(289 F.)

COVELLI v. UNITED STATES.

(Circuit Court of Appeals, Second Circuit. March 28, 1923.)

No. 186.

Conspiracy 47-Evidence held to show place of forming conspiracy was in Brooklyn.

Evidence that conspiracy to violate the Harrison Anti-Narcotic Act, as amended by Act Feb. 24, 1919 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 6287g et seq.), by importing cocaine and heroin without paying the tax, was consummated by telephone agreement between a co-conspirator in Manhattan and accused in Brooklyn, whereby accused agreed to come to the co-conspirator's house in Manhattan and bring him the money to use in buying the drugs abroad, held to warrant an inference that the conspiracy was formed in Brooklyn, in the Eastern district of New York, where accused was tried.

In Error to the District Court of the United States for the Eastern District of New York.

Salvatore Covelli was convicted of conspiring to violate the Harrison Anti-Narcotic Act, and of aiding another to commit an offense against the United States by violating said act, and he brings error. Affirmed.

The plaintiff in error was indicted on two counts:

and

First, that he and one Conti did, “at the borough of Brooklyn within the jurisdiction of" the District Court aforesaid, conspire, with other persons whose names were to the grand jurors unknown, to commit an offense against the United States, viz., to violate the Harrison Anti-Narcotic Act as amended, in that Covelli, Conti et al. agreed to import and bring into the United States cocaine and heroin without registering as required by the statute and without paying the tax prescribed by law. Overt acts were alleged, viz.: (1) That Covelli paid to Conti $1,000 with the intent that Conti should purchase the drugs in Italy and thereafter import and bring the same into the United States; and also (2) that Conti did so invest the money received from Covelli and did bring the drugs so purchased into the United States.

The second count charged Covelli under Criminal Code, § 332 (Comp. St. § 10506), with aiding, inducing, etc., Conti to commit an offense against the United States, viz. a violation of the same statute, to wit, the Harrison AntiNarcotic Act, as amended (38 Stat. 785, amended 40 Stat. 1130-1132 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 6287g et seq.]).

Plaintiff in error was convicted under both counts; this writ followed. Herbert N. Warbasse, of Brooklyn, N. Y., (Ralph E. Hemstreet, of Brooklyn, N. Y., of counsel), for plaintiff in error.

Ralph C. Greene, U. S. Atty., of Brooklyn, N. Y., and Guy O. Walser, Asst. U. S. Atty., of New York City (William A. De Groot, Asst. U. S. Atty., of Brooklyn, N. Y., of counsel), for the United States.

Before HOUGH, MANTON, and MAYER, Circuit Judges.

HOUGH, Circuit Judge (after stating the facts as above). We have been favored with a very able argument for plaintiff in error, yet remain of opinion that most of the assignments of error do not require extended comment. Some of them rest upon no exception, and some are in form insufficient; yet we have examined all, to ascertain whether

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any injustice has resulted from matters not well covered technically. Gruher v. United States, 255 Fed. 474, at page 478, 166 C. C. A. 550. We are of opinion that no injustice was done; it is true that Covelli could not have been convicted without the evidence of his accomplice, Conti; but we cannot be concerned with what in substance is a complaint that the jury believed Conti rather than Covelli. The circumstances corroborating Conti were numerous, each perhaps insignificant in itself, but in the aggregate quite sufficient to satisfy the jury and the law.

One point requires consideration, as it is jurisdictional, though we are satisfied no one thought of it below. The indictment charges the. formation of the conspiracy within the Eastern district of New York, and no place is fixed in respect of the overt acts alleged. Since such an indictment will lie either in the jurisdiction where the conspiracy is formed, or in any jurisdiction where an overt act in aid of the conspiracy is executed, the argument is suggested that conspiracy is a continuing offense, and any and every conspiracy is reborn every time an overt act in aid thereof is committed; therefore, even if the conspiracy was not actually formed in the Eastern district, this indictment is sustainable, if any overt act is proven to have been committed therein. We shall not dwell on this argument, or its applicability to the case at bar, but consider the simpler question, whether there was enough evidence to go to the jury in respect of the place of forming conspiracy. Proof was ample that the scheme of confederation, whereby Covelli was to furnish the money and Conti was to get therefor the unlawful drugs in Italy and bring them back to Covelli, was formed in the brain of the latter, and by him announced to Conti, when the latter, in Brooklyn, stated that he was going to Italy for his health. To this plan Conti objected, in substance, that it was dangerous business. Covelli sought to reassure him on this point, whereupon Conti said that he would "tell you [Covelli] before I leave what I will do." Then, added Conti, "Six days or a week before I leave I told him." Evidence then followed thus:

By Conti: "Q. Was that six days before you left that you called him? A. Yes.

“Q. And how did you call him? A. I call his place on the telephone. I was calling him, because I had got my ticket."

This telephone call by Conti was from Manhattan; Covelli answering from Brooklyn. Conti was then asked:

"Q. What did he say? A. He said, 'Come and see me;' and I told him that I didn't have much time, so he said, 'All right, I will come to see you tomorrow at your house""

-which house was in Manhattan. Covelli accordingly came to Manhattan with $1,000, and gave it to Conti for drug purchases.

It is quite clear, as argued for plaintiff in error, that if Conti had rejected the whole matter and refused to accept the $1,000 when the two men met in Manhattan, there would have been no indictable conspiracy; but this is no more than recognition of that locus pœnitentiæ always afforded by the conspiracy statute, which forbids indictment or pun ishment unless the formed conspiracy be followed by an overt act.

(289 F.)

We think the inference strong that, since Conti testified that he had said to Covelli, "I will tell you before I leave what I will do," and then added, "And six days or a week before I leave I told him," that the telling was over the telephone. Covelli certainly interpreted what was told over the telephone as an invitation to bring the $1,000-as a statement that his proposition was accepted. Thus the conspiracy was formed the moment the minds of these men met, and this occurred when Covelli in Brooklyn heard Conti's assenting voice.

Since we feel justified in drawing this inference, we think the jury was justified in drawing the same; the verdict shows that they did so. Undoubtedly it would have been more artistic, and better practice, to direct the attention of the jury more specifically to this point; but it is quite obvious from the bill of exceptions that no counsel at the trial. thought of the matter now so acutely pressed. We may add that on this point, also, we are quite sure that no injustice was done. Judgment affirmed.

FLEMING v. MONTANA COAL & IRON CO.

(Circuit Court of Appeals, Ninth Circuit. June 4, 1923.)

No. 3995.

Corporations 457-Injunction will not issue to prevent mortgagor's buying its bonds, instead of redeeming under option.

Where corporate mortgage gave mortgagor the option to call bonds for redemption before maturity at 105 per cent. of the par value thereof, injunction would not issue at suit of a bondholder to prevent the mortgagor's purchase in the open market of bonds without complying with the option; such option being for the mortgagor's benefit solely, and its nonexercise and purchase of the bonds by mortgagor resulting in no injury to such bondholders.

Appeal from the District Court of the United States for the District of Montana; George M. Bourquin, Judge.

Suit by Henry S. Fleming against the Montana Coal & Iron Company. From an order denying a temporary injunction (286 Fed. 453), plaintiff appeals. Affirmed.

George F. Shelton, of Butte, Mont., and Folger & Rockwood, of New York City, for appellant.

Thomas M. Kearney, of Racine, Wis., and Johnston, Coleman & Johnston and W. J. Jameson, Jr., all of Billings, Mont., for appellee. Before GILBERT, HUNT, and RUDKIN, Circuit Judges.

RUDKIN, Circuit Judge. The plaintiff is the owner of four bonds of the defendant company, of the par value of $1,000 each, secured by mortgage. The mortgage provides, among other things, that it is for the equal and pro rata benefit and security of all bondholders, at whatsoever period the bonds may be issued, without any preference or priority of one bond over another, except as to the mode of redemption therein provided. The mortgage then prescribes two methods for redemption before maturity. The first is from a sinking fund, and is

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not in controversy here, as it is conceded that the sinking fund provision has at all times been complied with. Under the second method, the mortgagor may call bonds for redemption before maturity. The bonds to be thus redeemed are selected by lot, and upon redemption the mortgagor agreed to pay a premium of 5 per cent. upon the par value of the bonds, in addition to the principal and accrued interest.

The plaintiff in the case sues in his own behalf and on behalf of all others similarly situated. The complaint alleges that the mortgagor has heretofore redeemed bonds to the amount or value of $138,000, without complying with the foregoing requirements of the mortgage, thus depriving the plaintiff of the opportunity to have his bonds selected for redemption at a premium of 5 per cent., and threatens to continue so to do, to the irreparable damage and injury of the plaintiff. The court below denied a temporary injunction, and from that order the present appeal is prosecuted. There is no substantial merit in the appeal. Unless restrained by contract, the right of the mortgagor to pay its debts and redeem its bonds before maturity is absolute and unqualified. The provision upon which the appellant relies was inserted in the mortgage for the sole benefit of the mortgagor, to enable it to redeem its bonds before maturity, without the consent of the bondholders. This reservation of a right does not limit or impair the general right enjoyed by every solvent debtor. Again, if we should assume that the appellant has the abstract right claimed, it would scarcely justify injunctive relief. He concedes the right of the mortgagor to dispose of its surplus as it sees fit, to distribute it among stockholders by way of dividends, to invest it in other securities, and even the right to invest it in its own bonds, provided the bonds are not redeemed or canceled.

In the face of this concession, how can it be said that the injury to the appellant is irreparable? If the bonds are worth 105 on the market, the appellant is not injured; and if worth less than that, it is safe to say that they will not be called for redemption at that figure. The right, therefore, would seem to be a barren one at best, and this suggests a grave doubt as to the jurisdiction of the court below. Jurisdiction was dependent upon a diversity of citizenship, and the value of the matter in controversy must exceed $3,000. The validity of the bonds is not questioned, and the security is in no wise impaired. The matter in controversy was not the bonds themselves, but the mere right to have them selected for redemption by lot. For reasons already stated, the value of this right is little more than nominal, and the general averment in the complaint that the value of the matter in controversy exceeds $3,000 is colorable only. In discussing a similar question in Orleans-Kenner Electric Ry. Co. v. Dunbar, 218 Fed. 344, 134 C. C. A. 152, the court said:

"The plaintiff sued in behalf of himself and of all other persons or corporations in interest who might join in the suit. No one else joined him in the suit. The result was that the original plaintiff was the only party before the court to be benefited by the decree which was rendered. Bruce v. Manchester & Keene Railroad, 117 U. S. 514, 6 Sup. Ct. 849, 29 L. Ed. 990. The suit remained one the sole purpose of which was to protect the original plaintiff's individual interests, and to prevent damage to him as a result of the granting of the privilege complained of. In such case the suit cannot be

(289 F.)

maintained, unless it is made to appear that the exercise of the privilege claimed to have been wrongfully conferred, and which is sought to be enjoined, would result in damages to the plaintiff to an amount in excess of $3,000. The matter involved was the injury to the plaintiff's property interest."

Certiorari in that case was denied by the Supreme Court, 238 U. S. 618, 35 Sup. Ct. 418, 59 L. Ed. 1492. It was there held that the court was without jurisdiction, unless the privilege granted to the defendant resulted in damages to the plaintiff to an amount exceeding $3,000, and it would seem to follow that the damages resulting to the appellant from a denial of the privilege here claimed must equal or exceed the jurisdictional amount. But the court below granted no relief calling for the exercise of jurisdiction, and inasmuch as the objection was neither raised there nor suggested here, we do not feel called upon to consider the question farther. If, in the opinion of the court below, it is without jurisdiction, the complaint should be dismissed upon that ground, rather than upon the merits.

The order appealed from is affirmed.

NEMAHA COUNTY, Neb., v. HARMON.

(Circuit Court of Appeals, Eighth Circuit. May 7, 1923.)

No. 6184.

1. Bridges 46(6)—Evidence held to support verdict against county for wrong. ful death.

In an action for damages for wrongful death because of defendant county's negligent construction and maintenance of a highway bridge, conflicting evidence held to support a verdict for plaintiff.

2. Appeal and error 216(2), 1068 (5)-Submission of comparative negligence without explaining statute held not reversible error.

In an action against a county for wrongful death caused by the giving way of a highway bridge following a heavy rainfall, the failure of the court in giving an instruction on the question of comparative negligence under the Nebraska statute to explain or define the statute was not reversible error, where no explanation or definition was requested by defendant, and no objection or exception was taken on that ground, and the court with the acquiescence of the counsel for defendant submitted special findings as to whether decedent's father or mother, decedent being a minor traveling in their automobile, was guilty of contributory negligence, and the jury found in special verdict that neither of them was guilty.

3. Appeal and error 1057(1)—Erroneous exclusion of evidence harmless, where other evidence supplied the facts sought to be shown thereby.

The exclusion of photographs offered by defendant to show the condition of a highway bridge after the accident resulting in the death of plaintiff's decedent, if erroneous, was not reversible, where other photographs admitted and the other testimony in the case fully disclosed situation in that respect.

4. Trial 260 (1)—Refusal of requested instructions otherwise given not error. The refusal of requested instructions, substantially embodied in other instructions given, is not error.

In Error to the District Court of the United States for the District of Nebraska.

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