welfare stock been omitted. How absurd it is to rate a corporation at the highest figure which an audit may show, regardless of what the figure plainly means. If instead of stocks it had been real estate carried at $7,000,000, and had appeared in the assets and against it a mortgage liability of $7,000,000, no doubt the audit figures would be entirely unobjectionable, although the items, so far as concerns actual worth or responsibility, might both have been omitted. But, according to the government's contention, it would make of the business a "$7,000,000 concern," as though that really meant anything.

In part 2 of the audit, which occupies over 60 pages of the printed record, and consists of voluminous detailed figures and many explanatory notes, is found this statement, "Liabilities—line 5-deferred earnings, $6,581,386.60. In this account is the amount of par value of welfare securities owned by the company, for which no credit is taken on the books, and is decreased as improving conditions of the welfare societies bear to the company's financial condition to warrant an enhancement in book value. The par value of welfare stock issued to the company of $7,223,551.60 is held at a book value of $642,205, or slightly less than 9 cents per $1 of par value." The practice of the Hawkins Company was, when it organized a welfare society, to take 51 per cent. of its authorized capital stock and enter this upon its books as an asset of the Hawkins Company, charging against it a liability equal to the unaccrued value of the stock. Presumably in the first instance, and before any of the welfare stock was sold, this would be an amount equal to the par. It is not questioned that the company's books showed this, and to our mind the carrying of this into an audit of the books is no indication of criminality on the part of the accountants, any more than it would have such effect in case of the real estate above referred to, or in the audit of a bank whose published reports customarily indicate as its principal resource a very large amount which is represented by deposits, which might be drawn out the next moment.

It was shown in evidence that, prior to the employment of these men to make the audit, another auditor had been employed, who had refused to enter these and other items, and whose audit Hawkins rejected. Such evidence was admissible as against those with whom he had his dealings, and perhaps their associates, but it does not appear that Haight and Willis knew anything about it; but, if they did, the conclusion of ariminality cannot be drawn because they

employed one method, and another auditor employed another. It would seem from the evidence that the first auditor deemed it a part of his function to go beyond the books and look into the matter of the actual value. These men contend that they had to deal only with the books and records as they found them.

It is suggested that in some instances they did enter items as the result of their own judgment, rather than what the books and records showed, notably setting up a reserve of $73,727.21 for probable loss on accounts receivable. This appears charged on the liability side in the reports, and of course was first included in the accounts and bills receivable. items of the assets. The entry tends rather to exculpate than to incriminate; for it reduces the surplus by that large amount, which, had they been fraudulently bent in making the very best showing, they probably would not have done. They say good accounting required this. This is largely a matter of the judgment of the accountant, since there are no governmental rules for such accounting, as is the case with national and state banks and insurance companies.

As to the other contention, that from the books and records themselves it appeared the business of the corporation was being run at a loss, whereas the audit shows an entry of surplus and undivided profits of $442,367.612, Willis, who was in actual charge at Portland of the audit, testified that it was true that from the books and records it appeared that the company was losing money quite heavily and steadily, and that but for the appreciation which the books showed in the welfare stock, to the amount of over $600,000, the audit would have shown a deficit, instead of a profit and surplus. If assets came to the company from any source, to an amount larger than a deficit which would otherwise appear, the overplus beyond this deficit would represent surplus or profit, undivided so long as it remained with the company. That from time to time those in control of the company directed that there be placed to the company's credit amounts representing appreciation in the welfare stocks is unquestionably true. The books showed such, and, if there is fraud in this, it is the fraud of those who caused it to be done.

If the welfare stocks did not show appreciation, of course the entries should not have been made. But it nowhere appears that these auditors were called upon to audit the welfare societies' books. In their contempo

raneous statement respecting one of such entries, which was made in the five-month period for which they made the statement of income and disbursements, appears the following: "Income, line 17, amount shown of $197,325, is the accrued portion of the enhanced value of welfare stock owned entered on the company's deferred earnings account June 30, 1922, and the total value taken credit for on the company's books for Iowa welfare securities of $7,000. The amounts entered were not segregated to the various welfare societies whose stock was included in the appreciation of value. It is recommended that such segregation be made and entered on the deferred earnings account. Your auditor has made no attempt to ascertain the correctness of the values placed on the accounts for appreciation of welfare securities, deeming that a matter proper to be decided by the officers and directors from information regarding the status of the welfare societies not available to your auditor, except as a result of investigation of the books and records of the welfare societies whose stock is affected by the entries." It was testified, without contradiction, that they did not have access to and did not examine welfare societies' books and records. The report as a whole sharply criticizes in numerous respects the company's keeping of its books and records, and practically sets up a new system therefor, which these defendants say they were employed mainly to do.

It is contended that criminality is to be gathered from the fact that the explanations and criticisms in part 2 above referred to are not carried into the condensed statement of the audit, which was made for publication. The notes and explanation of part 2 are very voluminous, and it is hardly to be expected they would be carried into the condensed statement or balance sheet, which is customarily a résumé of detailed figures. However, the opposite figure respecting the welfare stock fully appears there, and the certificate indicates that the audit was made from nothing but the books and records of the company. It does not appear that Willis and Haight had any prior contact or dealings with Hawkins, or any interest in him or his companies, and for anything that was shown to the contrary, they, residing in Indianapolis, were employed in the regular way to do this work, and it does not appear that they were to receive or did receive for their work anything beyond the usual and ordinary compensation for such service. While a report so predicated, unaccompanied by an appraisal, can give little

assurance to the public as to the true condition of the concern itself, apart from that of its books and records, nevertheless, so far as regards the items here particularly relied on to indicate criminality, the evidence shows they were taken from the books and records of the company, just as they purport to be, and we are unable to perceive in the transcript any evidence of criminal conduct of these two.

Our conclusion is, and it is so ordered, that the judgments against Sacks, Willis and Haight be reversed, and the cause remanded for retrial as to them, and that the judgments against the other nine defendants are, and each of them is, affirmed.

Under Employers' Liability Law Alaska, employé who lost eye in course of employment, having previously lost sight of his other eye, held entitled to recover as for total disability. 2. Appeal and error 273(5).

General exception to instruction covering several propositions of law does not bring before appellate court question of whether lower court erred in stating one of issues. 3. Appeal and error 274(5).

In action under Employers' Liability Law Alaska, general exception to instruction that person who has lost one eye and loses remaining eye is totally disabled does not raise question of whether answer admitted eye was lost in course of employment.

In Error to the District Court of the United States for the Territory of Alaska, Division No. 1; Thomas M. Reed, Judge.

Action by Thomas D. Scott against the Killisnoo Packing Company. Judgment for plaintiff, and defendant brings error. Affirmed.

H. L. Faulkner, of Juneau, Alaska, for plaintiff in error.

Henry Roden, of Juneau, Alaska, for defendant in error.

Before GILBERT, HUNT, and RUDKIN, Circuit Judges.

GILBERT, Circuit Judge. In an action brought under the Employers' Liability Law of Alaska (Laws 1923, c. 98), the question arose whether the plaintiff, who had lost the

sight of his left eye in an accident arising out of and in the course of his employment, could recover as for a total disability, he having many years before lost the sight of the other eye. The proof was that he was capable of performing and did perform for his employer the same services and earned the same wages as employés who had the use of both eyes. The court below instructed the jury that, if they found that the plaintiff lost an eye in the course of his employment, having previously lost the sight of his other eye, it would be their duty to find that he was totally and permanently disabled, and return a verdict in accordance therewith. The jury so found, and judgment was rendered as for total and permanent disability.

The plaintiff in error assigns error to that instruction and to the refusal of the court to instruct that the plaintiff could recover no more than the sum provided for the total and permanent loss of one eye, and it contends that recovery could be had only for the damages fixed by the act for the loss of an eye, which was $1,872, and not the damages fixed for total disability, which was $4,680. We think the instruction given by the court was justified, in view of the language and the purpose of the act, and the construction which similar acts have generally received at the hands of other courts. The Alaska Workmen's Act is not essentially different from the Compensation Act of Massachusetts (St. 1911, c. 751). In construing that act in the leading case of In re Branconnier, 223 Mass. 273, 111 N. E. 792, it was said the act "fixes no method for dividing the effect of the injury and attributing a part of it to the employment and another part to some pre-existing condition, and it gives no indication that the Legislature intended any such division. The total capacity of this employé was not so great as it would have been if he had had two sound eyes. His total capacity was thus only a part of that of the normal man. But that capacity, which was all he had, has been transformed into a total incapacity by reason of the injury. That result has come to him entirely through the injury." A similar view of a similar statute was expressed in Combination Rubber Mfg. Co. v. Court of Common Pleas, 96 N. J. Law, 544, 115 A. 138, in which the Court of Errors and Appeals of New Jersey held that, where a workman, having already lost one eye at the time of entering into a new employment, sustained an accident which caused the loss of his remaining eye and rendered him totally blind, an award as for total and permanent disability was justified. The

same has been held in Rhode Island, Connecticut, Illinois, and Colorado. In re J. & P. Coats (R. I.) Inc., 41 R. I. 289, 103 A. 833; Fair v. Hartford Rubber Works Co., 95 Conn. 350, 111 A. 193; Heaps v. Industrial Commission, 303 Ill. 443, 135 N. E. 742; Industrial Commission v. State Ins. Compensation Fund, 71 Colo. 106, 203 P.

215.

[1] The plaintiff in error contends that, under the statute of Alaska, compensation for total incapacity is based upon the fact that the total incapacity results alone from the injury itself, and that here the total incapacity for work results, not alone from the injury, but from the injury plus the loss of an eye, which occurred twenty-five years ago. We think the act should receive a fair and liberal construction in consonance with its purposes, and that, in providing a fixed compensation for the loss of an eye, the Legislature had in mind a situation in which the other eye would still be available. Here was a man possessed of but one eye. He was able to work as other men work. His vision was sufficient for all practical purposes. By accident he lost the use of his eye and thereby became totally and permanently disabled. We cannot agree that a distinction is to be made between the Massachusetts act and the act here in question, in that the former provides compensation for a "total incapacity for work” and the latter provides for a "total disability arising out of the injury." Construing the Massachusetts act, the court, in the Branconnier Case said: "An employé, who, before entering the service, had lost one eye, and who thereafter, from an injury in the course of employment, lost the sight of his remaining eye, was entitled to compensation for a 'total incapacity for work,' as such result came to him through the injury."

Nor are we able to accept as applicable to this case the reasoning in Lente v. Luci, 275 Pa. 217, 119 A. 132, 24 A. L. R. 1462, where the court held that to compensate one as for a total disability through the loss of one eye would be to give him a preference over his neighbor who might have lost both eyes in the same accident, or the reasoning in Weaver v. Maxwell Motor Co., 186 Mich. 588, 152 N. W. 993, L. R. A. 1916B, 1276, Ann. Cas. 1917E, 238, that the loss of the second eye, standing by itself, is a partial disability, and of itself does not occasion total disability, or the ruling in Jennings v. Mason City Sewer Pipe Co., 187 Iowa, 967, 174 N. W. 785, that, where the loss of an only remaining eye produces total disability the plaintiff should be deemed to have already

of the first eye.

[2, 3] In instructing the jury, the court said: "In this case a peculiar condition arises. It is alleged in the complaint, and admitted in the answer, that the plaintiff was totally blind in one eye prior to the time of his em= ployment by the defendant, and that, during the course of his employment, by reason of the accident set forth, he lost his other eye, thus rendering him totally and permanently disabled. I instruct you that under the law mentioned, as I construe it, if a person has lost one of his eyes and in the course of his employment loses the remaining eye, he becomes totally and permanently disabled. And the court proceeded in the instruction to tell the jury that, if they found such to be the fact, it would be their duty to render a verdict for total and permanent disability. The instruction was excepted to, but no ground of exception was specified. It is now asserted in this court that the instruction was erroneous, for the reason that it was not true that the answer admitted that the plaintiff lost his eye in the course of his employment. A general exception to an instruction covering several propositions of law is of no avail to bring before an appellate court the question whether the court below, in charging the jury, erred in stating one of the issues in the case. The judgment is affirmed.

PERRY v. UNITED STATES.

(Circuit Court of Appeals, Ninth Circuit.

August 2, 1926.)

No. 4803.

1. Searches and seizures 2.

and evidence obtained were inadmissible. 3. Criminal law 1169(1).

In Error to the District Court of the

United States for the Southern Division of the Northern District of California; John S. Partridge, Judge.

Manuel Perry was convicted of violations of the National Prohibition Act, and he brings error.

Reversed and remanded.

Edward A. O'Dea, of San Francisco, Cal., for plaintiff in error.

Geo. J. Hatfield, U. S. Atty., and T. J. Sheridan, Asst. U. S. Atty., both of San Francisco, Cal., for the United States.

Before GILBERT, HUNT, and RUDKIN, Circuit Judges.

HUNT, Circuit Judge. Perry was convicted under three counts, charging violation of the National Prohibition Act (Comp. St. Ann. Supp. 1923, § 101384 et seq.): (1) Maintenance of a common nuisance on or about the 28th of February, 1925, at 30 Jackson street, San Francisco, by keeping for sale 11 pints of jackass brandy; (2) unlawful possession of said liquor at the same time and place; (3) at the same place having on February 12, 1925, sold certain intoxicating liquor, to wit, three drinks of jackass brandy.

The evidence was that prohibition agents, in company with another person, on February 12th went to the place described in the information, and bought three drinks of

2. Criminal law 395-Where search warrant

was directed to federal prohibition director, his assistants, etc., and served by general prohibition agent, not named, warrant and evidence obtained were inadmissible (Act June 15, 1917, tit. 11, §§ 6, 7 [Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 104964f, 1049648]).

Under Act June 15, 1917, tit. 11, §§ 6, 7 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, $$ 104964f, 104964 g), providing for search warrants to issue to civil officer of United States authorized to enforce any law thereof, or to person authorized by President, to be served only by officer mentioned or person in his aid and pres

ence, where warrant directed to federal prohi

bition director for California, his assistants, agents, and inspectors, service by general pro

for; that on February 28th, 16 days after the sale, prohibition agents returned to the place with a search warrant dated that day; that when they entered no one was present, but that shortly thereafter the defendant came in and stated that he was the proprietor; that search was made, and jackass brandy was found in the rafters and in the basement; that, upon being questioned by the agents at that time, defendant denied that he had ever made a sale, or that he owned the jackass brandy found in the basement and admitted in evidence.

Defendant, by motions and exceptions to the rulings, saved the question of the validity of the search warrant issued, and wheth

er the search and seizure were illegal, and whether the evidence obtained as a result of the search and seizure was competent. [1, 2] The affidavit upon which the commissioner found probable cause was made on February 28th by Carl Ahlin, a federal prohibition agent. Applicant stated that he personally bought liquor at the place described on February 12, 1925, and paid therefor. The commissioner, after formal reference to the affidavit and facts therein stated, found probable cause for the issuance of the warrant, and on February 28th issued the same, addressed to the "Federal Prohibition Director in and for the State of California and to his assistants, agents and inspectors and any or either of them." The return on the warrant showed service and execution on February 28th by "D. W. Rinckel, general prohibition agent."

Title 11, chapter 30, section 6 of the Act of June 15, 1917 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 104964f), provides that, if the commissioner is satisfied of the existence of the grounds of the application, or that there is probable cause to believe their existence, he must issue a search warrant, signed by him with the name of his office, "to a civil officer of the United States duly authorized to enforce or assist in enforcing any law thereof, or to a person so duly authorized by the President of the United States, stating the particular grounds or probable cause for its issue, and

commanding him forthwith to search the person or place named, or the property specified, and to bring it before the judge or commissioner." By section 7 (section 104964g) a search warrant may in all cases be served by any of the officers mentioned in its direction, but "by no other person, except in aid of the officer on his requiring it, he being present and acting in its execution." If we assume, as we do, that there is an official appointed by the Commissioner of Internal Revenue, and for convenience called the federal prohibition director in and for the state of California, that the warrant was properly directed to him, and if it had been served by that official the service would have been valid, we still have the question whether the warrant was invalid by reason of the direction to his assistants, agents, and inspectors, and any or either of them, and also by reason of the fact that the warrant was executed by a person or official not included in the direction of the warrant. Section 7 makes it plain that the officers authorized to enforce the provisions of the Prohibition Act are the Commissioner of Internal Revenue,

his assistants, agents, and inspectors, and all other officers of the United States whose duty it is to enforce the criminal laws, or to a person duly authorized by the President. There is no inclusion of assistants to a federal prohibition director in and for a state; nor are we advised of any authority giving to a prohibition director for a state power to appoint his assistants, agents, and inspectors, and to clothe them with authority to serve search warrants.

Congress has been very careful, not only in the designation of those to whom search warrants may issue, but also in confining the power to make search by forbidding the service of a warrant by persons other than the officers enumerated in the direction of the warrant, except in aid of an officer upon his requiring it, the officer being present and acting in the execution of the warrant. The question has recently been considered by the Circuit Court of Appeals for the First Circuit in Leonard v. United States, 6 F.(2d) 353, where the view was expressed that it is essential that a search warrant shall be directed "only to an officer or class of officers to whom it was directed," and that warrants not so directed are invalid. In that case there was also the further point that the search warrants were served and returned by a federal prohibition agent, but not the officers named in the warrants and to whom they were directed; nor were the warrants executed in the presence of the officers named. The court held that, for that reason also, the searches and seizures were illegal, and that the evidence obtained thereunder was incompetent, and should have been excluded.

In our opinion that case is well founded upon the principle that statutes which authorize search warrants must be strictly construed. We therefore hold that the direction in the search warrant was an essential part of it, and that because the plain language of the statute was disregarded, not alone in respect to the direction to those officers who were authorized to serve, but also in respect to those who did serve it, the objections to the warrant and to the use of the evidence obtained and the search were well taken and should have been sustained. United States v. Dziadus (D. C.) 289 F. 837; United States v. Innelli (D. C.) 286 F. 731.

[3] Counsel for the government urge that, if the conviction is held unwarranted under the first two counts, it may be sustained and the defendant sentenced again under the count charging a sale on February 12th. But from the beginning of the case the principal questions were those relating to the validity of