction thereof in any court of the United States of competent jurisdiction within the district in which such offense was wholly or in part committed, be subject for each offense to a fine," etc.

33 Cust. Ct. 450

Opinion by Oliver, C. J. In accordance with stipulation of counsel that the merchandise consists of compass rings similar in all material respects to those the subject of Abstract 58039, the claim of the plaintiff was sustained.

394 U.S. 930

C. A. 6th Cir. Certiorari denied. Mr. Justice White is of the opinion that certiorari should be granted.

459 U.S. 1215

C. A. 5th Cir. Certiorari denied.

303 U.S. 626

The rule to show cause herein is discharged and the motion for leave to file petition for writ of habeas cofpus is denied.

135 U.S. 286

Mr. Justice Miller delivered the opinion of the court. This'is a writ of error to the Circuit Court of the United States for the District of Colorado. The action was brought in that court by Peter Campbell et al., plaintiffs, against The Iron Silver Mining Company, defendant, and was in- the nature of an ejectment to recover possession of a mineral lode called The Sierra Nevada lode ruining claim. The pleadings merely set up that the plaintiffs were the owners of said lode or claim, describing it, and that defendants had intruded upon their possession. The defendants denied that plaintiffs were the owners of the claim, and asserted their own title. The case was submitted to the court without a jury. The court made the following finding of facts and conclusions of law on which it rendered a judgment for the plaintiffs: " This cause coming on for trial before the court, and the parties appearing by their attorneys, and having, in open court and by their stipulation in writing filed with the clerk, waived a trial by jury, and the court, having duly heard and considered the evidence, oral and documentary, offered by the respective parties, and having duly deliberated thereon, finds the following facts and conclusions of law, viz.: " That the defendant, The Iron Silver Mining Company, is a corporation created and organized and existing under and by virtue of the laws of the State of New York, and has complied with the laws of the State of Colorado, so as to entitle it to do business and sue and be sued in the State of Colorado^ "That the mining ground and property described in the pleadings in this action were a part of the public domain of the United States until the title thereof passed out of the United States by the issuing of patents, as hereinafter set forth. "That the said patent of the Sierra Nevada lode mining claim was issued to the said plaintiffs and their grantors and predecessors in interest at the time thereto stated, and by duly executed and recorded deeds of conveyance the title to the land mentioned and described in the said patent and the complaint in this action has been conveyed to and is seized, owned and possessed by the said plaintiffs, and was so seized, owned and possessed by them at the time of the commencement of this action. "That on the 13th day of November, 1878, said William Moyer duly made application in the proper United States land office to be allowed to enter and pay for a patent for said William- Moyer placer mining claim, being survey lot No. 300 and mineral entry No. —; that on the 21st day of February, 1879, said William Moyer was allowed to and did make entry in said land office of the United States and paid for the said placer claim, and that on the 30th day of January, 1880, the said William Moyer placer patent was issued to the said William Moyer for the tract of land described in said placer patent, and that by virtue of duly executed and recorded deeds of conveyance • the said defendant company has become the owner of and seized of all the right, title and interest in and to the said tract of land described in and conveyed by the said placer patent. " That the ground described in said patent of plaintiffs for the said Sierra Nevada lode claim is principally located or situated within the exterior boundaries of the tract of land described in said placer patent for the said- William Moyer placer claim and is a part of the same land, and the maps introduced in evidence and contained in the bill of exceptions and record correctly delineate the surface of the ground com.prised within the exterior boundary lines of the said placer patent and the said lode patent, respectively. " And the court finds as conclusions of law from the foregoing findings of fact, that it is conclusively presumed and found, from the face of said Sierra Nevada lode patent, that the said Sierra Nevada lode claim had been duly discovered, located, and recorded, and owned by the said patentees in said Sierra Nevada lode patent and their predecessors in interest, (the said plaintiffs,) within the exterior boundaries of the said tract of land described in said William Moyer placer patent, before the time of the said application for the said placer patent, and the mining ground described in the said complaint and conveyed by the said lode patent is excepted out of the grant of the land described in and conveyed by the said placer patent. " And the court finds that the plaintiffs were, at the time of the commencement of this action, and still are, the owners and seized of said tract of land described in said complaint and called the Sierra Nevada lode mining claim; that the said defendant company wrongfully withheld, and still doe's wrongfully withhold, the possession thereof from the said plaintiffs. 'It is, therefore, ordered and adjudged that the plaintiffs-have judgment against said defendant company for possession of the mining ground in dispute, as described in the. complaint herein, with costs, to be taxed. " And forasmuch as the matters and things' above herein set forth do not appear of record, and the said defendant tenders this its bill of exceptions, and prays that the samp may be signed and sealed by the judge of this court, and pursuant to the statutes in such case made and provided, which is accordingly done, this 8th day -of July, 1885, being one of the judicial days of the May term of the said court, a.d. 1885, at the city of Denver, in said district. " (S'g'd) . Moses- Hallett, DisH Judge J This finding of facts and conclusions of law is embodied in and made a part of a bill of exceptions. We think the correct practice in cases submitted to a court without a jury is for the court to -make its finding of facts and its conclusions of law a separate paper from pleadings or bills of exceptions. The only thing of any consequence in the bill of exceptions, containing a considerable amount of oral testimony, almost every word of which is objected to by one party or the other, is the two patents under which the adverse parties claim title. From this and the finding of facts it appears that the patent under which the Iron 'Silver Mining Company claims was issued .to William Moyer on his application, made in the proper land office on the 13th of November, 1878, and bears date January 30, 1880; and that the one under which plaintiffs below claim bears date March 15, 1883. It is conceded that both patents cover the land in controversy. The Moyer patent, being the elder, is for fifty-six acres of placer mining land. The plaintiffs' patent, though of a later date, is for a vein or lode of mineral deposit which runs under the surface of the ground covered by defendant's patent. The conclusion of law which controlled the judgment of the Circuit Court in the present case is that "it is conclusively presumed and found, from the face of the said Sierra Nevada lode patent, that the said Sierra Nevada lode claim had been duly discovered, located and recorded, and owned by the said patentees in the said Sierra Nevada lode patent and their pred.ecessors in interest, the said plaintiffs, within the exterior boundaries of said tract of land described in said William Moyer placer patent, before the time of the said application for the said placer patent, and the mining ground described in the said complaint and conveyed by the said lode patent is excepted out of the grant of the land described in and conveyed by the said placer patent." It is the soundness of this conclusion of law from the facts found which we are called upon to review. The real principle on which the plaintiffs relied to establish the superiority of their claim .for the lode in controversy is, that it was a known lode, within the meaning of the act off Congress on that subject, at the time of the application for the Moyer patent, and therefore, by the act of Congress on that subject, the title to it did not pass to the grantee in that patent. If the fact were proved that the Sierra Nevada lode was a known lode, within the limits of the placer patent obtained by Moyer, at the time of his application, the contention of the plaintiffs is sound. But notwithstanding nearly all the testimony, particularly all the oral testimony found in the bill of exceptions, was introduced for the purpose of proving the existence of this lode, and that it was known to Moyer or his grantor, and in refutation of that proposition, the court in its finding of facts makes no finding on that subject. It was obviously the opinion of the court, and it is the ground on which defendants in error support its judgment here, that the patent issued by the government is conclusive evidence that such vein was known so as to authorize the land department to issue a patent for it as being reserved out of the grant in Moyer's patent. It is very singular that the patent to Campbell, and others for the Sierra Nevada claim makes no reference to this reservation in Moyer's patent, and no statement that the existence of the lode was known to anybody at the time the Moyer patent was applied for or when it was granted. There is nothing on the face of this patent to show- that there was any contest before the land department on this question of the existence of the vein, and the knowledge of it. on which the validity of the patent is now supposed to rest. We have, therefore, the junior patent, which is held to defeat the prior patent, with no reference to any contest between the different claimants before the land office, and we have the court, in deciding the present case, while hearing the testimony which would defeat or sustain that patent, utterly ignoring it, .and making no finding upon the subject which the defendants in error believe to be involved in the issue. The reason of. this action by the court is very plain. It proceeds upon the idea that it is conclusively presumed, and found, . from the face of the Sierra Nevada lode patent, that the said lode claim had been duly discovered, located and recorded. within the exterior boundaries of 'the land described in- the said Moyer placer pa,tent before the application for the said Moyer patent. As there is not a word said on the face of the Sierra Nevada lode pátent on this subject, we must look fpr some* inference of law, rather than to the statement of facts. upon which this presumption conclusively arises.' . That presumption of law, as explained by counsel, is that, since the law under which the Moyer patent issued reserved from' its operation any known vein or lode within the exterior boundaries, it is presumed that, when the officers of the land department issued the patent for the Sierra Nevada lode, they made such inquiries into the question of the existence of, this lode, and its being known to the grantee in the Moyer patent, as authorized it to decide that question; and that that decision is binding and conclusive forever upon all parties. We are not able to agree with this statement of the law. The proceedings in the land department for securing title to government lands are usually ex parte. There is no general provision of law which requires a party who can make .the necessary proofs, which on their face entitle him to purchase land from the government, to call any individual as a contestant, or to notify other parties interested in the matter that he is about to proceed. Each one proceeds in his' own manner, and establishes his own claim, and the officers of the government frequently do not know that there is any other party claiming the same land, while there may be such a party who has' also taken proper steps, and whose rights are superior to those of the party presenting himself before the officers of the government. It is this ex parte proceeding which is supposed to bind the claimants under the Moyer patent conclusively and forever in regard to their knowledge of the existence of this Sierra Nevada lode at the time they made application for their patent within its limits. We are not ignorant of the many decisions by which it has been held that the rulings-of the land officers in regard to the facts -on which patents for land are issued ar.e decisive in actions at law, and that such patents can only be impeached in regard to those facts by a suit in chancery brought to set the grant aside. But those are eases in which no prior patent had been issued for the same land, and where the party contesting the patent had no evidence of a superior legal title, but was compelled to rely on the equity growing out of frauds and mistakes in issuing the patent to his opponent. Where each party has a patent from the government; and the' question is as to the superiority of the title under those patents, if this depends upon extrinsic facts not shown by the- patents themselves, we think it is competent, in- any judicial proceeding where this question of superiority of title arises, to establish.it by proof of these facts. We do not believe that the government of the United States;' having. issued a patent, can, by the authority of its own officers, invalidate that patent by the issuing of a second one for the same property. If it be said that the question of the reservation of this vein as a known lode under the law on that subject makes a difference in this respect, and- that the land office has a right to inquire whether such lode existed, and whether its existence was known to the patentee of the first patent; wc answer that a patent, issued under such'circumstances to the claimant of the lode claim, may possibly be such prima fade evidence of the facts named as will place the parties in a condition to contest the question in a.court. •But we are of opinion- that it is always and ultimately a question of - judicial cognizance. The first patent conferred upon Moyer the right to this vein and to all other veins within the limits of his fifty acres of -placer claim. There is excepted from that grant any lode existing and known at the time, application was made for his patent. Whether such- a lode, did exist, and whether it was known to him, is a question which he has a right to have tried by a court of justice, and from which he cannot be excluded by the subsequent action of the officers of the land department. It is not necessary to. consider whether there may not be reservations of a character -which could be thus disposed of by the proper land offices; for instance, a reservation of any land heretofore patented or granted to other parties. There is nothing there to decide but to look at the records of the land office and.see whether any land within that boundary ever had- been granted. A reservation of a.specific boundary, laid down so.as to be identified, in the first patent, needs no judicial action to determine what 'it is that is reserved. But in-.the present case, two facts requiring judgment, dis: cretion, knowledge of .the, law and the balancing of testimony, are' essential to the exercise of the right to grant the property-to some -other party. One of these, the existence of such a vein, is a question often of great conflict of evidence, requiring the weighing of testimony.. The other, the most important of all, the most difficult to decide, the least likely to be decided correctly .by ex parte testimony or in expoMe proceedings, is .the question whether, if such mine existed, it was known to the party who applied for the patent at the time application was made. And • while we are not prepared' to say at this time that the land officers cannot, on a prima facie case, decide the right of the applicant to' such vein and give him a patent for it, we are satisfied that in any conflict between -the title conferred by two patents, whether it be in law or in equity, the holder of the title under the elder patent has á right to require that thé existence of the lode, and the knowledge of its existence on the- part of the grantee of the elder patent, should be established. Here we have a remarkable, fact, the absence of any evidence of a contest before the land department on that subject, and of any hearing bn the part of the owner of the elder title. We have no finding or assertion of the existence of such fact in, the junior patent,-or that it was established even by ex' parte proceedings before the officers of the government; and the introduction of evidence, on the trial in this case, on that subject, was ignored- as any part of the qase on which the'judgment of the court was based. It rests solely, and as the court says, conclusively, on the presumption that the officers of the government did their duty in the matter, and that what they decided is incapable of contradiction. The case in this court bearing the nearest analogy to the one before of is that of Railroad Co. v. Smith, 9 Wall. 95, 99. By the act of September 28, 1850, all the swamp and overflowed lands belonging to the United States were given to the States within which they lay. ' The Secretary of the Interior was directed by the statute to ascertain and distinguish these lands and certify them to the -several States, and it has been repeatedly held by this court th,at the act itself was a present grant of all. such lands. Congress subsequently, by the act of June 10, 1852, granted the right of way and a portion of the. public lands to the State of Missouri, in aid of the construction of railroads. This grant was accepted by the legislature of' Missouri, which, by a statute, vested the land granted'in the Hannibal and St. Joseph Railroad Company, the company having located its road, whereby the even-numbered sections and quarter sections granted to the State for the use of said road were ascertained. The railroad company, finding Smith, the defendant, residing upon and claiming one of these quarter sections, brought an action of ejectment to recover possession. Smith defended on the ground that the land was swamp land, and the title passed from the United States by the act of 1850, and could not be granted to the State of Missouri, or to the railroad company, by the act of 1852. The latter act con-, tained a reservation from the grant for the .railroad of -all lands theretofore conveyed or disposed of by the United States. Here then were two grants of the same lands by the United States, these grants operating as effectually as patents to convey title to the property described in them. It became necessary in the suit to ascertain which of these was the superior title. The elder grant prima faoie, to wit, the. grant of the swamp lands to the- States, which we have said was a grant inprcesenti, was the better title. But the question arose as to how it could be shown that this was swamp land within the meaning of the act- of 1850, and therefore passed by -that statute, and could not afterwards be transferred by the act of 1852. The act of Congress granting these swamp lands had made it the duty of the Secretary of the Treasury,* a duty after-wards transferred to the Secretary of the Interior, to' ascertain what were swamp lands, and to make certificate of the fact to the States that were entitled to them. This duty had not been performed by" either the Secretary of the Treasury or the Secretary of the Interior. There was no record or documentary evidence, therefore, by which the State claiming those swamp lands, or its grantee claiming under it, could establish the fact that the land which he was occupying was swamp land under the grant of 1850. The case was brought in a state court of Missouri, and that court permitted Smith to show by parol evidence, the evidence of parties familiar with the land, that it was swamp and overflowed land at the time the grant 'of 1850 was made by Congress, and had been ever since, and on this testimony a judgment was rendered for the defendant Smith, which was affirmed by the Supreme .Court of the State. From that court it was brought to this court by a. writ of error. This court said that "by the second- section of- the.act of 1850, it was made-,the duty of the Secretary.of.-the Interior to ascertain this' fact [namely, whether it was swamp. land or not] and furnish the State with the'evidence of it. Must the State, lose 'the land, though clearly swamp land, because that officer has 'rieglected to do this ? The right of the State did not depend on hig action, but on the act of Congress, and though the States might be embarrassed in the:-assertion of this.'right by the delay or failure of the Secretary to ascertain and make out lists of -these lands, the right of-the States fo them could not be defeated by that delay. ; As that officer had no satisfactory evidence under his control to enable him to make out these lists, as is abundantly - shown by. the correspondence óf the -land .department with-the state officers, . he. must,'if -he attempted it, rely, as he did in many cases, on witnesses whose personal knowledge enabled-them to report as to-the character of the tracts claimed' to be swamp and overflowed. "Why should not the same kind of testimony,- subjected to cross-examination, be competent, when the issue is made in a court of justice, to show that they are swamp and, overflowed, and so' excluded from the grant under which plaintiff claims, a. grant which was also a gratuity ? The matter to be shown is one of observation and examination, and whether arising before the Secretary, whose duty it was primarily to decide it, or before the court, whose duty it became because the Secretary had failed to do it, this was clearly the best evidence to be had, and was sufficient for the purpose." The subsequent case of French v. Fyan, 93 U. S. 169, as. shown by a careful reading of it, is not in conflict with this-decision, because in that case the Secretary having acted upon the matter and certified that the lands then in controversy were swamp and overflowed lands, it-was not permitted, in a trial before a jury, to contradict this certificate by oral tes timony. And in the still later case. of Wright v. Roseberry, 121 U. S. 488, the principle we are stating is clearly laid down in a case almost identical with the present one. It is urged upon us, in answer to this view of the subject, that by sections 2325 and 2326 of the Revised Statutes it is made the duty of a person seeking to avail himself of the discovery of a mineral lode and obtain a patent for the same, previous to making the application for a patent, to file the survey and field-notes of the grant which he claims, and do certain other things showing him to be entitled to purchase the mineral landyvhich he claims, all of which is to be under oath.. The statute then declares that the register, upon the filing of such application, field-notes, etc., shall publish a notice that such application has been made, for the period of sixty days, in a newspaper to be by him designated as published nearest to said claim, and at the end of this sixty days' publication, "if no adverse claim shall have been filed with the register and the receiver" of the land office, "it shall be assumed that the applicant is entitled to a patent, upon the .payment to the proper officer of five dollars per acre, and- that no adverse claim exists; and thereafter no objection from third parties to the issuance of a patent shall be heard, except, it is shown that the applicant has failed to comply with the terms of this chapter." . • Section 2326 then proceeds to enact that where an adverse claim is filed it shall be upon oath of the person making, the claim, and shall set out the boundaries, ñature and extent of such adverse claim, and all proceedings shall be stayed in the land office until the controversy shall be settled or decided by a court of competent jurisdiction. It makes it the duty of the adverse claimant, " within thirty days after filing his claim, to commence proceedings in a court of competent jurisdiction, to determine the question of the right of possession, and prosecute the same with reasonable diligence to final judgment;. and a failure so to do shall be a waiver of his adverse claim. After such judgment shall have been rendered, the party entitled to the possession of the claim, or any portion thereof," may " file a .certified copy of the judgment roll with the register of the land office, together with the certificate of the surveyor general that the requisite amount of labor has been expended or improvements made thereon, and the description required in' other cases, and shall pay to the receiver five dollars per acre for his claim, together with"'the proper fees, whereupon the whole proceedings and the judgment roll shall fee certified by the register to the Commissioner of the General Land Office, and a patent shall issue thereon for "the claim, or such portion thereof as applicant shall appear, from the decision of the court, to rightly possess. If it appears from the decision of the court that several parties are entitled to separate and different portions of the claim, .each party may pay for his portion of the claim, with 'the proper fees, and file the certificate and description by the surveyor general, whereupon the register shall certify the proceedings and judgment rolls to the Commissioner of the General Land Office, as in the preceding case, and patents shall issue to the several parties according to their respective rights." The argument we are considering assumes, as a matter of law, that all that was required of the owners of the Sierra Nevada claim, and all that was required of the register and receiver of the land office in regard to these publications, was done and had, and that, therefore, the owners of the Moyer patent are concluded by the proceedings which are thus supposed to have taken place. There are two substantial objections to this view of the subject. The first is that if such proceedings Avere had, and resulted either in the trial of the adverse claim before a court of justice, or in the failure of Moyer or anybody else to assert an adverse claim, those proceedings are matters of public record, and as, in this case, they must constitute the main reliance of those claiming under the Sierra Nevada patent, for the superiority of their title, this record should have been produced on the trial of the case; and that the mere opinion of the register and receiver of the land office as to what those proceedings are and their effect upon the prior patent of Moyer, should not be substituted for the production of those proceedings themselves, copies of which Avere easily obtainable at the land office department. Another reason, which we think more satisfactory, is, that a careful examination of this statute concerning-'adverse claims leads us to the conviction that it Avas not intended to affect a party who, before the publication first required, had himself gone through all the regular proceedings required to obtain a patent for mineral land from the United States; had established his right to the land claimed by him, and received - his patent; and was reposing quietly .upon its sufficiency and validity. It is true that there are no very distinctive words declaring what kind of adverse claim is required to be set. up as a defence against the party making publication; but throughout the whole of these sections and the original statute from which they are transferred, to the Revised Statutes, the words " claim " and " claimant " are used. This word is, in .all legislation of Congress on the subject, used in regard to a claim not yet' perfected by a title from the government by way of a patent. And the purpose of the -statute seems to be,. that where there are two claimants to the same mine, neither of whom has yet acquired the title from the government, they shall bring their respective claims, to the same property, in the manner prescribed in the statute, before some judicial tribunal located in the neighborhood where the property is, and that the result of this judicial investigation shall govern the action of the officers of the land department in determining which- of these claimants shall have the patent, the final evidence of title, from the government. This view, is consistent with the entire statute on the subject, and some'of its language is inconsistent with the idea that any contest to be thus decided is between a party who already has the legal title to the property which he claims and some other party who is only setting up a claim to the same property. In-the first place, its inapplicability to the present case is shown by the requirement that in all cases the successful party shall pay five dollars per acre before he can get. his patent. This argues that it has no reference to a- placer patent, because for the land conveyed by a placer patent the party is only required to pay two dollars and a half an acre. Again, the following language seems inconsistent with the idea that one of the contesting parties may already have a patent for the land in controversy, namely: " After such judgment shall have been rendered, the -'party entitled to the,- possession of the claim, or any portion thereof, may, without giving further notice, file a certified copy of the judgment roll with the register of the land office, together with the certificate of the surveyor general that the requisite amount of labor has been expended or improvements made thereon, and the description required in other cases, and shall pay to the receiver five dollars per acre for his claim, together with tlie proper fees, whereupon the whole proceedings and the judgment roll shall be certified by the register to the commissioner of the General Land Office, and a patent shall issue thereon for the claim, or such portion thereof as the applicant shall appear, from the decision of the courts to rightly possess. .If it appears from the decision, of the court that several parties are entitled to separate and different portions of the claim, each party may pay for his portion of the claim, . . . and patents' shall issue to the several • parties according- to their respective rights." It is too obvious to escape comment that by this proceeding there are brought before the court adverse. claimants- to mineral land, and that the party who succeeds in establishing the superior right to the possession shall have a patent. This may be the party who institutes the original-proceeding or it may be the party who sets up the adverse claim. Whichever of these two establishes his better right to the possession -gets the patent. . ILow can this apply to a .case where one of the parties already has a patent ? How can he be required to pay again for the land for which he has already paid all that the law requires ? How can he be required to establish before the land, office his right to the possession of a mine for which that office' has already granted him a patent ? And- again, how can such a case be brought- within the terms of a statute which provides, that where " several parties are entitled to separate and different portions of the claim, each party may pay for his portion of the claim, with the proper fees," etc., "and patents shall issue to the several parties according to th'eir respective rights." Why should a patent issue to a party for that for which'he already has. a patent?' These expressions of the statute, so clearly applicable, to par ties who are only claimants and have no title, show what the purpose of Congress was in passing the law, and that it was not intended that a party who had already gone through all these .proceedings and established his right to the mine which lie claims, and received his patent for it, shall be put upon the same level with mere claimants, who have yet to establish their claim and prove their right even to the possession, and that he is to be brought before a judicial tribunal to make a contest with a party who has no legal standing in court to contest with him, who has the legal title from the government. And this is just and is sound policy. Why should a party who has the legal title from the government of the United States, on which he relies with safety, be called upon to answer every adventurer who digs a hole in the ground thus conveyed to him and asserts a right to mineral found in that ground ? When he has once obtained the patent of the United States for his land, he should be only required to answer persons who have some established claim, and to contest with this party not before the administrative departments, but in courts of justice, by the regular proceedings which determine finally the rights of parties to property. For these reasons, we do not believe that these sections, 2325 and 2326, are intended to apply to the case of a party who has a prior patent for the land which may be the subject of controversy before the register and receiver of the land office. Is it fair and just that the party who has gone through all the processes which the laws of the United States require of him to obtain title to its lands, and has obtained that title, shall be subjected-by the officers of the government of the United States to defend that title before them from the attacks.of an outsider? We have more than once held that when the government has issued and delivered'its patent for lands of the United States, the control of the department over the title to such land has ceased, and the only way in which the title can be impeached is by a bill in chancery; and we do not believe that, as a general rule, the man who has obtained a patent from the-government can be called to answer in regard to-that patent before the officers of the land department of the government. Ex parte Schurz, 102 U. S. 378. For these Reasons, we are of opinion that, the .Circuit Court in refusing to consider the testimony found in the case, in regard to the known existence of the vein of the Sierra Nevada claim at the time of the application for the Moyer patent,- was in error; and, also, that it was erroneous to hold that, on the face of the patent for the Sierra Nevada mine, the existence of this vein and the knowledge of its existence were to be conclusively presumed in this action. The judgment is reversed, arid the ease is rema/nded to the Circuit Court, with a direction to grant a new trial.

566 U.S. 1037

C. A. 2d Cir. Certiorari denied.

528 U.S. 853

C. A. 11th Cir. Certiorari denied.

419 U.S. 1045

C. A. D. C. Cir. Motion of respondent for leave to proceed in forma pauperis and certiorari granted.

568 U.S. 832

Ct. App. Tex., 14th Dist. Certiorari denied.

459 U.S. 968

Ct. Cl. Certiorari denied.

564 U.S. 1045

C. A. 4th Cir. Certiorari denied.

484 U.S. 862

Sup. Ct. Pa. Certiorari denied.

502 U.S. 1094

C. A. 9th Cir. Certiorari denied.

531 U.S. 1095

C. A. 5th Cir. Certiorari denied.

465 U.S. 1076

C. A. 8th Cir. Application for stay, addressed to Justice O'Connor and referred to the Court, denied.

328 U.S. 852

Petitions for writs of certiorari to the Supreme Court of Texas denied.

545 U.S. 1110

Ct. App. D. C. Certiorari denied.