.

Before WALKER, Circuit Judge, and GRUBB and CALL, District Judges.

CALL, District Judge. Libel was filed in the United States District Court for the Western District of Louisiana against 275 cases of mineral water, praying for confiscation and condemnation of same for having been shipped in interstate commerce in violation of the Food and Drugs Act (Comp. St. §§ 8717-8728).

The libel, after alleging the shipment of the cases of mineral water in interstate commerce and the presence of the same within the jurisdiction of the court, alleges that the same were misbranded in the following respects:

"That the following statements regarding the therapeutic or curative effects thereof, appearing on the label aforesaid, to wit: 'Robinson Springs Water. Springs at Pocahontas, Miss. Recommended in the treatment of Bright's Disease, Diabetes, Dropsy, Cystitis, Gout, Rheumatism, Indigestion, Kidney and Bladder troubles. Directions: * Robinson Springs and Sanitarium Co., Pocahontas, Miss.'-were false and fraudulent, in that the same were applied to said articles knowingly and in a reckless and wanton disregard of their truth or falsity, so as to represent falsely and fraudulently to the purchaser thereof, and create in the minds of purchasers thereof, the impression and belief that it was in whole or in part composed of or contained ingredients or medical agents, effective, among other things, as a remedy for Bright's disease, diabetes, dropsy, cystitis, gout, rheumatism, indigestion, kidney and bladder troubles, when in truth and in fact said article was not in whole or in part composed of and did not contain ingredients, nor a combination of ingredients, capable of producing the therapeutic effects claimed on the labels, and therefore not effective as a treatment for said above-mentioned ailments."

C. L. Bradley put in a claim to the water seized by the marshal, and excepted to the libel:

(1) That the label does not disclose that the waters contained in the bottles are misbranded, because the label does not claim that the waters contain any ingredients or substance for the cure of any human ailment.

(2) The label described in the libel does not pretend that the waters conItain medical agents effective as a remedy for human disease.

(3) That the labels set out in the libel do not amount in law to a misbranding.

An answer was also filed admitting the shipment in interstate commerce, and the labels as set out in the libel, and were intended for sale as a mineral water recommended to be freely used in the treatment of certain diseases, and that the same were in the jurisdiction of the court, but denies that they were misbranded, or that the brand was false or fraudulent. The answer then proceeds to allege that before putting the waters upon sale he had the same thoroughly tested, and was advised by reputable physicians that the use of said waters was beneficial in the treatment of certain kidney troubles mentioned in the label; that the water was sold under a guaranty that those not satisfied with the result of the use of the water might have their money back; that said label had been submitted to the proper board in Washington, and it expressed itself as having no objection to same; that the labeling was in good faith, and not in any attempt to perpetrate a fraud upon the public.

(264 F.)

The exceptions were overruled, and the cause went to trial before a jury. After the government case was in, the claimant moved for an instructed verdict. This motion was renewed at the close of the entire evidence. Each of said motions were refused, and the jury returned a verdict in favor of the government, upon which a judgment was entered condemning said water. The errors assigned are as follows:

(1) The court erred in failing to sustain exceptions to the libel.

(2) The court erred in refusing to instruct the jury to find a verdict for claimant.

(3) The court erred in refusing the charge that the label on the bottles of water did not violate the act of Congress, in that the said label made no statement regarding the therapeutic or curative effect of said waters. (4) The court erred in refusing to grant a new trial.

[1] The first and third assignments raise the same question of law: Does the label as set out in the libel bear the interpretation sought to be placed on it by the government; i. e., that the words, "Recommended in the treatment of" the diseases named, properly construed, mean that the said water had a curative or therapeutic quality? If the court could say that they did not have this meaning, then it should have sustained the exceptions and given the charge asked. If it could not, then no error was committed in overruling the exception and refusing to give the charge. The construction of the language used in the label was in the first instance for the court; the falsity or truth and the intent of the claimant were for the jury to find from the testimony before it.

[2] It seems to us that words, "Recommended in the treatment of Bright's disease," etc., "Directions **" could only mean that the use of the water in the treatment of the diseases named would effect a cure or alleviation of such diseases; otherwise, why recommend it? Unless this means that the water did contain elements or ingredients which would alleviate or cure the diseases named, when taken according to the directions thereon contained, it was a waste of printer's ink. Would not any one suffering from any one of the diseases named understand that by the taking of the water his ailment would be alleviated or cured by reason of the ingredients contained in the water? It seems to us that he would. Treatment would only be taken with a view to alleviation or cure, and a water possessing elements or ingredients favorable to that end only would be recommended.

We think this label clearly susceptible of this construction, and that no error was committed, either in overruling the exception or refusing the charge.

[3] The contention is made that the water condemned in this case is not a drug, within the meaning as used in the act. To confine the meaning of the word "drugs," as used in the third subdivision of section 8, to any definition of "drug" found in dictionaries or pharmacopoeias, would in our judgment be entirely too narrow. As Justice Hughes says, in Seven Cases v.. U. S., 239 U. S. 517, 36 Sup. Ct. 193, 60 L. Ed. 411, L. R. A. 1916D, 164, "That false and fraudulent rep

264 F.-6

resentations may be made with respect to the curative affect of substances is obvious," and when so made of water it seems to us it would be trifling to say that water ordinarily is not a drug in the true meaning of the word, and therefore does not fall within the condemnation of the third subdivision of section 8 of the act. If the allegations of the libel are true, the claimant has put the substance, water, in interstate commerce with the recommendation that it possesses certain elements or ingredients which are curative, or at least alleviative, for the diseases named in the label. He will not be heard now to say the substance recommended is water, and not a drug. Such a construction would nullify the act of Congress.

[4] After the government had closed its case the claimant moved for an instructed verdict, which motion was denied, and this action of the court is assigned as error in the third assignment. The evidence produced on behalf of the government tended to show the shipment of the water in interstate commerce, the wording of the label as set out in the libel, the analysis of the water and absence therein of any medicinal ingredients possessing curative or alleviative properties in the treatment of the diseases named in the label, and the position. of the claimant in respect to the article.

Under that condition of the proof, it seems to us clear that the trial judge would have had no right to withdraw from the jury the determination of the two main questions at issue, namely, whether the claims made in the label were true, and, if not true, whether they were made knowingly and fraudulently. The judge is only justified in withdrawing a case from the jury when the testimony is such that no reasonable construction of it would justify a verdict for the plaintiff. "The case should not have been withdrawn from the jury, unless the conclusion followed, as matter of law, that no recovery could be had upon any view which could be properly taken of the facts the evidence tended to establish." Texas & Pacific Railway Co. v. Cox, 145 U. S. 606, 12 Sup. Ct. 909, 36 L. Ed. 829. After a full review of the testimony for the government, we cannot say the testimony is of this character. The jury would have been justified in finding from this testimony, unexplained or uncontradicted, the falsity of the label and the fraudulent intent of the claimant in putting forth the claims made therein.

The motion for an instructed verdict was renewed at the close of the testimony in the entire case, and denied by the court. The testimony in its then condition made an issue of fact upon conflicting testimony, which could only be decided by the jury in the case.

[5] The last error assigned is the refusal of the court to grant the motion for a new trial. The refusal or granting of a motion for a new trial is in the sound discretion of the trial judge, and cannot be reviewed upon writ of error or appeal. Mattox v. U. S., 146 U. S. 140, 13 Sup. Ct. 50, 36 L. Ed. 917. The case was submitted to the jury by the trial judge in a full and clear-cut charge defining the issues, and the jury found against the claimant.

We find no reversible error in the record, and therefore the judgment of the trial court is affirmed.

(264 F.)

FIRST NAT. BANK OF ROME, GA., v. FIRST NAT. BANK OF JASPER, FLA. (Circuit Court of Appeals, Fifth Circuit. March 10, 1920.)

No. 3430.

1. Process 86-Constructive service against nonresident only good as to rights in res.

Constructive service can only bring nonresidents within the jurisdiction of a court, where there is a res in the control of the court, and then only for the sole purpose of adjudicating his rights, if any, to the res.

2. Judgment 17(3)-Proceeds of discounted note not a res, justifying a judgment against nonresident on constructive service.

Where a buyer of stock discounted his note at a bank and paid the proceeds to the seller, who deposited them in the bank and received u certificate of deposit, and the proceeds of the note never became a special deposit, but were mingled indiscriminately with the bank's money, such proceeds did not constitute a res within the control of the court, conferring jurisdiction to render a decree on constructive service against the nonresident holder of the certificate of deposit.

3. Appearance 9(8)-Appeal from order refusing to quash service not general appearance.

In the absence of an authoritative decision by the state court, the rule in Florida that an appeal from a final decree on the ground, among others, of insufficiency of the service is an appearance bringing the appellant rightfully into court, will not be extended to an appeal from an order refusing to quash the service, as the statute, as construed by the state court, authorizes such an appeal, and it is to be implied that some benefit may be derived from the appeal.

4 Judgment

714(2)-Decree held to adjudge only rights in a supposed fund, and not to bar action on certificate of deposit.

Where a buyer of stock discounted his note at a bank and paid the proceeds to the seller, who deposited them in exchange for a certificate of deposit, a decree in a suit by the buyer against the seller, the bank, and a nonresident bank owning the certificate of deposit held, in view of the decision of the state Supreme Court construing the bill, to adjudge only the rights of nonresidents in a supposed fund in the bank issuing the certificate, and hence not to constitute a defense to an action on the certificate, even if the court had jurisdiction over the nonresident bank.

5. Banks and banking 152-Bank is personally liable on certificate of deposit. A certificate of deposit, executed by a bank, is in legal effect a duebill, and imports personal liability of the maker.

In Error to the District Court of the United States for the Southern District of Florida; Rhydon M. Call, Judge.

Action by the First National Bank of Rome, Ga., against the First National Bank of Jasper, Fla. Judgment for defendant, and plaintiff brings error. Reversed and remanded.

W. E. Kay, J. L. Doggett, and Henry C. Clark, all of Jacksonville, Fla., and L. A. Dean and J. E. Dean, both of Rome, Ga., for plaintiff in error.

Hilton S. Hampton and S. S. Sandford, both of Tampa, Fla., for defendant in error.

Before WALKER, Circuit Judge, and GRUBB and JACK, District Judges.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

GRUBB, District Judge. This was a suit in the District Court upon a certificate of deposit brought by plaintiff in error as plaintiff against the defendant in error as defendant. Judgment for the defendant was based upon a plea that set up as a bar to the suit a decree of the circuit court of Hamilton county, Fla., in which one Corbett was plaintiff and the parties to the present suit and others were defendants. The sufficiency of the plea as a bar to the present suit depends upon (1) its validity and (2) its effect.

[1, 2] 1. First, as to its validity as against the plaintiff in this suit: At the time the Florida suit was brought, the present plaintiff was a nonresident of Florida, and was served by publication under a statute of Florida permitting such service. The sufficiency of the constructive service was assailed by a motion of the then defendant to set aside or quash the service, which was overruled by the circuit court. From the order overruling the motion an interlocutory appeal was taken to the Supreme Court of Florida, which affirmed the order of the circuit court for reasons hereafter stated. 66 Fla. 438, 63 South. 833. It is settled that constructive service can only bring nonresidents within the jurisdiction of a court where there is a res in the control of the court in which the nonresident has an interest, and then only for the sole purpose of adjudicating his rights, if any, to the res. Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565. This is the extent of the jurisdiction of a court to proceed upon substituted service, in the absence of personal service or appearance. At the foundation of this limited jurisdiction, based upon substituted service, is the control of a res by the court asserting it. If there is no such res, the court acquires no jurisdiction for any purpose over the person of a nonresident, upon constructive service.

The circuit court of Hamilton county, Fla., proceeded to final decree in the case of Corbett v. First National Bank of Jasper and others upon the theory that there was a res, in which the nonresidents were interested, in the control of that court, and the Supreme Court of Florida on appeal took the same view, and sustained the constructive service upon the nonresidents upon that idea. The supposed res was the proceeds of a note which the plaintiff, Corbett, had discounted at the Jasper Bank, for the purpose of paying for shares of the capital stock of the Rome Insurance Company, which he claimed to have been induced by fraud to purchase. The proceeds of the note were paid to the trustee for the insurance company, and immediately deposited by him in the Jasper Bank, which issued its certificate of deposit therefor to the said trustee. The present suit is brought by the holder of the certificate of deposit. It is upon the theory that the proceeds of the note, so deposited in the Jasper Bank, created a specific fund in that bank, control of which could be and was acquired by the Hamilton county circuit court by order of that court restraining its disposition, and thereby impounding it, that the two Florida courts acted. The correctness of the theory is essential to the jurisdiction of the Florida circuit court, for if there was no fund there could be no jurisdiction acquired by substituted service.

The proceeds of Corbett's note, when discounted, were paid to him