ter also found that J. L. Walker had received the sum of $51,500 from the Walker Grain Company and reported that the testimony was conflicting as to whether that company owed Walker anything at the time; but the district judge sustained exceptions to this finding, and held that the said sum of $51,500 belonged to the Walker Grain Company and was wrongfully taken by Walker. The court entered a decree against each of the corporations for the amount found by the master to be due by it, and against the individual defendants for the aggregate amount found to be due by both corporations. The amount of the decree against the Ivy Grain Company was in excess of the amount claimed in appellee's amended bill, but on motion for rehearing submitted by appellants the court permitted appellee to file an amendment claiming the amount found by the master and the court to be actually due. The evidence is not included in the record, and it is therefore to be assumed that the findings of the court upon the facts are correct.

In support of their assignments of error, appellants contend: That the court erred in refusing to dismiss the suit for want of jurisdiction, because, first, the court reached the conclusion from the evidence that the charges of fraud and collusion had not been sustained, and, secondly, because appellee's amendment declaring on the written contracts, by

which the defendants bound themselves to pay the accounts sought to be recovered, constituted an abandonment of the original suit and set up two new and distinct causes of action, upon each of which there was a plain and adequate remedy at law; that, as the averments of fraud and collusion apply only to J. L. Walker, the bill should have been dismissed as to all the other appellants; that the decree against Julian A. Ivy was erroneous, because there was no averment in the trial amendment that he executed either of the written contracts; and that the decree against the Julian A. Ivy Grain Company was in excess of the amount claimed against that company in the amended bill upon which the trial was had.

[2, 3] The charges in the bill of fraud and collusion stated a cause of action against the individual appellants. If they were liable for both accounts, the amount sought to be recovered was within the jurisdiction of the District Court. It was found, upon a consideration of the evidence, that the corporations were not used as dummies in the perpetration of a scheme to defraud. The court reached that conclusion in the exercise of its

jurisdiction. Section 37 of the Judicial Code (Comp. St. § 1019) provides for the dismissal of a suit which does not really and substantially involve a dispute or controversy properly within the jurisdiction of the court. A suit upon a claim made in good faith is not to be dismissed, although the court may decide that the claim is not supported by the evidence. Hart v. Keith Exchange, 262 U. S. 271, 43 S. Ct. 540, 67 L. Ed. 977; Binderup v. Pathé Exchange, 263 U. S. 291, 44 S. Ct. 96, 68 L. Ed. 308.

In Flanders v. Coleman, 250 U. S. 223, 39 S. Ct. 472, 63 L. Ed. 948, it is said: "Whether the District Court has jurisdiction to grant any relief must be determined upon a consideration of the allegations of the bill and the amendment thereto. If there be enough of substance in them to require the court to hear and determine the cause, then jurisdiction should have been entertained." The District Court proceeded to hear the case on the merits, and must have been convinced that appellee's suit was brought in good faith. [4, 5] The amendment to the bill which declared on the written contracts of appellants to pay the accounts of the corporations was not an abandonment of the original suit. The amendment was wholly unnecessary inasmuch as appellants themselves had introduced the same contracts in evidence in an effort to sustain their theory that appellee had a plain and adequate remedy at law. Furthermore, in our opinion the court properly entertained the case on the equity docket, because the accounts were disputed and complicated. Kirby v. Lake Shore R. R. Co., 120 U. S. 130, 7 S. Ct. 430, 30 L. Ed. 569; Walker v. Wilkinson (C. C. A.) 3 F.(2d) 867; 10 R. C. L. 355.

[6] The court found that J. L. Walker had illegally taken $51,500 out of the treasury of the Walker Grain Company. It is hardly open to question that jurisdiction existed for the purpose of compelling an accounting by him upon the suit of creditors. Chicago, etc., Ry. Co. v. Third National Bank, 134 U. S. 276, 10 S. Ct. 550, 33 L. Ed. 900. In view of the fact that the corporations appear to have been insolvent, there existed jurisdiction in a court of equity, although appellee's claims had not been reduced to judgment. Case v. Beauregard, 101 U. S. 688, 25 L. Ed. 1004. Having properly acquired jurisdiction, it was proper to proceed in equity to do full justice without sending the case of the other appellants to be determined on the law side of the court. Equity Rule 23; Ober v. Gallagher, 93 U. S. 199, 23 L. Ed. 829; Camp v.

adjudicated bankrupt and during the administration of its affairs Ben L. Berwald, who was the president and principal stockholder of the bankrupt corporation, made an offer in writing to the trustee to take over the assets of the bankrupt for an amount of cash sufficient to pay the unsecured creditors 55 per cent. of their claims. He was careful to stipulate that he did not submit himself to the jurisdiction of the court, and the offer contemplated the compromise of all claims of all unsecured creditors of the bankrupt against himself and the other officers and stockholders of the bankrupt, as well as the claims against the bankrupt corporation. To that effect a clause as follows was inserted:

"This offer is made with the understanding and for the express consideration that each and every unsecured creditor of said bankrupt will release the said bankrupt and all its officers and directors, and each and every one of them, from any and all liability of every character and description growing out of or incident to or connected with the operation of the said Ben L. Berwald Shoe Company prior to its adjudication in bankruptcy."

Before the offer was made the trustee contemplated suits against Berwald and his associates to recover unpaid stock subscriptions amounting to approximately $10,000, and also to set aside a preference of about $6,000. He recommended the acceptance of the offer. A hearing was had before the referee, and 62 out of 66 unsecured creditors agreed to the compromise. Appellants, who are 4 of the unsecured creditors, objected. They had previously filed suits in a state court to recover the full amounts of their claims from Berwald and the other officers and directors, on the grounds that the bankrupt was in reality a partnership, of which the stockholders were members, and was not a corporation, that the stock of the corporation had never been paid in, and that the individual officers were guilty of fraud in securing credit for the corporation. An order had been issued staying these proceedings in the state court. On the hearing before the referee, he recommended the acceptance of Berwald's offer, but certified the question to the District Court. The District Court entered an order approving the compromise and ordering the fund, which had been guaranteed by Berwald, to be distributed pro rata among the creditors.

[2,3] It may be conceded that the trustee may, with the approval of the court, com

promise any controversy concerning the bankrupt estate, and for this he represents all of the creditors under the law. Such would be his claim for the unpaid portions of the stock subscriptions and his right of action to set aside a preference. Bankruptcy Act, § 27 (Comp. St. § 9611). The proceedings in this case to that extent are regular, and would be binding on appellants, if that were all; however, the offer in this case goes beyond an ordinary offer of compromise. Appellants are seeking in a state court to hold the officers of the corporation liable as individuals for the full amounts of their claims. These claims were not urged in the bankruptcy proceedings, and could not have been.

We cannot assume that these claims are without substance, and with regard to them the trustee was not authorized to represent appellants. A simple illustration will demonstrate this: It would never be contended by any one that the trustee could compromise the claim of an individual creditor against a third person arising from his indorsement of the bankrupt's note. There is no difference in principle in the case here presented. Furthermore, none of the parties has submitted himself to the jurisdiction of the District Court with regard to these suits, and the District Court was without jurisdiction to bind appellants to the full extent of the compromise offered. The order appealed from goes too far, and is prejudicial to the rights of appellants.

The court expressed the opinion that the state courts would take notice of the bankruptcy proceedings and act accordingly. It is quite apparent that, if the order is allowed to stand, appellants will be greatly embarrassed in exercising their rights in the state court, if not absolutely prevented from so doing.

it

[4] It would seem that the compromise offered was fair so far as the trustee was concerned, but, on the other hand, it may well be that appellants were justified in rejecting it so far as their individual claims are concerned; however, under the circumstances, would not do to affirm the order, with a modification reserving the rights of appellants as Berwald and his associates must also be considered. Undoubtedly they intended the acceptance of the offer to end the suits in the state courts, and to settle all claims of any kind against themselves arising from their connection with the bankrupt. They have the right to have their offer accepted exactly as made, or not at all.

HARDY-BURLINGHAM MINING CO. v.

BAKER.

(Circuit Court of Appeals, Sixth Circuit. February 5, 1926.)

poisonous gases, was not supported by professional reasons for conclusion, nor theory as to how or why results could follow, held that his testimony constituted at best only that scintilla of proof not justifying submission to jury of question whether plaintiff's condition of health was caused by his inhalation of mine gas.

In Error to the District Court of the United States for the Eastern District of Kentucky; Andrew M. J. Cochran, Judge.

1. Trial

No. 4300.

In federal courts, a mere scintilla of proof does not justify submission of issue to the jury, but proof must have appreciable and reasonable substance.

2. Evidence 14, 571 (9)—Common knowledge that "nervous wreck" cases develop without known physical cause, and claim must be based on definite and competent expert proof.

It is common knowledge that many of the cases of "nervous wreck" develop without any known specific physical cause; hence a claim that such result followed known and specific physical or functional upset must have definite and competent expert proof, which shall at least show fair and reasonable probability of cause and effect relation.

3. Appeal and error

926(7)-Circuit Court of Appeals will assume physician sufficiently qualified as expert, where no objection was made.

Circuit Court of Appeals will assume that a physician was sufficiently qualified as an expert, where no objection was made, although the mere fact that he was practicing as physician might not be enough.

4. Evidence 555-Opinion based on subjective symptoms stated to doctor to qualify him to testify cannot be received.

Expert opinion of doctor based in material part on statements by plaintiff of the subjective symptoms from exposure up to time of statement, for the purpose of qualifying doctor to testify, cannot be received.

5. Evidence 555-Opinion based on subjective symptoms stated to physician to get treatment and cure are admissible.

Opinion of physician, based on subjective symptoms stated to him to get treatment and cure would be admissible in evidence.

6. Damages 208 (2) -Doctor's testimony presenting no professional reasons for conclusion held to constitute only scintilla of proof, not justifying submission to jury of question whether plaintiff's condition of health was caused by injury.

Where doctor's testimony as to injury to mine employé being caused by inhalation of

O. H. Pollard, of Jackson, Ky. (T. T. Cope, of Jackson, Ky., and C. S. Landrum, of Lexington, Ky., on the brief), for defendant in error.

Before DENISON, DONAHUE, and MOORMAN, Circuit Judges.

DENISON, Circuit Judge. In the court below Baker recovered against the Mining Company a judgment based on a personal injury. At the time of the trial he appeared to be, and, giving due effect to the verdict, it must be assumed that he in truth was in the condition which is concisely indicated by the term "nervous wreck." He charged this result to his experience in the first half hour of the first and only day that he worked in the defendant's coal mine. It is his theory that he then inhaled a "poisonous gas," which defendant was negligently permitting to exist at the place where he was put to work, and that his final condition was the proximate result of this negligence.

The only question for review is whether there was in the evidence the necessary legal basis to support each of the three conclusions: (1) That plaintiff did inhale gas at this time and place; (2) that its presence implied defendant's negligence, and (3) that there was due causal relation between this in

halation and his later serious illness. We pass by, as needing no separate consideration, the fourth question, whether he was at and before the trial really sick, or only malingering.

[1] Appellate courts are constantly deciding whether, in a given case, there was or was not "substantial evidence" to a given effect. Usually it is enough to decide this concrete question, and no more. Occasionally it is worth while for a court to review the fundamental definition, and recall how it has been

discussed and fixed by the decisions controlling that court. This seems an appropriate occasion for some consideration of this kind, because the proper application to this record of the "substantial evidence" test depends upon some precision of understanding as to what the test is.

The rule prevailing in some jurisdictions that any evidence having any legal tendency to prove the point, is enough to require the court to submit that point to the jury was, 50 years ago, denied by the Supreme Court in Commissioners v. Clark, 94 U. S. 278, 284, 24 L. Ed. 59, where the "scintilla" rule is expressly disapproved. That court has at different times defined the degree of proof involved as: That from which the jury might "justifiably find" a verdict, or "come fairly and reasonably to the conclusion" (Pleasants v. Fant, 22 Wall. [89 U. S.] 116, 122, 22 L. Ed. 780); that upon which the jury can "properly proceed" (Commissioners v. Clark, supra); "evidence that would justify" (Carter v. Corusi, 5 S. Ct. 281, 285, 112 U. S. 478, 484 [28 L. Ed. 820]); that from which the conclusion "can be reasonably and legitimately inferred" (Randall v. B. & O. R. R. Co., 3 S. Ct. 322, 323, 109 U. S. 478, 482 [27 L. Ed. 1003]); that from which "a reasonable inference can be drawn" (Smith v. U. S., 14 S. Ct. 234, 235, 151 U. S. 50, 55 [38 L. Ed. 67]); "some evidence,

but so meager as not in law to justify a verdict" (Sparf v. U. S., 15 S. Ct. 273, 292, 156 U. S. 51, 100 [39 L. Ed. 343]); "is of such a conclusive character that the court can be compelled to set aside a verdict to the contrary" (Patton v. T. & P. Ry., 21 S. Ct. 275, 276, 179 U. S. 658, 659 [45 L. Ed. 361]). This court has often attempted the definition or explanation. The precise point is best illustrated by the difference between the legal duty not to submit and the discretionary duty to grant a new trial. Though the Supreme Court had several times used language which seemed to ignore any such distinction, Judge Lurton, in Mt. Adams Co. v. Lowery (C. C. A. 6) 74 F. 463, 20 C. C. A. 596, in a thorough opinion, develops the difference. He quotes with approval:

"A scintilla of evidence, or a mere surmise that there may have been negligence on the part of the defendants, clearly would not justify the judge in leaving the case to the jury. There must be evidence upon which they might reasonably and properly conclude that. there was negligence. Applying the maxim, 'De minimis non curat lex,' when we

say that there is no evidence to go to the jury we do not mean that there is literally none, but that there is none which ought reasonably to satisfy a jury that the fact to be proved is established."

Many English and federal cases are reviewed, and he concludes:

"If evidence be of so slight a character as to come within a reasonable definition of the scintilla rule, it is the duty of the court to direct a verdict, or, if it has submitted the matter to the jury, to set aside a verdict having no other support than a mere scintilla. In all such cases the evidence is insufficient in law."

There is, further (page 475), recognition of the rule that "evidence may be so insufficient in fact as to be insufficient in law." The further conclusion is that there may be such insufficiency in fact in plaintiff's evidence as to make it clear that the verdict for plaintiff ought to be set aside and yet not such insufficiency in law as to justify refusing to submit. In Felton v. Spiro (C. C. A. 6) 78 F. 576, 24 C. C. A. 321, the same rule is again applied in an opinion by Judge Taft; and again by Justice Harlan for this court in Travelers' Co. v. Randolph, 78 F. 754, 759, 24 C. C. A. 305; he suggests another formula for the power to direct, "when the evidence is so distinctly all one way that a different view of it would shock the judicial mind"; and again the subject was discussed for this court by Judge Severens in Minahan Grand Trunk Ry., 138 F. 37, 70 C. C. A. 463. He said:

V.

"Undoubtedly, it is distinctly settled that a mere scintilla, a spark, which arrests attention, and then from mere lack of vitality fades away, is not sufficient to warrant the submission of an issue of fact to a jury, when the scintilla is all that is developed by the party having the burden of proof. Such a showing has no substance, has not the quality of proof, and the judge may lawfully say so to the jury. And it must be admitted that the Supreme Court has gone a step farther than this, and assigned to the province of the court the right to direct the jury in those cases standing between those where there is a mere scintilla and those where there is substantial evidence, standing in a borderland, so to speak, where the evidence is so vague, indefinite, or inconsequential as not to furnish a reasonable foundation on which a verdict could rest.

"In other cases it is said the condition contemplated in which the judge may direct the verdict is when, 'in his deliberate opinion,