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25 F.(2d) 11

beas corpus by alien, is concerned only as to whether evidence supported finding of depor tation.

Appellate court, on habeas corpus proceedings by an alien ordered to be deported, does not decide issues of fact, but is concerned only with question whether there was substantial evidence to support requisite finding.

3. Affidavits 18-Ex parte testimony and affidavits can be received and considered as evidence in administrative hearing.

sure within the elastic bags is kept constant; 2. Aliens 54(17)-Appellate court, on ha(5) check valves between the mixing chamber and the separate supply sources of nitrous oxid and oxygen; (6) an attachment directly connected with the apparatus for administering oxygen and nitrous oxid; (7) a vaporizer with a by-pass whereby chloroform or ether may be given with the gas mixture or without the gas mixture and can be entirely cut out at will. In addition thereto, plaintiffs assert and claim that this prior art shows forward of the mixing chamber a rebreathing bag; also means for varying the amount of rebreathing by the patient, and an electric light bulb in the mixing chamber for heating the mixture. This, however, depends, not upon patent disclosures, but upon evidence as to the prior practices already re-. ferred to, and is in dispute."

The two additions to this art which Heidbrink claims he made are (a) means for automatic control of the flow of gases to the patient while the patient is receiving the gas; and (b) means for definitely regulating and determining the volume of the flow of the mixture and increasing or decreasing the amount without changing the proportion of the gases or the quality of the mixture.

The evidence before the District Court was such as to justify a finding in favor of the defendant to the effect that appellants' machine did not permit of the volume of the flow of the mixture being increased or decreased without changing the proportion of the gases or the quality of the mixture. This was the basis of the allowance of the patent. [7] Upon the appellants rested the burden of proving their case and each and every essential element thereof. That it failed to show that its machine would permit of a change in the volume of the mixture without change in the proportion of the two gases is, we think, established by the evidence. Such evidence as was introduced on this issue established the contrary.

The decree is affirmed.

MITA v. BONHAM, Commissioner of
Immigration.

Circuit Court of Appeals, Ninth Circuit.
March 30, 1928.

No. 5350.

1. Allens 54 (9)-Evidence held to sustain deportation of alien for giving assistance to prostitute.

Evidence on habeas corpus held sufficient to sustain finding that alien was properly ordered deported on ground that he was giving assistance to a prostitute.

In administrative hearing, ex parte testimony and affidavits can be received and considered as evidence, particularly if no objection is made to their reception, and providing adminis trative officials are willing to entertain crossexamination and rebutting proofs.

United States for the District of Oregon;
Appeal from the District Court of the
Robert S. Bean, Judge.

Habeas corpus by Itsusaburo Mita against R. P. Bonham, Commissioner of Immigration at the Port of Portland, Oregon. Judgment of dismissal, and petitioner appeals. Affirmed.

of Portland, Or., for appellant.
Elton Watkins and W. H. Fowler, both

George Neuner, U. S. Atty., and Forrest
E. Littlefield, Asst. U. S. Atty., both of
Portland, Or., for appellee.

Before GILBERT, RUDKIN, and DIETRICH, Circuit Judges.

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DIETRICH, Circuit Judge. The plaintiff, an alien, was ordered to be deported upon the ground that he was giving assistance to a prostitute, and also that he was maintaining a house of prostitution; the house in question being a hotel operated by him at Portland. The court below dismissed his petition for a writ of habeas corpus. [1] Fully appreciating the consequences of deportation to the alien and his family, we have examined the record with care, but find no substantial ground for disturbing the order. To warrant deportation it was only necessary for the government to show that appellant was knowingly giving assistance to a prostitute in the pursuit of her unlawful vocation. Two witnesses, one a city police officer, gave testimony which, if credited, would leave no doubt of the truth of the charge. In a campaign against violators of the law, these two men were assigned to the task of discovering evidence. Admittedly the Hart woman occupied a room in the appellant's hotel. The police officer, who had upon a previous occasion rented a room at the hotel, testified that on the evening of

April 22d he inquired of Mita whether he could have a room and a girl. Mita replied that he could have a room, and that there was a girl in No. 215, but he did not know whether she would stay with him all night. Mita took him to his room, turned on the light, indicated where room No. 215 was, and return ed to the office. Shortly thereafter, the witness knocked at the door of 215, and, after inquiry as to who sent him and whether he had a room, the Hart woman admitted him. She explained that she could not stay with him all night, but for a price named offered intercourse. Also upon May 3d the officer made inquiry of Mita whether the girl was still in 215, and upon receiving an affirmative answer and going to the room he had a similar experience with the woman, she again offering intercourse. The other witness, Charles Mike, testified that on a Saturday night he asked Mita what he charged for rooms, and upon receiving a reply he said he might take a room if Mita had any girls. Mita responded that he would get him one, and that there was one in 215, but she was busy. Upon repeated inquiries later that night and the next day, the witness was informed that the girl was either busy or out. Mita informed him of the age of the girl, that she was good looking, and what her price would be, and upon the witness' return Monday night, recognizing him, Mita guided him to 215, opened the door, and told him to go in. The Hart woman was lying on the bed partially clad. Arising, she came to the witness and, taking a lewd posture upon his lap, inquired if he did not want to spend a little money.

[2] Such being a fair statement of the testimony for the government, the most that can be said of all other evidence exhibited by the record is that it bears upon the credibility of the two witnesses and makes a case of conflicting testimony. But we do not decide issues of fact, and are concerned only with the question whether there is substantial evidence to support the requisite finding.

We have but recently held that a single proposal of intercourse may be made by a woman in such a manner and under such circumstances as to constitute the clearest evidence of her immoral vocation. Leffer v. Nagle (C. C. A.) 22 F. (2d) 800. See, also, United States v. Curran (C. C. A.) 8 F. (2d) 355. And if this woman conducted herself

on these three occasions as the witnesses relate, there can be no doubt that she was a common prostitute, active in her calling. Furthermore, if, as the testimony tends to show, appellant rented her a room and upon request for a "girl" directed or guided men to her room, adding information as to her appearance and charges, and advising them at times that she was "busy" or "engaged," he knowingly assisted her within the denunciation of the statute. The fact that he did not share directly in the earnings is, after all, only a probative circumstance, possibly neutralized by the consideration that he may have thought the presence of a "girl" in his house would measurably popularize his rooms. And if the evidence establishes the charge of knowingly giving assistance to a prostitute it is quite unnecessary to inquire whether it was also sufficient to warrant a finding that the hotel was a "house of prostitution," within the intent of the act. [3] As to the affidavit of the Hart woman, it is the settled rule in this circuit, and at least in some of the others, that in an administrative hearing ex parte testimony and affidavits can be received and considered as evidence, particularly if no objection is made to their reception, and providing, of course, the administrative officials are willing to entertain cross-examination and rebutting proofs. Choy Gum v. Backus (C. C. A.) 223 F. 487, 493; Chin Ah Yoke v. White (C. C. A.) 244 F. 940; In re Parianos (No. 5123 C. C. A.) 23 F. (2d) 918 (decided January 23, 1928); Imazo Itow v. Nagle (No. 5267, C. C. A.) 24 F. (2d) 526 (decided February 27, 1928); Ex parte Garcia (D. C.) 205 F. 56, 57; Ex parte Hidekuni Iwata (D. C.) 219 F. 610; United States v. Brough (C. C. A.) 15 F. (2d) 377, and cases therein cited.

But, entirely aside from the rule, we are unable to see how the question is even remotely involved here. The department was not in need of the affidavit, and made its case without even offering it in evidence. Thereafter, while the appellant was testifying upon his own behalf, his attorney demanded or requested that the affidavit be put in, and the presiding officer supplied it, with the express statement that it was in response to counsel's request, whereupon appellant's attorney proceeded to interrogate him relative to some of the matters therein contained.

Judgment affirmed.

25 F.(2d) 13

RODENBOUGH v. UNITED STATES.

Circuit Court of Appeals, Third Circut. March 28, 1928.

No. 3702.

1. Statutes 181(1)—Fundamental canon of statutory construction is to ascertain and give effect to legislative intent.

The fundamental canon of statutory construction is that courts should ascertain and give effect to the intent of the legislative body.

2. Statutes 184-Construction of statute which is rational and sensible, and which bears most directly on legislative object, should be selected where two constructions are possible. When, because of doubtful language in a statute, two possible intentions appear, the courts must select the one which is rational and sensible, and which bears most directly on the object which the legislative body sought to obtain, or the evil which it endeavored to remedy or avoid.

3. Statutes 191-In construing statutes, courts should adhere closely to commonly understood meaning of words in immediate relation to their subject-matter.

In ascertaining intent of Legislature, courts are careful not to be led astray by definitions of single unrelated words of statute being construed, or by the refinements of lexicographers, but adhere closely to the use of words in their commonly understood meaning and in immediate relation to their subject-matter.

4. Statutes 245-Construction of taxing statute should favor citizen and be against government.

In construing a tax act, courts are required

7. Internal revenue 28(2)—Presumption governing trustee's commingling of trust and personal funds held inapplicable in identifying money inherited within five years for estate tax deduction purposes (Revenue Act 1918, § 403 [a], subd. 2 [Comp. St. § 63363⁄4d]).

Where decedent, within five years before her death, inherited property from her father, proceeds of which she deposited in her general bank account with money from other sources, burden on decedent's executor of identifying portion of deposit acquired in exchange for property inherited, to authorize deduction thereof from net

value of decedent's estate for estate tax purposes, under Revenue Act 1918, § 403 (a), subd. 2 (Comp. St. § 63364d), could not be aided by presumption governing tracing of trust funds commingled by trustee with his own funds, whereby trustee, in making withdrawals for his own purposes, is presumed to have withdrawn his own funds.

8. Internal revenue 27(2)-Discharge of executor from personal liability for estate tax does not bar action against him in representative capacity (Revenue Act 1921, § 407 [Comp. St. § 633634h]).

Provision of Revenue Act 1921, § 407 (Comp. St. § 63364h), discharging an executor from personal liability for any additional estate tax on payment of amount assessed does not bar action against him in his representative capacity for such additional tax.

In Error to the District Court of the United States for the Eastern District of William Pennsylvania; H. Kirkpatrick, Judge.

Action by the United States against Elmer E. Rodenbough, executor of the will of Elizabeth McCahan Rodenbough, deceased.

to incline most strongly against the govern- Judgment for the United States (21 F.[2d]

ment and in favor of the citizen.

5. Statutes 184-Statute will be read in light of its purpose.

A statute will be read in the light of its purpose.

6. Internal revenue

8(14)—Statute authorizing deduction, for estate tax purposes, of property received in "exchange" for property inherited within five years, held to authorize deduction of property into which inherited property can be traced (Revenue Act 1918, § 403 [a], subd. 2 [Comp. St. § 63363⁄4d]).

Revenue Act 1918, § 403 (a), subd. 2 (Comp. St. § 63364d), providing that, from the value of resident decedent's net estate shall be deducted for estate tax purposes an amount equal to value at decedent's death of any property identified as having been inherited by decedent within five years prior to his death, or as having been acquired by decedent in "exchange" for property so received, held not to limit right of deduction to one transaction of exchange by barter, substitution of one security for another, through medium of money or otherwise, but extends such right to any property into which inherited property can be traced, regardless of number of transactions involved.

781), and defendant brings error. Reversed and remanded for new trial.

See, also, 14 F. (2d) 989.

William C. Alexander, Jr., Porter, Foulkrod & McCullagh, and Walter Lee Sheppard, all of Philadelphia, Pa., for plaintiff in error.

George W. Coles, U. S. Atty., and Mark Thatcher, Asst. U. S. Atty., both of Philadelphia, Pa. (Clarence M. Charest and William T. Sabine, Jr., both of Washington, D. C., of counsel), for the United States.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

WOOLLEY, Circuit Judge. The United States brought this action against Elmer E. Rodenbough, executor of the will of Elizabeth McCahan Rodenbough, to recover taxes on a sum claimed as a deduction in determining the decedent's estate tax and disallowed by the Commissioner of Internal Revenue under provisions of Section 403 (a)

(2) of the Revenue Act of 1918 (Comp. St. Appeals and brought this action against the 63364d), which read as follows:

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"(2) An amount equal to the value at the time of the decedent's death of any property, real, personal, or mixed, which can be identified as having been received by the decedent as a share in the estate of any person who died within five years prior to the death of the decedent, or which can be identified as having been acquired by the decedent in exchange for property so received, if an estate tax under the Revenue Act of 1917 or under this act was collected from such estate, and if such property is included in the decedent's gross estate."

A jury was waived and the case tried to the court on facts stipulated. Those presently pertinent are as follows:

W. J. McCahan, the father of Elizabeth McCahan Rodenbough, the defendant's decedent, died in 1918 leaving an estate of $14,688,694.20, on which a tax of $2,894,173.55 was paid. His estate consisted chiefly of stocks and bonds and Mrs. Rodenbough's share, which his executors gave her in kind, amounted to $3,831,506.22. Subsequently she sold some of the securities, others were paid off by the obligors, and one company of whose stock she held many shares went into liquidation and disbursed to her over $1,200,000. With these moneys, it is stated, Mrs. Rodenbough purchased or "acquired" other securities. She died in 1921. Her executor, in computing the estate tax, regarded the value of the securities she had purchased with the proceeds of the securities she had received from her father's estate deductible under the cited provisions of the Revenue Act of 1918. The Commissioner, however, thought otherwise and, first adding the same to her estate, determined a deficiency in taxes amounting to $113,000. Whereupon her executor appealed to the United States Board of Tax Appeals which found against the deficiency in the estate tax determined by the Commissioner on a holding that the value of the property so purchased was properly deductible, and, after making small adjustments, entered an order determining the deficiency to be the sum of $1,797.12, which the executor paid. 1 B. T. A. 477.

The Commissioner refused to acquiesce in the determination of the Board of Tax

executor to recover $111,852.58, the difference between the deficiency determined by him and that determined by the Board.

The learned trial court found on its construction of the cited provisions of the Revenue Act that the value of the father's property which in the hands of the decedent had thus revolved from one transaction to another was not deductible, and even if deductible in principle it was impossible on the facts to identify the estate of the father which, admittedly, had been taxed within

five years.

On the first ground and others to be mentioned presently, it entered judgment for the plaintiff for $144,849.04, the principal of its claim with interest. The defendant then sued out this writ of error.

The first question is whether the securities whose value is claimed as a deduction in determining the decedent's taxable estate be identified as having been acquired by the which can constitute "property decedent in exchange for property" which she received from her father's estate. The

government's position is based on a strictly literal interpretation of the word "exchange” as used in the statute. It contends that property whose value can be deducted in computing an estate tax must have been acquired in a transaction constituting an exchange in the sense of barter and that the statute excludes all transfers of property for money, and all exchanges of property with money as the media; that it limits the deduction to cases where only one exchange of that kind has taken place; and that none of the transactions by which Mrs. Rodenbough acquired the property whose value is now claimed as a deduction was an exchange within the statute thus construed, and, therefore, the question of the identification of those securities as having been purchased with the proceeds of securities received from her ancestor is immaterial. On the other hand it is the position of the defendant that

looking not to the form but to the substance of the transactions-the securities which Mrs. Rodenbough purchased to replace those she received from her father's estate (subsequently paid off, liquidated and sold) constitute property "acquired" (by her) in exchange for property so received, and that by tracing the proceeds through her bank account the securities whose value is claimed as a deduction can be identified as property so acquired.

The learned trial court in construing the statute did not confine its consideration to the single word "exchange" as strictly denot

25 F.(2d) 13

ing barter, but quite properly extended it to
the phrase, "acquired
in exchange
for" property received from the first dece-
dent. Yet in doing so it held to the concep-
tion of exchange of one property for anoth-
er, carrying the idea of substitution and ex-
tending it to what if not in form must be in
substance an exchange of one security for
another, giving this illustration (21 F.[2d]
781, 784): "Where the only facts that can
be shown are that property was sold and that
sometime subsequently other property of ap-
proximately the same value purchased, it
cannot be said that the property so pur-
chased was acquired in exchange for the
property sold, even though it could be shown
that it was purchased with the proceeds of
the property sold." The court finally held
that: "The fact, if it be a fact, that with the
money so received [from the disposition of
securities which the decedent had received
from her father] she subsequently bought
some of the securities now claimed [as deduc-
tible] does not bring those securities within
the language of the deduction," as they were
not "acquired in exchange" for the original
securities and there was no relation between
the original securities and those subsequent-
ly purchased except, in certain cases, the
equivalence of the sums of money involved.

derstood meaning and in immediate relation to their subject-matter. Merchants' Loan & Trust Co. v. Smietanka, 255 U. S. 509, 41 S. Ct. 386, 65 L. Ed. 751, 15 A. L. R. 1305; Doyle v. Mitchell Bros. Co., 247 U. S. 179, 38 S. Ct. 467, 62 L. Ed. 1054; Eisner v. Macomber, 252. U. S. 189, 40 S. Ct. 189, 64 L. Ed. 521, 9 A. L. R. 1570. And particularly in construing a tax act, courts are required to incline most strongly against the government and in favor of the citizen. Gould v. Gould, 245 U. S. 153, 38 S. Ct. 53, 62 L. Ed. 211.

And so in construing this statute we first look at its subject; next search for its purpose in respect to some particular problem; and then find if we can the intention of the legislative body that enacted it. The subject of the act, without question, is taxation at death; and equally certain such taxation is not on the estate or property of a decedent but on the right to transmit his estate, ascertained in a way the statute defined. Knowlton v. Moore, 178 U. S. 41, 20 S. Ct. 747, 44 L. Ed. 969; N. Y. Trust Co. v. Eisner, 256 U. S. 345, 41 S. Ct. 506, 65 L. Ed. 963, 16 A. L. R. 660. Realizing that, unless avoided by legislative provision, the same or substantially the same estate would be twice taxed when two deaths occur successively within a short time, the Congress enacted the provisions in question with the general purpose or intention to avoid the hardship and inequity of double taxation. Its particular intention, however, is to be gathered from the particular manner by which, as specified in the statute, it proposed its general purpose should be carried out. Thus we see the problem which was before the Congress and we have in statutory form the manner in which it met it.

2

We have studied very carefully the construction which the learned trial judge gave the statute and have been impressed by his logical and closely knit reasoning, yet we find ourselves at variance with some of his premises and therefore opposed to his conclusions. [1-4] Before construing the statute in question we bring into view certain applicable, and helpful, canons of construction, the fundamental one being that courts should ascertain and give effect to the intention of the legislative body. 36 Cyc. 1106. When, be- [5,6] A statute must be read in the light of cause of doubtful language, two possible in- its purpose. Tucker v. Alexander, 275 U. S. tentions appear, another canon of construc-, 48 S. Ct. 45, 72 L. Ed. -. As it is tion requires that courts shall select the one which is rational and sensible, Scandinavian Belting Co. v. Asbestos, etc., Works (C. C. A.) 257 F. 937, and which bears most directly on the object which the legislative body sought to obtain or the evil which it endeavored to remedy or avoid. Holy Trinity Church v. United States, 143 U. S. 457, 12 S. Ct. 511, 36 L. Ed. 226; Northern Pacific v. United States (C. C. A.) 213 F. 162, L. R. A. 1917A, 1198. In performing this responsible function courts are careful not to be led astray by definitions of single unrelated words of a statute or by the refine ments of lexicographers, but to adhere closely to the use of words in their commonly un

To

clear that the Congress intended completely
to avoid the inequity of double taxation, we
shall, in order to effectuate its intention, give
the statute a construction as broad as the in-
tention itself. In laying this estate tax the
Congress had two situations in mind.
meet them, it first provided that from the
gross estate of a decedent there should be de-
ducted an amount equal to the value at the
time of his death of any property which he
had received and continued to hold as a share
in the estate of a prior decedent who had
died within five years of his death and on
which a tax had been paid. This provision
contemplates the identical property which
one person has "received" from another and

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