which is the method generally adopted by accountants, and which though not exact, was as nearly accurate as it was possible to make from the company's books, or as is usually obtained from the books of a small retail business. The company was engaged in selling furniture on the installment plan. While appellant claims the assessment was erroneous, he fails to show that any part of it should be disallowed. Section 212(b) of the Revenue Act of 1918, 40 Stat. 1064 (Comp. St. § 6336%f) provides: "The net income shall be computed upon the basis of the taxpayer's annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made upon such basis and in such manner as in the opinion of the Commissioner does clearly reflect the income." It follows that, as the company's method failed to disclose its income, the assessment as made was authorized by law. That assessment was prima facie evidence of the amount due. Upon proof by appellant that it should be reduced by any particular amount, the government would still be entitled to recover the remainder. United States v. Rindskopf, 105 U. S. 418, 26 L. Ed. 1131. As the assessment was not shown to be incorrect, the prima facie presumption that attached to it was not overcome, and the District Court correctly sustained it as made. The judgment is affirmed. MORINI v. UNITED STATES. Circuit Court of Appeals, Ninth Circuit. October 31, 1927. No. 5258. Aliens 53-Where alien entered by land at place other than port of entry, deportation was proper, although he previously resided in United States (Immigration Act 1917, § 19 [8 USCA § 155]). Where native and subject of Italy, who lived in United States for about nine years, went to Mexico temporarily, and re-entered United States at place other than designated port of entry, in violation of Immigration Act 1917, § 19 (8 USCA § 155), order of deportation was proper, and fact that he had resided in United States, or had declared intention to become citizen, or had registered under the Selective Service Act (Comp. St. § 2044a et seq.), did not enlarge his rights. Appeal from the District Court of the United States for the Southern Division of the Southern District of California; William P. James, Judge. Petition for writ of habeas corpus by John Morini against the United States. From an order denying the petition, petitioner appeals. Affirmed. C. E. Burch, of San Diego, Cal., and J. Robert O'Connor, of Los Angeles, Cal., for appellant. Samuel W. McNabb, U. S. Atty., and Donald Armstrong, Asst. U. S. Atty., both of Los Angeles, Cal. Before GILBERT, RUDKIN, and DIETRICH, Circuit Judges. RUDKIN, Circuit Judge. This is an appeal from an order denying a petition for a writ of habeas corpus. The appellant was ordered deported to Italy on the grounds that he entered the United States by land at a place other than at a designated port of entry for aliens; that he was a person likely to become a public charge at the time of his entry; and that he has been convicted of, or admits having committed, a felony, or other crime or misdemeanor involving moral turpitude, prior to entry. We need consider the first ground only. The appellant is a native and subject of Italy; he first entered the United States in 1906 or 1907; he departed from the United States, and entered the republic of Mexico, November 17, 1926; he attempted to return to the United States on the same evening, and was told by the immigration officer to appear the next morning for examination, but instead of so doing he entered the United States surreptitiously, at a place other than a place designated as a port of entry for aliens. Section 19 of the Immigration Act of 1917, 39 Stat. 889 (8 USCA § 155), provides that any alien who shall have entered the United States by water at any time or place other than as designated by immigra tion officials, or by land at any place other than one designated as a port of entry for aliens by the Commissioner General of Immigration, or at any time not designated by immigration officials, or who enters without inspection, shall, upon the warrant of the Secretary of Labor, be taken into custody and deported at any time within three years after entry. tered the United States prior to his last enHad the appellant in this case never entry, the validity of the order of deportation would not be open to question, and the fact 21 F.(2d) 1005 that he had been a resident of the United States for a number of years before, or that he had declared his intention to become a citizen of the United States, or that he had registered under the Selective Service Act (Comp. St. § 2044a et seq.), did not enlarge his rights or change his status. In Frick v. Lewis (C. C. A.) 195 F. 693, it was held that the fact that an alien had been a resident of the United States for a number of years, and had declared his intention to become a citizen, and that he had left the country for a temporary purpose only, was immaterial; that the statute was applicable so long as he remained an alien; and that the legality of his last entry is to be determined as though there had been no previous entry. Under the same decision, deportation to Italy was proper. This case was affirmed on appeal. Lewis v. Frick, 233 U. S. 291, 34 S. Ct. 488, 58 L. Ed. 967. plant and a clear water basin for the sum of $150,900. The Loyd Contracting Company procured from the plaintiff two bonds to cover the respective contracts. The contractor proceeded with the work until July, 1927, when default was made. The Maryland Casualty Company took over and assumed the completion of the contracts. At the time of default, the commissioners had on hand sums of money unpaid and to become payable by reason of said contracts. At the time of the failure of the Loyd Contracting Company, it was indebted to many persons for labor performed, services rendered, and materials furnished. A large number of these persons have filed liens against the fund in the hands of the board of water commissioners. Many others threaten to do so. During the progress of the work, the Loyd Contracting Company assigned a portion of this fund to the Merchants' National Bank of Dunkirk, N. The order of the court below is therefore Y., one of the defendants in this action. affirmed. The validity of that assignment is contested by the plaintiff. A large number of defendants have appeared in the suit. The defendant Warsaw appears specially, and MARYLAND CASUALTY CO. v. BOARD OF Elevator Company WATER COM'RS OF CITY OF DUN KIRK, N. Y., et al. asks that the bill of complaint be dismissed on the ground that no equity jurisdiction exists. District Court, W. D. New York. October 21, The jurisdiction of the federal court is com 1927. plete by reason of diversity of citizenship. The sole question is whether equity jurisdiction exists. The bill of complaint prays for judgment and decree on various counts, among them: (a) For an accounting to ascertain the debts owing by the Loyd Contracting Company; (b) that the board of water commissioners be restrained from paying over any moneys in their hands under the said contracts, except to plaintiff; (c) that the sums of moneyi. e., $7,067.83-paid to defendant Merchants' National Bank of Dunkirk by the board of water commissioners are trust funds in the hands of said bank for the benefit of plaintiff, and that an accounting be had of the amount paid by said board of water commissioners to said bank; (d) that an accounting be had of the amount of the indebtedness owing by the Loyd Contracting Company to plaintiffs; (e) that a temporary order of injunction be granted, restraining all defendants and creditors from bringing suit on account of the above contracts; (f) that all the rights, demands, and claims of all parties hereto be adjudged, determined, and adjudicated. The case of Barston v. Mingo Drainage District (D. C.) 264 F. 224, is relied upon by defendant Warsaw Elevator Company as authority that this case is not one for equity jurisdiction. The Mingo Case is authority for the proposition that jurisdiction in equity is not had on the sole ground of preventing a multiplicity of suits, the court there holding that the facts of that case did not confer jurisdiction upon the court. In that case the action in equity was brought by the contractor to prevent a large number of different suits for damages to be brought against him, and to compel all of his creditors to intervene and have their demands determined in one action. In this case the equity jurisdiction of the court is invoked, not solely for the purpose of determining the claims of the 40 or 50 defendant lienors, although their claims will be determined in the action, but this action brings before the court on its equity side the various other questions arising out of these contracts, including the right to and ownership of certain funds, and the accounting for these funds by various of the parties to this action. Andersen v. Wool Trading Co. (C. C. A.) 14 F. (2d) 586; Reynes v. Dumont, 130 U. S. 354, 394, 9 S. Ct. 486, 32 L. Ed. 934; Montgomery Federal Jurisdiction, Sec. 702; Maryland Casualty Co. v. Johnson (D. C.) 15 F. (2d) 253. view of orders of the referee denying the petitions of the partners for an order directing the trustee in bankruptcy to set off and turn over exemptions to each petitioner. Referee's orders affirmed. Chas. H. Kavanagh, of Niles, Mich., for bankrupt. Hilding & Hilding, of Grand Rapids, Mich., for creditors. RAYMOND, District Judge. This matter is before the court upon petition for review of orders of the referee denying the petitions of the above-named partners for an order directing the trustee in bankruptcy to set off and turn over to each petitioner his exemptions out of stock and fixtures. The facts are undisputed. On December 31, 1925, petitioners, who were then copartners in the dry goods and clothing business in Benton Harbor, Mich., knowing that they were insolvent and that failure was imminent, for the express purpose of converting nonexempt property into exempt property and thereby saving a $250 exemption to each, entered into an agreement whereby the partnership was dissolved. The store was thereupon divided into two parts, one partner conduct The motion to dismiss the bill of com- ing his business on one side of the store and plaint for want of equity is denied. In re JACOBS et al. the other conducting his business upon the opposite side of the store. On January 25, 1926, they joined in a circular letter to their creditors, offering 25 cents on the dollar in full settlement of claims. This resulted in the filing of an involuntary petition in bankruptcy, and an adjudication was made February District Court, W. D. Michigan, S. D. August 11, 1926. 13, 1927. Bankruptcy 397-Partners may not dissolve partnership on eve of bankruptcy and each claim exemption allowed a bankrupt (Bankruptcy Act, being 11 USCA § 23 [a]; Uniform Partnership Act Mich. §§ 25 [c], 30). Since Bankruptcy Act, § 5a (11 USCA § 23), provides that a partnership may be declared a bankrupt, and since Uniform Partnership Act Mich, § 30 (Pub. Acts Mich. 1917, No. 72), provides that a partnership is not terminated upon mere dissolution, but continues until the winding up of the partnership affairs is completed, members of the partnership may not, on the eve of bankruptcy, by entering into a dissolution agreement, dissolve the partnership and divide the assets, and thereby defeat the intent of the Uniform Partnership Act Mich. § 25 (e) by each claiming the exemption allowed a bankrupt. In Bankruptcy. In the matter of Sol Jacobs and Hyman Adelberg, individually and as copartners doing business as the New York Outlet, bankrupts. On petition for re The question presented is whether members of a partnership, knowing themselves to be insolvent, may, on the eve of bankruptcy, dissolve the partnership, divide the partnership assets between themselves, and thereby obtain individual exemptions. This is a mooted question, upon which the cases of Crawford v. Sternberg (C. C. A.) 220 F. 73, and In re Turnock & Sons (C. C. A.) 230 F. 985, disclose the divergent views. Discussion of the subject will also be found in Remington on Bankruptcy, § 2938. Careful consideration of the two cases above cited leads to the conclusion that the latter is supported by better reason and the weight of authority. Section 30 of the Uniform Partnership Act (Pub. Acts Mich. 1917, No. 72), provides: "On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed." Section 5a of the Bankruptcy Act (11 USCA §23) provides that "a partnership, during the 21 F.(2d) 1007 continuation of the partnership business, or after its dissolution and before the final settlement thereof, may be adjudged a bankrupt." It seems clear that the effect of these provisions is that the members of a partnership may not, by the mere act of entering into a dissolution agreement immediately prior to bankruptcy, defeat the obvious intent of the Uniform Partnership Act that partners may not claim any right under the exemption laws in partnership property. See section 25 (c), Uniform Partnership Act. United States v. Balsara (C. C. A.) 180 F. 694; In re Najour (C. C.) 174 F. 735; In re Ellis (D. C.) 179 F. 1002; In re Alverto (D. C.) 198 F. 688; In re Akhay (D. C.) 207 F. 115. Our Supreme Court has definitely settled the question so far as full-blooded natives of China and Japan are concerned by declaring that they are not white persons, and therefore not entitled to citizenship. See latest cases of United States v. Thind, 261 U. S. 204, 43 S. Ct. 338, 67 L. Ed. 616, and Ozawa v. United States, 260 U. S. 178, 43 S. Ct. 65, The orders of the referee in bankruptcy 67 L. Ed. 199; Yamashita v. Hinkle, 260 U. herein are affirmed. S. 199, 43 S. Ct. 69, 67 L. Ed. 209. In re FISHER. Applicant comes within the class of persons of mixed blood. In re Camille (C. C.) 6 F. 256, it was held that a person of half Indian blood, whose father was a white Canadian and his mother an Indian woman, is not a "white person," within the meaning of sec District Court, N. D. California, S. D. October tion 2169. In re Rallos (D. C.) 241 F. 686, 18, 1927. it was held that one whose father was a Spaniard and his mother a Filipino is not entitled to naturalization. Also in Re Lampitoe (D. C.) 232 F. 382, it was held that the son of a Filipino mother and a father who was half Filipino and half Spanish is not a white person, and is not entitled to naturalization. In Re Knight (D. C.) 171 F. 299, it appeared that the petitioner was born on a British schooner in the Yellow Sea. His father was an Englishman, and his mother half Chinese and half Japanese, and their marriage occurred at Shanghai under the Application by Antonio Jose Fisher for British flag. The petitioner enlisted in the naturalization. Petition denied. United States navy off the coast of China in 1882, and first came to the United States in 1892. He had served honorably since his enlistment until his application, when he was 43 years old. It was held that petitioner was not a "free white person." In Re Young (D. C.) 198 F. 715, petitioner was born at a place in Yokohama, Japan, under the dominion of the empire of Germany, of a German father and Japanese mother. It was held that he was not entitled to naturalization, for the reason that he was not a white person. The court said that the right to become naturalized depended upon parentage and blood, and not upon nationality and status. It seems clear to this court that applicant Fisher is barred by the provisions of section 2169, and his petition is therefore denied. GEORGE A. MENDES & CO. v. BOWERS, Collector of Internal Revenue. District Court, S. D. New York. July 28, 1927. Internal revenue 38 (3)-Payment of income tax to secure return of bonds deposited after demand for additional tax was unenforceable, held voluntary, and not recoverable. Where plaintiff deposited Liberty Bonds, to be returned to it only on payment of additional income tax, if demanded, which demand was then enforceable, and afterward, after the time for enforcément had expired, paid the additional tax to secure return of the bonds, such pay ment was voluntary, and cannot be recovered back. At law. Action by George A. Mendes & Co. against Frank K. Bowers, Collector of Internal Revenue. Judgment for defendant. Benjamin Mahler, of New York City, for plaintiff. Charles H. Tuttle, U. S. Atty., of New York City, for defendant. BONDY, District Judge. Though the business of buying and selling merchandise was only an incident of plaintiff's business of selling on commission goods belonging to others, the evidence discloses that on January 1, 1917, the plaintiff had unsold merchandise on hand inventoried at $17,943.78, and also that it made substantial profits in its business of buying and selling merchandise. Under such circumstances, I believe that this is not the case of a trade or business having not more than a nominal capital, and that therefore it does not fall within section 209 of the Revenue Act of 1917 (Comp. St. § 6336%j). It has been stipulated that on May 17, 1922 (that is, within five years of the filing of plaintiff's income tax return, and while payment of an additional tax assessed for the year 1917 could be enforced), the defendant deposited with a bank Liberty Bonds of the par value of $20,000 to protect the liability of the collector to the government, and to be turned over to the defendant in the event that the plaintiff fails or refuses to pay the tax when demanded; that on March 24, 1923 (within five years of the filing of the return), the Commissioner of Internal Revenue demanded payment of $7,373.04, the balance of the tax remaining due after crediting a conceded overassessment; that on April 2, 1923 (more than five years after the return was filed), the plaintiff paid $7,373.04; and that at the same time Liberty Bonds of the par value of $20,000 were returned to the plaintiff. The facts stipulated make inapplicable the cases relied on by the plaintiff. The collector withheld the collection of the tax when the bonds were deposited, on the understanding that they were to be returned to the plaintiff only after the tax was paid. The plaintiff never demanded back the bonds on the ground that the payment of the tax was not enforceable, because more than five years had passed since the return was filed. On the contrary, he paid the tax, knowing that the bonds would not be returned voluntarily unless the tax was paid. The return of the bonds constituted consideration for the payment; and the payment was voluntarily made in accordance with plaintiff's agreement, notwithstanding that the check was marked "Paid under protest." The plaintiff, after its default in the payment of the tax on demand, could not insist on the return of the bonds, especially without making good its default and paying the tax. As stated, the payment was voluntarily made to induce, and in consideration of, the return of the bonds notwithstanding plaintiff's de fault. There, therefore, should be judgment for the defendant. |