National Bank, the State Trust Company went into the hands of a receiver. It is perhaps only just to say that Mr. Duncan claims this was due to the failure of the State National Bank, the enormous decline of its stock, and the financial difficulties of the Bankers' Trust Company in St. Louis, and its refusal to renew the remaining notes of the State Trust Company given for the stock in the State National Bank. That in general the State National Bank was defectively managed is perhaps best shown by the fact that early in 1914 its directors were compelled to take out securities which were not regarded as good by the representative of the Comptroller of the Currency to the amount of $210,000, and, when the bank had thus been helped by the retirement of the worst of the paper held by it, it failed in June, 1914. Before its failure, from various causes, there had been great withdrawals of deposits. The claims filed against it were about $850,000. It should have had the amount of assets to pay this, and to pay its capital of $500,000 and its surplus of $45,000, or about $1,395,000. Two years after its failure it had paid 20 per cent. upon the claims filed, or less than 12 per cent. of what its assets should have been. The government showed that, aside from the State Trust Company indebtedness, Duncan's direct and indirect liability to the bank when it failed was about $103,000, and Garanflo's indebtedness of the same character was about $58,000, and the balance of assets, aside from the liability of the stockholders, was not sufficient to meet the obligations to the depositors. The evidence tends to show that the ultimate deficit in. the payment of depositors will exceed $300,000. If to this be added the $500,000 of capital, the $45,000 of surplus, and the more than $200,000 paid in to take up the worst of the bank paper by the directors, it is manifest that the bank had lost more than $1,000,000 under the management of the two defendants. Bearing now in mind that the sole questions in the case are "willfulness and intent" and our holdings in Withaup v. United States, 62 C. C. A. 328, 127 Fed. 530, Olson v. United States, 67 C. C. A. 21, 133 Fed. 849, Exchange Bank v. Moss, 79 C. C. A. 278, 149 Fed. 340, Thomas v. United States, 84 C. C. A. 477, 156 Fed. 897, Colt v. United States, 111 C. C. A. 205, 190 Fed. 305, Schultz v. United States, 118 C. C. A. 420, 200 Fed. 234, Trent v. United States, 143 C. C. A. 170, 228 Fed. 648, Kinser v. United States, 146 C. C. A. 52, 231 Fed. 856, and Samuels v. United States, 146 C. C. A. 494, 232 Fed. 536, Ann. Cas. 1917A, 711, all the specifications of error not hereafter specially considered seem to us to be disposed of adversely to the plaintiffs in error. [1] Gen. Lloyd England, receiver of the bank, was on the witness stand and was asked: "Q. Have you assessed the stockholders as the federal laws provide with national banks? "Judge Manning: We object to the testimony as to the assessments by the Comptroller, as irrelevant and incompetent, or any other testimony that has been introduced along that line. "Court: The objection is overruled. "Judge Manning: We except. 246 F.-58 "A. The Comptroller of the Currency has assessed them. Q. Leaving out of consideration the amount received from the assessment, what could have been realized from the assets of the bank proper? (Objected to by the defendants upon the ground that the same was incompetent and irrelevant, which objection was by the court overruled, and the defendants, at the time, each duly and severally excepted.) A. The estimate made based on which the assessment was made was $525,000. Q. Or about 65 per cent. of the amount of the deposits? (Objected to by the defendants upon the ground that the same was incompetent and irrelevant, which objection was by the court overruled, and the defendants, at the time, each duly and severally excepted.) A. Yes." It is objected in this court that this was not the best evidence. No such objection was made in the court below. Mr. Duncan, when on the stand, was asked: "Q. You would think it [the stock in the State National Bank] was as good as Arkansas and Arizona, wouldn't you, even now?" Thereupon Mr. Duncan voluntarily and without objection on behalf of either defendant said: "No; I don't think so, because the bank stock has been assessed." It is probable there was no error, but in any event the proper objection was not made, and the voluntary statement of the defendant Duncan showed substantially the same facts. [2] Robert Neill, who was a national bank examiner in 1913, testified he was present at a director's meeting of the State National Bank, and both of the defendants were also present, and that two members of the board, one of whom was Mr. H. H. Foster, the other he could not recall, said that that was the first knowledge he had of the existence of the overdraft of $77,000 of the State Trust Company. The statement was made by Mr. Foster: "That in the condensed statements, which were read to the directors at their meetings, this had never been called to their attention; that this overdraft of the State Trust Company existed." If Mr. Neill's statement was untrue, both the defendants and all the other directors could have denied it. If it was true, and Mr. Foster, with or without another director, joined in the statement in the presence of the defendants and all the other directors, and they none of them dissented, the jury had a right to say they all acquiesced in its truth. This evidence was clearly admissible on the question of whether the directors knew that such credit was being extended to the State Trust Company, and its extent. [3] Mr. John E. Coates was a director in the State National Bank and a witness for the defendants. On cross-examination he was asked: "Q. How much are you indebted to the bank now, Mr. Coates? A. $9,750, secured." It was manifestly admissible for the government to show on crossexamination of defendant's witnesses, if it could, that they had been parties to the loose management of the bank, as showing their interest in defending the management and as affecting their credibility. There was no error in this. During the examination in chief of the defendant Duncan the following took place: "Q. State what, in your opinion, was the solvency, or the value of the note, of the North Arkansas Land & Timber Company? A. We regarded it good. Q. I will ask you about the North Arkansas Land & Timber Company. Had you been furnished with estimates of the value of its holdings? A. Yes. Q. What is that book, Mr. Duncan (handing a certain book to the witness)? A. This book is a blueprint book of cruise of timber land, made by J. P. Brayton, of Chicago, of the property of the North Arkansas Land & Timber Company. Q. What does that report show as to the amount of timber held by the North Arkansas Land & Timber Company? "District Attorney Martin: We object to it, your honor. "Mr. Townsend: The only ground upon which it is competent is this: It just gives the basis that Mr. Duncan had for his opinion in considering the North Arkansas Land & Timber Company good. It is a report made by a reporter. "Court: That is secondary evidence. Now Mr. Duncan- It would be proper for him to state the investigation he made and where he sought information. I don't think that that particular report is competent. "Mr. Townsend: We desire to save an exception. "Court: He may testify to the fact that he made an investigation, and as to what his belief was from that investigation—his opinion-but the report itself would not be competent testimony, because that is made by some one who is not a witness, who doesn't identify it himself, who is not sworn. "Q. I will ask you, Mr. Duncan, if you made any investigation, or any effort, to find out the value of the holdings of the North Arkansas Land & Timber Company? A. Yes, sir; I employed J. P. Brayton, a well-known timber estimator of Chicago, to cruise the property for me, and paid him a fee of $552 for doing so, and got his regular report. Q. Based on his report, but not the report itself, what was your opinion of the value of the timber holdings of the North Arkansas Land & Timber Company? A. Based upon his official report to me, I estimated the timber on said land to be worth"District Attorney Martin: He is doing there indirectly what the court says he may not do; he can't give the estimate of the timber from what some one else gave him, or told him. "Court: He can give the value from the investigation he made. "District Attorney Martin: He can't say, 'Based on such report, I am of the opinion there was so much timber there.' "Court: It couldn't be based on anything else from his testimony; he states the manner in which he sought the information. Now, that will go to the jury for what it is worth. It goes to the question of the intent of the defendant in the transactions that he had with the bank in using this particular stock or bonds, or whatever they were, as collateral. You may answer. "Witness: Based upon the report furnished me, the value of the timber on said land, was $122,047; the value of 6,400 acres of the land was $32,000; making a total valuation of $154,047. The cruise is of 8,800 acres of land, but 400 of it we had no fee-simple title to; about 8,400 acres of land, 6,400 tillable land estimated. Q. Did you, or not, believe that this property was actually worth this amount? A. Yes." On cross-examination the following took place: "Q. Did you consider the North Arkansas Land & Timber Company good for that? A. I considered it good for all of its debts, and if the property is sold to-day for its worth it will pay all it owes. Q. Although it has 8,000 acres of land mortgaged for twice what it cost, and no income, and yet you consider it is good for a loan? A. It was estimated by Chicago estimators to be worth $150,000." It thus appears the defendant was allowed to testify fully as to what he thought the timber and land were worth, basing his opinion upon the report of Mr. Brayton, but he was not allowed to offer the unsworn statement of the to the court and jury unknown party, Brayton, as direct evidence upon the value. The ruling was so manifestly correct that it requires no further consideration. Error is assigned upon the failure to direct a verdict for defendants, as asked by them at the close of all the evidence. We have read every word of the evidence as preserved in the record, and find that there was so much evidence of the willfulness and unlawful intent of the defendants that the ruling of the court was correct. The defendants excepted to the refusal to give each of the five instructions asked. Having read with great care the clear and impartial charge given by the court, we find that every element of the charge as asked, so far as accurate and correct, was given by the court in its instructions. No error is made to appear, and the judgments as to both defendants are affirmed. UNION PAC. R. CO. v. MARONE. (Circuit Court of Appeals, Eighth Circuit. October 26, 1917.) No. 4883. 1. COURTS 372(3)-PRECEDENTS-DECISIONS OF STATE COURT. The liability of a master for personal injuries of his servant is a question of general law; and, in the absence of state statute, it is not governed in the federal courts by decisions of state courts, but by the common law and rules of decision of the Supreme Court and other federal courts. 2. NEGLIGENCE 1-WHAT CONSTITUTES. Negligence is a breach of duty, and where there is no duty or no breach, there is no negligence. [Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Negligence.] 3. MASTER AND SERVANT 101, 102(8), 236(1)—INJURIES TO SERVANT-DUTIES OF MASTER AND SERVANT-PROVISION AND OPERATION. The duty of a master is one of provision, while that of a servant is one of operation, it is the duty of the master to exercise reasonable care to provide a reasonably safe place in which, and reasonably safe machinery or appliances with which, the servants may do the work assigned to them, and it is the duty of the servant to exercise reasonable care so to use the place, machinery, and appliances furnished and so to conduct the operations intrusted to him as to protect himself from risk, danger, and injury, and neither the master nor the servant is liable for a breach of the other's duty. 4. MASTER AND SERVANT 177, 227(1)—INJURIES TO SERVANT-NONLIABILITY OF MASTER-SERVANT'S NEGLIGENCE OF OPERATION. Where the place in which a servant is required to work, or the machinery or appliances with which he is required to work, or the method of doing the work, becomes dangerous, and results in injury only because of the negligence of the injured servant, or of his fellow servants, the master is not liable. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 5. MASTER AND SERVANT 191(1)-INJURIES TO SERVANT-"FELLOW SERVANTS" "COMMON SERVICE.” All who enter into the service of a common master except those who become heads of and vested with absolute control of separate departments or branches of a great and diversified business thereby become engaged in a common service, and are fellow servants in all they do except that which they do in discharge of the master's nondelegable duty of provision. [Ed. Note. For other definitions, see Words and Phrases, First Series, Common Service; First and Second Series, Fellow Servant.] 6. MASTER AND SERVANT ~216(1)—INJURIES TO SERVANT-ASSUMPTION OF RISK. In the absence of statutory provision to the contrary, each servant by accepting his employment voluntarily assumes the risk and danger of the negligence of his fellow servants in the discharge of their duty of operation, whether those duties are of superintendence and direction, or those of equal or subordinate service. 7. MASTER AND SERVANT 203(1, 3)—INJURIES TO SERVANT-ASSUMPTION OF RISK. A servant assumes the ordinary risks and dangers of his employment, and the extraordinary risks and dangers which he knows and appreciates. 8. MASTER AND SERVANT ~222(1)—INJURIES TO SERVANT-ASSUMPTION OF RISK. Neither the order of a vice principal to a servant to work in a dangerous place, or in a dangerous way, nor his assurance of the servant's safety, nor the servant's fear of losing his job will relieve the servant from his assumption of risk and danger, where they were readily observable and were known and appreciated by him, unless the vice principal makes a promise to remove them. 9. MASTER AND SERVANT ~243(1)—INJURIES TO SERVANT-NEGLIGENCE OF MASTER. Plaintiff, a section man, while assisting in the cutting of a rail with a sledge hammer and chisel, was injured by a piece of steel, which was chipped off and driven into his eye. A rule of the railroad company declared that goggles provided for that purpose should be worn when cutting rails with a track chisel, and such goggles were in the toolhouse when the accident occurred. A short time before the accident, while cutting other rails, a piece of steel chipped off and struck plaintiff on the wrist. On the day of the accident plaintiff told his foreman that he wanted something to protect his eyes, but the foreman replied, "Go on; that is all right; we never use them;" and plaintiff, fearing to lose his job, did as he was directed. Held, that the railroad company, having made its order and furnished goggles, was not negligent. 10. MASTER AND SERVANT 189(3)—INJURIES TO SERVANT-"FELLOW SERVANTS." In such case, as the work of cutting the rails was merely one of operation, the foreman was plaintiff's fellow servant for whose negligence the railroad company was not liable. 11. MASTER AND SERVANT -NEGLIGENCE. 219(15)—INJURIES TO SERVANT-VICE PRINCIPAL In such case, as the danger was obvious to plaintiff, having been brought to his attention by the previous chip of steel which struck him in the wrist, he assumed the risk, and the company was not liable, though the section foreman be treated as a vice principal. In Error to the District Court of the United States for the District of Nebraska; Joseph W. Woodrough, Judge. Action by Michael Marone against the Union Pacific Railroad Com For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes |